CoreWeave’s Debut Tests Market Appetite for AI and IPOs
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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, I'm Caroline Hyde and this is Bloomberg Technology. Coming up, all eyes on Corweave's downsized IPO, with shares set to begin trading on the Nasdaq. We'll discuss with Magnitar, Corweave's largest equity holder. This as AI capacity concerns remain, yet in the midst of the anxiety, the race to invest in AI companies has created a slate of new billionaires. We'll highlight them. And US and EU tariffs are front and centre, with the market share of Chinese EVs falling to a two-year low across Europe.

But first, we check in on these markets, which are ever more in sell-off mode. To end this week, we're off by almost 2% on the Nasdaq 100. And when you're looking at the points drags lower and the fact that we're back to the worst week since March the 14th, it is the who's who of the Magnificent Seven that drag us down. In terms of key points to the lower...

It is Amazon, Meta, the likes of Microsoft, of course, Apple even amongst some of the biggest drags today. But we want to put this in the light of the IPO that we have, of course, on this day. CoreWeave, one of its biggest...

key clients is Microsoft. It's off by more than 2%. Amazon, of course, key exposure to these hyperscalers, which is a cure for anxiety. Nvidia off by 1.6%, which invests an awful lot now into CoreWeave, but also, of course, is a supplier of its chips. Across the board, we're in the red. Let's get to CoreWeave after it raised $1.5 billion in its IPO. The shares are expected to begin trading today on the NASDAQ. Look,

the latest is that they priced at $40. We're seeing that perhaps at the moment they're indicated to open at $45. Katie Roof joins us now. This is such a litmus test, not only for the AI trade, but the IPO trade too. Exactly. It's been a really tough few years for tech IPOs. And this is supposed to be the one that was going to kick off a slate of maybe seven or eight venture-backed IPOs for Q2. And they're all

watching this to see how it's going. And so far, it's not going well at all. They downsized the size of the IPO considerably and they priced significantly below the range. Both of these things are generally seen as very negative indicators. So instead of raising $4 billion, which they originally aimed to, but just a month ago, they raised $1.5 billion. All of this is

to continue to put more AI data centers out there, but also it's about paying down their debt. And this is perhaps one of the idiosyncratic risks that comes to CoreWeave because it is a unique asset to be investing into. Sure. And so, you know, it's hard to say if really this is skepticism about CoreWeave

itself or about the market in general. And so it could be, yeah, concerns about their debt, concerns about, you know, maybe even AI getting overvalued. I mean, certainly there's a lot of investor enthusiasm about AI, broadly speaking still. But maybe they thought

that there would be even more enthusiasm than there is. It's hard to say what the market's concerns are right now, but it's tied to a hot company like Nvidia and it's going public at a time when last year's tech IPOs actually went fairly well.

Timing seems to be the brutal issue here. Nvidia had to come and step in basically and say, I will take $250 million of this. I will secure and put a $40 price bottom in on it because I'm a key client and equally I'm a key investor. They got about 6% of the holding of the equity. That is such a

bad signal. Who else is impacted by this? Who are the VCs that got in late on this particular name? Well, so Magnetar, a hedge fund, is actually the largest shareholder here. They got in early, didn't they? They've been supporting for a while. Yeah, sure, sure. But you also have

other names like Kotu is involved. But interestingly, of the top shareholders, and I looked at the cap table, there were no VC names above 5% in that ownership. And so while it is venture-backed, certainly some unusual players here are the owners. Some crossover funds, some

strategic investors to say the least. Katie Roof, such a great job across the Venture Sphere. You want to tune in later to this hour for our conversation with Corweave's largest institutional investor, that is Magnetar. The senior managing partner, David Snyderman, is going to be joining us to discuss. But first, let's get back to the markets and what this signals for. Ipek Oskardeskaya is with us, senior market analyst at Swisscoat.

All eyes from the public markets are on this listing, not just private investment that matters, but the ongoing AI narrative is kind of in the breach here. Oh, I think we have a technical issue. Are you muted?

Oh, how technology fails us at times. We'll get back to Ipek in just a moment, but we want to be discussing with her just how we've got this pushes and pulls as to ultimately what the demand side is for AI capacity at the moment, but also demand side for AI generative products. Let's just bring you a tweet that I noticed, a post, as I'll say, coming from one Sam Altman, who's been discussing the fact that we're also rushing to use the latest formation of ChatGPT and the image generator that we're seeing, as he calls it, a meltdown.

of GPUs at the moment. So much demand for his compute capacity. Let's get back to Ipek because herein lies the quandary for the market. We are questioning AI infrastructure, whether we're in a bubble and whether or not we should therefore be backing CoreWeave or not. On the other side, you've got Sam Altman seeing such success for the latest product announcement from ChatGPT that his GPUs are melting. So what's your take right now?

I mean, yes, the core means IP is clearly not coming at the right time in terms of market appetite because it's coming at a time when investors are increasingly worried about whether there is an oversupply in AI data centers and AI supply overall, while demand looks like it's not growing as fast as many have projected. But on the other hand, the news actually come in and they are encouraging. There is a great adoption of AI technology

in technology and this adoption is also expanding toward the non-technology focus of the market. It is also happening in China and across the world. So yes, there are a lot of doubts about whether the AI adoption is happening at the desired speed. On one hand, the big technology companies, they keep ensuring the markets and investors that this is happening. And on the other hand,

we see some slowing in the pace of what you would expect to be a strong growth in terms of market valuation. So there are a lot of doubts right now, and GoView is actually going public in the middle of

of a jungle of doubt. Ipek, we'll have to leave it there with some technical difficulties with your sound, but we thank you so much for your perspective. Ipek Ossorgeskaya, of course, happy weekend of Swiss Quote. Coming up, the tech industry warning President Trump's tariffs could undermine his own policy agenda. Jason Oxman from the Information Technology Industry Council is going to be joining us on that. This is Bloomberg Technology.

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 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 can build with confidence, knowing that Microsoft 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.

Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? A combination of financial services and generosity programs. Thrivent offers advice, investments, insurance, banking, and generosity, as well as resources to fund service projects or direct dollars to causes you care about. With more than 120 years serving clients, you can plan your finances with confidence. Visit Thrivent.com to learn more. Thrivent.

where money means more. When your company has a position to fill, are you really seeing the best professional candidates? Sure, you get plenty of resumes, but you may be missing an untapped resource. Ideal candidates not currently job searching. People not actively looking, but who may be open to the right opportunity. It can be the difference between a good hire and a great hire.

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com and see how the recruiters, with a deep understanding of the experience and expertise you need, can find the right fit for your business. After all, you deserve to see the best candidates, both active and passive. Whether you're looking for a long-term or project-based professional,

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com right now to get started. That's srgpros.com. Specialized Recruiting Group, a tailored approach to professional hiring. ♪

The tech industry has been warning that trading restrictions on chips passed during the Biden administration, the so-called AI diffusion rule, but it could hurt US companies at a time when tariff uncertainty is already creating headwinds. Jason Oxman, President and CEO of the Information Technology Industry Council, is the person to talk to about this because we know that Nvidia and Oracle are coming and joining your industry group at the moment, hoping that you'll help navigate a policy quandary that's upon us right now.

Ultimately, they don't want the AI diffusion rule. Why is it a bad thing, Jason? Well, it's a good concept and the execution is enormously complex. As you noted, this was a rule that was adopted in the waning days of the Biden administration. And under normal circumstances, our communication to the Trump administration would be that Biden administration rules need to be rethought and redone. And this is one of those examples.

The challenge here is that the concept of denying the Chinese Communist Party and the Chinese army access to the latest generation of AI technology from American companies, well, that's a good idea. It's a national security issue, and we want to do it in the right way. But the Biden administration did it in the wrong way. They did it without consulting industry. They did it without technology.

coming up with a roadmap for success and perhaps most importantly, they did it by punishing American allies around the world by denying them access to AI technology at the same time. So what we're asking the Trump administration to do, let's start over. Let's do this again. Let's consult with industry. Let's get this rule done in the right way. Did they really not consult industry at all or did they just consult the wrong people in industry from your perspective?

I know it's easy for industry to say we weren't consulted properly. In this case, it is honestly the case that they did not consult us at all. And this rule was released seven days before the end of the Biden administration. They really wanted to rush it out the door. They'd been working on it a while. They ran out of time, and they did it without consulting industry. And the reason industry consults

a consultation is important is not just because we think we have good ideas we do but it's more important to make sure that the rule is done correctly so that american industry is not punished and the most important goal of ensuring that america continues to dominate ai worldwide which is a key tenant of the trump administration that's what we want to make sure happens when the rule is redone so let's think about a more perfected rule here as you say the ultimate goal of ensuring that

very sophisticated chips doesn't get into China's hands, for example, you think is the right one. How do we get there without hurting the middlemen that are the wrong middlemen to hurt?

Yeah, I think there are two things here. One is the way in which the rule was put in place by the Biden administration. It actually imposes caps on every country in the world and their ability to get access to AI technology. 17 countries in the EU are in the so-called Tier 2. There are three tiers here. Tier 3 means anybody can get whatever they want. Tier 2 means there are restrictions. Tier 1, you can't get anything. Tier 2 for 17 countries in the EU means they're capped on their ability to buy AI technology.

technology from the US. Why? Not because we're worried about them, but because we're worried about enforcement mechanisms. So what the Trump administration could do is work and negotiate with our allies around the world to make sure those enforcement mechanisms are in place to deny the Chinese Communist Party access to this technology. That's the first thing I think is important.

The second thing I think is important, and again, this is why industry consultation is important, is China is a market that is huge. It's one and a half billion people. A lot of stuff is made there. A lot of stuff is sold there. If we deny China access to all American technology, the only message that delivers to China and, frankly, to other countries around the world is maybe China should make this technology because they're going to make it available without restriction to the rest of the world. So we want to make sure we don't...

ironically incentivize the Chinese technology industry to start making inroads and harm American interests around the world as a result. Jason, has that horse already bolted? From what we see with DeepSeek, that was in the case of lack of access to sophisticated chips, they found a workaround.

Well, they did, and I think there are a lot of questions about DeepSeek and just how well it was put together, how functional it is, and whether it was programmed in part with American technology. And we'll see more about that going forward. But I think there's no question that U.S. technology isn't dominant and doesn't continue to be dominant.

the real only open question is how long will that last and if we deny American technology companies access to international markets and partners that handicaps our ability to continue positioning the United States as a world leader in AI Jason is not just the AI diffusion rule that has many investors

concerned. It's also just tariffs, more bluntly, coming in as a weapon. We've just seen what's being... Oh, I think we've just got some breaking news that I want to go to, that President Trump and indeed now the leader of Canada, Carney, have agreed to meet after Canada's election where Mark Carney is now the leader. So just a bit of breaking news there from the geopolitical front.

with Trump and Carney meeting, Jason, and this is to do with that very thing of tariffs. At the moment we've seen how autos have been in the eye of the storm when it comes to Canadian tariffs, when it comes to Mexican tariffs. But we understand that semiconductors are going to be coming into place when we think of Liberation Day in early April. How much is that a fixation of the market?

Well, the president has suggested that semiconductors perhaps won't be subject to tariffs. And I think this raises the broader question of certainty for business. That's what business needs. It needs certainty. And we're only, what, nine weeks into the Trump administration. A lot has happened. He's moving very quickly. And the tech industry is responding very favorably to the Trump administration's call, the president's call.

to bring manufacturing back to America. The very first business announcement made in the White House, literally less than 24 hours after President Trump's inauguration, was three ITI member companies, SoftBank, Oracle, and OpenAI, announcing a $500 billion manufacturing project in the United States. We've seen TSMC announce another $100 billion investment, Apple $500 billion, even international companies, Siemens and Samsung,

Schneider Electric have announced multi-hundred million dollar investments just in the last few days. So it is happening. The tech industry, really more than any other industry, is responding to the president's call. But to your question about tariffs, I think it's really about certainty. Tariffs can be a tool, and we'd like to see the president continue to exercise his skill as a business negotiator, which he does very well, and strike deals. And trade deals in particular are important.

Tariffs are a path to trade deals. The president during his first administration did a terrific job of entering into trade deals around the world with China, with Mexico, with Canada, with Japan and others. We'd like to see those trade deal negotiations move forward and replace the need for tariffs so we can have that business certainty and access to U.S. markets and international markets that American companies need. Jason Oxman, thanks so much for joining today from the Information Technology Industry Council.

Meanwhile, it's time now for Talking Tech. And first up, India reveals a $2.7 billion plan to subsidize the production of electronics components, covering parts used in displays and camera modules and some circuit boards. The Indian government says the program is expected to attract nearly $7 billion in investment and could help some companies pivot.

away from China. Plus, shares of Oracle, they're trading on the downside today, along with the rest of the market, but the US Department of Defense said it's terminating a plan to use Oracle software in maintaining its civilian workforce as part of the Pentagon's cost-cutting efforts. Defense Secretary Pete Hegseth says the program ran six years behind schedule and was more than $280 million over budget. Speaking on Fox News, Elon Musk says his Doge team is well on the way to slash the US deficit and weed out Ford. Take a listen.

to reduce the deficit by a trillion dollars. The government is not efficient and there's a lot of waste and fraud, so we feel confident that a 15% reduction can be done without affecting any of the critical government services.

But the swift action by President Trump and Doge to fire workers, cut costs at the IRS, for example, are creating temptation amongst taxpayers to cheat. Tax professionals and former IRS commissioners are sounding the alarm bells, saying the administration's actions could actually embolden people to commit fraud on their taxes or simply not pay them.

Chinese EV automakers actually saw a market share drop to a two-year low in Europe. According to Research and Data Force, less than 7% of EVs registered in February were made in China. That's despite an overall jump in European EV demand. Bloomberg spoke with Sigrid de Vries, Director General of the European Automobile Manufacturers Association, about the impact of tariffs on the autos industry.

This comes on top of already very challenging times. We're at a watershed moment for industry in the midst of a huge transformation and fierce competition. And yeah, this is very disruptive. And we really hope this can still be averted. For more, let's go to Bloomberg's Anthony Palazzo. Anthony, I thought that Chinese EV makers were being brought up a storm over in the UK and Europe, but it seems as though the tariffs are having an impact.

Yes, that's right. And with all the news around President Trump and his tariffs, it's easy to forget that there's trade tension between the EU and China.

The Chinese companies have been really making an impact here in Europe. They've been doing it for probably the past five years. And all of that came to a halt around the middle of last year when the EU introduced tariffs on Chinese-made products.

electric vehicles. And that's put a dent in that growth and really held it at a stalling rate for about the last past six months. And for February, we see that it's actually gone down. And as you said, despite a

an increase in the number of EVs being sold in Europe, the number of Chinese-made EVs has gone down. What's interesting is we know Tesla hasn't been benefiting either. Their sales have been on the downward trajectory. But is it local European makers of EVs that do well, therefore? Right. And that's the other irony of this whole situation, is that Europeans have largely started to turn away from Tesla. They don't like the way Elon Musk...

has been conducting himself and intervening in German politics. And so that created an opening, and the Chinese automakers, by and large, have not been able to fulfill it

And at the same time, the European automakers have come out with some new models. There's some smaller ones made by Renault. There's a larger one made by Volkswagen that's really come out and done well. And so the local carmakers have really done well.

Anthony Palazzo, thanks for the update on all things EVs. Meanwhile, returning to the White House, is dismissing the disclosure of Houthi attack plans being exposed in messages through Signal as a glitch. But experts are arguing information in those chats could have given priceless information to foreign adversaries. Bloomberg's Jake Blyberg is here to really articulate what is it within these messages that are significant?

clearly detrimental to US and indeed that spies cannot wait to get their hands on? Yeah, it's a good question and it takes really sort of a close parsing of these messages. It's something we've seen current and former security officials doing. And one of the most important things that has raised questions about the security here is this reference from National Security Advisor Mike Walsh

to sort of surveillance or some type of view into the movements of a particular Houthi sort of military leader. Top missile guy they call him. Yes, exactly, who Waltz refers to as a top missile guy. And what...

What he suggests when we talk to current and former intelligence officials is that the U.S. had some sort of oversight, whether it be signals intelligence or aerial oversight or actually someone on the ground who was observing this person. And that...

that's a really valuable clue to foreign adversaries who might be trying to understand U.S. military operations. Meanwhile, Attorney General Pamboni goes on time and time again to say sensitive information not classified was inadvertently released. We go back to the technology side of all of this, though. Is it music to adversaries' ears that signal is being used whatsoever? I think it probably is, especially for this type of

highly sensitive operational information. The thing to understand is that while Signal makes strong and credible claims about its end-to-end encryption, where that information ends is on a device. And if that device is infiltrated, if that device might be in a foreign country where it can be attacked by foreign spy agencies, it's still vulnerable there.

It might be secure in transit, but once it arrives on your phone, it's still vulnerable in the way anyone's phone is vulnerable. It's a story that's going to continue, and we thank you for tracking it for us. Jake Ryberg on the security implications of using that signal device.

Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York. Let's get a check on these markets. We are once again in sell-off mode to end this week. It is a down week. We're currently off by 1.7%. But those declines were accelerating on this Friday. We're currently off by almost 2% on the NASDAQ 100. Amazon, Microsoft, Apple, Nvidia, Meta, Google...

basically a who's who of the magnificent seven are leading us to the downside. Very few stocks are currently in the green. And this, of course, on a key day and test for the market when it comes to IPO appetite, but also artificial intelligence appetite. Let's get back to CoreWeave. I'm pleased to say Bloomberg's Ryan Gould joins us, who has been tracking this IPO, the intricacies of the pricing that looks like it's going to price at about maybe $42.50, maybe $45 is where it's indicated it priced at 40, but might trade higher.

But this has been a torrid time, and you've just spoken to the CEO. Yeah, so I just got off the phone with Michael Entrato, the CEO of Corweave. Obviously, a very eventful week to them. I think they're relieved to kind of get to this point now where, you know, the letters have been signed. They're looking to open shortly, as you say, indicated 45-ish.

Some of the big takeaways, I would say. He's saying, Michael and Trader is saying that, you know, we saw yesterday NVIDIA came out and said that they're going to anchor this IPO, a $250 million order. Without NVIDIA coming in, Mike and Trader says that this IPO will probably not have got over the line, which I think is quite a statement. I mean, you know, I think there's obviously a lot to be said here about them coming in and validating sort of core strategy. They're clearly a big customer. But I think just putting that out there, it gives you a sense of kind of the market dynamic here.

to have a customer like Nvidia coming in and saying, "Okay, we're going to get behind you." Without them, this out here wouldn't happen. I hate to be cynical, but Nvidia could be seen to be just protecting, A, its demand, but also protecting its own investment. They were already a 6% holder of CoreWeave, right? I think that's probably fair, yeah. And I think, you know, in a week where Nvidia has also been down and under some pressure, I mean, I don't want to sort of put words in anyone's mouth, but it's kind of like, you know, let's help out a friend.

That's what it comes across in some way. And I think, you know, just given how fundamental CoreWeave or NVIDIA is to CoreWeave, I think it probably makes a lot of sense for them to have come in with that kind of statement. Yeah. But I think, you know, there were some other headlines as well, as we talked about this week. I mean, the Microsoft headlines sort of distancing themselves from some data center infrastructure. Coming from TD Cowan, yeah. Yeah, I mean, you know, it's been a rough week. It's been bruising, and I think the guys over at CoreWeave are very relieved to get to this moment.

perhaps some of the bankers are too. The question is how the rest of the IPOs unfold. Ryan Gould, it's been a busy day for him. We thank him for joining us.

Meanwhile, let's just talk about a company that did recently have an IPO, not too long ago, social media platform Reddit. It can't actually shake off its gloomy sentiment right now. Shares of the company have fallen 50% from February highs as it struggles to recover from its earnings report that revealed it lagged in digital advertising among peers. The company also said it took a hit in traffic due to changes in Google Search's algorithm. Now, Reddit also faces some additional scrutiny as its early investors reach the end of their lockup periods.

basically putting further selling pressure on the stock. We'll see as and when that lockup ends, if they do indeed sell.

Now, the race to invest in AI companies is actually still on. Amidst this anxiety about too much capacity, we're seeing new billionaires being minted, according to analysis from Bloomberg. Here to tell us all about it is Bloomberg's Tom Maloney. Put aside Corweave and the anxiety, no matter what, Michael Entretia is now a billionaire, so is the co-founder, and there's a long list of new AI billionaires. Three billionaires, three billionaire founders coming out of Corweave.

And looking at that, we decided to use it as an opportunity to look at other fortunes being made in AI right now with these sky-high valuations. So 29 founders we looked at across eight companies. Collectively, they own stakes that are worth or soon to be worth $71 billion.

The who's who of the startups, some of them unsurprising, some of them, like, I mean, we know Perplexity, for example, has got that sort of evaluation. What's interesting is some of them are open AI alums setting up their own companies, not yet even with products, and they're worth so much money. Maria Marati, for example. Yeah, absolutely. You know, look, a couple of these companies I'd never heard of. Thinking Machines Lab, you just mentioned. I mean, that's a brand new company, no product.

products, OpenAI, Illumz, looking to raise a billion at a nine billion valuation. And then Safe Super Intelligence, again, OpenAI, Illumz, less than a year old. They're already sitting on a $32 billion valuation. So just kind of

really insane numbers out there. Clearly, there's a lot of love for the use of generative AI, even if perhaps the capacity for it is not being too loved on this day. Tom Maloney, great to have him. Meanwhile, coming up, Silicon Valley veterans set their sights on outsiders. The co-founders of Long Journey Ventures join us to talk about their firm's strategy. There's a little bit of magic, apparently. This is Bloomberg Technology. ♪

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 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 can build with confidence, knowing that Microsoft 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.

Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? A combination of financial services and generosity programs. Thrivent offers advice, investments, insurance, banking, and generosity, as well as resources to fund service projects or direct dollars to causes you care about. With more than 120 years serving clients, you can plan your finances with confidence. Visit Thrivent.com to learn more. Thrivent.

where money means more. When your company has a position to fill, are you really seeing the best professional candidates? Sure, you get plenty of resumes, but you may be missing an untapped resource. Ideal candidates not currently job searching. People not actively looking, but who may be open to the right opportunity. It can be the difference between a good hire and a great hire.

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com and see how the recruiters, with a deep understanding of the experience and expertise you need, can find the right fit for your business. After all, you deserve to see the best candidates, both active and passive. Whether you're looking for a long-term or project-based professional,

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com right now to get started. That's srgpros.com. Specialized Recruiting Group, a tailored approach to professional hiring.

Time now for VC Spotlight. Today, we're talking to investors with long histories in the sector who say they are looking for founders who don't fit the typical Silicon Valley model. Cyan Bannister, Lee Jacobs are co-founders of Long Journey Ventures. It's got $450 million in assets under management. Magic, it seems. And Lee, I start with you. You're second believers in the magically weird. What does the second believer bit mean?

Yeah, great question. Thanks for having us. The second believer is, look, it takes the founder to have a lot of belief in themselves and what they're up to. And our role is to identify that belief and just be right there next to them at the very earliest stages. We're talking about backing companies,

before they really have a product. In a lot of cases, it's just two people in a room. And our role as the second believer is to be there for them and believe with everything we have and have them build the future that they imagine. You have phenomenal background, Cyan, coming from Founders Fund. You say you're addicted to this early stage investing. But you also talk about sort of backing entrepreneurs that are absurd or have at least absurd and unconventional ideas. Have you ever backed anyone

back to anyone whether the idea remains absurd or do they all end up becoming conventional wisdom? Well, obviously you don't get everything right and so some things do maintain being absurd. Is there an example? But eventually...

Well, there's a lot of examples that continue to be absurd. You're basically too early and you're not right about timing. But some things, you know, they end up becoming consensus investments and you end up seeing them on your show on the Bloomberg terminals. But we like to get...

ahead of it and invest in them early when it's not a thing and there hasn't been a term coined for the whole space yet. But eventually it does. I mean, Lee, I think of many would have thought sending gigantic rockets that then you can reuse and even catch. The boosters of would have seemed absurd a long time ago, but you helped with early checks into the likes of SpaceX, Uber, Anduril. Lee, is there a consistent factor in the companies that you're backing?

Yeah. All the businesses that we back at the stage when they're really absurd before they become consensus are independently derived. The founder has followed their own curiosity to something that no one else sees. I like to say they're in a room by themselves, and that's a really good sign. So our job is to be in that room with them and to show us the future they see. So yes, Andral and all these businesses that Cyan and us have all backed were absurd. It sounded crazy.

But now they're here on Bloomberg TV. So, yeah, they enter the mainstream over time. And our role is to be there for them as they tell us the future. So the main theme is just independently derived and derived with curiosity. San, we were just seeing a list of portfolios, companies that you've backed in prior, funds.

companies that you back now. I'm interested in Crusoe in particular because this is about data center capacity, AI infrastructure, but doing it with the climate in mind. What drew you to that company in particular?

You know, I'm actually going to toss this one to Lee. I think he deserves most of the credit for Crusoe. He was the first check into Crusoe ever and saw this company before anyone else did. And he actually brought it to me at Founders Fund. And it's how Lee and I actually developed some of our working relationship. I think it would be best for him to answer this. He deserves all the credit. Lee, go into this moment, given we've got a day where CoreWeave is going to the market. And many are questioning the need for AI infrastructure. Are you questioning it?

No, not at all. Crusoe is a really special business. Yes, we were the second believers in that business at the earliest stage. What they saw, what Chase and Cully saw initially was a real need for energy and a real need for actually building these data centers in very difficult places. And that, you know, CoreWeave is a great business. We're really excited about the space in general. We believe Crusoe has a different business model.

and a different opportunity ahead of it where they really have focused on energy from day one. And as we know, energy is the real bottleneck for what it takes to build a great AI application and build these data centers. So we're really thrilled. Sam, you've built a very unique space within which you work. You've built a unique philosophy on the way you invest. And you've got your fourth fund, I think it's $181 million in excess of. How are

How are you thinking about where the talent is that you back? Are you all about West Coast, where you currently sit? Are you thinking about outside of that particular area of Silicon Valley? Yeah, we're location agnostic. We have venture partners all over the world. We have a venture partner, Pascal Levy-Garbois, who's in France. We have Justin Meyers, who's in Austin, Texas. We're always looking to expand the team. We punch above our weight for our fund size. You know, magical founders exist everywhere.

And what we're looking for are people who are just thinking about how they're going to fundamentally transform the future for humanity, and they're thinking about very big ideas. And so we like to think six to seven years ahead. Going back to Crusoe, we identified that energy was going to be needed for crypto as well as AI before AI was even a space.

And so that's what we're doing right now is we're thinking about what comes next. And so while everybody's investing sort of in the Cambrian explosion of the application layer, we're thinking about what does this enable six to seven years from now. And so we're already looking at things like biotechnology, nanotechnology, et cetera. And you can always count on long journey to be thinking about the future because it's a long journey before they ever end up on NASDAQ.

You know, we have to be able to see this idea when it's just a napkin and a bunch of people in a house potentially and give them their first check and believe in them. House, garage, room. You've got roughly 130 companies, Sayan, that you've backed thus far. That's a lot. And I'm thinking about how you're attracting the LPs into fund after fund. What do you think is the ability to weather what has been a tough time in the VC market?

Well, we're very differentiated. I think that our LP base sees that when they look across all of their fund managers. They're seeing that there's not a lot of duplication because we're looking into the future. We're finding people that look absurd and so everybody's passing on them.

And so, you know, when you have a crazy idea about the future, if you think about Uber, when they went out to pitch Uber, everyone said to me when I tried to pass that deal on to my co-investor, you know, my colleagues, no one's going to get in a stranger's car. You look at Airbnb, they said no one's going to stay on a stranger's couch. If you look at Niantic,

They said no one's going to catch invisible Pokemon. If you look at SpaceX, they said no individual in the private sector deserves to launch rockets into space. The list goes on and on. So I'm looking for, you know, one of my ex-colleagues, Jeff Lewis, liked to call it a narrative violation. And that's how he coined it. But that's what I'm looking for are, you know, things where I have a firm belief and I can see the future.

and no one else can, you're going to get a pricing advantage. And we continuously bat above average and we're doing incredibly well and our LPs see that. And so I know it's a competitive and a tough landscape to raise right now, but I think our LPs are very excited and continue to be in what we're doing. Who doesn't love a little bit of absurd? Simon Bannister, Lee Jacobs, two of the co-founders of Long Journey. Thanks so much for joining us today.

Let's return to CoreWeave's IPO. I'm very pleased to say we're welcoming David Snyder, a managing partner of Magnetar. It is the biggest institutional investor of CoreWeave, long-term backer. I've got to ask today, I mean, the timing, how do you feel about it? Well, first, thank you so much for having me. And this is an exciting day for Magnetar, for our investors, and especially for our partners at CoreWeave.

For us, this is one step in a long process and a beginning step in that process. Sentiment and timing, it's really about execution of the company today.

And will you therefore remain a long-term committed holder even as it goes public? I know you've exited a little bit on this particular liquidity moment. We actually have not exited at all. We've bought in every round prior to this and we remain committed to the company. This company is, they're the gold standard now for AI infrastructure. So as this transformation happens,

They're the picks and shovels of this industry. When we invested in them, I think they had $12 million of revenue at the time. What year was this? This was only four years ago. This past year was almost $2 billion of revenue and climbing quickly. So it's pretty incredible what they've done. It's a great management team.

In many ways, the timing hurts because of the narrative that we get bombarded with. Joe Tsai saying there's a bubble in AI capacity. We've got TD Cowen trying to point to Microsoft for moving away from data center leases. How do you feel about AI capacity right now? You know, it's funny. We read and hear the same stories, but it's not what we see in the actual business. The business itself has insatiable demand. They can't keep up with the demand of the business, which is why it's so exciting for us. And, you know, I...

I'll walk you back to how we think about it at Magnetar. We watch earnings reports of all the major companies and we add up CapEx, but where does the CapEx actually go? It goes into these innovative companies like OpenAI. And then OpenAI, you see the revenue traction. They announced, I think a couple days ago on Bloomberg, that they were $4 billion last year, and I think it's $12 billion this year and $27 billion next year.

I think that's one company in one sector. You start to add up all of that revenue, and what people don't understand about compute is it's the single biggest driver of the expense structure of these companies. 30 to 70%.

of revenue goes directly to pay for compute. Right now, Coreweave's the gold standard for that market. Before, I've got to ask you about OpenAI a little bit more, but what's so interesting is the way you've done it is your lending, and your background's fixed income, so you know all about lending, your equity provider. Why go so across the capital structure of a company like this that ultimately only has...

a limited amount of ultimate customers, the hyperscalers? Sure. Well, first, their customer base is growing quite quickly, so we'll hit on that in a second. But for Magnetar, what we're really good at is lowering the cost of capital for capital-intensive companies. And so we haven't been in technology near as much in the past, but now we're seeing them cross. Now technology is capital-intensive.

Technology, for AI to be effective, you need GPUs, you need energy, and you need real estate. Three of the most capital-intensive industries on the planet, and people like Magnetar can come in and really help companies and partner with them and lower their cost of capital. For us, we want to participate across the capital structure of these companies.

You mentioned customers. A big lease was signed with OpenAI by CoreWeave. Interestingly, OpenAI now has exposure to CoreWeave shares on the back of that as well. But I want to bring you the latest post out of Sam Altman because he's saying, look, the frenzy to get hold of the latest image generation chat GPT is, quote,

GPUs are melting. Tell us about OpenAI and your bet there. You're coming in when their valuation is $300 billion with a sizable investment. Is it about $1 billion you're coming in? So that was reported that we're looking at the investment. And we are looking. We love the company. We love management. They're doing a great job. That's in our investment committee right now. But we're also looking at many other companies across the sector. So that investment has not been made to date.

Tell us therefore where you are looking and where the value accrues. You say you're about capital expenditure, so it must be on the AI infrastructure layer and the large language model layer, but everyone's getting excited about the applications. Would you go there? Yeah, for us, we're really focused on capital intensity, businesses that need to drive down their cost of capital. That's where we can be a value-added partner, and we can be a value-added partner not just to companies, but to venture firms who aren't used to looking at this type of capital intensity.

You've obviously been in Corwee, for example, for a long time. We have, four years. And you're going to stay with it through the public markets. Yes. How do you think they now need, and Mike and Traytor now needs, to talk to the market about insatiable demand? At the moment, we're worrying a little bit about the amount of leverage. We're worrying a little bit about

ultimately how they have financial controls. This moment of being public, what does it mean in terms of how the business is run? Yeah, I think there's been some misconceptions in the marketplace about the debt load. You know, if we go back to real capital intensive businesses, people take orders and bring it to the bank and the bank lends them money to fulfill the orders and they pay back when the orders come. That's exactly what

Mike and his team have done on their financing journey. And so in order to get the most efficient cost of capital, if you get long-term contracts, which they have with companies like Microsoft and OpenAI, those are readily financeable in the marketplace. And Microsoft's not pulling away?

Not only is Microsoft not pulling away, these are take or pay contracts. Microsoft has contracts for many years and they'll continue to pay every month. In my mind, it's sort of like we go and release a car. Of course, it depreciates the day you leave the lot, but you still owe for four years on your car lease. That's the same thing here.

I think, again, these companies need a ton of compute right now. The best provider of compute for all of these companies is CoreWeave. I'm so interested in Magnetart. You're in everything at the moment that's interesting to our audience. So where do you now focus? You just told us about it's about the capital expenditure element. Are there regions that you look to? What is the next company? What is the next OpenAI for you?

Sure, we have a lot in our pipeline and we've made hundreds and hundreds of investments. This is our 20-year anniversary, but it's really about a consistent methodical process to invest. We want to understand assets, we want to understand cash flows, we want to understand downside scenarios. So we look a lot different than a normal equity investor. We're very focused on analyzing assets, the cash flows they produce, and making sure companies have the right runway.

Will you promise when it's out of your investment committee, you'll come back with OpenAI? I'd love to. I'd love to. It's great to have you, David Snyderman. Thank you so much. Magnetar Managing Partner. We hope to have him back. Now, that does it for this edition of Bloomberg Technology. Don't want to forget to check out our podcast. You can find it on the terminal, as well as online on Apple, Spotify, and iHeart. From New York, from San Francisco, wishing you a very happy weekend. This is Bloomberg Technology.

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