Meta Turns to Nuclear Power to Run AI
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From the heart of where innovation, money, and power collide, in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde and Ed Ludlow. ♪♪

Live from New York and San Francisco, this is Bloomberg Technology. Coming up, meta goes nuclear and buys nuclear power from Constellation Energy for its AI needs.

Plus Elon Musk selling $5 billion in debt for his own AI startup, XAI, with Morgan Stanley shopping that debt. And we sit down with Drew Baglino, former Tesla executive who's out with his new startup, Heron. But first we check in on these markets and look energy dictating trade in many ways in the tech news. But there's energy in some of the benchmarks. We're looking at the Nasdaq and what

NASDAQ now up 0.6% ED. This is as we see the jobs numbers just coming in, showing resilience for US economic growth, even though the OECD had pointed to some anxiety around growth and the tariff impact earlier today. But you're looking under the hood. What's caught your attention?

Yeah, that Meta nuclear deal. Meta shares slightly softer. Constellation supplying the energy, the nuclear energy, actually really muted gains relative to the big jump we saw in the pre-market when the deal was announced. 1,121 megawatts over 20 years. This isn't just a sizable deal to source nuclear energy for Meta and its data centers. It's bigger than the deal that Microsoft did with Constellation. And it's worth getting into the details on this one, Karin.

And we can. We've got the perfect person. Bloomberg's Will Wade is with us. The context here is important. It is bigger than the Microsoft purchase that we'd seen previously. And what does it allow Meta to do in terms of yet further energy coming from AI from nuclear in the future, too? Well, the thing about nuclear is that it's clean. There's no carbon from nuclear power plants. And wind and solar are clean. And all these tech companies have these really ambitious goals.

carbon-free goals. We're going to be net zero by 2030, 35, whatever. In the last year, their power needs have climbed and they need so much electricity for all this AI, power plants take a long time to build. So suddenly they're like turning back to gas and coal and that's a threat to their green goals. So being able to get nuclear, that's a real win. Well, on the Constellation side, there's a lot of signals here of commitment.

upgrading and updating capacity, potentially building new capacity. What have you learned in your reporting about this company? Yeah, so that's really exciting because we don't have any big nuclear plants under construction right now. The last one was the Vogel plant in Georgia and

they finished it was kind of a debacle. It was seven years late, it was billions over budget, and it really scared people away from wanting to do that again, even though the rest of the country is saying, please build us more big nuclear power plants. The only people that aren't saying that

are companies like Constellation that have to write the checks for these power plants. So if they can line up a customer like Microsoft, like Meta, someone who's going to be willing to help them out on the finances, that's making them have more confidence about building a new plant. And Constellation said exactly that. They have...

an NRC permit that gives them permission to do another reactor at the same Clinton site in Illinois. So there's not very many places that already have that paperwork handled. And so Constellation CEO Joe Dominguez told me last week that, yeah, they're looking at it. They're looking at a lot of different options, but they're seriously considering it. And that's something we haven't heard in a while.

Bloomberg's Will Wade, thank you very much. Let's now expand the conversation. Take a look at the impact of the deal for both the technology and nuclear power industries. Joining us is Jefferies analyst Brent Till. And I've done the math on it, right? Basically, this deal between Constellation and Meta is about 35% larger in total energy terms on constant capacity basis than the Microsoft deal. But it's worth putting Microsoft as an operator, Meta as an operator.

as an operator of data centers into context versus the hyperscalers. What does that math tell you about Meta and what it's doing here?

Well, Meta's playing big for the AI game. They're going to spend over $65 billion this year in CapEx, and they have one of the highest increases in terms of absolute dollar spend on CapEx to fuel this AI generation. So they're a huge player along with the other hyperscalers. Amazon and Microsoft are obviously going to spend more in CapEx, but the percentage increase is the highest increase

And I think what this deal signifies is that we're at the beginning of this AI adoption curve. It's going to take, again, any one, if you will, of a baseball analogy. And this is going to be a multi-decade transformation.

I think when you look at the statistics of this transaction, right, it's a 20-year deal, which puts it at the higher end of an energy transaction. They're paying actually more than they would for other energy. They're not building the data center near the nuclear plant. It's all virtual. So I think they're effectively, as your other presenter mentioned, this is an offset from a carbon perspective, so better for the environment.

And I think they obviously want to get as much capacity locked up as they can before others get to that, to get to that capacity and energy. So I think, I mean, there's multiple things to read in here and look at. From our side, we've talked to our energy team, and this, again, goes to the longer end and longer tail. And obviously they wanted to save this facility. So this obviously gives them a chance to basically take a facility that maybe was going to be shut down to saving it.

Brent, how much anxiety have you had about energy being the blocker here to these hyperscalers meeting the level of demand? Massive. I mean, I'm a tech guy. And again, I was just talking to our energy team before I got on. I mean, who would have thought that at this point we'd all be scrambling to understand energy, real estate. I mean, the biggest bottleneck

to powering AI right now are the transmission lines from the energy companies to the data centers. And these, you know, we've been told by many that are sometimes two or three years backlogged. So

So they can't even – they can get things built, but they can't actually finish the last piece of this because their lead times are so long to get the equipment. So, I mean, we're – again, Microsoft has said this to us many times. When they show up every day, they're like – it is like –

They're on fire the whole day where they just can't sit still because there's so many moving pieces to make this all work. For us to basically hit one prompt bar and say – ask a simple question. What hotel should I stay at in San Francisco based on this budget? Or whatever question you want to ask. But you think about how simple the questions are, but what actually has to happen in the back end is so complex.

And so we're living with massive anxiety, even covering the space, trying to keep up with all the data. And isn't it funny that it feels but a few weeks ago that the anxiety was that they were overbuilding and that the supply side was just getting too much? Is that a thing of the past, Brent?

It's a thing of the past. I think here's the problem. We're doing third grade math and nothing against my competitors, but all my competitors put out a data point. The Ohio data center for Microsoft is, is, is, is on hold. The Wisconsin facility is not coming up live and everyone goes, AI is over. Everyone run for the hills, sell everything. And,

And that's not what's happening. What's happening is we're doing this efficiently, and we're going to move pieces around. But as Microsoft and others have shown, they're making money.

and they're actually generating revenue growth. So it's not about just blowing money and not generating a return. It's balanced revenue growth and profitability. And I think many of the companies that we cover are signaling that. They're going to be pieces that move all over. And sometimes, again, as I said, you can't even find the transmission lines to get to these DCs. So they have to move

to other data centers. Right. And so it's, yeah, it's a giant Rubik's Cube that is super scrambled and I'm not very good at Rubik's Cubes. So we're trying to figure it out.

Brent, neither am I, to be fair. But what you just said makes me want to go back to the 20-year commitment with this particular nuclear deal, because you can either see it as absolute conviction of the need to source energy at those levels long term because of what AI is doing, or you look at it as a hedge, the need for protection to make sure you've got the energy security if you need it.

I mean, I think it's a combo of both. And again, it's a carbon offset, right, from all the other ways that they're generating power. So there's that, you know, environmental component that they have to be conscious of. So I think they check the box on that. They lock up a facility that perhaps was going to go offline. They protect this power from perhaps others that were going to get it. In the AI industry, you know, there's kind of multiple ways

you know, checkboxes, I think they get out of this transaction. As we understand it, it's virtual. There's no, like Amazon and others are doing nuclear and putting DCs near it. As we understand it, this is nothing's near it. So, you know, it's a virtual deal, which again, is unique. So I think there's kind of multiple threads to pull here. But again, I think what this signifies is that

We are really early. It's going to have massive impacts on all of our lives across every industry. And I think they talked about this yesterday. Over the next year, Meta will be able to power full

advertising AI actual campaigns, which means if you run a small business, you can say, I'd like a sidewalk sale for my furniture company. And here are the pictures from the last year. I don't have to hire a videographer. I don't have to hire a creative pro, whatever. You just put the pictures in. All of a sudden it spits out

Here's a sidewalk sale Thursday with the band, the wine, the cheese, and here's the discounts, and here's the video, and you do it at a fraction of the cost. I mean, this is pretty incredible what this is going to do for small businesses. The Meta is enabling the small business economy to find the right customers, to generate the right campaigns. It's a completely different world.

And again, I think we're all trying to have more wine and cheese with our generative AI, Brent. That's what we're trying to do. Jeffrey's analyst, Brent Thill, it's so good to have you on. Just the scale of the ambition coming from Meta. Meanwhile, let's talk about what's happening with Morgan Stanley. It's shopping a $5 billion debt package for Elon Musk's AI company, XAI, according to a source. Now, this is the latest fundraising move by the billionaire who is also tapping markets for fresh equity across his business empire. Kurt Wagner joins us some more. Look, is he

looking to the debt market to finance his own infrastructure build-out.

I have to imagine so, because if you remember, Caroline, XAI has that huge data center in Memphis, which they call Colossus. It was just, I think, last month that Elon Musk was out saying that they have 200,000 GPUs at that site with aims to be more than a million GPUs either there or even at a site nearby. So, I mean, the scale at which Elon is thinking as it comes to XAI and these data centers is very massive. Obviously, as we've talked about and you know,

as well as anybody, this is incredibly expensive stuff. So it's not surprising to me that he's not only out trying to raise this money via debt, but also, as Bloomberg has reported, they're looking to raise money with an equity round as well.

This is a lot of things happening in parallel. You have debt. What was reported yesterday by another outlet is a tender to give employees liquidity, both XAI and X employees, a secondary offering. And then go back to that bit, Kurt. What I'd heard was that as soon as that merger closed, Elon and people like Jared Birchall, his finance lieutenant, started phoning everyone and saying, if we raise some money, want to get involved? That's kind of classic Elon Inc. play.

It is, and this is what Elon does, right? He spends a lot of his time over in government sort of seemingly ruining his reputation and watching Tesla's stock tank. And then at the same time, people are lining up out the door to do business with him in all of these private endeavors. And as you mentioned, right, X, XAI, Neuralink just raised over $600 million. I believe they announced that yesterday.

So, you know, this is someone who, because of his track record, because of his ambitions, usually has no problem getting people to give him money. I think the question is how much and where does it go, right? How useful is it for him? Or is he just raising money for the sake of raising money? I think in this case with the XAI thing, given what he signaled publicly about the data centers in Memphis specifically, I think we can assume a lot of this would go toward building out that project.

Bloomberg's Kurt Wagner, thank you very much. Coming up, an energy startup founded by a former Tesla exec is aiming to transform transformers. We'll talk to the CEO, Drew Baglino, about the company's latest fundraise and its technology next. This is Bloomberg Technology.

Discover how one of China's largest financial services companies serves 240 million customers with AI-powered solutions. Hear from Ping An's co-CEO and chief scientist. We're a goldmine of data integrated to provide tailored solutions to our customers. Public domain tax, 3.2 trillion tokens, 7.5 billion images. Tune in to our technology-powered growth podcast.

Find it at group.pingan.com, Spotify, or Apple Podcasts. 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's security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft.

And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.

Increased electricity demand driven by AI is running up a shortage of transformers. Startup Heron Power has set out to address that bottleneck with solid state transformers that help electricity in its sector scale faster. Its founder, Drew Baglino, is the high profile, long serving and now former Tesla exec who helped shape that company's powertrain, battery and energy product strategy. Delighted to say Drew joins us here in San Francisco.

Thanks for having me, Ed. A lot of people were waiting to see what you would do in your life after Tesla. It is Heron and Heron Power. What is the technology and what's the goal? Yeah, Heron Power's goal is to build grid-scale power solutions to an accelerated and all-electric future.

The technology is basically leveraging the bleeding edge of power semiconductors to go directly from all the new energy technologies that are out there. They're all DC. This is solar, batteries, data centers. And they got to get to a grid which is AC, alternating current.

And we're going to do that without transformers, fully with power electronics, high frequency modular power electronics that we're designing here in California. You were talking about the cutting edge of semiconductors in that field. We often, for example, talk about silicon carbide on this show. Yeah. But I wondered if you'd just give the backstory. Did you design this technology? Are you working with someone who did?

We're developing it in-house. We're taking the best known topologies for advanced power electronics. There's a lot of great academic work actually in this space and applying them to the grid scale power electronics problem.

Historically, the way it's been done is you have a low voltage converter, inverter, rectifier, has lots of different names, going from somewhere around 1,000 volts DC, that's what batteries are, that's what solar is, data centers will be in the future. In fact, on this show, NVIDIA talked about 800 volt power electronics in their data centers. He did, yeah. And you'd go through a low voltage inverter, so you'd end up with AC at 480 or 600 volts, and then you need one of these old school converters

grain oriented electric steel, oil filled transformers to get up to 34,000 volts. And we're going to do it directly without the use of a transformer. Drew, who is it you're disrupting here at the moment? Is it old school electricity players? Is it the Schneider Electric? Is it the Siemens? Who is it that you're really taking on here?

Yeah, I think we're trying to provide a more efficient, more compact, more scalable solution. And there's actually a lot of players in this space. You've got switchgear providers. You've got lots of different transformer providers. There's a lot of, honestly, like no-name power electronics providers and some bigger name players. And so it's a little bit of everyone, I would say.

But really, when I zoom out, electricity growth is poised to triple over the next couple of decades. And that's not just due to AI, but also electrification of vehicles, buildings, everything else. And so there's going to be room for many players to support this growth.

Drew, give us that wider context, because we started off the show by talking about meta looking and locking in nuclear energy for its future AI needs. How much of a bottleneck is energy? How much of a bottleneck is just the infrastructure that you're trying to rework? How much do we blame, well, incidents like the Spanish blackout on not modern enough infrastructure? Yeah.

The electricity sector is poised at an interesting inflection point. It's really the confluence of three major trends. First, you've got demand. For the first time in decades, there's actually robust electricity demand, and that's due to a number of factors. You've got electrification of buildings, transportation. You've got AI. You actually have a lot of new manufacturing load, which is exciting to see that coming to the United States and other developed countries. On the same time, you've got supply. In fact, abundant, clean electricity

renewable energy is growing at explosively, to be honest. In 2024, over 500 gigawatts of utility-scale solar was deployed. That's over half a trillion of capital investment in solar that year alone, and that number was up 30% year over year. So massive increase in abundant potential supply. And then the last thing is aging infrastructure, especially in the developed economies.

You know, over half of the infrastructure that's out there is over 30 years old. Some of it's 40, 50 years old. But that begs the question, Drew, so to interrupt, who is your customer? Yeah. If you want to fix the entire grid, who are you selling to? Initially, we're selling to energy project developers and data center developers. Data center builders, like who? Yeah, so actually we have letters of intent signed with Crusoe. Interesting. A leading...

AI data center developer and cloud services provider. And we also have a letter of intent signed with Intersec Power, one of the largest renewable energy developers. - You're working with Google. - In the US, I think. - They are, yeah. - I've got to ask you how you view Tesla's energy business, right? In the context of Heron, you're an alumni, but do you expect to work with Tesla on the kind of storage and solar side?

Certainly possible. We haven't had discussions, but I look forward to having discussions in the future if it makes sense. But the door wouldn't be closed for any reason. Not that I could see. I mean, again, I think this is a huge problem. It's a massive sector, trillions of investment over the coming years. There's opportunity for everybody. But yeah, I think Tesla Energy has done an amazing job. I mean, obviously, I put a lot of my time in there over the past decade. If you go back to 2014...

Utility-scale storage didn't exist. I mean, residential batteries didn't exist. And now in 2024, over 50 gigawatts of utility-scale storage was deployed around the year and invests capex of like $40 billion. That's massive. And that year itself, I think, was almost a doubling of deployments.

So really at the beginning of the energy storage wave. And I expect Tesla Energy to continue to grow quickly. You were the longest serving person at Tesla, basically behind Elon for a really long time. Would you just kindly share some insight in how it works at Tesla? You were one of sort of three stated executive officers. But the thing that I learned in my reporting is there's a really deep bench of talent, particularly on the energy side at a time where everyone talks about Elon Musk looking elsewhere and being distracted. Yeah.

Yeah, I mean, I'm super proud of what the Tesla team and myself and others were able to contribute to over the past two decades.

Again, we talked about the energy business from zero to nothing, I mean zero to something amazing, but I think we shouldn't overlook the contributions that Tesla provided to the EV space. Again, in 2014, maybe there was 100,000 total EVs and last year 10 million, more than 10 million. I mean, that's three orders of magnitude. It's impressive.

and continuing to grow. And Tesla didn't just do it itself, right? It encouraged many newcomers to enter the space. And I think that speaks to the capability of the team there. You know, it's a really strong team and I look forward to what they continue to do in the future. In fact, I just got a new Model Y and I got to say, it's an incredible improvement over the Model Y I got in 2020 during the height of COVID. Drew Baglino, founder, CEO of Heron Power. Thank you so much for your time on Bloomberg Technology.

It's time now for Talking Tech and first up, Xiaomi's EV business is expected to turn profitable by the second half of the year, according to founder Li Jun. Its Su7 sedan has enjoyed strong sales even in the cutthroat market where rivals have been slashing prices. Taiwan Semiconductor Manufacturing has blamed the traffic

for delays building out its plant in southwest Japan. Company is pushing ahead with plans to expand abroad in the face of geopolitical tensions and rising demand for Nvidia chips. CC Wei, CEO, also reaffirmed TSMC's commitment to spend another $100 billion on its Arizona plant. And Microsoft is cutting hundreds more jobs just weeks after its largest layoff in years. A Microsoft spokesperson said the latest cuts are in addition to the 6,000 announced last month.

welcome back to bloomberg technology i'm caroline hyde in new york and i'm ed ludlow in san francisco the markets caro they are rebounding somewhat ed we had some anxiety around that oecd forecast for slower growth on the back of tariffs but now well it's full steam ahead on the nasdaq at least up six tenths of a percent large thanks to jolt's job openings looking steady the macro picture a good news signal for today but so too as some of the chip performances let's just dig into individual movers nvidia

I mean, a cool $100 billion added in market cap on one day alone. We're up 3.2%. That helps to the benchmark. But so do does a new record high for Broadcom. Look, we've got their earnings coming out after the bell on Thursday. Analysts looking excitedly to their AI products. And look, we just got news of one. Dina Bass, our colleague, writing about Tomahawk 6 chip switches. Switch chips.

This is about making AI accelerators that much more efficient, Ed, and it's leading an acceleration in the stock more broadly. Meta, down 6 cents per cent, but we've been talking all along about the fact that they're turning their attention to nuclear to power their AI desires. You need the infrastructure, and we're seeing a build-out, a 20-year contract with Constellation at the moment. Let's get back to you, Meta.

Yeah, it's our top story. Meta says it's reached a deal to purchase nuclear power capacity from Constellation Energy, all in on an effort to keep up with the soaring demands of energy to power artificial intelligence. Here with more Bloomberg's Riley Griffin. On the Meta side, the Meta beat, earlier in the program we talked about the size and scope, the numbers. This is a bigger energy supply deal than Microsoft did with Constellation. But I think we haven't yet answered the question, why is Meta doing this?

It's a great question and it's worth noting here that this is Meta's largest power agreement to date. While we don't have the specific financials, they've told us that. And really this is about driving power for its data centers, for its AI ambitions, as Meta's demand for this really surges. Let's talk about their ambitions, Riley, because they're now a hyperscaler. Why?

Yeah, they are hoping to dominate the AI race. They're competing not just with social media companies, which they're known for, but with the open AIs and anthropics of the world and the Microsofts. This is a fast moving race. They are quickly scaling. They've said this year that they are going to spend as much as $70 billion plus.

In CapEx, a lot of that dedicated to AI infrastructure. And this 20-year deal is about assurances. While energy will start coming in in 2027, they want some near-term assurances that the grid will remain reliable, stable. And this was an effort to do that in part because Constellation's plant was at risk of closure, according to Meta's head of global energy.

We want to thank you so much for bringing us the latest on all things Meta Bloomberg's Riley Griffin. Appreciate it. Look, let's talk about the theme when it comes to VCs as well. Actually, in the current economic environment, we're seeing them raising funds and some to tackle this new age of energy demand and indeed climate solutions at the same time. Energize Capital just closed its Ventures Fund 3, totaling $430 million to scale digitally enabled climate solutions

Let's bring in John Tuff, managing partner of Energize Capital. And John, speak to the theme that we were just talking of. The need for AI brings through a whole other power demand picture that we're seeing a turn to nuclear. Where do startups come in?

You know, that was the perfect lead in for Energize. The energy demand narrative across the U.S. right now and globally is unparalleled. And, you know, it's the answer to the power, where does the power come from, isn't all of the above. It is natural gas. It is solar. It's wind. It's batteries. It's all the technologies. Energize Capital, at our heart, we're a climate solutions investment firm. We look at investing at the intersection of software and climate. And

And our belief is that there are these amazing megatrends. There's data centers, there's AI, there's energy transition and mobility, there's circular economy, reshoring, all these areas. And generally, we look to find ways to index those megatrends in a capital light way. And the energy transition is the most exciting of them all right now, like full stop. The amount of capital going into the space, the amount of uncertainty and complexity, it will reward specialist firms, it'll reward specialist investors. And that's who we are in the space.

Specialist and emphasis on software, because what we're talking about, right, not just the Constellation Meta news, but Drew Baglino on earlier, right, with his new company, Heron. We're talking scale that's in the billions and billions and billions of dollars. You've raised a really big fund, but you're looking at the earliest stage. How do you find something that's worthwhile when all of that scale of activity is going on?

Yeah, that's a great question. The way we've thought about it is the energy transition is today, and so there should be budget today. We're not looking for these technologies that will be ready in 10 or 20 or 30 years. If you have a great solution in software, we should be able to find a customer for you today that we can diligence.

And so we're actually seeing inverse to some of the public press these days is companies are getting much bigger, faster in the energy and climate transition moment, especially in the software layer where they can scale not just in the US where there's energy demand, but internationally as well, where there may be a few more markets that are more favorable to some of these new technologies. Where are these companies geographically?

Yeah, so historically about a third of our investments have come outside the U.S., but we are predominantly U.S. in terms of where we focus. The U.S. is still the innovation hotbed for the energy transition. What I like to say is that demand requires innovation, and this is the economy of demand.

This is the economy where we're looking for the next generation tools to serve these AI hyperscalers like you mentioned, to serve the complexity of the grid. And generally, if we can solve it here, those technologies do emerge in other areas around the world. Yeah. John, just talk to us about how you're seeing around the world work, how you're seeing the startup ecosystem build out and whether you actually just really want to bring it into home where you allocate the money.

Yeah. So for us, the international markets have been a source of great deals, just as we said before. But fundamentally, even when we partner with those European firms, they're looking for access to the U.S. markets. This is the area of American energy dominance has become the theme. And it's real. There's big budgets. There's firms in the technology space spending more money than utilities in CapEx.

And so what we're doing is we're trying to find these amazing companies who can serve the space, help them scale to 50, 100, 200 million of revenue and beyond, and ultimately be successful public firms.

One of those examples just to hit on at home is a firm called Nira Energy. A great example of energized thesis. We love the concept of a complex energy grid. There's natural gas going on, there's wind, there's solar. And the other side of the equation, we have data centers, we have big new buildings, we have electrification mobility all taxing the grid. Nira finds a way to aggregate all of that complexity and make interconnection queue management recommendations for the grid operators.

incredibly powerful software, AI-based, you know, a why now moment and we're excited to back them. What's interesting, you've been allocated as you talk already from the fund, Nira, Tiber, another one when it comes to battery software, John, but the LPs, you've actually got some energy infrastructure players, old school ones, G even over among them giving you money. What do they want in a minute?

Yeah, so we're fortunate to have this really big swath of LLP base. About 80% of our LPs are institutional, pension funds, endowments, OCIOs. And we're also very lucky to have this kernel of traditional industrial technology firms like GE Rinova.

GE is powering the future of a lot of the energy transition. And so for us, they're a fantastic capital partner and insights partner to help us reach insights into this market in the States and also globally. So it's very much a symbiotic relationship on how we can return great capital returns, but also good insights.

John Tuff, managing partner of Energize Capital. Great to have you on the show. Thank you. Now, coming up, Trump Media has raised $2.44 billion to create a Bitcoin treasury. We're going to discuss the rise of these types of reserves next with Elise Kleen from Stillmark. This is Bloomberg Technology. Remember when a single technology glitch could bring an entire workday to a standstill? I'm Mark Banfield, Chief Commercial Officer at TeamViewer. Today, most technical issues are recurring.

If you know the patterns, these issues can be remediated before they impact your business. One major UK retailer discovered a single point of sale outage cost them around $1 million in lost sales during a single lunchtime. Now, using TeamViewer's digital workplace platform, the same company is able to identify and fix those issues before they even happen. But proactive troubleshooting isn't just about the incremental improvements.

is about fundamentally reimagining how work happens for everyone. And the companies that move first get competitive advantages in terms of efficiency, productivity, and innovation. To find out more, visit bloomberg.com forward slash teamviewer.

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.

Trump Media, the company behind Truth Social, has raised $2.44 billion to buy Bitcoin for its treasury. It's one of a growing number of companies following Michael Saylor's Bitcoin buying model. At Strategy, for more, I want to bring in Alisa Killeen. She's GP and managing partner of Stillmark. What is the logic, particularly if you are the parent company of a social media platform in doing this?

We've seen several companies enter the strategy recently to become Bitcoin treasury companies, Bitcoin acquirers as their core focus. It's important to differentiate that from companies that have added Bitcoin to the treasury for the purpose of diversification or growing the treasury. And the market is differentiating between the two. The relative size of the Bitcoin treasury is important for how it's valued by the market.

So for Bitcoin treasury companies, what we have seen is that the market provides differentiation across a few measures. So first we see the method to acquire Bitcoin being important. Is debt used? Is equity sold? And what are the terms of the debt?

We've also seen that brand and trust in the management team is important. And I think as the space matures, having a Bitcoin business that generates yield across market cycles will also be valued. That's interesting, though, because that name is particularly volatile from its equity perspective, from the stock story. What does it tell you about Bitcoin, you know, that market?

It's held on a balance sheet in Treasury, the long-term view of what will happen with Bitcoin. It says that Bitcoin has really matured. So with the introduction of Bitcoin and the acceptance of the Bitcoin spot ETF, we saw the Wall Street investors really...

Identify Bitcoin as an asset that belongs in people's portfolios, institutional portfolios, and that is different and distinct from other crypto assets. Now, as Bitcoin has matured, the Bitcoin treasury strategy is doing the same. Of course, this is something new, but as multiple players enter, we are beginning to understand how the market will value this strategy.

We've seen the emergence of new metrics, in fact. And in early May, Blockstream's CEO introduced a really interesting metric for evaluating Bitcoin treasury strategy companies and their execution, and that's a pace of MNAV cover.

And so what that means is, well, taking a step back, MNAV is a metric that measures a company's Bitcoin net asset value. It's calculated by dividing enterprise value by the company's Bitcoin NAV.

And months to MNav cover is a measure of the pace with which a company can acquire Bitcoin to justify the premium. So if the market notes that a company has grown their Bitcoin per share 2x over the past 18 months, for example, as MicroStrategy has, that can justify a 2x premium.

Elise, what's interesting is, of course, you've been in this game for a very long time. Not meaning to age you, but like 2013, that was just five years after the white paper on Bitcoin. And you come in starting studying it from an institutional perspective. The store of value we now see being played out in terms of having it on treasury. But what about actually as a decentralized finance use case as well? Because that's where you've been focusing investments.

We've seen companies in the Bitcoin as a store of value and investment space be pulled into providing other services and a more full banking experience for their user base, both for retail users and for institutional clients.

By that, we've seen users demand and successfully receive from these companies tools for lending, for borrowing, for yield generation, so that they can be fully banked by their Bitcoin providers, the companies that they've trusted to onboard to Bitcoin with.

Now what we're seeing as technologies have matured is the introduction of not just traditional finance tools, but also DeFi tools. Those that have been tested and seen early products market fit in crypto spaces have matured to launch on Bitcoin to provide decentralized technology.

Finance, all the same. Borrowing, lending, but in a manner in which is more consistent with crypto principles. The maturation, Elise Killeen, founder and managing partner at Stillmark. We appreciate you on all things Bitcoin.

Snowflake. It is in full summit mode this week, which means it is making a slew of product and M&A announcements. One of those is its acquisition of Crunchy Data. It's a provider of trusted open source Postgres technology and products that's basically for data management. I caught up with the Snowflake CEO, Sridhar Ramaswamy, at the start of the summit on this news. All applications that require backing stores, we call them transactional stores, and

And Crunchy Data is really about providing a world-class, post-class offering for customers right within Snowflake. If you think of creating an agent-tkai application, you need some place to store those interactions, to then retrieve them, to answer follow-on questions. That's what Crunchy Data does. It is an enterprise-grade database that's going to make it much easier for developers to create

applications, including agentic ones on top of Snowflake. What is it like doing M&A right now? How do those conversations start? How willing do you think the investor base is to see it? I think investors are open to M&A and we are pretty thoughtful in how we do acquisitions. We don't do reckless multi-billion dollar acquisitions. By bringing in products that serve a clear product need, quickly integrating them, taking them to market,

We are doing a really good job with acquisitions. Obviously, with the Neva acquisition that I came through, that technology went into making Snowflake an AI powerhouse. And a more recent acquisition, DataVolo, is going to come out as OpenFlow, which is going to make it really easy for our customers to bring data, both from unstructured data systems, think SharePoint, think Google Drive, and so much more.

and make it really easy for them to bring data. And Crunchy Data is next in this series of acquisitions that is going to fulfill a big open need that we have. We feel good about the acquisitions that we're doing and the value that help us create for both our customers and also for our investors.

M&A brings in talent too. Look, that's how you came to Snowflake and have become the ultimate CEO. I'm interested by how you are building up the talent base right now. You've been hiring a lot. What about 400 workers of late, largely sales and marketing? Is that the area you need to beef up?

Well, we continue to hire pretty briskly. There are variations quarter to quarter. I wouldn't look too much into that. We feel really good about our business. So we are hiring in all the key functions in engineering and product for sure, but also in sales and marketing because we feel good about our ability to turn that into revenue. Our company is still growing exceptionally well. We guided to 25% for the year.

and showed no deceleration from Q4 to Q1. All of that wants to make us invest in the business. We're also responsible. We practice what we preach. There are a lot of agentic AI applications inside Snowflake that is making us all

me included, more efficient in terms of how we do our day-to-day jobs. It's that combination of being right at the center of the enterprise AI revolution combined with this willingness to use AI ourselves to make things more efficient that make us really feel good about the future that's coming.

Snowflake CEO Sridhar Ramaswamy, let's take a look at HPE shares. This is its schedule to report second quarter results after the market closed today. Morgan Stanley expects a mixed report, especially for the company's server business. The firm noted an uncertain backdrop given tariffs, but said there was a flaw under the stock

given Elliott Investment Manager's stake in the company. AI story as well, Cara. Yeah, and another earnings one for you, Ed. CrowdStrike releasing earnings after the market closed. Look, Alice is pretty optimistic. Redbush, for example, raising its target price ahead of the report.

For more on what to expect, let's bring in Bloomberg Intelligence's Mandeep Singh. I can't believe it's been almost a year since the disaster for CrowdStrike taking so many people offline. How are they looking now? I mean, they have recovered well in terms of, you know, making sure they don't end up losing a lot of customers. So at the same time, when I look at the net new ARR,

which is a key metric they report on, it's still negative. So it's not as if they've been adding more business than they were adding a year ago. So net-net, look, there are a lot of changes happening in the cybersecurity space because of generative AI.

I mean, think of all the AI agent deployments at the enterprise level. What they're really fearful of is data leaking to these large language models. And that's where data security becomes paramount. That's where CrowdStrike comes in. So nobody has really talked about AI in a big way. Talo Alta has mentioned it. Zscaler actually saw a sequential acceleration. So what would be interesting is CrowdStrike, which has got more exposure to SMBs,

How have they managed given the volatility in the quarter? - Mandeep, I'm very excited to talk with you about Meta securing 1,121 megawatts capacity, nuclear capacity. You put a react out, I'm not surprised you did, and you go straight to inference, and I'm not surprised you did. Can you just give us your thesis?

I mean, look, everyone has called out reasoning being the primary driver of additional compute. They are not talking about scaling laws and training anymore. It's all about reasoning at the time of submitting the query that the model is thinking a lot more.

And in the case of Meta, they're serving 3 billion monthly active users. If they have to roll out generative AI to this 3 billion monthly active user base, like Google has done with AI overviews, they need a lot of compute. And that's why even if you think training

is not as much of a driver. Inferencing and reasoning is a driver because of the power density. And look, they're trying to get as much energy as they can because they've raised their capex. They've got a lot of Nvidia GPUs. How do you utilize those GPUs at 100% capacity? You need the power. And so they're just being proactive here in terms of sourcing that power.

30 seconds. How much can Meta look to different ways of using infrastructure? Like we had Grok on recently, which are trying to be the chip for inference that is less power hungry than an NVIDIA, for example. Yeah, look, NVIDIA will tell you they are optimizing for power in their latest Blackwell chip as well. So clearly everyone is trying to solve the power equation, but there is nothing like having the power...

through their data center, then that's a good situation to be in, especially when you're spending $70 billion a year, which is three times your historical capex. So you don't want power to be the bottleneck.

Those are the numbers that matter. Bloomberg Intelligence Senior Analyst Mandeep Singh with the BI React on that meta deal. That does it for this edition of Bloomberg Technology. Do not forget to check out the podcast. You'll find it on the terminal as well as online on Apple, Spotify and iHeart. I'm going to be flying out to you in a few hours' time, Ed. Can't wait to be back in San Francisco for the summit. This is Bloomberg Technology. ♪

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