New Deal Brings Anthropic's Claude to Databricks, Amazon's Allure Among Mag 7
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Live from New York, I'm Caroline Hyde and this is Bloomberg Technology. Coming up, the Magnificent Seven is in the reddest sell-off in tech mega caps as Trump's trade war is still on the horizon. Plus, an exclusive conversation with the CEOs of Anthropic and Databricks who are out with a new partnership to bring clawed models to the enterprise.

and advertisers return to X, with the platform projected to post a jump in advertising sales. That's according to new research. We'll bring you those exclusive numbers later this hour. But first, we check in on a market that is sinking once again. The Nasdaq 100 off by nine-tenths of a cent. But we're seeing the Magnificent Seven all

trading lower and by some significant numbers move on and have a look at what's underneath the hood as we still try to digest what happens in terms of tariffs and ultimately what valuations should be at for big tech we're off by 3.6% again for Tesla

this is as we see the downward trajectory continue after the european numbers bode ill for the company we're looking at fundamentals that continue to get under pressure and indeed nvidia's off by four percent we're seeing all the points drags from mag seven i shine like what's happening with arm we'll get to that in a moment but the legal tit for tat still going on with qualcomm and arm and i'm looking at amazon off by 1.4 maybe the one that's starting to look like it's more juicy from a valuation perspective let's get to it with ryan velastelica who with us with us and

This is another day of stress on the valuations of the Magnificent Seven. Let's just go to Nvidia and some of the reasons that we're seeing the sell-off from a macro perspective. Is this about the economy?

Yes, broadly speaking, yes, I would say that is the case. There is still a lot of uncertainty about tariff policy, about the implications for overall economic growth, the outlook for the consumer, the outlook for businesses. We are seeing signs of businesses are maybe pulling back on investments just because they are not sure what the tariff situation is going to be, what the economic outlook is going to be. All that kind of frozen activity, all that uncertainty is really just causing people to take some profits if they still have them and just kind of take a pause and step back.

But when you step back, you start to look at the valuations, you look at the fundamentals, and you've done exactly that. For example, Amazon not been trading at these sorts of price to future earnings levels in years.

Yeah, so some of these names, you know, at the start of the year, there were a lot of concerns about valuations. Those concerns are a lot smaller now, just given how much some of these names have come down. So in the case of Amazon, they have pretty strong earnings growth. They've been really focusing on efficiency and cost cutting, things that are really improving their profitability. That is really driving the multiple down. The multiple is about

half of what it was over the longer term it is cheaper than apple now and just a few years ago apple was several times cheaper than amazon so that's quite the flip in narrative when it comes to tech valuations amazon is cheaper than other retail names like walmart and costco it's a stock that you know given people continue to have pretty optimistic views about its long-term growth potential the multiple here it wouldn't surprise me if you start seeing people look at a name like this say it's really come off its lows the fundamentals look pretty intact still a lot of

earnings growth potential and revenue growth potential ahead even in a rockier economic climate. Maybe that's why they start taking a look at a stock like this. But who is taking a look at a stock like this, Ryan? You get so much inbound in response to your stories. Are people starting to want to catch what seems like a falling life?

You know, that's something I've heard, the falling knife thing. I do think people still feel like these are pretty safe companies. The story isn't broken. Even if some of the air gets let out, even if the multiples come down a little bit more, I don't think people are really concerned about the long-term prospects of these companies. They're still considered to be very dominant in their field. Even if we see a weaker economic outlook, it wouldn't surprise me if we saw Amazon, for example, maybe consolidate its market share, especially in online retail or retail overall.

You know, cloud business remains very strong. It has an ad business that's growing a lot. There's certainly a lot of positives you can point to here, even if we see a lot more volatility in the short term. Brian Vlaselica, we thank you for a macro perspective across Magnificent Seven. Meanwhile, just take a look at Arm and Qualcomm once again. Now, this is as Arm is trading significantly lower today, as you can see. Qualcomm, as is being reported, has begun a global antitrust campaign against Qualcomm.

the chip designer, alleging in private meetings that Arm is guilty of anti-competitive behavior. It's all according to sources and we want to get the analysis of all of this with Mandeep Singh from Bloomberg Intelligence. And for me, it immediately becomes a question of just what a distraction this is. But ultimately, this is Qualcomm coming out and feeling and stating that Arm is getting competitive with them and therefore stopping access to their technology, to their designs.

Yeah, and especially when it comes from one of your top two customers. In the case of Arm, you know, Qualcomm is a top two customer. It's never easy. So, look, Arm did bring a lawsuit back in 2024, which they ended up losing against Qualcomm. And to me, it reminds me, you know, what Qualcomm faced against Apple. I mean, I remember 27 to 2019, they had the back and

where Apple was using Qualcomm technology and Qualcomm didn't go anywhere with getting more royalties from Apple. I think ARM is in a weak position here given Qualcomm is using all the

IP that ARM has to offer and paying for it. And, you know, granted, they made that acquisition of Nuvea, but at the end of the day, they're still using ARM's instruction sets. And it's hard to really prove that, you know, Qualcomm is doing anything wrong. So I'm not surprised that they are going all in with this antitrust campaign. But I think ARM is in a weaker position.

Qualcomm making complaints to the European Commission, we understand, the FTC in the US, Korea Fair Trade Commission, Mandeep. I just want to get the perspective of the companies. Qualcomm has declined to comment. Spokespeople from this regulator is also declining. I'm saying it's confident it will prevail. But I go to the distraction perspective here because they say they remain focused on enhancing innovation. Does innovation generally dip when companies are locked in what might be a year-long

years-long legal disputes. Yeah, and especially with the AI market moving so fast with inferencing, I mean, everyone is trying to come up with new designs in terms of how to do inferencing faster. So you're right, it is a distraction. And in the case of Qualcomm, they have expressed interest in even Intel. I mean, granted, Intel has a new CEO now, and we don't know what they will end up doing with the overall business.

But clearly, Qualcomm has ambitions on the CPU side, and really they want to do much more with the inferencing chip beyond smartphones. So to your point about distraction, I mean, all the back and forth and the lawsuits do seem like a distraction. Many people wanting to go beyond the smartphone in this environment. Mandeep Singh, thanks for joining us.

We'll hear from the CEOs of Anthropic and Databricks on their brand new partnership, AI policies under the Trump administration, and so much more. This is Bloomberg Technology.

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Databricks and Anthropic just announced a five-year partnership to offer Anthropic models and services on Databricks. Basically, it's bringing Anthropic's clawed models directly to 10,000 companies. Tim Stenevik sat down with the Anthropic CEO, Dario Amodei, and Databricks CEO, Ali Godzi, to discuss what this means for their customers. What it really means is that you can use securely Anthropic

inside Databricks. You can get all that intelligence, especially all the programmability. These models, you know, Cloud are really good at programming, and you can use that for data science, and you can use it together with all the data that we have. So enterprises have been storing their data with Databricks for the last decade. How do you build AI that can reason on that data? So we're super excited to bring those, the LLMs and that data together in the partnership. Dario, we know what Ali's getting out of it.

What are you getting out of it? So we're really excited to bring Clawd to a wide range of enterprise customers. Clawd models are growing very fast. The API revenue is growing at something like a 20x annualized rate. But we want to make sure that our models can meet all the requirements that complex enterprise customers have.

And we can do this with the help of Databricks. As Ali was saying, we can take our models, which are the world best for coding and many other tasks, and use Databricks' tools to operate on the customer data.

And we can work together to secure that customer data and make sure that customers can be assured that they get the proper security experience. Both companies value things like safety, security, privacy, things that enterprise customers greatly value. Where is the fastest area of growth for you? I think by far and away the fastest area of growth is code.

Claude models are better than anything out there by a wide margin in terms of how they code. We power a large number of players in the space including Cursor, Codium, Cognition, GitHub Copilot, First Cell, Source Graph, many others that I'm not

even mentioning, and we're starting to build an ecosystem around this area. Now, all that said, we also have partners in many other areas. We have partners in the financial space. We have partners in the biomedical and scientific research space. We work with companies in the legal and productivity space. So it's pretty broadly spread, but among those areas, I think code has by far been growing the fastest. I'm curious about each of your views on the

administration and what we've seen thus far out of Washington. David Sachs, he's crypto and AI czar. Oli, what does he mean for your business? I think it's great that we have people that actually understand the tech that are in the government. I think it's early days. So, you know, we're working together to figure out what's the best way to bring value to our customers. How are you working together? Are you in touch with him?

Yeah, I mean, we've given our feedback on AI policy and other things, and they're requested that. I mean, I think the government's requesting it broadly from the industry. So we're excited.

Dario, what about you? Are you in touch with the administration? Yeah, we're in touch with this administration just like we've been in touch with the last administration as well. The thing I like to say is AI has big implications for society, so it's very important for Anthropic to be about the policy and not about the politics. So we don't care which...

you know, regardless of which administration is in office at the present time, we have a set of things that we think it's good to do, you know, good to do in AI policy. And, you know, we've told the same thing to the Trump administration that we've told to the Biden administration. We have folks that we've talked to in this administration, just like the last administration, and we've delivered exactly the same message.

both times. We aim to be consistent, we aim to be non-partisan and offer our view of how to make the industry go best. - What is the US government's role, well what should the US government's role be in your view? - Yeah, so we laid this out in our RFI submitted to the OSTP, I think that was a couple weeks ago.

But, you know, things that we've emphasized include, I won't get the complete list here, but include export controls on chips to China, testing of models for national security risks such as bio or cyber risks. The government should have a role in provisioning as much energy as possible. The government should help to secure AI labs. We're very concerned about security. We talked a lot about security, you know, as part of this partnership. But another kind of security is, you know, we're worried about our

models and our technology being stolen. So those are a few of the areas where I think the government can have a constructive role. Anthropic CEO Dario Amodei and Databricks CEO Ali Gozi, along with our very own Tim Stenovic. And look, let's stick with global competition around AI models. It is top of mind for U.S. tech companies because ever since DeepSeat launched, the Chinese tech industry has been flooding the world with more AI models. Bloomberg's Peter Elstrom joins us for more. And Peter, if

It feels like every day there is yet a new update or a new release coming from DeepSea and so many others. Is that the cadence we're getting? Yeah, I think you're pretty much exactly right. It has been almost every day that we've been seeing these new AI services and models that have been introduced from Chinese companies. We count at least 10 of them over the past two weeks. And those are really just the major companies. This is Baidu and Alibaba and Tencent, Apple.

ANC group also came out with some AI breakthroughs. And really what they're doing is they're putting a lot of pressure on the profit models that we're seeing in Silicon Valley, where they're providing open source AI services that people can use and modify and incorporate into their technology to be able to use all of

all of the know-how of the AI models without paying some of the prices that you would have to pay if you went to more premium models like OpenAI, like Google in particular. So they're putting some downward pressure on those companies in particular. They've been mostly focused on the China market so far, but they certainly have global ambitions, and we'll see how far they take that.

Ultimately, it feels as though this is a rerun of what we've seen in plenty of industries. You think of China and EVs, you think China of solar. They've driven down the costs and the prices. But what does this mean? What's the implication for a U.S. competitor? Is it a bad thing?

got to be good for customers. Yeah, those are very interesting parallels. If you look at EVs or you look at solar panels, certainly there are some negative implications for other countries around the world. It's not exactly clear how this is going to play out, though. At this point, they are driving down profits in certain areas of the AI industry, but they're probably shifting the competition to other areas like execution. Who can actually build the services to connect some of that AI

AI know-how with corporate needs, for example, or consumer needs. And you're going to see a lot of innovation, certainly out of Silicon Valley and the companies that we were just talking about, and also out of China. Overall, it's probably good for the AI market. You get rapid commercialization of these services, you get lower prices, you get some robust competition, and that will probably lead to more innovation down the line.

And certainly, Apple CEO Tim Cook been going to that home of innovation of late at Hangzhou. Bloomberg's Peter Elstrom, we thank you so much. All things China. It's time now for Talking Tech. First up, Google's Gemini gets an upgrade. The company's released version 2.5 of its AI model that it says is capable of reasoning before responding and resulting in better performance and accuracy. And the latest model is available to use in Google's AI Studio and Gemini app.

Plus, OpenAI is now making it simpler to edit images in ChatGPT. During a live stream on Tuesday, the company showed how users could now refine images in ChatGPT with a series of conversations. Now, according to OpenAI, the program will now also be able to better create diagrams, infographics and logos for professional use.

Meanwhile, Elon Musk's Grog is making political waves in India. The AI chatbot that Musk described as maximally truth-seeking has made some controversial responses around Indian politics, including criticising Prime Minister Narendra Modi and praising opposition leader Rahul Gandhi. Grog's replies have sparked a political firestorm within the Indian government as they take a look at making action against users who prompt for those responses.

Let's just stick with Elon Musk because for the first time since the billionaire acquired X, where Grok is, the social media platform is on pace to see advertising revenue grow. That's according to research firm eMarketer. Jasmine Enberg is with us, vice president and principal analyst for eMarketer. And you brought us this research exclusively. Jasmine, where did the data come from? How are you tracking this increase?

The data is from our proprietary forecast here at eMarketer and we have a multi-source methodology where we have a team of forecasters that regularly goes through a variety of different sources from third party research firms to interviews with advertisers and looks at broader macroeconomic and digital advertising trends to put together these forecasts.

The drivers of growth, therefore, those advertisers that are returning, are they coming back with a feeling of joy and desire to spend or is there something else going on here?

Look, first I would say that this is a recovery, not a rebound. Even with the growth that we are projecting, X's ad business in 2025 is still going to be smaller than Twitter's ad business was back in 2019. And to your question, some of this growth is actually being driven by fear. There are plenty of advertisers out there now who see

spending on X as kind of a cost of doing business in order to mitigate any potential legal or financial repercussions. The problem, of course, is that fear is not a sustainable motivator. Luckily for X, it's not just fear that's driving this growth. It has also been able to secure a new base of advertisers, including small and medium-sized businesses, which is something that

Twitter historically struggled with. The problem there is that these advertisers have less money to spend and so while they're helping to prop up the growth, we're still not seeing spending levels reach the same heights as they were prior to Musk's takeover. Okay, so take us back to, you put the two and a quarter billion dollars basically expected for 2025. What is that versus pre-40 billion dollar acquisition by Elon and where does it go from there?

So it's smaller than it was in 2019. And of course, Twitter saw very strong growth like other social ad businesses during the pandemic, which means that pretty much all of that growth that it gained is lost. We're still expecting the ad business to continue growing in 2026 and 2027, which is the end of our forecast. But of course, we have other

less visibility into those years because the situation is still incredibly volatile. There's still a lot of concerns about brand safety among advertisers. And as those attitudes continue to evolve, we could see shifts in spending. Of course, there's also the economic uncertainty that's impacting advertising budgets, as well as the uncertainty at TikTok. So there's a lot of different moving parts that could change how advertisers spend their budgets.

When you talk of the advertisers who are coming back, whether it's through fear or a desire to access new products, have the main ones that took on Elon come back? Has Disney come back, for example?

We don't have an exact list of all of the advertisers that have returned. What we do know is that many of the big tech advertisers have returned. There was also reports that Apple, for example, which was once a target of Musk's, has returned. But there's plenty of evidence to show that many of these companies are returning to spend, though, again, not at the same levels as previously. I like how you brought in TikTok there as well. We're all waiting as to what April the 5th really brings. But would X benefit?

From TikTok being taken off the scene, it feels like it's always a meta driver rather than an ex-driver.

So the biggest beneficiaries of TikTok disappearing would be Meta and YouTube because of Instagram Reels and YouTube Shorts. They're obviously the most natural fits for users, for creators, and for advertisers. In January, we actually released an analysis that showed that about 50% of reallocated TikTok ad dollars in the U.S. would go to Meta and YouTube. There would be, you know, other spending to other platforms, potentially also X,

but mostly to other social platforms like Snapchat, perhaps even Pinterest. We saw some of that during TikTok's brief shutdown, as well as other players, competitors to TikTok and other industries, thinking about retail media like Amazon or even streaming services, because TikTok touches so many aspects of our digital lives. Very briefly, we've only got about 30 seconds. The competitors to X, are they thriving or not?

Well, what's been really interesting to see is there's been a resurgence now as well in growth in some of these competitors. We saw after the election, of course, that Threads and Blue Sky saw many new users coming onto the platform, and that seems to be sticking. But even as X has lost users, both of those platforms remain significantly smaller. Jasmine Enberg, great to have you back. E-Marketer, we appreciate it.

Welcome back to Blue Mag Technology. I'm Caroline Hyde in New York. A quick check on these markets because after a few days of stability, we're coming back off. Maybe we're selling some of the moves that we've seen in the last couple of days. Maybe we're taking a few profits after Monday's stellar charge higher of more than 2% on this particular benchmark. And we sustained growth yesterday, but we're now off by a percentage point. And really, it's the Magnificent Seven that tug us lower. We're off by 8.3%.

well, that's 1.8%, let's call it, on this particular index. And really, it's the likes of Nvidia, which are off by a significant amount. So too is Tesla. Take a look at what that particular name is doing. We know it's volatile. We know that the bulls like Cathie Wood remain in this name. But we're currently off by almost 4%.

had a dramatically good day on Monday, pushing up more than 9%, 10%. However, we did then get the BYD strength. We also got the worries about European sales, and we see some of that come off on Tesla. Rivian off by 0.3%. There's some interesting news there of a spin-off when it comes to smaller mobility forms of transport. Let's get to that work with Bloomberg's David Welch.

I just want to go to the news on Rivian in particular. We understand that they're spinning off what's going to be called also, they're investing up to $100 million coming from another player, Evolve, as well. This is about small mobility. Where is there a gap in the market for that, David? There's a market for smaller urban-type vehicles that don't need to go as far on a charge as the bigger vehicles Rivian sells. I think one of the issues Rivian has is

Right now they're selling expensive pickup trucks and SUVs that happen to be electric. And people like them, they're sort of a unique style compared to what Tesla has and compared to what Ford and General Motors sell for electric pickup trucks. But they're still very pricey for what they are at the end of the day and it's tough for them to get scale and really drive their costs down just selling those vehicles. And they've got other models coming that would have more mass appeal but I think with something like this

The industrial logic behind it would be you're selling more vehicles and getting your battery costs down, which ultimately is how any of these EV companies are going to get into profitability. They've got to get those costs down and you can't do it selling 50,000 trucks and SUVs a year.

They call it micro-mobility company for also, and I correct myself that it's Rivian and a VC firm, Eclipse, who are going to be helping finance all of this. I mean, this comes at a time where the competition does seem pretty fierce. Even though that Chinese competition can't make its way into the United States, globally, all eyes on EV, all eyes on more efficient and cheaper models, David. Compare what's happening with Tesla at the moment. Just why the pressure continuing on the stock?

Yeah, Tesla's-- it's really an interesting case here. I get asked this all the time, is that the political pressure because of Elon's stance and his closeness to Donald Trump. And I think that's probably true on the margin. Maybe more than that. There's really not data that tells us how much of that is true. But look, EV sales were flattening out even before Elon became essentially part of the Trump administration. So they were already losing growth rates as a company.

And a lot of that is competition from China. BYD, Li Auto, those players over there, they have very good products. They're coming on strong. It's tougher for foreign companies operating in China to get the sales they want. That includes Tesla. I think there is political pressure in Europe that's causing Tesla to lose some sales. And don't forget, they're changing over the Model Y, which means they've got production down. That always cuts sales for any car company. I think that's also a big piece of it. And then the thing you just mentioned, competition.

In Europe, you've got all the European automakers

adding more EVs and coming on pretty strong. In the US, you've got Hyundai, Kia selling a lot of new product. General Motors is bringing out a lot of new EVs and they're ramping up production right now. So there's competition here that wasn't here two or three years ago that Tesla has to deal with. And by the way, the Model Y is being changed over. But this is a product line that's pretty stale with the exception of Cybertruck. And Cybertruck is too quirky to sell in really big numbers.

It certainly is. David Welch, thanks so much for joining us. Meanwhile, let's just go to another key stock you could keep an eye on, GameStop. It's having a stellar day. It's up the most since June of last year. That's as Bitcoin is interestingly off by one and a quarter percent, 86,000. But these two...

stories are linked. GameStop is up more than 15% because they announced after their earnings yesterday that they are indeed going to move forward with having Bitcoin on their own balance sheet. Yet another company that's doing it, all following Michael Saylor, of course, with strategy, but many others have done it. Block, for example. Think of the way in which they saw crypto on their balance sheet. Bitcoin currently off by one and a quarter percent, so GameStop are not enough to drive it higher. But this comes in

The context of a major crypto summit that's underway in DC at the moment and legislation regarding digital assets is of course making its way through Congress. Joining us now is Blockchain Association CEO, Kristin Smith. I just want to start on the idea of more companies storing Bitcoin or other crypto on the balance sheet. That because the moon music is changing. Is that because regulation is finally creeping through?

Yeah, and I think we've had such progress in Washington, Caroline, that I think it's pretty clear across institutions, across traditional companies, across those who are managing treasuries of large organizations, that digital assets are something they should be thinking about. I was up in New York last week at the Digital Assets Summit, and the amount of enthusiasm and excitement amongst the TradFi and institutional investors was...

was really great, and I think that's extending to companies as well. So I think it's smart. I think it's something a lot of companies are looking at, and I think we're going to see more announcements like this going forward. It's smart because GameStop gets a pop in its stock when actually its revenues are down 28% year on year. They're able to sort of harness...

what feels like a feel-good effect that retail likes to trade off. So tell us actually fundamentally how this sort of helps businesses and how you see regulation in particular supporting crypto right now. I think the regulatory clarity is key. This is something that the industry has been talking about for many years now. We're seeing a lot of progress. We've seen a lot of actions taken to undo the damaging policies that were put in place when Gary Gensler was the head of the SEC.

And we're seeing Congress do a lot of work to establish and put the legislation in place that we need. It seems like every week here in Washington, we have another vote on crypto. You know, two weeks ago, we had the Senate Banking Committee, which very rarely holds markups.

had a vote on stablecoin legislation. We're expecting a House committee to do the same on their counterpart legislation next week. We also have the final vote to undo the tax policy that President Biden put out at the very, very last days of his term is going to be repealed by Congress this week. So we're seeing steps. There's a lot of momentum. There's still a lot of work to do, but I think

You know, we've got the White House, we've got the leaders in the House and the Senate are all communicating, they're all talking together, and they all want to get this done. And I think it's a cornerstone of sort of the administration and Congress's priorities for making the U.S. more competitive, more innovative, and more

modern and so I think that does going back to your original question give companies some comfort that they can look at these assets as something that will be more stable that will be welcome and something that they need to be thinking about going forward. What's not being tackled that you'd like to see tackled from a regulatory perspective Kristen?

- You know, it's interesting. They're really covering the list. I think it's two steps, like I was saying. The first step is undoing the policies of the past. We've seen the SEC dismiss litigation across the board in the industry. We're seeing Congress fix this IRS rule that was enacted late in the administration. And we're seeing agencies like the OCC

undo some of the letters and interpretive guidance that they had put in place over the past four years that made it very difficult for crypto to integrate with the banking world. And then, you know, in terms of what we need to get done, we need a stable coin framework, we need a market structure framework.

But I think there's also a lot of interesting things going on with tokenization. The SEC just announced yesterday they're doing a series of roundtables on various topics and are trying to figure out what they have within the existing authority that they have that they can do to help make this space more competitive. So, you know, we're really excited about it. It's a lot of work to do. I think everyone in the crypto policy space feels like they're ready for a vacation, but we're not going to...

let down now. We've got a lot of work to get done and potentially a short time to do it. But I think once it's in place, it will be lasting and it's something that will allow the U.S. to be competitive for decades to come. Briefly, Kristen, is enough being done to sort of get rid of the tarnishing effect that crypto sometimes have? The idea that

David Sachs, for example, has done a lot to make explicit. He sold down his assets, his exposure to all these things. But when you've got, well, ultimately GameStop's like a meme name getting in on Bitcoin and then you have some sense, and I don't know, it's not factual, but there's a sense from those out there that many ways people are benefiting from crypto doing well over in the administration. Is enough being done to tackle that?

Yeah, you know, I think that's an interesting question. I think, you know, David Sachs took steps that were absolutely appropriate for him to do by selling off his positions and funds and various investments. I think that is a smart thing to do. You know, I do think there are a lot of folks within the Trump family that are obviously very interested in this space. But I think the important thing, though, this is this is this

this is really important work that we need to get done and get across the finish line. And I think there are a lot of different policy makers across the agencies, Congress and others that are really committed to doing this and that this is something that should benefit everyone who wants to participate in this ecosystem, including

corporations and tradfi and institutional investors, etc. So I think this is a space that's only going to grow over time and that we'll see more innovation that is built on top of these blockchain networks. Kristen Smith, always great to have you on the show. Thank you. Blockchain Association CEO. You are coming up

More in TradFi meets fintech. Mercury hits a $3.5 billion valuation after raising $300 million in its latest round. We'll be speaking with the CEO, Imad Akun, next. This is Bloomberg Technology.

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Fintech firm Mercury has just announced a Series C funding of $300 million. It's been led by Sequoia Capital. Now, the latest round helping push the company's valuation to $3.5 billion. Here to discuss is Imad Akhun, Mercury CEO. And, well, what the money is for, therefore, Imad? I understand there's new products coming along.

Yeah, we've actually been profitable for the last 10 quarters. We did 500 million in revenue last year. So really seeing this money is kind of helping us invest in new products, but also giving us a cushion. We could do future acquisitions and things like that. Last year, we launched a bunch of new products, including invoicing, accounts payable, and Mercury Personal. So we're expanding from serving just businesses to consumers as well.

You've got to go there, M&A. Where would you want to do inorganic as well as organic growth then?

Yeah, we'll see. We made an acquisition last year in the accounting space. But yeah, we haven't announced anything else. But the interesting thing about banking is there's a lot of places to expand, both in terms of new types of customers. So we kind of expanded in the last few years from startups to e-commerce and professional services as well, as well as kind of these new products that we can build on top of it. We really want to reimagine banking so it's not just kind of...

you know, a dumb account that doesn't do anything. We really wanted to help Bible People's finances and help them run their company in the easiest way possible. It's reported that Sequoia Capital was particularly impressed by the way you handled the influx of demand coming after the collapse of SVB. And certainly Mercury and Brex were everywhere we were talking. That amount of client deposits that came in, how much have you retained? How have you managed to build from that moment?

You're not technically a bank.

So how are you thinking about broadening out? You, of course, have relationships with underlying banks that give you the ability to help with these products. You're also thinking of building software, ultimately. What do you want to be thought of? How are we going to say this is what Mercury is in five years' time?

Yeah. We kind of think about like, you know, reimagining banking. So, you know, one of the benefits of working with kind of partner banks is we actually work with a sweep network underneath the hood. So we provide everyone $5 million in FDIC insurance. So the vast majority of the deposits we have are actually FDIC insured. And we work with kind of two main partner banks right now, Choice Financial and Column Bank.

And, you know, we kind of think, like, if there was a software company that built great software for banking, what would it be? And that's where we think about, like, kind of broadening out the suite and really want to redefine banking, right? Banking shouldn't just be a bank account. It should be a lot more. And I think in 10 years, it'll be weird to do invoices not from a bank account. It'll be weird to kind of have spend management and corporate card that's not part of your banking. You're using funds, I understand, to help banks.

give liquidity to your talent, your workforce, you're doing a tender offer. But many will be thinking, where's the next step? The exit, in many ways. In 10 years' time, will Mercury be publicly listed? Will you have been bought by someone? Will you have bought others?

Yeah. You know, I don't think of this as like a thing I want to exit. I want to run this company for the next 20 years. There's a lot we can do and we will do. I think being public along the way is part of the journey. So yeah, there's nothing imminent. We only actually launched six-ish years ago. So I still think of us as a pretty young company.

But yeah, it's important for employees to have access to some liquidity rather than waiting another 10 years or whatever it is till we go public. So we wanted to provide that as an option. I'm sure lots of them want to buy houses or do nice things for themselves. And yeah, I think as we're profitable, it makes sense to make that available to our employees.

Imad, it's great speaking with you. Imad Alkhoun, come back, Mercury CEO. Congrats on the raise. Meanwhile, scientists, they are laying the foundation for a field that may blur the lines between the biological and the synthetic. It's called biocomputing. Human neurons emerge with chips, with startups building sci-fi alternatives to traditional hardware. The living human brain cells end up actually powering AI. Primer, it's the latest Blue Mega Originals series, takes a deep dive into this.

This is a simulation of Pong, the iconic 1970s arcade game where you use this paddle to stop this ball from getting past you. It's a pretty simple game for us humans to learn and as of quite recently with advancements in AI, computers can learn it too.

But today, Pong has a new kind of player. Not a computer, nor a human. A cluster of living human brain cells on top of a silicon chip can play Pong. Yep, researchers in a lab taught a tiny clump of neurons to, in a sense, play this video game. But it's more than just a game. Some believe merging biology with computing could upend our approach to artificial intelligence.

AI is a massive, often volatile, global market with people looking all over for a competitive edge. In 2025, private sector companies teamed up to invest more than $500 billion in AI infrastructure alone.

But what if the building blocks of that infrastructure include living human brain cells with the promises and challenges of our own biology? Sounds like sci-fi, right? Well, we're kind of on our way. Science fiction talked about this. I love thinking about the Hollywood stuff, like are we really computers? Are computers really human? My life has been focused on how can you elicit intelligence from brain cells in a dish.

Tune in tomorrow for the second episode of Primer on Bloomberg TV at 6pm Eastern.

US officials, they're not permitted to use a messaging app signal to share sensitive information yet today the Atlantic has released the near complete transcript of a signal chat where top US officials discuss military plans. Let's bring in Bloomberg's Mike Sheppard for the technology angle of all of this but before we get into signal and its intricacies the broader context here is that we're getting more and more information what exactly was said in this conversation.

Well, that's right, Carol. And this is an episode that is not going away, much to the Trump administration's chagrin. They are seeing this really carry on through days. And in many ways, it is a jaw-dropping blunder of operational security, according to experts and many lawmakers on Capitol Hill who heard from and really pushed hard back at the top

intelligence officials in the U.S. government who were appearing before them for a hearing. And the question is, why were these officials using this app to discuss something so sensitive? And we can see now from the full Atlantic transcript that, yes, this was sensitive and potentially classified information about the details of strikes that were to be waged against Houthi rebels in Yemen. And this raises all sorts of questions about

operational hygiene and security hygiene that are being put forth by senators, including the top Democrat on the Intelligence Committee, Mark Warner. In that hearing, as you say, that many intelligence people and experts were attending. Mike, just go back to Signal, though, because this all came to light because the wrong person was CC'd in the chat, and that being Jeffrey Goldberg over at The Atlantic. But why would it not be appropriate

to be used in this sensitive manner? What's the worst that can happen? Well, actually, we're getting an example of the worst that could happen. Let's say it wasn't Jeffrey Goldberg of The Atlantic, the editor-in-chief, a Washington veteran, someone who is widely known across town and who I worked with many, many years ago. Let's say, for instance, it was instead somebody from the Houthi side who saw those war plans and could

alert the rebels about what might be coming. It could also be another U.S. adversary that had a window into operational planning or other sensitive information. If they're using Signal for this, what else are they using it for? And that is what we also don't know.

Now there's a reason why beyond just adding the wrong person to the chat, which I guess maybe we're all guilty of doing at one time or another in our own lives, there is the risk that your phone could be infected with spyware or somehow compromised in another fashion that would allow

observation of message traffic and other information. And this is why the Defense Department and other U.S. intelligence agencies require sensitive conversations to be carried internally on secured networks and in secured spaces. Mike Sheppard, the story continues to unfold. Thanks for bringing it to us. Meanwhile, that does it for this edition of Bloomberg Technology. You do not want to forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify, and iHeart. This is Bloomberg Technology.

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