OpenAI Plans UAE Data Center, AT&T Buys Lumen’s Consumer Fiber Business
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Live from New York and San Francisco, this is Bloomberg Technology. Coming up, OpenAI pays $6.5 billion in stock for Apple veteran Johnny Ice AI device maker. We discuss the impact.

Plus, OpenAI works to develop a major data center in the United Arab Emirates, a big overseas expansion of its Stargate effort to build out AI infrastructure. Plus, AT&T agrees to buy the consumer fiber operations of Lumen Technologies. It's $5.75 billion. We'll discuss the AT&T CEO. And let's just dig into how OpenAI is planning that push into hardware, Ed. Joining up, as you say, with the legendary Apple device designer, Johnny Ive, the tie-up came with a pretty hot promo video.

I have a growing sense that everything I've learned over the last 30 years has led me to this place and to this moment.

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of cynicism around whether or not open AI and Johnny Ive can really take on Apple to bring us AI in a physical form. But what do you make of the promotional video? What do you make of the impact? I mean, look, the video was incredible, wasn't it? The cafe they filmed it in belongs to Francis Ford Coppola. And I was saying to a colleague, it's almost like he directed it himself, right? It was so grand. Look,

I love Johnny Ive. He's an incredibly gifted man. I think this is an incredibly difficult thing for even him to achieve because creating the kind of hardware, which their stated aim really is to topple the iPhone as the leading device of choice when it comes to interacting with computing. I think that's incredibly difficult. And I think for all the experience and talent that Johnny Ive has and

the team that he's assembled, which Sam Altman called, I think, the most gifted, talented team ever assembled in history, which kind of gives you an idea of the hyperbole he's working with at the moment. Marvel unite. Yeah, precisely. I just think it's an incredibly tall order. I think it's easier for Apple to solve AI than it is for open AI to create the new iPhone, put it that way.

OK, so let me go back to basics on the story. What the entity, OpenAI and I/O, is saying is that by the end of 2026, they'll have a range of devices. But we don't know what form factor, right? We don't know smartphone or, dare I say, chunky broach a la humane. I just want to get the basics of that out there. But to me, this seems like an acquihire because what

OpenAI is getting is not just Johnny Ive, but a team of other former Apple designers and who are, according to the press release, remaining independents. Well, this is all about bringing in the expertise that OpenAI just doesn't have. I mean, of course, they've done incredibly well in creating a leading AI company and it's seen as being ahead of the pack still. And Chad GPT has a huge

market share in terms of people who are willing to go to a website to put an AI prompt in and get what they need. The problem is that over time, I think that way of interacting with AI gets a lot less useful. And I think we're seeing signs of that already. We've seen how Google are putting AI straight into their search engine in a big way. And that's a way to capitalize on a tool that people already have, already use.

and they find AI that way. OpenAI doesn't necessarily have that same vector. It doesn't have a device like Apple. It doesn't have Amazon's reach of the cloud. It doesn't have a social network like Meta. It doesn't have a search engine like Google. And so they have to do something, right? They have to create something that's going to be the place that people interact with OpenAI specifically.

And a piece of hardware is the way to do that. This is a very good, albeit expensive, way to bring on that expertise. But then the complications will follow. I think next year's keynote, if they decide to present it in this way of this new device, whatever it is, and there's been reporting this morning that it's perhaps like a third device in addition to your laptop and your phone, there'll be something else.

I mean, that's going to be a very watched keynote. I think it's a big, big ask to expect people to add another device their day because we saw, like you mentioned, with some of those other wearables that people from the word go just weren't very impressed. I think Johnny is probably going to be a better judge of making something people like than those companies perhaps were. But I still think he's asking a lot of people to get on board with.

Johnny Ive was pretty critical of Humane and others having tried AI hardware. What's interesting, though, is Eddie Cue, the Apple executive, was giving evidence at that Google legal fight saying in 10 years' time we probably won't be using iPhones. We're going to discuss the Apple impact, but more broadly, do you think that this is a moment that we should be risk-off with Apple?

I think the context of those comments from Eddy Cue were in a competition hearing where it served the company very well for him to say there's a big threat against the iPhone.

I do think what this is doing at the very least is highlighting the fact that Apple has been caught very much on the back foot. Since Johnny and I have left, I think it was almost six years ago, there hasn't been this sort of product visionary in the company. They haven't sort of hired behind him in a way that most people might have wanted. So I do think it sort of highlights that Apple has just huge amounts of work to do.

I want to go back to basics even further. I think about how I use ChatGPT every day, and I use it through my iPhone, frankly, either voice mode or 4.0 text. How much of this story is about OpenAI thinking to itself that exact question? How are people going to use our software in the future?

Yeah, I think that's a big, big lingering concern, I think, for the entire company, particularly as Caroline just mentioned. I mean, this was Johnny Ivers has been quite outspoken about what he sees as legacy devices of the iPhone and of Mac, just laptops in general, I guess you could say. I do wonder what this announcement might do for OpenAI's relationship with Apple, incidentally, because

Obviously, you can use ChatGDP on the iPhone now as a sort of almost add-on service. I wonder if Apple might be thinking a bit more carefully about how they manage that relationship. But yeah, I just think this is about bringing ChatGDP into an everyday device in a way that's going to be much more integrated. Right now, as you say, people use the app.

But I don't think this is going to be something that people go to an app specifically for. I think it's going to be a tool that's within a tool they're using for something else. And that's the deterrents I have.

Focusing on Apple, the point of your opinion piece this morning is that this is a bet by IVE and Altman that they might be able to kill the iPhone. And that's what drove the market in yesterday's session. Bloomberg Opinions, Dave Lee, thank you very much. Stick around for more OpenAI news as the company helps develop a major data center in the UAE. More on that later this hour with Chris Lane, Chief Global Affairs Officer at OpenAI. I want to talk more about Apple. President Trump has taken aim multiple times at the tech giant.

Most recently, calling out a little problem with Tim Cook, asking the Apple CEO to stop building in India. For more on Apple's political concerns, Bloomberg's Ryan Vlastelica joins us. And, you know, the point in your markets piece is that headlines are not going in Apple's favor right now, but the stock is underperforming as a consequence.

Yes, pretty dramatically underperforming, especially over the past month or so, where the Nasdaq 100 is up double digits, give or take, and Apple is, you know, I think down a couple of percentage points. So certainly just a negative political backdrop for Apple. This is just sort of the latest example of this. Obviously, it's not as dramatic as we saw at the start of April when the tariffs were first announced and Apple saw

really historic levels of volatility. Since then, of course, we have seen some positive signs like exemptions for smartphones and other electronic categories. And of course, we had the sort of the detente with China with respect to some of the tariff levels. But there's still, you know,

Being in the attention like this is certainly a precarious position to be in, especially since people don't really see what Apple can do, especially in the short term, to assuage some of the administration's stated complaints about its global manufacturing footprints.

We're looking at a one-year chart of Apple right now. It has come up significantly from its lows. We sold off hard because of tariff anxiety. We're now up 17% from those lows, Ryan, as your story points out. But when you couple the ongoing worries of the Trump administration putting Apple and Tim Cook individually in the line of fire, at the same time as OpenAI seems to be coming for its lunch when it comes to hardware with AI, none of this speaks well. And you talk about how under-owned Apple is.

Yes, that was a Morgan Stanley study that was put out not too long ago looking at the first quarter. Portfolio managers are underweight on Apple relative to its position within major benchmarks. Just a sign of the sort of like overall cautiousness towards the company right now. You mentioned the AI position. It is very unclear how well they are going to be competing in that realm. In addition, we have to sort of

longstanding concerns about its valuation, about its overall levels of growth, especially if people aren't as eager to be buying iPhones. And of course, on top of that, the political backdrop with tariffs, with trade wars and just sort of all this stuff putting together. It's certainly a lot of stuff for Apple investors to be considering if they're looking at the stock right now.

I'M LISTELICA. REALLY WELL READ. THANK YOU SO MUCH. COMING UP, AT&T CEO JOHN SANKE IS JOINING US NEXT ON THE COMPANY'S LATEST ACQUISITION.

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AI is becoming mission critical for every enterprise on the planet in order to compete, transform, innovate. And the second kind of major trend is really about consumer and wireless and fiber demand curves are converging and you really need scale for to compete in the fibers of the home business. So we looked at both of those trends and said, we're going to double down where it makes the most amount of sense.

THAT WAS KATE JOHNSON, LUMEN TECHNOLOGIES PRESIDENT AND CEO AFTER AT&T AGREED TO BUY ITS CONSUMER FIBER OPERATIONS FOR $5.75 BILLION. JOINING US NOW TO DISCUSS ALL OF THE DEAL IS AT&T CEO JOHN STANKE. WE HEARD FROM KATE, THIS CONVERGED CUSTOMER YOU HAVE SPOKEN TO ON YOUR EARNINGS. IS THIS THE STRATEGY BEHIND BEEFING UP WHEN IT COMES TO FIBER?

Yeah, Carolyn, as you know, we've talked about before, we believe there's going to be this demand for increased data consumption and workloads moving forward, especially upstream workloads. There's no better technology out there for Americans than fiber.

And we've got a big lead on how we're building fiber in the United States today, and this just accelerates it. And if you think about what we're doing here, we're effectively getting a little bit over a year's worth of build in this transaction. We managed to go into a footprint that because there isn't scale right now in the Lumen operations, we can bring the AT&T scale behind it, drive penetration of customers, which drives revenues up and most attractive to us.

is that these are markets where we're kind of under share and wireless business as well. And we know that when we put fiber in, we win. And we have a good success record of putting fiber

customers together. Forty percent of our AT&T fiber customers use our wireless service. So we're really anxious to get a chance to get into these markets and start driving some wireless growth that maybe we wouldn't have seen otherwise. You bring customers together. John, you also bring infrastructure investment together. You have partnered before with BlackRock when it comes to reinvesting and accelerating the infrastructure build out. You're talking about bringing in another partner in terms of investing in this in the future. Have you had interest already?

Oh, sure. Look, we've been really successful with our gigapower joint venture with BlackRock, and they've been a fantastic partner to work with. We're incredibly pleased with how that venture is maturing and where it's going. The right thing for us to do right now is to carry this through the regulatory process where we have control over doing that.

and ultimately get this transaction closed. But we're really excited to bring an equity partner in with us under a very similar construct to what we did with GigaPower. And I wouldn't be surprised if BlackRock might be interested in continuing in that relationship. And if not them, we know there's others who like these kind of infrastructure plays. And I think we're viewed as a pretty attractive partner, given our ability to build rapidly and what we've been able to show in terms of our market penetration and growth.

John, who would that equity partner be? Well, it's to be determined. We'll ultimately close it first. That's our really important thing to do right now is make sure we get...

all the regulatory approvals. And then, you know, we'll do the right things with the various folks out there to make sure that anybody who has an interest has a chance to talk to us about it. And I would expect is we've had a great relationship with BlackRock. And if it's something they're interested in moving forward with, I'd certainly like to move forward with them. But that doesn't foreclose another option if for some reason this isn't right for them and the timing.

John, this deal and a number of other things that you've done really intensifies competition in broadband, particularly for Comcast and Charter. Just thinking about our show, Bloomberg Technology, and all the people across America that watch it, why is that competition important?

Well, look, I think what's important is that Americans walk away with great infrastructure and that communities have world-class communications infrastructure that allows them to grow and have commerce and have jobs and people that want to locate to their areas. And the cities that we're going into and that we'll be picking up here have frankly been somewhat underinvested in fiber.

And fiber is the best technology out there. It's better than anything that cable has on the market. And so our belief is that this is going to be great for those local communities because not only are we buying these assets,

But we're making a commitment to nearly double our fiber footprint by the time we get out of 2030. That means we're going to be investing and growing in Denver and Seattle and Salt Lake City and Phoenix and Minneapolis, St. Paul, putting the best technology out there and employing local people who do the construction and hiring technicians that do the installation and houses.

That's a great thing for communities and it's a great thing for the United States because you're going to get world-class fiber infrastructure that's built for the AI revolution, that's got symmetrical speeds down and out of the house. That's going to be good for everybody. There seems to be M&A for everybody as well, John. When it's you partnering with Part, buying that Part of Lumen, when we've just had Charter and Cox, when it comes to broadband more broadly, are you going to be more active in the M&A space, do you think?

Well, Carolyn, I've said, I think even when we've spoken before, that my belief is that the communications industry is going to go through a layer of consolidation over the next decade. And I've been pretty clear that AT&T has a unique position. We start with a fantastic asset base as other companies are looking to bring capabilities together to meet the converged dynamic that customers want to buy from one company.

and we have a lot of organic opportunities to invest in our business. And we talked about that in our December analyst day. What's unique about this transaction is it accelerates the footprint and it's a make buy decision looks pretty straightforward. It looks like maybe in this case we should have bought instead of made.

Look, if there's other options that come up that are similar in the economic dynamics where we can pick up footprint that accelerates us by a year or two and we're buying it at a price that's similar to what we can go out and invest in organically, I wouldn't be closed minded to that type of thing. But I'm not sure that there's going to be that many opportunities as a scale to do that. In fact, this particular transaction is a bit unique given its size, the markets and the footprint.

And I don't expect that there's going to be a lot more behind it. John, there had been reporting in April about a sort of lack of knowledge of the Trump administration's approach to particularly in rural areas, broadband and fiber and perhaps not releasing funds from the prior administration. What was your communication with the president and the administration about this? And how supportive are they of the kind of big picture that you outlined to me a moment ago of what you're trying to do for America?

Well, certainly the administration would like to see investment in the entire tax plan that they're putting forward is stimulating that. And if we get what has been passed by the House last night or this morning,

I absolutely believe we'll be taking some of that benefit on the tax side and increasing our pace of fiber investment in our business and in some of these markets I just talked about. Our communication has been, there's been a lot that's happened since Bede was envisioned almost four years ago and the legislation was put in place and the legislation that said it should be a technology neutral investment to build to these rural areas or places that aren't connected to the Internet.

And when you look at what the FCC said were the uncovered households last year, it was only about 7.5 million households. That's almost half as many households as when Congress passed the $46 billion for bead subsidy.

The private industry, private markets and whatever government funding has been out there has already solved half this problem. And so should we be taking a step back and thinking about how we're spending that money and are we doing it the right way where maybe we use satellite technology to get to very expensive locations instead of building fiber out there? I think that's the right thing for the American taxpayer. And I think the administration is doing the right thing to reconsider that.

John Sankey, AT&T CEO. It's been wonderful speaking to you on the deal. Really appreciate the time. Thank you very much indeed when it comes to all things M&A. We're going to take a quick check on the broader markets right now. All things partnerships and ability to trade names outside of the United States. We're going to be discussing how Nvidia and Tesla shares popped today. This is as we understand news that

BACT FINANCE IS GOING TO BE PARTNERING WITH KRAKEN TO ENABLE YOU TO TRADE THESE U.S. NAMES IN A TOKENIZED MANNER IF YOU ARE BASED OUTSIDE THE UNITED STATES. IF YOU ARE BASED IN EUROPE AND YOU WANT TO BE TRADING INVIDIA OR TESLA STOCK THROUGHOUT THE NIGHT ON A 24-HOUR BASIS, YOU CAN USE A NEW TOKENIZED BASIS FOR THIS PARTICULAR STOCK.

The person that's driving that is Kraken co-CEO. And we speak to him now with Shanali Basak standing by as well. Shanali, take it away. Caroline, thank you so very much. And Arjun, it's good to have you. Of course, that is Arjun Sethi joining us, Kraken's co-CEO. This is big news in the world of tokenization. It's big news for Kraken.

It's available to people who are outside of the United States. And my major, major question really is how soon this could be brought onshore in terms of approvals on a regulatory basis to get this done.

Thanks for having me. I think the way to sort of think about it is that tokenized securities is the same way in which you should think about collateral. So collateral is the foundational trust layer, is the way in which we want to be able to help enable and enumerate this worldwide. And so while we're launching this with Bakkt and our other partners with Solana in Europe, in Europe,

Latin America and Asia as sort of our first markets, we are going to work to bring this into the United States over a period of time. But I think what's more important is that you now for the first time have collateral that you can take with you 24/7, it's permissionless, you don't have to ask anyone for it, and it's not part of a walled garden. And I think that's the key aspect of what it means to be able to tokenize an asset. One issue though, Arjun, and you could see it coming from a mile away, is if you bring it to the United States,

How do the traditional exchanges behave? This is not something that you can see the likes of a NASDAQ readily allowing or not pushing back against as you go to the SEC to get this done in a bigger way.

I think it's pretty natural for incumbents and what I call post-World War II brick-and-mortar companies to always push back against what they might have a monopoly upon. And what does that really mean? It's a walled garden. It's hard to innovate. It's hard to build on top of it. So when you think about global liquidity, global developers, global access to capital, global access to collateral, what do you want to build for and what do you want to build against? I think these types of products, it's not going to be just us, but...

Anything that's happening the crypto protocol ecosystem or decentralized is that we're letting people get access to be able to innovate on behalf of US customers in the long term on behalf of European customers and And the rest of world customers is that you're able to finally in one place get access to global liquidity access to

more products and not part of one, again, walled garden. So we're in exchange. Our whole goal is to be able to provide liquidity and to provide this innovation. But what you're now able to do is figure out ways in which the traditional industries, as you just mentioned, how can they be a part of the ecosystem rather than being sort of left out? Well, they need regulatory...

Clarity. Arjun, great to have you. Look, Superstate already acknowledged that they're doing this. They announced it earlier in the month. You're now doing it. But Larry Fink and Vlad Tenev and Robin Hood, they want clearer guidelines here in the United States. How briefly do you think that will occur? 30 seconds.

Look, I think with any of the regulators that are out there from policy down to regulation, what we're really talking about is how do we innovate, how do we build? So, you know, the folks at the SEC have been extremely, like, promotive of these types of ideas around how do we bring this to everyday consumers, how do we bring this to everyday investors? And so I'm pretty positive that, like, we'll get to a place where we can start thinking about how to launch this. Again, not just with one company or one customer, but across the board.

That was Bloomberg's Shinali Basak there with the Kraken co-CEO, Arjun Sethi. Thank you. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Ed Ludlow in San Francisco. I feel like there's a little bit of outperformance in technology shares, Gary. Maybe a little after yesterday's pretty brutal sell-off. We saw the bond market dictate trade yesterday. Maybe a slight resilient in the bond market today helps just galvanize some risk-taking back in tech. We're up just 0.3% on the Nasdaq 100, clawing back some of yesterday's losses. But as you say, big tech is in charge when it comes to some of those names we've been looking at, the NVIDIAs, the Teslas. But look at

What's happening in terms of some of the earnings that also rang out and outperformance when you think about what's happening with Snowflake up almost 12 percent on its numbers. They're basically seeing product revenue drive forward because of new AI products that are coming to bear. They're managing to drive at least in this fiscal quarter looking forward a billion dollars worth. People liking that 25 percent growth. Zoom also had showed the AI tools helping their revenue and they raised their forecast but not enough to impress investors worth by 1.4 percent.

BUT LOOK WHAT IS NOT TRADING WELL ON THE BACK OF AI. TODAY WE GET A LITTLE BIT MORE RESILIENCE IN APPLE, BUT NOT MUCH. WE WERE LOWER BY MORE THAN 2% YESTERDAY. WHERE IS THE AI LEAD? PERHAPS BEING TAKEN BY OPEN AI. THERE IS A CONCERN OF COURSE WITH THE DEAL WITH OPEN AI MANAGING TO BRING ON FOR $6.5 BILLION JOHNNY I'S COMPANY. WILL THEY LEAD THE CHARGE IN HARDWARE OF AI? BUT THERE IS SO MUCH MORE NEWS WHEN IT COMES TO OPEN AI AS WELL.

There is, but first I've got some breaking news crossing the Bloomberg terminal. Google, Alphabet, the parent of Google, is facing a Justice Department probe, an antitrust probe, into its deal with Character AI. The Justice Department's looking into whether Alphabet violated antitrust law with its agreement to use the technology

of the popular chatbot maker. Antitrust enforcers Bloomberg is reporting citing sources have recently told Google that they're examining the structure of that agreement between Alphabet

and between character AI. The shares pairing a little bit of their gains, but as we've been talking about, there's been some momentum in the stock this week. Okay, staying with AI, another big story. OpenAI is set to expand its Stargate AI infrastructure program internationally. The company's partnering on a five gigawatt data center cluster in Abu Dhabi. Joining us now, Chris Lehane. He's the OpenAI's Chief Global Affairs Officer.

How did this come about? We know the details. This is a huge project. We can get into it. But there is a backstory here that many want to know about. Who was involved from the UAE? Who was involved from the administration on this side? And who was involved at OpenAI? Yeah, I think there's multiple sort of, as you're alluding to, streams that have come together here. First of all,

Open AI has been talking about this concept of how do we build democratic air? How do we allow the fact that the U.S. is leading on the innovation to leverage that lead to begin to build democratic AI rails around the world? We've been having this conversation for more than a year. Countries all around the world, including in the UAE.

the new administration comes in, President Trump comes in. I think there's a real vision to have what I would sort of call a commercial diplomacy approach. That includes both how we can use our technology again to build these democratic rails around the world, but also as part of that to bring investment back into the U.S. And so with the president's trip last week to the Middle East, particularly into the UAE, I think that was really a catalyst, a moment to bring all of these different streams together.

And the administration was in the middle of really trying to forge and facilitate all of this. And ultimately, what we're announcing today, I think, is really one of these win-wins, right? It's a win knowing that there are two countries in the world that can build AI at scale, the U.S.,

and China. We want as many countries as possible building on U.S. rail. So a win there and a win for the investment back to the U.S. Sorry. Can the UAE do it at scale? Five gigawatts of electricity is an insane amount of power for a nation like the UAE. I'm just going to read this because I couldn't believe it. The International Energy Agency and its data show that the entire country generated 155,000 gigawatt hours of electricity in 2022. That's about 17.7 gigawatts in total. In other words, this data center is

will consume one third of the entire country's energy. How on earth are they going to supply it? So, you know, Sam Altman, our CEO, has talked about the fact that as we move into this intelligence age being driven by AI, like there will be two components that really drive this access to electrons, energy, and then how the innovation moves forward. Those two things really move in concert. But when you're talking about the UAE and we're talking about this particular facility, it's five gigawatts.

over a time period. Our particular piece and what we're really anchoring on is that we're going to do one gigawatt. And within that one gigawatt, about 200 megawatts, I'm sorry, I'm getting a little bit of details, but 200 megawatts coming online over the course of next year. So I think the way to think about this is it will likely go in a series of stages. What I think is really impressive and interesting about how we're thinking about this particular partnership is that we're going to bring

AI to the entire nation, to the entire country. It's going to be accessible for its citizens. It's going to be used by the country to advance transportation, energy modernization, healthcare, education. So a really interesting way to think about it. And if you think of AI as almost a nation building technology, right? Countries around the world understand that this is maybe our generation's equivalent of electricity.

Again, two countries that can really provide it, the U.S. and China. And so there's an opportunity here to really work with these countries to create interesting models. We have Stargate in the U.S., which is our infrastructure project here in the U.S. We now have Stargate in the UAE. And, you know, our hope and aspiration and plan is to begin to do this around the world. Jason Kwan, our chief strategy officer, is heading off to Asia next week for a series of conversations to build on this. Are there one or two countries in Asia, Chris, that you're focusing in on?

I think when we look at Asia, we've talked about sort of stage one or initial stage of this, what we call open AI for countries. We're going to look at countries in Asia that I believe you would sort of put in the category of being historic U.S. allies, historic U.S. partners.

Jason's going to be traveling to countries like Korea, Japan, Australia, Singapore, all places where we're going to be having those conversations. And I think as we get into those conversations, we will learn a lot more. To date, we've already had more than 30 countries around the world reach out to us to want to talk about open AI for countries. So there is a great interest. And I do think what is going on here is

Is that the world understands that we are in a moment that there is an imperative to getting access to this technology. The U.S. does have the innovation lead right now. And can the U.S. leverage this lead to bring our version of AI, a democratic version to the rest of the world? And as part of that process, bring investments back to the U.S. as well.

And what then, in terms of those investments in the U.S., is the limiting factor? If energy cannot be brought to bear of five gigawatts in the UAE, it certainly can't be here in the United States. What sort of timeframe are we going to be able to have the infrastructure necessary to bring generative AI to the masses, to bring hardware, which you might be now teaming with Johnny Ive, to bring by 2026?

Yeah. So first of all, on the U.E. question, I having spent time there last week, I do think this is a country that has a real plan and a real strategy. So I am certainly confident that they're going to be able to get to where they want to get to. We feel a great deal of confidence in the ability to deliver on the one gigawatt that we've agreed to in terms of the data center. Now,

Just two weeks ago, I was in Abilene, Texas, where I was visiting one of our sites as part of U.S. Stargate. It's going to be over a gigawatt of energy. There are 3,000 workers on the ground, electricians, plumbers, metalworkers, carpenters. Sometimes, apparently, the numbers increase, go from 3,000 to 10,000 workers on the ground there. Look, this is a country, the United States, that has a history of thinking big, acting big,

and building big. And the conversations we're having on U.S. Stargate with other states around the country and Texas really has shown to us that there clearly is a path to be able to move forward in developing the type of infrastructure that we're going to need in the U.S. Yes, there are challenges, but I also think there's an understanding that we are in a global economic competition, that infrastructure is destiny. It's the key to the U.S. maintaining its lead. And so there is a lot of support

and dare I say, even energy behind getting access to that energy. Chris Lehane, it's great to have you back on the show. OpenAI's Chief Global Affairs Officer. Thanks for talking us through the deal. Coming up, digital physical therapy services, Hinge Health, it goes public. Company CEO joins us next. 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.

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For the first time in Europe, sales of China's BYD electric vehicles overtook Tesla. And that was in the month of April. Let's get out to Bloomberg's auto czar, Craig Trudeau. This is really key data, a key moment. In particular, 24 hours or so after Elon Musk told Bloomberg that it was not a Tesla unique problem, weakness of sales in Europe.

Yeah, I think when you look at the sales that Jado released today, one of the key things that comes across here is that going back before April, BYD wasn't even sort of sniffing Tesla sales really until early this year. And so for them to pass Tesla in this region after for so long Europe being a weakness, we heard Musk sort of offer the excuse that

THE ELECTRIC VEHICLE SEGMENT. TESLA HAS BEEN A LEADER IN EUROPE UNTIL RECENTLY. FOR THEM TO BE OFF TO SUCH A DEPRESSED START EARLY THIS YEAR, AS YOU SEE VOLKSWAGEN BE SO STRONG, BMW, YOU SEE SCOTA THERE WAS A HUGE GAINER IN THE EV SEGMENT. BYD CRACKING THE TOP 10 AND

beating out Tesla in the process. I think it's really, you know, the sort of watershed moment that is going to turn a lot of heads and make people sort of appreciate, again, you know, just how much of a challenge Musk may be having with his brand and his image in this region.

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Well, thanks for having me, first of all. Our vision at Hinge Health is to use technology to scale and automate the delivery of care itself, and that is a fantastic opportunity. We started with physical therapy, so we've shown that we could automate away about 95% of human clinician hours associated with physical therapy, which is about a $50 billion market here in the U.S., and

20 million Americans now have access to Hinge Health out of about 260 million adults in the U.S., only about 8% of adults now across 2,300 customers. And yeah, we're just getting started. Just getting started. You come in at a healthy more than $2 billion valuation at the price point that you priced at.

But that's actually a long way from your original valuation back in 2021 when markets were a little more crazed, shall we say. Why come to IPO now? Why not wait for valuation to recover? Will you ever get to the $6 billion level again, Dan?

Well, look, when we closed our last private market valuation in October of 2021, it was three weeks before the Nasdaq peaked in that last bubble. It wasn't because of some genius stroke on my end. It was divine intervention. But I'll tell you what, since that moment, we have more than quintupled our revenue, doubled our gross profit. So 10x our absolute gross profit that we're bringing home. We went from losing...

$100 million a year to being free cash flow positive for the last four quarters and having a 12% operating margin in Q1. And so look, I can't control where the markets are going to go, but I can say that we held up to our end of the bargain.

Daniel, I've had hundreds of hours of physical therapy and physio, and I've left my rugby career behind. But I went and did that in person, physically. This technology convinced me that it's going to get a whole market of people that are reluctant to go and do that because they can suddenly do it through a digital medium. Well, look...

You know, you're not alone. About 40% of Americans will have a musculoskeletal condition in any given year. That ranges from like a sprained ankle through a twisted knee through, you know, say, knee or hip arthritis to just, you know, chronic low back pain. And so 40% of us have a musculoskeletal condition in any given year. About 9% of us see a physical therapist. So there's a big drop-off between those with the musculoskeletal conditions and those actually going to PT. And that's because, not because people dislike PTs. PTs are one of the most popular providers in the healthcare industry.

is but going to PT, taking two to three days off work each week, paying a copay, paying a parking fee, which is kind of the hidden copay in America's health care system. It's really inconvenient. And so what we've done with our technology is to improve access, improve convenience, improve personalization, and substantially lower costs. And that's why we've been so popular with members and with our enterprise customers.

The biggest complaint and problem for you growing the top line as well about virtual health is the insurance factor. Have you cracked it? Will you be able to move smoothly billing through insurance, that kind of thing?

You're absolutely right. Reimbursement or getting through insurance is one of the biggest barriers to innovation in healthcare. And so we're lucky 50 plus health plans and pharmacy benefit managers, including five of the top five health plans and all three of the leading PBMs have selected Hinge Health as either their preferred or exclusive digital musculoskeletal provider. And this means self-insured employers who are buying us don't have to worry about contracting, IT security, procurement.

they could turn us on a lot easier. So look, it was really tough early on, but we've shown a repeatable go-to-market motion to where we could onboard a lot of customers very, very quickly. And now 20 million Americans have access to Hinge Health. But we've got a lot of work to do because there's 120 million Americans get their health care from their employer and another 100 million plus who are on fully insured Medicare Advantage or federal plans. So we've got a lot of work ahead, but we have a really good head start and a repeatable motion. Dan Perez, CEO of Hinge Health, thank you very much.

Some of the biggest holders of Trump coin are set to join President Trump for dinner later this evening. Among the attendees is crypto entrepreneur and founder of the Tron blockchain, Justin Sun, who revealed he was the top holder of the meme coin. I want to bring in Catherine Dowling, Bitwise General Counsel, to kind of help us understand why we are focused on and interested in a dinner between all the participants that I've just outlined.

Well, first, I was not invited to the dinner, so unfortunately. But I think...

Some of the the Trump involvement in the digital asset world has been incredibly helpful for the momentum that we're seeing in the industry. It has opened up a lot of doors, which is great. And we need to continue with that momentum. And there have been some aspects that have obviously created some noise around the edges. And I think that's going to work itself out. The way that I look at it across many technologies, but in this case, you know, we're talking about crypto, is that getting in front of the president can often inform his attitudes.

attitude towards something as general counsel. Do you actually see that moving one step forward, which is to legislation or something specific on the policy front? I do, actually, but not just because one person has Trump's ear. I think there's been a very clear agenda set out by many very involved digital asset ecosystem, smart leadership folks

who have been working with Congress. And we have a Congress that has a couple years behind it in experience with looking at trying to get legislation moving forward. And we're really finally seeing some of that momentum with the genius movement has been tremendous. And it's a tremendous step forward, some of which is already baked into the market. And yet, where's the genius act upon progress?

Senators Elizabeth Warren and Adam Schiff are basically saying this dinner exactly shows why we are worried, why these rules aren't tough enough because you've got a so-called pay to play occurrence with this dinner is what they see. Corruption, foreign influence is a risk. Do you see that?

I do see it. I do see it more as noise and I see it as something that we can segment. It's not a reason to not move forward with this important legislation, which is becoming more and more bipartisan. The more we move digital assets out of this kind of political noise,

the better, because we don't want it to be influenced or to have the momentum changed or challenged because of these conflicts. It's incredibly important to deal with those conflicts and to do it in a transparent way. And I do believe we can do both at the same time and meet both of those needs.

without saying all or nothing, we can't move forward on this because of this noise. But the conflicts are incredibly important to deal with, and we don't want that stopping up this incredible movement that we need to continue to see that is so important for so many reasons, one of which is to keep the U.S. at the forefront of expanding this technology. And that can't be underscored, Caroline. It's an incredibly important thing. We need to hold on to that perspective.

mainstay that core and make sure that we deal with this noise on the side and figure out a way to create barricades around those conflicts so that it doesn't impact the movement we need to continue to push for.

And we actually have been talking about the push forward today, tokenized assets when it comes to equities. We had the Kraken co-CEO on talking about X stocks that's backed by backed finance, that if you're outside the U.S., you might be able to have a tokenized version of Tesla or Nvidia stock to trade 24 hours. But they can only do it if you're outside the U.S. Are you optimistic that this sort of innovation will be met with regulatory clarity here in the U.S.?

Absolutely. It's coming and it's coming soon. This is just the tip of the iceberg and it's incredibly exciting to see. But you're going to see more and more tokenization experiments. You're going to see beta programs just like this one. And I think that is a good sign of keeping this. Look at tokenization. You can't you can't politicize tokenization. Right. It's it is blurring the lines between TradFi and crypto trading. It's changing the architecture.

And at heart, that is what blockchain is all about. Changing the architecture. Turns out Swift isn't so swift anymore when you look at blockchain technology in terms of how quickly you can settle, how quickly you can pay people on a global scale. And the more we focus on the technology and how we are changing traditional finance, the way we make payments, the way we make settlements,

stable coin is a great way. Kind of early core. Look at how stable coin works. If you can kind of focus on that technology aspect move out some of the noise on the sides make it less political. We'll get a lot further a lot faster. I've been telling a bit wise asking for less noise. We'll see if the administration acquiesces to that. That does it for this edition of Bloomberg Technology Ed.

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