Tesla’s Earnings Miss, New Crypto Firm Launches with Backing from Cantor, SoftBank
42:44 Share

Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

Developers like you are building the future, but you need the right tools to move fast and go further, right? That's where Microsoft comes in. With Microsoft, you can do it.

With tools like GitHub Copilot, VS Code, and Azure AI Foundry, you have everything you need to push the limits and bring your ideas to life faster. And with security, compliance, and responsible AI built in, you can focus on what matters most, building the next big thing. Learn more at developer.microsoft.com slash AI. Bloomberg Audio Studios. Podcasts. Radio. News.

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, a U-turn for Tesla. Shares rise as Musk vows to pull back from Doge. Plus, news of potential job cuts send Intel shares soaring. And Cantor Fitzgerald teaming up with Tether and SoftBank

SoftBank to start its own crypto firm led by Jack Mallers. We have him live later on in this hour. But first, let's check in on the markets and Bitcoin is on the higher side, but so too are stocks. Let's look at how the Nasdaq is currently adding to a two day gain that is the best two day gain in about 10 days since April 10th. We're actually about two weeks now. We're adding about $600 billion in terms of market capitalization to the Nasdaq 100. And I'm looking at the Magnificent Seven. It really is big tech on top. We're up 4.8%. Ed, what are you looking at in the micro?

I'm looking at Tesla and a stock that is up 8%. And frankly, it is shocking when a company misses earnings by that wider margin, which we'll go through later in the show, and the stock reacts in this way. And it's about a single story. Elon Musk, key man risk, and him saying, next month, May, I will pare back the amount of time that I'm spending on Doge and I will allocate more time to Tesla. It's exactly what the market wanted to hear. And we, throughout the hour, are going to go deep on that name because it's such a critically important one, Karen.

Let's talk a little bit more about US Treasury Secretary Scott Besson. He's soothing the markets further with a recognition that America first does not mean America alone. He also showed for the IMF and World Bank, he showed some support, but he spoke of the need to course correct. Bloomberg's Kayleigh Lyons has more from DC. This seems to be a calming, a soothing to the market that's going on right now.

Well, yeah, and you're seeing that evident in the price action today, Caroline. This is just another instance of a kind of a tone shift we've seen from the administration over the last several days, as there has been, of course, a lot of disdain for multilateral institutions emanating from the Trump White House. Scott Besson, to some extent, putting the worst of those fears to bed, saying that the administration is willing to work with the IMF and World

banks so long as they keep to their missions and avoid what he called mission creep, focusing on things like carbon footprints or climate change. He also, to your point, the key line that investors likely will seize on here is America first does not mean America alone, kind of underscores that this administration is trying to pivot away from perhaps the worst case scenarios the markets had considered around American isolationism.

and protectionist policy. Keeping in mind that today's speech came after Scott Besson yesterday told a closed-door meeting of investors that the current tariff situation with China specifically is unsustainable, that he expects a de-escalation. President Trump then followed those remarks, speaking in the Oval Office to reporters yesterday by saying he does expect a deal with China and that the ultimate tariff rate

will be well below the 145% where it currently stands. And of course, we got some fresh reporting from the Wall Street Journal today that the administration could be looking at cutting those tariffs on Chinese goods by as much as half in the range of 50 to 65%, depending on the product and whether or not it is

pertinent to U.S. national security interests. So we're seeing kind of a walking back of some of these most extreme policies. I would point out, though, President Trump right now is speaking with reporters on the North Lawn of the White House and still reiterating that he thinks both China and the European Union have been ripping the U.S. off, though he reiterated he does think they will get a fair deal with China. Bloomberg's Katie Lyons in D.C., thank you very much. Let's turn back to Tesla. The company's rise in the markets today can be attributed to one key moment on the earnings call yesterday.

Starting probably in next month, May, my time allocation to Doge will drop significantly. I'll have to continue doing it for, I think, the remainder of the president's term, just to make sure that the waste and fraud that we stopped does not come roaring back.

Elon Musk saying he will allocate more time to Tesla starting in May, reducing his Doge activity. For more, let's go to Bloomberg's yesterday. And I go back to irrespective of what Musk just said on the top and bottom line, this was one of the worst quarters for a long time. But Wall Street and investors around the world are looking past that. Yes, that's absolutely right. I mean, whichever way you slice these numbers, these were absolutely terrible numbers.

numbers that have not been seen in years, especially when you go to first quarter comparisons. Despite that, expectations were that numbers will be terrible. So that was kind of built into the stock. And that exactly is what the stock market is telling us. The stock is up 5%, 6% last I checked. And a lot of it is really coming on from the fact that

Musk is now saying that he will start pulling away from his government work and kind of focusing back on Tesla. And this is exactly what investors were hoping to hear. Now up 8% near session highs, Bloomberg session day. Thank you very much. For more on Tesla, William Stein, Truist Securities Managing Director joins us now. He maintains a hold rating on the company with a price target of $280.

Well, you're traditionally a semiconductor analyst, right? You think about compute and you think about AI. But I did know in your research that you, even against your own models, the fundamentals of this business missed by a really wide margin. Just take me through that data set that you have and then we'll get on to the other stuff like RoboTaxi and AI.

Yeah, I don't mean to be disagreeable or controversial, but I want to say very clearly that when we look at results of companies, it's important to understand both the broker or sell-side aggregate consensus, but also the buy-side consensus view. The company had already updated

investors in the street with delivery numbers about a month ago. And I think many investors had not updated or at least on the sell side have not updated models. So when you compare versus sort of the so-called consensus numbers, it looks like this huge miss. But in reality, you know, relative to our model that had been updated and I think compared to other models where if you looked at just the consensus of updated estimates,

The miss was not very big. In fact, relative to our model, only 1.5% on revenue, actually beat on gross profit, missed on operating profit somewhat, and they missed on EPS by $0.06. This was not some disaster, at least relative to what we were expecting following the update a month ago.

They were somewhat disappointing results. Relative to what we expected, the disappointment came in two places. One was in energy forage and generation. So you think about solar roof and mega packs, that sort of thing. And the other was operating expenses, where they accelerated some AI R&D investments. And that's, I don't think, the end of the world for investors. In fact, one could take a positive spin on that.

William, I get that perhaps it doesn't miss versus downgraded expectations, but a profit drop, the worst profit number since 2021, a revenue drop nevertheless shows real fundamental issues here. Are the fundamental issues going to be alleviated by more time spent at the company by Musk?

Oh, I think in at least two ways, right? I mean, the two sort of obvious ways are, number one, if you accept the supposition that Musk's, in the way that the investor relations team has described it to me, that his greatest superpower is in delivering huge technological advancements by spending very little money, but just very focused talent.

then it's a big positive from that perspective. And the other is to moderate what I think Musk characterized as political sentiment. I think spending less time in the public eye doing government projects will be good for the stock.

We want to thank you so much, William Stein, who's been joining us from Truist Securities. I know you're a man who focuses a lot on the AI opportunity, a lot on the semiconductor space as well. So we appreciate your time today. Meanwhile, though, coming up, we're going to get more on semiconductors. Intel planning more than 20% of job cuts ahead of earnings tomorrow. More on that scoop ahead. This is Blue Mare Technology.

Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

and EY Consulting. Technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. 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

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

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.

Let's look at Intel shares surging after Bloomberg reported the company's looking to cut more than 20% of its staff. It would be the first major restructuring under new CEO Lipu Tan. Bloomberg's Ian King joins us with more.

This is based on what a source told us. And yes, there's a bloat issue, right? But there's also a refocusing issue. Reading the report, it's like get rid of middle management and focus on actually making some money on technology that's competitive. Yeah, I mean, I think our understanding from our sourcing is that the problem is the decision-making at Intel has become bloated, that everything that should be happening quickly isn't happening quickly. There's a lot of meetings, a lot of...

empire building a lot of silos that need to be swept away in order for them to get back on track and to try and catch up with competitors like NVIDIA.

And all eyes on how they can make moves in AI. Ian King, we appreciate it. It was a great scoop that came out. Meanwhile, looking at the broader tech markets, we've got Ankur Crawford with us, Alja Portfolio Manager, who can speak more broadly to the tech space. But just going to this need to focus in on generative AI, the opportunity by a company like Intel, is it still all about AI? Are we able to focus on the long-term opportunity when you've got headlines just now from Trump saying, well, that the U.S. will have a fair deal with China?

Yeah, look, AI is the next revolution that we have to chase. So it is important that Intel fixes its house. But, you know, I think Intel has kind of lost the game on AI. What they have to figure out is if they can hold the...

kind of prowess on manufacturing and catch up with TSMC because that becomes a more strategic imperative than being able to develop a competing AI chip to NVIDIA. How I saw manufacturing that was meant to be coming more to home, Ohio for example, that then gets pushed back because of current quandaries about whether there's going to be government support for the CHIPS Act anymore, whether there's going to be money coming from the government.

How is Intel or any chip maker currently to navigate whether they invest in the U.S. or not? Well, definitively we need to invest in the U.S. I think the administration has made it very clear. I think it is a necessity that we start investing in the U.S. So I am completely on board with that.

I don't actually think that the lack of chip act funding is the reason that Intel is not investing in the US. I believe that they've actually lost the

the benefit of being first. And they are struggling with going from one node to the next. We'll see where they are on 18A, which is the next node. But as of right now, they're still outsourcing to Taiwan Semi, which shows you that in fact TSM has taken the lead on these last three nodes.

And we will find out more Thursday evening when Intel posts numbers. I think they'll have to answer a lot of those questions. Earnings is so interesting, right, in the context of everything happening around the world. I want to bring up this chart, which is average EPS surprise. And we're still kind of...

Rattling our brains a little bit, Ankur, about the Tesla share performance in this session relative to the numbers it posted. And the reason I like this chart, I find it so interesting, is that actually Tesla has a terrible track record compared to the other Mag7 names in positive surprise on EPS. That's all to say, do you think that given the macro environment right now, all of these names might get a bit of a pass this quarter?

Yeah, I think sentiment has gotten so dire that many of these companies are putting up okay numbers. Like you look at iSurge yesterday in healthcare space. You know, the numbers were okay. However, it was better than expected. Tesla, the same way. The numbers were okay, but they talked about I think some of their growth drivers, which were humanoids. They talked about how they're going to have autonomy by the end of this year. I think he said millions of vehicles by the second half of this year. And even

Even if it's not second half of this year, as long as there's a roadmap to true autonomy, I think that's what's going to drive the next leg in Tesla, not necessarily the margins on the auto side.

they also pulled guidance. Do you expect that to be a move elsewhere in the Mag7 names? I think that we could get many companies not actually giving any guidance because the uncertainty is high. So if you're a CFO or a CEO trying to navigate this market,

you really have a hard time right now because, you know, what do you guide to? Do you guide to 145% tariff or 40% tariff from China? Do you guide to, and what you're seeing today, for example, in Vertiv. Vertiv basically has assumed, or, and iSearch have assumed, you know, full tariff impact. So, you know, iSearch last night, the CFO said 145% tariff is what they have included in their guidance and have guided that way.

just in order to buffer any kind of impact on their earnings. You say it's difficult for a CEO, a CFO to navigate, boy is it also difficult for you, an investor. Oh, for sure. So do you remain committed in the longer term? Do you stick to the long-term narratives that have driven these stocks higher over the last couple of years, or do you pause, do you take money out? So I think if you haven't taken your money out already and protected yourself, now is not the time to do it.

So that's the first thing. Secondly, you know, by September, I would, I will go out on a limb and say by September, we are no longer going to be talking about these trade wars. And we will have moved on to something else. And maybe, maybe we'll be looking at the midterms and how great the economy is doing. But it won't be the trade wars. So I think this is a kind of a short term focus geopolitically to, to, to,

play a game that the US, the administration is currently playing. However, it will be behind us shortly. You know, as we move forward, the AI trade is still very, very prevalent and there's no escaping it. That train has left the station. So, you know, yes, we will start again. And, you know, right now there's some very compelling opportunities in the market. Should America's biggest technology companies prepare for a recession?

You know, tough to tell, and I think it's a binary answer, and in part because the policies are going to dictate if we go into a recession.

You know, if we do have a 145% tariff and we keep ratcheting up these tariffs on foreign goods and we have a retaliatory effect, yes, we are going to go into a recession. And I would say that there would be like 90-some percent probability that that would happen. If we can thread the needle and not be quite as aggressive, the situation changes. And maybe we have a bit of a soft landing at, you know, 1% GDP growth instead of negative GDP growth.

Encore Crawford of Alger, great to have you on the show. Thank you very much. The European Union has fined Apple and Meta for violating its tough new antitrust rules for big tech. Now, the fines total 700 million euros, about $798 million. They're actually relatively modest compared to previous EU fines, and it's likely to be thought to be avoiding further provoking President Trump. For more, let's bring in Bloomberg's Sam Stolten. But it's provoked the ire of Apple and Meta. They've got some fighting talk in response.

It has indeed, yes. Hello, Caroline here from Brussels. Yes, well, Apple has said that it will actually appeal this fine, and it's about 500 million euros against the California firm. And Meta has gone even further with Joel Kaplan, who, of course, you'll remember, spent quite a few years himself in the White House, but now Meta's global head of policy, saying that this is a discriminative act from the European Union and

and that it is continuing to unfairly target American businesses. So it's certainly a ratcheting up in these transatlantic tensions. Indeed, Meta's fine itself was a bit less than Apple's. It was only $200 million. But generally, despite these fines being lower than traditional antitrust penalties, they still haven't particularly pleased firms on the other side of the Atlantic.

The logic being that because they're lower than historic penalties, they won't draw the ire of President Trump. He won't retaliate. But I think that the spokesperson for the EU that we spoke to for the story points out that this had nothing to do with trade, Sam.

Yeah, I mean, that's the message coming from the European Commission. This is an independent regulatory action. It's got nothing to do with the trade talks whatsoever. But the scuttlebutt here in Brussels and around town generally is that, of course, the EU has had...

under the Digital Markets Act to fine these companies up to 10% of global annual revenue. And actually, these fines are less than 0.15% of global annual revenue for both MATA and Apple. So there is something that is holding the EU back here, and it is more likely than not, despite what the European Commission says, these ongoing trade negotiations.

Bloomberg's Sam Stolten in Brussels, thank you very much. Another story we're tracking, the co-founder of Instagram says the photo sharing app could have thrived without Facebook's. Kevin Systrom testified that Meta CEO Mark Zuckerberg treated Instagram's growth as, quote, threat and starved the app of resources after the purchase. The US government seeking to prove the social media giant created an illegal monopoly through its acquisitions of Instagram and the messaging service WhatsApp. Cara?

Yet more antitrust cases going on, Ed, and the Justice Department's effort to break up Google is one of them. Bloomberg's David Alba joins us on the latest out of what is trying to find remedies to ensure that Google no longer seems to be a monopoly. One of those remedies the government wants is to sell off Chrome, and seemingly there's a buyer for it.

Yeah, yeah. We heard in trial testimony yesterday that the head of product for ChatGPT, Nick Turley from OpenAI, said that OpenAI would be interested in buying Chrome if it were actually for sale. Google, of course, does not intend to sell it.

and is fighting sort of this remedy that is proposed by the DOJ. But, you know, they will see how the rest of this remedies trial goes and what Judge Mehta, the judge in this case, eventually decides.

Davey, a point of intrigue is that Chromium, the underlying code base for Chrome, is open source, right? And I think Google will lean heavily into the idea that in the browser market, that's a really good thing. Has there been any debate of that so far?

Yeah, absolutely. Google's defense in not wanting to spin off Chrome is that, look, the underlying technology for Chrome is open source and it's used by different browsers from different companies, including Amazon's Silk browser. But the DOJ still contends that Chrome is a key gateway into the Internet and Internet search specifically. And if it were to be controlled by another party, then that would help

sort of break up the power that Google has about users' data, users' queries, everything that feeds into Google Search and improving that product.

Bloomberg's Davey Alba, thank you very much. We have some breaking news crossing the Bloomberg terminal. Treasury Secretary Scott Beston says that there has been no unilateral offer from Trump to cut China tariffs. He is speaking to reporters on the sidelines of the Institute of International Finance event in Washington where he was giving a keynote. And this is the key wording, no unilateral offer from Trump to reduce tariffs on China. There have been earlier reports, of course, from the Wall Street Journal that

the president was considering a tiered approach to tariffs, but the wording here, incredibly specific.

He also has been commenting on remarks by the president about firing Federal Reserve Chair Powell, saying that in Besant's case, the Treasury Secretary, quote, does not have a stand on the Trump-Powell firing remark. And Caro, that's something in the markets context with the Nasdaq 100 pushing up 3.1% that we've been tracking closely. Off of its highs, but still trading up on the day. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Ed Ludlow in San Francisco. Cara, some moves in the market. Boy, are there moves. And we remain higher on the Nasdaq, up more than 3% on the Nasdaq 100. Even as we try and digest some of the overall headline risk, whether or not we're seeing a cooling down of tensions around China, whether we have Trump having some...

more positive narrative towards the country. But Scott Besson coming out clearly saying, look, there is no full China trade deal yet. It's going to take two to three years. So we come off of our highs a little bit. We're up 2.8 percent. No unilateral offer from President Trump to cut China's tariffs as yet. But we look underneath the hood with some of the individual stocks that are on the move. I want to shine a light on European trading. We just finished. SAP surged 8.8 percent. We had the best innings in six years. They post really strong profitability and a great balance.

backlog for their cloud orders. What does that mean for the company that is run by Bill McDermott, which is ServiceNow? Of course, he used to run SAP over in Germany. Now he runs ServiceNow up 6.7%. Their earnings after the bell, will they post some resiliency? Remember, they're exposed some of the doge cuts across government. So too is IBM. We're up just 2% ahead of their earnings after the bell as well. Revenue is likely to flatline for that particular business, Ed.

Let's get back to Tesla. The stock has also pulled back literally in the last couple of minutes on those headlines from Treasury Secretary Scott Besson, but still up 7%, not up on fundamentals or the core of the earnings report, but literally the commentary from Elon Musk that he will pare back time at Doge and add more time, allocate more time to Tesla. Bloomberg's Craig Houdel, who leads our global coverage of the auto industry, is with us. You and I have been pouring through the commentary on the call and the earnings deck, and there are contradictions in there

about the core business, demand hit from the backlash to Doge or is it the brand or is it something else? Hello.

I do think the first quarter we absolutely have to acknowledge that the Model Y changeover was disruptive, right? And it's going to take us some time to sort of parse just how much demand there is for that model. It is, after all, Tesla's most popular far and away, and it's one of the best-selling vehicles in the world.

The question is going to be, how much can Tesla rely on that one vehicle? And can it reliably continue to be sort of a one-trick pony where the Model 3 has been a letdown despite that vehicle getting a makeover recently? And the rest of the lineup is kind of sucking wind. The Cybertruck is not...

living up to Musk's expectations in the lease. Yeah, significant number in sales down for the Cybertruck. But there is going to be a cheaper Model Y in the first half of this year. That's what helps send the shares higher. So too is the robo-taxi outlook for what's happening in Austin in June. There was real recommitment in certain areas of the business.

Yeah, I do think that there was concern after some reporting by Reuters a few days ago that maybe there was a setback in the timing for more affordable vehicles that they've been saying will be on the way for the first half.

I think there was not necessarily a full-throated denial of that. There was a comment during the call about a ramp not going as smoothly as hoped. And I do think that even the

driverless rides that they're going to start in Austin. I think Musk talked about that being a pretty limited initial launch of just a handful of vehicles. So maybe some expectations setting there in light of how Musk tends to really sort of promise the moon, it's maybe a little surprising to see the shares jump so dramatically

when some of these reasons for sort of being a swage were not necessarily full-throated. Bloomberg's Craig Duhal in London. Thank you very much. For more on Tesla, we're joined now by Alexandra Mertz, a longtime Tesla shareholder on Social Platform X. She goes by at Tesla Boomer Mama and is seen, frankly, as a leader among the very large group of retail investors that follow the EV maker closer. She's also the CEO and founder of LNF Inc.,

investor services. Alexandra, thank you for joining us back on Bloomberg Technology. Let's just start with the basic reaction you have to Elon Musk opening the call saying, starting in May, I will pay back the amount of time spent on Doge and allocate more time to Tesla.

Thanks for having me, Ed. Yes, with pleasure. Well, first of all, I want to thank Elon for having done the job at Dodge he's been doing. This has been important for any U.S. taxpayer and for anybody that's interested in the United States becoming the power it should be. And he has been stellar in getting this organized, how he is stellar in organizing anything.

So I'm really pleased he put some time and effort into this. It's always been clear, both by Elon and by President Trump, that this would be limited in time for his full-time allocation of time. But this is coming to an end in May, which is not surprising at all, other than people who may not have listened. So him dialing it down to one to two days a week

And do remember, Elon's week is a seven-day week and not a five-day week. So him dialing it down to one to two days of Dodge oversight and still being available to it doesn't mean he's completely backing out of it.

We're happy as Tesla shareholders that he's going to put more time into Tesla, but frankly, nothing has been delayed or missing the four or five months that he has now been with Dodge. The launch of the new Model Y simultaneously in four factories on three continents shows how strong the Tesla team is, whether Elon is in Washington, D.C. or somewhere else in the world.

So there is really, you know, there was no concern whatsoever. And people being surprised by the stock going back up, as Greg said, I think they have not watched what Tesla is actually going to accomplish.

Alexandre, something you just said that nothing has been missed. I was also trying to understand there was some contradiction between what Elon Musk said on the demand side and absent of macroeconomic impacts, they don't see an impact to demand. But the CFO to Nature was quite clear

about the brand impact in the quarter, the first quarter, and quote, "the changing political landscape having an impact on future sales." I have a question for you from X, from the audience, from one of your fellow community members essentially, and it asks you, you usually live in California, what is your gauge of quote, "brand damage" given your geography? And that question comes from Farzad.

Yeah, that's a very good question, Farzad. I honestly here in Santa Barbara don't see any impact. There are more Teslas out there. I picked up my new Model Y last Saturday and the Tesla Center was busy. It was crazy, actually. But at the same time, from 10 to 12, there was the typical Saturday morning protestation in front of the Tesla store. Always the same people. They get carried in with buses. At 10 o'clock, they start. At 12 o'clock, they go off. And

will have an impact. This has an impact on people that probably would not have purchased Teslas, but still want to make noise. On the other side, on the upside, there is now a whole new clientele. We're seeing many people that have never considered EVs now considering EVs and in particular Teslas. And so, you know, it is give and take. I'm not saying it was completely without brand damage, but clearly the overall goal of Tesla

putting real AI on the streets, being the one vector that will be the one transporting anybody and everybody in the next decade, that hasn't been changed in anything. But Alexandra, they're kind of late to that party, certainly slower than Waymo. I got my Waymo in Arizona just last week. What of the rollout and when it becomes a real business model action here?

That was actually the key phrase I found yesterday in the earnings call when Elon for the first time quantified when he expects significant revenues from full self-drive, which he said by middle of 2026. And that is just around the corner. And the Waymo model, that was actually really a fun moment because the whole team there had a good chuckle about

Waymo costing way more money. I mean, as you know, Waymo is built on other companies' vehicles, is very expensive and is geofenced. So it is in no way comparable, but I mean, no doubt they have done

a great service of bringing full self-driving to the masses and have to be congratulated for. It is in no way comparable what Tesla has. Tesla's will work everywhere, as has been proven with the rollout of FSD in China. They had hardly any information on Chinese roads, yet were immediately able to adopt FSD to China.

Alexandra, it's always great to have you on the show. Thank you for articulating so well. Alexandra Mertz of L&F Investor Services. Now coming up, Jeff Rosenthal joins us to discuss his new venture capital fund, CIV, backing tech startups tackling energy and manufacturing. This is Blue Mag Technology. Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

At EY Consulting, technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. 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

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

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.

There's a new venture capital fund on the scene, CIV, launching with an inaugural $200 million fund to back startups trying to reshape manufacturing, electrician, compute needs. Jeff Rosenthal, co-founder and managing partner of CIV, joins us now. You've got some big names behind you as well, some real founders in USV, for example. Fred Wilson's on board, Gwynne Shotwell as well of SpaceX.

Where are you already allocating the money? Because you've already invested in certain startups. Yeah, you know, we built this firm for a specific purpose and that is to back and build companies focused on critical infrastructure

and industry here in the US. And so that spans digital infrastructure, robotics, AI and compute, really guided by this fast moving, fast approaching set of megatrends with AI and compute and the power needs behind it, the reshoring and re-industrialization of global industry following COVID, Ukraine, and now a new administration, and really just the electrification of everything. So we're seeing this inflecting demand

you know, driving this demand and supply. And it now is not only a deep need for our economic wellbeing, but it's also a national security issue. - Jeff, when did you conceive the idea for the firm and the fund? And when did you start building it? Because clearly this is very much in line with what this administration is trying to do in America with heavy industry of different types.

We started building this firm a couple years ago, really thinking about the origination of the idea of backing and building in these spaces. I don't think that we could have predicted that these trends would have accelerated to the degree that they have in the last, say, six to 12 months across nuclear and critical infrastructure, supply chain logistics, manufacturing.

But, you know, we have both a background in investing in these themes, but also building companies in these themes. And so we're not just passive capital. We actually also roll our sleeves up. I mean, you've invested in SpaceX. Patrick has founded a clean energy business. You've got Abhijoy over from KOTU. But what of the thesis of where you invest and how you actually seed, but also co-found businesses like a nuclear business? So what's the recipe here?

Yeah, so we're principally an investment firm. We spend the majority of our time in capital really identifying and then earning the right to back the best founders. When we have a really defined thesis, a real right to win, and a partner who is going to lead that business as the active co-founder and CEO, only then will we co-found businesses on platform. So before we raised any outside capital, really to prove the thesis to ourselves,

ourselves. We made six investments, five were direct investments in companies like Base Power, Crux, Verse, Senra Systems. And then our first build company, as you mentioned, we co-founded the Nuclear Company, which is a fleet scale nuclear developer, really powering AI and large scale industry here in the United States.

Jeff, manufacturing and growing manufacturing requires capital. It's expensive. You're looking at the early stage. So what are the innovations that you hope to find that I guess lower the cost of doing business in this country or something of that effect? Yeah, absolutely. I think that when you look at just the cost of doing business in this country, when we think about the reshoring of heavy industry or critical industry,

One of the things that people will point to as a major challenge is just the cost of labor. And I think that there's a lot of technological innovation across robotics and AI that gives us confidence that that is something that we will be able to compete on a global scale here domestically. The beauty of many of these businesses compared to, say, traditional venture capital, Silicon Valley-style software companies is that they scale

often with non-dilutive capital. So we focus on businesses that are actually highly efficient to equity and then can scale with asset capital or debt. Jeff Rosenthal, CIO of Eco, founder and managing partner. Thank you for joining us here on the show. Thank you.

Crypto news. Cantor Fitzgerald is teaming up with Tether and SoftBank to create a new crypto company called 21 Capital. It's going to be accumulating Bitcoin in a similar fashion to, say, that of Michael Saylor's strategy. Plans to launch more than 42,000 Bitcoin, of course, worth more than $4 billion. And Jack Malice is also co-founder. He's CEO of 21 Capital. And he joins us now. We usually have you on because of Strike. You're getting me fired up. How are you doing, Caroline? Good to see you. Jack, when did this idea come to be?

The founding story. So I co-founded the business with Tether. I would say I've known the Tether group for over a decade. There just weren't that many Bitcoiners around over 10 years ago. So we've done a lot of work together in El Salvador, etc. We've been so inspired by Michael Saylor and all of the public companies acquiring Bitcoin. But I would say over the last few years, that inspiration turned into what we thought was an opportunity and a hole in the market that we could deliver on.

which is bringing blue chip credibility and startup upside. We feel like we can bring enough capital and be big enough to win, we're small enough to grow, and most importantly, a pure Bitcoin business. A lot of these companies, they're pivoting from a past operating business, they're rebranding, changing their name,

maybe selling video games to buy Bitcoin or selling medical equipment to buy Bitcoin. And we're a purpose-built Bitcoin company. We're going to build Bitcoin products, Bitcoin cash flow, and we're going to give Bitcoin per share growth to shareholders and be hopefully the best way for investors to get Bitcoin exposure in the public markets.

Jack, I think off camera, just before we started, you used the word vehicle, a vehicle for Bitcoin. I think like a reasonable question that people have is what does the CEO of a new company whose mission is to accumulate Bitcoin do day to day? Like, what is it that you're going to try and manage or achieve? Yeah, so for...

All the Bitcoiners out there, we encourage you to check out our filing. We've introduced two new metrics to the public markets. One is BPS, stands for Bitcoin Per Share, as opposed to Earnings Per Share. And the other is BRR, which stands for Bitcoin Return Rate. And my job and what I'm dedicated to do for our shareholders in which we view similar to our customers

is grow our Bitcoin per share. So we're an operating company and when you buy a share of 21 in a hypothetical sense, what we intend to do is let's say our Bitcoin per share is 0.05. Our intent is to be able to grow that to 0.06 Bitcoin per share, 0.07 Bitcoin per share. Where a vehicle like an ETF, your exposure is static. So 21 is an operating business and we will be building Bitcoin products

Bitcoin operative cash flow and then using the capital markets to accretively grow the Bitcoin on our balance sheet. So we want our shareholders to get wealthier, get richer in Bitcoin terms and our metrics encourage the market to view us not in fiat terms and Bitcoin terms because we're not here to necessarily beat the market. We're here to build a new one and encourage the world to adopt Bitcoin in a sense that we believe it hasn't yet.

Jack, you already have a Bitcoin product and it's Strike. Yes. And it's where people can buy, sell, store their crypto. What happens to that? Are you still going to be leading that business? Yeah, I'm the CEO of both companies. We're actually disclosing today at Strike some of our financials. So Strike, immensely profitable. We have over 20%, even a margin.

85% gross profit margin. We have only 75 employees. So on a gross or net profit per employee basis, we got to be one of, if not, you know, the biggest in the Bitcoin space in that regard. And so it's an incredibly strong business. It's doing well. I'm so proud of the employees and our investors and thankful for our customers. And, you know, Caroline, you can just do things. And I'm

I'm gonna lead both businesses. I truly believe my purpose on this planet is to try and help Bitcoin have a chance to change the world in what I believe is the right direction. And I think Strike and 21 both independently work towards that.

Jack, you have plans to raise capital and I guess not just like as a one off over time, raise capital. Right. How will that work in practice? What mechanisms will you use? And a lot of people that watch the show like ask if they're not registered institutional investors, like how can they participate in that?

Yes. I thought for a second you were going to offer me some money to buy some Bitcoin. Absolutely not. Absolutely not. I'm kidding, man. Go with my actual question. No, totally. So listen, we are hopeful to have our shares listed on a stock exchange under the ticker XXI. Today, we are trading under CEP, which Caroline mentioned is our Cantor Equity Partners. And that stock is trading in live today.

If it's successfully merged upon closing, it will be XXI. We do intend to raise as much capital as we possibly can to acquire Bitcoin. Again, my one rule to my shareholders is it will be accretive. Our Bitcoin per share will grow. We will never...

have Bitcoin per share negative. At least that's our intent. Our intent is to make sure that when you're a shareholder of 21, that you're getting wealthier in Bitcoin terms. And that's my job as a CEO to deliver that. So we plan on raising capital in all different type of sectors and markets and really blending Bitcoin and incorporating it in the traditional financial system to deliver a powerful equity to the public markets for Bitcoiners. Is that the selling point versus ETFs? Because you came up

with this idea over the course of years. And since that time, there's not just been strategy that you can invest in or block, but you can get spot Bitcoin ETFs. What's the upside? And in fact, a viewer from Bloomberg is asking, like, how can you have more bits than an ETF? Right. OK, so I got to be clear, I'm not preaching a future that I can I can promise. This is hypothetical and this is our intent. Somewhere my lawyers are like, that's our guy. Right. But

But our intent, Caroline, is that when you buy a share of 21, and let's say that's 0.005 Bitcoin per share, we go out and we intend to close deals, build products, add Bitcoin to our treasury to where in which you get a press release and you say, wow,

21's Bitcoin per share grew from 0.05 to 0.06. I just got more Bitcoin exposure. I got wealthier in Bitcoin terms just by being a shareholder of this company. And ETF is not an operating company. You know, iBid isn't outgrowing your exposure to Bitcoin. It's a static exposure through their security instrument. Whereas for us, we're a business, I'm a CEO, I get up, I work every day to grow how much Bitcoin your share represents on our balance sheet. That's the big difference.

21 Capital CEO Jack Mallers and Strike CEO. Great to have you back on the show, Caro. And that does it for this edition of Bloomberg Technology, a busy one, Ed. Yeah, let's just quickly look at some of the names we care about. Tesla, it's up because Elon Musk has pledged to return to Tesla. Less time at Doge. Intel, Bloomberg reporting is cutting 20% of staff, getting focused on tech, cutting out middle management. And the market broadly has pulled back, right, Caro, since those Besant heads. But there's green on that screen.

Green on the screen as we anticipate IBM ServiceNow earnings. And of course, we've got Intel tomorrow. Don't 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.

Developers like you are building the future, but you need the right tools to move fast and go further, right? That's where Microsoft comes in. With tools like GitHub Copilot, VS Code, and Azure AI Foundry, you have everything you need to push the limits and bring your ideas to life faster. And with security, compliance, and responsible AI built in, you can focus on what matters most, building the next big thing. Learn more at developer.microsoft.com.ai.

How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast, free shipping to in-depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to AmazonBusiness.com for support.