Trump Proposes More Tariffs, Musk's X Looks To $44B Valuation
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Live from New York, I'm Caroline Hyde.

And I'm Jackie Davalos in San Francisco. This is Bloomberg Technology. Coming up, President Trump plans to impose 25% tariffs on autos, chips and more. We'll break down the potential tech impact.

Plus Microsoft's big quantum leak. We have its new Majorana chip, what it means for the future of computing. And Elon Musk's X is in talks to raise money from investors and a $44 billion valuation, the amount he bought it for back in 2022. But first, we check in on these markets. And we look at the tussle that is, once again, a tariff crisis.

that drives through the market, and we try to work out who it helps, who it hinders. We're currently off by 0.3% on the NASDAQ 100, dragged lower by Meta once again in the fray after it finally stops its run-up that we've seen in market capitalization. The SOX, though, the chip semiconductor index that we're seeing at the moment, up 4%.

up 0.4%. ADI coming out with its numbers looking good. We'll dig into what it means in terms of the overall tariffs they want individual chip makers. Move on, some individual names I want to shout out in the world of autos and chips. Tesla is actually your biggest points driver to the higher side today, Jackie, actually managing to push off some of the selling that's going on in the NASDAQ 100. We're up more than 2%. We'll dig into, of course, what Elon Musk and President Trump were saying to Fox yesterday. Intel off by almost 5%. Yesterday's run up, of course,

Speculation surrounding potential deals selling off assets as much as TSMC, some cold water being pulled on that today. We're off by 5%, but still higher than we had been in the previous weeks. But let's dig into the news of the day, Jackie. Right, let's go to Washington, D.C., and bring in Bloomberg's Mike Shepard to break down President Trump's potential tariffs and its impact. Mike, what do we know about the scope and timing of the tariffs that Trump is proposing here?

Well, Jackie, he gave us only a few clues yesterday, and one of them was on the timing. He floated a date of April 2nd for this latest round of tariffs that could come on autos, chips and pharmaceuticals. And this, of course, would come on top of a lot of other levies that he has already rolled out or is planning to roll out. And those include the 10 percent tariffs on all imports from China, levies against

Canadian and Mexican goods that could go into effect next month unless our neighbors to the north and south are able to negotiate another delay or maybe avoid those tariffs altogether. And then steel and aluminum imports as well. So we know the broad strokes. Now, what this means in particular for chips remains unclear. Would there be exceptions? And how far would these go? Would it be all

categories of semiconductors or only the most advanced chips. So we still have a lot to learn before this actually gets implemented or gets delayed or negotiated away.

Mike, it's interesting, of course, the ramifications on European stocks felt hard, particularly in the auto sector. Today, Tesla rallies. Is that a competition potential and the fact that it will have less of it from inbound and more costly cars coming in? Or is it more what Elon Musk had to say with Sean Hannity at Fox alongside the president?

Well, Musk's comments certainly had that kind of ameliorative effect for anyone who wants to invest in Tesla after having seen the company struggle a little bit. We have seen concerns raised about how quickly they are coming up with that lower cost model that investors have been waiting for and consumers have been waiting for, and also concerns that maybe Elon Musk

The CEO of Tesla is a little bit too distracted with some other ventures, including Doge. But let's go back to the whole chips and broader question that you were raising about autos. When you think about autos, too, there are so many chips in vehicles today and so many other goods today that the impact could be wide ranging. Now, Elon Musk may be able to find a way around that, given his proximity to the president.

Well said, Mike. Great to catch up with you. Thank you. We've got some breaking news. We do know we're anticipating a new, more affordable phone coming from Apple, currently off by four-tenths percent as we get the details on the iPhone 16E. They call it a powerful new member of the iPhone 16. It's going to have capabilities at a more affordable price, they say. As soon as February the 28th, you can buy a white and a black

iPhone 16E for as little as $599. Close eye on Apple, close eye on the markets more broadly. Martin Orton's with us, chief investment strategist at Empower, to really break down how investors are taking the deluge of headlines, particularly when you're thinking we've got, you know, launches and products still coming, but Apple affected by potential tariffs and geopolitics, not to mention the chips in the auto sector today. How do you see through that?

Well, you know, it's so interesting because I think the market really is trying to see through all the tariffs. We've had a lot of tariff noise, of course, during the Trump administration, but some kind of predictions or precursors to that with what we saw President Trump posting on Truth Social, what he said during the campaign trail. And by and large, we've seen a market that's largely looking at tariffs as a negotiating tactic and able to kind of shut it off.

or not let it impact kind of how the market performs. And I think there's a kind of a missing calculus there that relates to Trump's broader comments around tariffs. He talks a lot about tariffs as a form of federal revenue. He talks a lot about tariffs as a way to even out trade deficits.

He talks about tariffs as a way to build manufacturing here in the US. And all of those other three elements, beyond the negotiation, which we know is part of this man who has an art of the deal, but all of those other three elements really focus on tariffs that are broad-based and long-lasting. And so I think this is something that the market is potentially going to need to grapple with, not on a case-by-case basis, but at the broad level for markets.

Marta, talk to us specifically about the technology industry's exposure to some of this tariff tit for tat. How are you thinking about positioning certain pockets of your tech portfolio going forward? Well, it's interesting when we think about tariffs with technology, we've spent a lot of time thinking about areas like automotives, but we've spent less time thinking about tariffs with technology. And I think a lot of times investors are looking at areas like tech and

expecting some sort of, I guess, get out of jail free card with some carve outs or something along those lines. I don't think that's completely out of line thinking. When we think about one of the incentives that President Trump has is to really make AI and US AI

a superpower and we see a lot of enthusiasm for that within the Trump administration. So I think there's some potential to think that we see tariffs coming at tech and then we see the enthusiasm for AI coming into a bit of a collision course over the course of 2025. But frankly, you know, the devil's in the details and the details aren't clear at this point in terms of how and where and the impact of the tariffs that we see in technology or the broad market.

Let's zoom out of the United States for a bit. China tech has really rallied, even though it's somewhat lagged when it comes to AI investments coming from the private sector and perhaps even the public sector. How are you advising clients to take advantage of some of that diversification, given they're seeing such a big boost?

China tech is a really interesting investment question. Of course, China stocks in general have been under siege. We've seen weakness really stretching back the past few years, and a lot of that relating to geopolitical risk, relating to regulatory concerns, relating to economic questions as it relates to China tech. And so we're seeing valuations that are pretty cheap. Of course, we've had a rally that's undercut some of those valuations, but still marginally cheaper than they were.

You know, if we stretch back our gaze several years ago, pre-pandemic, and you have some really healthy big tech companies in China, some rivals to what we have here in the U.S. So I think if we're looking at the valuations here at home and they seem a bit stretched to us, and then we cast our gaze to something like the China valuations and they're a bit more approachable, I think a diversified approach isn't a bad thing.

strategy when it comes to technology exposure. I think the critical question is thinking about sizing it because, of course, you have these overhangs, the geopolitical, the economic, and etc., that should adjust the position sizing accordingly. I just think of China and I think back to the market sell-off we saw in that knee-jerk reaction to the deep-seek news. I just want to

think about market reaction forces at the moment, particularly in this age of generative AI. And what was so interesting is we heard from the Fed Vice Chair just speaking for the supervision indeed, Michael Barr, about potential market manipulation because of generative AI. Just take a listen, Martin. As they will be directed to maximize profit, gen AI agents may converge on strategies to maximize returns through coordinated market manipulation.

potentially fueling acid bubbles and crashes. Speed, automaticity and ubiquity could generate new risks at wide scale. On this show we talk so much about the investment opportunity into the technology.

But the technology is having an effect on investment. And how is that affecting you? How are you thinking about risks that come about because of generative AI? I mean, it's a very important question. And I think AI, as we've seen in different areas, opens up a whole new spectrum of risk. Whether we think about fraud, we think about market manipulation, we think about just misinformation. I think that those risks are real with AI. And I think there is some consideration that...

valuations haven't really taken into account the downside of AI. We think a lot about the upside. We think especially about the improvement in earnings that we can see, certainly in technology, but for the broad market overall. But we think less about what those risks can be. And I think it's partly because, one, we don't want to think about the risk, but two, it's hard to speculate and it's hard to articulate. But I think that's where smart regulation, smart decisions by the companies themselves, and of course by Washington are going to really matter

in terms of how we see this deployed across the economy. - Marta Norton, Chief Investment Strategist at Empower, thank you for joining us. Now coming up, we'll be hearing from Microsoft's Head of Strategic Missions and Technologies on the company's brand new quantum processor. This is Bloomberg.

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Microsoft just unveiled Majorana One, the tech giant's first quantum computing chip. We sat down with the company's executive vice president of strategic missions and technologies, Jason Zander, to break down what this means for the future of quantum. Take a listen. One of the best use cases that we see is going to be in places like chemistry.

That's a place where we use even AI now. We're using it to discover new molecules and build new things. But AI is just an approximation. A quantum computer actually speaks the language of nature, which is quantum mechanics. That's what makes it so powerful. So when we combine those things together, we're going to be able to do brand new things. Like I said, I'd love to get rid of forever chemicals. I would love to get rid of microplastics. We're going to need to invent new technologies.

technology to be able to do that. Quantum computers are going to be able to help us accelerate it. It's just not something you can do on a classic supercomputer.

Let's talk about the competition because Microsoft isn't the only one developing its quantum computing chip. Google unveiled their own in December called Willow. Theirs has 105 qubits. Microsoft is harnessing about eight. Talk to us about how we can stack these up against each other. Is it a count the qubit kind of race or is Microsoft doing something different in the approach that makes it better?

And when you talk about qubits, there is sometimes this race in industry say that I've got a ton of qubits. The real interesting question at the end of the day is what can you do with them? And so I could have a thousand qubit, but if they can't finish an actual quantum workload and application, it really doesn't matter. Or if it takes a thousand years to finish that application, it kind of doesn't matter.

And so at the end of the day, what's most important is not the count of qubits. In some ways, that's kind of a vanity metric. That's for any vendor, not just Google, but it's true for everyone. What really matters at the end of the day is can I get to that high count but make them useful?

And that's the value of this topological conductor that we've got, this topological core. These topological qubits have error resistance built in. They're small, they're fast, they're digitally controlled. There's just no one else that has that. So we can get to the scale and we can make sure that they're useful.

And like I said, today you're going to start off with a small count, just like transistors originally. There weren't that many of them. There were tons of vacuum tubes. Over time, you're going to get that transition and that scale. That's what's going to help in 20 years of experimentation to get us there. Now starts the real race to go make the volume up and go higher. In January, Jensen Huang said that useful quantum computers are likely 20 years away. Is he wrong?

I think that we're getting to the point, especially with this announcement, where we're years away, not decades away. And I believe that part of what Jensen was referring to was some of those scale challenges that I mentioned in some of these technologies, needing a warehouse-size computer to make it work. We don't need that. But if you did need that, then you can imagine how it would take a long time to get through there.

But from our perspective, the fact that I can put a million qubits on a chip that fits the palm of my hand, they're small, they're fast, they're digitally controlled. That means it's years, not decades. There's still a lot of work to do, but it's not going to be decades out. We're actually finding ways to accelerate even as we speak.

Microsoft's Executive Vice President of Strategic Missions and Technologies, Jason Zander there. Let's get more on this announcement with Bloomberg's Matt Day. I think back to the Willowchip announcement of Alphabet and the stock rallied hard for several days. I'm looking at the moment, Microsoft has jumped about four-tenths of a percent trading higher now on the back of this announcement, Matt. And just talk us through what it really means for Microsoft, what it means in terms of pushing its own computing forward.

This means Microsoft thinks they're far enough along, they're close enough to a workable quantum machine where they say, hey, look, we built some hardware. This isn't just a theoretical construct from us. This is something that maybe in a few years we could put in a data center in some capacity. This is them saying this is not just a theoretical construct. This is something we built, and we think it's, if not ready for primetime, they're ready to start churning these things out.

Matt, do you have a sense of where this leaves the artificial intelligence priority? I think quantum has been the topic that we've all been waiting for for years, but AI came first. Where does it leave it in terms of what the company tackles the most over the next coming years?

Oh, Quantum is by no means going to supplant AI. Microsoft and all of its peers in big cloud are still spending tens of billions of dollars on AI chips, on new data centers. None of that is going to go away. If you want a sense, I know Jason Zander just said years, not decades, but it's worth checking out some of the photos of these systems that Microsoft published this morning because we're still talking about super-culed, colder-than-space vacuum conditions. These are still operational.

operating very much in a laboratory construct, even if Microsoft built a product. So the AI revolution is going to keep churning on, even as they plug away on this in the background. That's Bloomberg's Matt Day. Thanks for joining us. Today's the day for Apple, the low-end iPhone, larger screen, Face ID, in-house cellular modem chip, and we get the price point. The 16E will be $599. Bloomberg's Mark Gurman joins us for more. The big unveil comes a little bit later. We're getting all the details already.

Yeah, 16E, yeah, $599. That's pretty pricey for a mid-tier phone, right? Affordable. It's affordable. It's more affordable. $599 versus something like $700 for the regular 16s, $1,000 plus for the 16 Pro models.

You're getting most of the Pro features here, right? You're missing a few, right? You don't have the dynamic island. You only have one camera versus two on the regular 16s or three on the 16 Pro models. But you have a screen size of 6.1 inches, so the same screen size as the entry-level iPhone 16, or I guess the old entry-level, the new mid-tier, right? But this is Apple's new low-end iPhone.

They want this to do particularly well in China, places like India, Southeast Asia. They think this phone will help ignite a new growth story for the iPhone. Don't forget, dipped 1% year over year in the holiday period. So this is very exciting for Apple and should be pretty exciting for shareholders.

Consumers, people have not upgraded their iPhone in many years. This is a compelling upgrade. You got Face ID, the home button is finally gone, you have USB-C, you have fast charging, you have a very fast A18 processor, you have Apple intelligence, you have chat GPT integration. So it's a pretty compelling phone. The price though, $180 more than the current iPhone SE, it replaces.

Mark, I'm super curious about what this means about Apple intelligence. Are these phones going to have some of that new generative AI boost to it? Because I'm curious if this actually works in a lower cost phone. Talk to us about

what we can plan to see from an AI front, and if this lower cost strategy has worked for Apple in the past. So you're going to get the A18 chip and the necessary RAM requirements in this new model to support the on-device models, the in-cloud models that run as part of Apple intelligence. You have that open AI integration in Siri in the new writing tools feature. You'll be able to download all the AI apps like DeepSeek and OpenAI and Gemini and Copilot.

pilot that are available on the App Store already. So from an AI standpoint, it's also a good citizen. But in terms of what Apple's doing with Siri and its own generative AI models, they're clearly a few years behind at this point, two or three years behind. They're supposed to launch a new AI-ified version of Siri this year. I reported last week it's being delayed probably from April to somewhere between May and June. But from an AI standpoint, this phone, if you buy it, will set you up big time to be able to run all the future AI features that

all these companies, including Apple, are trying to dream up right now. It's going to be available from February 28th. Why the timing here and what we're seeing in this focus? Is it that we finally saw this

reduction in revenue growth that we've seen more broadly? Is it the China anxiety? Is it the geopolitics that plays here? So Apple typically releases these types of products, lower end devices, iPads, non-excite, the products that are not their most exciting products in this sort of January to May time period. But February is a little bit earlier than typical for an SE. You normally would see that somewhere between late March and April. So I would imagine they brought the release up a little bit knowing that dip happened, right?

six months out, four months out, you're still able to maneuver things. In this day and age where they're not holding physical launch events, they're doing everything online, you have a little bit more flexibility if you're Apple to release these things. So getting it out during this quarter, Q2, I think is important for Apple ahead of giving the results in several weeks from now.

Mark, you mentioned Siri has seen some delays. What's the status there? Is it something that we can expect coming this year and in what form will it come? So the new Siri features, they announced this in June, are three things. One is on-screen awareness, so it can answer questions based on analyzing what you have up in front of you on your display. It could also answer questions with the context of your own data. Those were supposed to come in April, now those are probably coming closer to May, June.

Always keeping us up to speed with the timing, Mark Gurman. Great to have him here in New York. I'm lucky. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Jackie Davalos in San Francisco. Quick check on these markets, Jackie, because, look, we're trying to understand the ramifications of what a 25% tariff on chips, on autos might look like for the market. And we have seen a selling of the Nasdaq. More broadly, when you're looking at what's pulling them down on the Nasdaq more from a points perspective, it's actually meta. Now off by 2%. Yesterday's sell-off as well after a 20-day run-up. Yes, we start to question maybe the market capitalization and the run-up that we've seen in this stock, but we're only down by some 2%. Bumble in

Humble, interestingly, really falling on the back of its earnings. We, of course, dating app, seeing executive turnover, seeing a questioning of really how they try to update the app, and the earnings didn't look as good as had been anticipated, or indeed worse than had been anticipated, robbed by 25%. Big fall. Etsy also down more than 10% on the back of its numbers. Gross merchandise sales coming in weaker than expected. First quarter forecast as well not looking so strong. This is, they do see some good profitability numbers, but more broadly we're worrying about

numbers. Let's move on. Have a look at what's happening in the world of crypto right now because Bitcoin actually up 1.4 percent. Remember, it has been hammered hard over the last few trading days. We're currently trading at more around sort of a $96,000 level. So well off of those highs, Jackie. The crypto market's enthusiasm has skyrocketed since President Trump's reelection with hopes of a more crypto friendly regime. Bloomberg's Annabelle Droolers spoke with Binance CEO Richard Tang, who says the U.S. has moved on from an oppressive crypto environment.

Under the Biden administration, Operation Chokepoint was in progress, right? So, yeah.

There's a bit of oppression in the US and US players, global crypto players are facing great uncertainty. And governments around the world are not really very supportive of crypto. I think we have a fresh reset and restart now. Since President Trump's election, actually we have gotten a lot of approaches by governments all around the world to say, "Hey, we want to look at this space now.

by the virtual fact that the US has appointed AI and crypto czar, represents that these are the two most important industries to support all future sub-economies around the world. And we are seeing fresh optimism. Governments around the world are supporting it. So you're talking directly with the SEC then about what the regulatory roadmap could look like? Are you talking with the Trump administration directly? Well, we give inputs to governments around the world

I think they value our inputs because we are the most regulated exchange by now globally. We are regulated in 21 different jurisdictions. What does your input to the US government look like? What do you want to see there exactly? So on the US front, you see very thoughtful appointments in terms of the different with David Sachs as AI and CryptoZar.

the different appointments to the different agencies, regulatory agencies on that front. And they want to come out with a very good framework. So it's still early days, but as and when there are firm proposals, we're very happy to give you inputs on that front. What exactly do you want to see though? I want to understand what would bring you back into that market. What is it exactly? Well, I think for every country, they have their own concerns, their own interests to take care of.

But we want to see a framework, regulatory framework, that is on the one hand, managing the risk aspects of the industry, on the other hand, very supportive of innovation and growth aspects. If you just focus on the risk aspect of it, you're missing out on all the new innovation that's coming into this space. And it's a very dynamic space. Do you think that the US is going to take a more business-friendly approach or do you think it's going to take an approach that's higher on consumer protection? I think you've kind of got to go down either

Vara, for instance, in Dubai, that's one that's more business-friendly, for instance. Hong Kong, a bit more on the consumer side. I think the US is going to come out. This is only my speculation. Is it going to be a bespoke

framework that really supports innovation, supports growth, but at the same time protects consumers. And all these different aspects are extremely important. So if you get that kind of framework that's bespoke, is it enough to bring you into the US market? Well, we always consider our global deployment, right?

We are holding a watching brief on the US. We need to see greater clarity coming out from the US and we will consider options at that point in time. And what would that look like to you, for instance? It's too early to speculate.

Marcia Tang, CEO of Binance Holdings, speaking with Bloomberg's Annabel Drowlers a little bit earlier. Look, let's talk about what is needed here from a regulatory perspective. Kristen Smith of the Blockchain Association. Look, we've had the promise of more crypto-friendly regulation, legislation, but it's slow to happen, of course, because Congress needs to weigh in. How are you marking us out of 10?

Well, I think we're on a 10 out of 10 right now. I think there is obviously a lot of work to do and it takes a lot of time. I think we're looking at things in sort of two phases. You know, the first step is we need to undo the harm that happened in the last administration. And we've seen hints of this with the repeal of SAB 121. Congress is actually working on a really important bill right now, the Congressional Review Act, to undo a rulemaking that the IRS tried to apply to DeFi in the late hours of

75 companies wrote a letter on that this morning to Congress and I think we're gonna get a vote on it this week. That's really important. So it's undoing the harm, it's stopping the litigation, but then we need to go and, as Richard was saying, get a framework in place. We need stablecoin legislation, we need market structure legislation. These pieces are harder 'cause they require a lot of work, but we're really optimistic that Congress and the White House are aligned on this and that this is the year to get these items done.

How much patience do you think ultimately those that have plowed in to cryptocurrencies as an asset of choice have for the actual legislative process here? Because it feels as though many were like, oh, they're just forming a task force more broadly. They're not actually bringing regulations here and now.

I think that the task force of the presidential working group that you spoke about is actually incredibly important. The SEC also has their crypto task force. These things don't happen overnight. You want to get the regulatory framework right, and it requires a lot of discussion and debate. The good news is we're not starting at zero. Congress did a lot of work this past year to really lay the groundwork and move the ball forward.

you know, like any draft legislation, there are issues here or there that still need to be worked out. And so, you know, one of the things we're doing at the Blockchain Association within our working groups is really to get people together to focus in on the specific issues and the details so we can bring smart, thoughtful approaches to Congress. Because I think, you know, what everybody in the industry wants is a pro-competition framework that also protects consumers. And so we're on the same page about the goals. It's working through the details that takes time, but...

You know, I think there was a press conference last week where David Sachs and the chair of the committees stood up and said they want to get this done in the first 100 days. I think that's pretty ambitious, but I think they're going to try. I think they're moving very quickly on Capitol Hill and that we're going to see a lot of progress.

Kristen, you mentioned the consumer. There's still plenty of people out there who are skeptical about the safety of their assets in some of these instruments. What policies or measures are you in favor of that would protect consumers? Yeah, well, I think...

I think, listen, we need to make sure that whenever there's an intermediary involved in crypto, they need to have appropriate regulations, right? If you're handing your crypto assets over to someone else, you want to know that they're safe, that they're not going to be taken away or used for harm. So we need to put those types of frameworks into place, and I think it's fairly easy to do. I think it's known. I think some of the more complex topics are figuring out when something is a security or a commodity. That's a long-time issue that...

the industry has been grappling with. But there are a lot of creative ideas out there and people are talking. But yeah, we want to make sure that consumers have confidence in using this. I mean, you know, the irony is it's actually oftentimes much better in crypto. If you look at these DeFi systems that are, you don't have to hand your assets over to an intermediary in order to borrow or lend or trade. They're actually like a lot safer because the code is there.

You can look at it, you know what's happening. So crypto is trying to improve the world for consumers. But you know, listen, there's things that are happening. It's still very early days. And so we want to make sure we get the regulatory framework right that gives people the confidence to come into the market.

One of the biggest skeptics out there, longtime skeptic, is JP Morgan's Jamie Dimon just last month said he doesn't think people should buy Bitcoin. What does this mean for crypto's rise long term if the bank, the largest bank in the country, hasn't come around yet? Well, listen, I think it takes time for these bigger institutions to change their mind. But there certainly is a lot of demand for Bitcoin. I mean, obviously, that's reflected in the price increase over the past year. And I think this is an asset that

is really here to stay. I mean, this is something where it's scarce, it's serving as a store of value, it is something that you can access from anywhere in the world without needing to go through an intermediary. So it's a truly revolutionary idea and I think it's one that

As more and more institutions become educated and comfortable with the idea, we'll see financial advisors recommending that people include a little bit of this in their portfolio. But no, Bitcoin's a wonderful innovation, and I think it's here to stay. That's Kristen Smith, Blockchain Association CEO. Thanks so much for joining us. Coming up, we speak with Turo CEO Andrei Haddad as they drop plans to IPO. This is Bloomberg. ♪

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More ex-OpenAI members are setting up their own AI startups. After co-founder Ilya Sosetskova is now, we have the former OpenAI CTO Mira Marati launching her own AI company called Thinking Machines Lab, along with several former OpenAI executives. Remember, Shireen Ghaffari brings us more. And everyone had been waiting with bated breath. What will she do? And here we have it, no product yet, but an inspiration and a product roadmap, at least to a certain extent.

That's right. So Meera Maradi, the former CTO of OpenAI, is starting a new venture and she will be building both the research models as well as some kind of products that are to be determined. And she's recruited quite a few former OpenAI employees, or I should say that quite a few OpenAI employees now work there.

Shireen, what do we know about why investors are so confident that a company with no product and no super clear roadmap yet, how can they actually emerge as a contender in AI?

I mean, right now there is almost, it seems like, insatiable demand to invest in the next big AI company. It's still sort of anyone's game as we're seeing all these AI models are becoming increasingly competitive with each other. Just this week, we saw Elon Musk's XAI release the latest Grok 3 AI models.

that they say outperforms OpenAI and other competitors on certain evaluations. We've seen the rise of Chinese startup DeepSeek similarly come out with a very competitive model. So it's still very early in this big race to AGI, right? And I think investors are keen to put their money in someone who's a big name and a trusted figure in the industry like Mira Marotti. - I mean, look, we were just talking about the $30 billion plus valuation that Ilya Tsitsipro is looking for in the market.

What about evaluation, a talk of people who want to be backing Mira's new project? That's right. So, you know, we've heard that she has been talking to investors and that there are talks, you know, to put in money, but none of this has been finalized yet. It's still very early. We will see. I think that there is high demand we are hearing to put money toward her company.

That's Bloomberg's Shireen Ghaffari. Thanks so much for joining us. It's still early into 2025, but it's already proving to be a tough year for the IPO market, with many companies opting to postpone or cancel their planned offerings outright. The latest coming from car-sharing company Turo, which has scrapped plans to go public three years after initially filing for a U.S. IPO. Turo CEO André Haddad joins us now.

Andre, you're not the only company out there that's really rethinking IBO plans, but what about the market conditions made this not the right time for you guys to go public? Did it have to do with growth or external factors?

Well, the market definitely hasn't helped. We've been waiting for an opening for the past three years. We filed our first S-1 back in late 2021. And as you know, '22 and '23 were tough years. We thought '24 might get better. There were some slight improvements, but as we entered '25, we've continued to see market conditions to be pretty choppy. There's a lot of change going on. There's a lot of adaptations that are happening.

And, you know, we have been on file for almost three years and it's had become a bit of a distraction to continue to file every quarter. And since the near term prospects of going public seemed a bit remote, we decided to postpone.

We've reported that some other late-stage startups are facing a cash crunch as they postpone plans to IPO, some of them having to go out and raise cash again. And they're finding a more skeptical group of venture capitalists that are more unwilling to give them additional cash at that stage. What does this mean for your future funding plans? Will you have to tap VC cash again at some point this year?

No, we don't have any plans to raise any capital. We have been seeing... Listen, the fundamentals of the business continue to be very, very strong. So just to give you a sense of where we are from a business standpoint, last year we ended 2024 with a little bit over $950 million of revenue, up from $150 million back in 2020. So the business has grown over 6.5x in the last four or five years.

It's been profitable since 2021. We've been EBITDA positive for the last three, four years now. And we have a very strong balance sheet with over $250 million of cash. So thankfully, you know, we don't have to go out and tap into the markets

But I agree with you, the markets have been more challenging recently for late-stage startups. In our case, we're just going to be focused on the fundamentals for the next few years and hoping that the markets will be more receptive and a bit less turbulent in maybe two to three years from now. And you want to be making more investments in the business while you remain private. Where, Andrej?

Well, you know, we still are early, frankly, in this market. You know, just, you know, we're excited about the growth and the numbers that I shared with you. But when you think about the size of the opportunity, Carolyn, you know this market quite well. And the opportunity is really very, very large.

We have been investing in our team, we have been investing in innovation, in the product experience. There's still a lot to build. We launched 70 different new features last year, enhancing the host experience, the guest experience. But there's a lot more that we want to do and frankly, we're going to take the opportunity of staying private for the next two to three years or so to make some bold, longer-term investments that are part of the roadmap that we're accelerating and bringing forward.

Andre, I go to a sensitive topic here because the start of 2025 was pretty devastating in terms of not one but two tragedies that involved Turo cars. How have you thought about safety and how much has in any way the decision to delay IPO been because of that? No, those two things are not really connected, Carolyn. The timing coincidence, of course, looks like they are, but they're not.

Yes, the start of the year has been extremely tragic for us. As you mentioned, the events of January 1st, the attacks of January 1st were made with two Turo vehicles. We've been very focused on understanding what's going on and looking inwards to our trust and safety over the last two months now.

As I indicated, back in early January, we ended up, of course, doing a lot of investigating internally, cooperating with investigators externally.

And we found out that the perpetrators of these crimes were very legitimate people with valid driver's licenses, with no criminal backgrounds. And so our trust and safety system that we built over the last 13 years actually performed as planned. However, we didn't want to take a look at everything. When such a tragedy strikes, you have to re-look at everything, and we did.

And one thing that I wanted to mention is that we're launching at the end of this quarter a new way for our hosts to signal any concerns that they have with public safety. So today, you know, our hosts can always cancel a trip if they're feeling uncomfortable with anything that's going on. And there's no penalties when that happens. Now we're specifically adding a topic which is related to public safety.

And not only will be able to enable our host to cancel these trips without any penalties on their track record, but also we'll be connecting them with a hotline of specialized representatives that will be able to support them while they're dealing with something that might be stressful. That's great. So we're making this change. We think it's important for us to be standing behind our hosts and supporting them whenever they feel anxious about something that looks like a public safety issue. What about...

other investments? You mentioned bold investments. Will that include M&A? We only have about 30 seconds. M&A is always an option. There's been a lot of consolidation in this space. And last year, you might recall, we announced a great partnership with Uber, sort of taking over their Uber car share business that they had been building in Australia. And we're partnering with Uber. We're going to become part of the Uber Rent partnership.

products and will be launching soon, this integration. So there's a lot, I think a lot of consolidation happening, especially as you pointed out with private capital becoming more scarce and more skeptical. I think it's pushing a lot of later stage companies to rethink their growth plans. And you remain independent?

That's the plan. We think the market is really big. We think that the fundamentals are very strong. And we have an exciting roadmap ahead, so we'll continue to chart our own path. Andre Haddad, thank you. Turo CEO. X is said to be in talks to raise money from investors that could value the company at $44 billion. Katie Roof joins us now. $44 billion being the amount that Elon bought Twitter for in 2022.

Yes, so much has been made about this acquisition price. Many people said he overpaid and at one point they had many people fleeing the platform, but they are now in talks to receive investment at a $44 billion valuation, same price, and this is at a time when all

Elon companies, SpaceX, Tesla, they're all going, XAI, they're all going up in value because of, partly because of Elon's ties to President Trump and the perceived value that that could add. And briefly, Katie, just who would be willing to give them money and why do they need the money?

So it could be potentially from existing investors. We know that the talks are early. You know, it's hard to say what they're planning to use the money for. But, you know, one thing that adds to their value is they are a significant shareholder in XAI, as it turns out. So they go up in value pretty much automatically when XAI goes up in value.

But usually the funding raise would be for hiring or potentially acquisitions. Great breaking news, Katie Roof. We appreciate it. Thank you. Now that does it for this edition of Bloomberg Technology. You do not want to forget to check out our podcast. Find it on the terminal as well as online on Apple, Spotify and iHeart. This is Bloomberg Technology. Feeling buried in a never-ending to-do list that comes with running a business, managing orders, tracking expenses? It's a lot.

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