SpaceX Lowers IPO Valuation Target | Bloomberg Tech 5/29/2026

Added: 2026-05-31

[00:00:03]>> "BLOOMBERG TECH" IS LIVE FROM COAST-TO-COAST WITH CAROLINE HYDE IN NEW YORK AND ED LUDLOW IN SAN FRANCISCO.

[00:00:12]TIM: THIS IS BLOOMBERG TECH. SPACEX COMING BACK DOWN TO EARTH WITH A SLIGHTLY LOWER VALUATION IN ITS IPO.

[00:00:20]WE WILL BREAK DOWN WHY. ANTHROPIC CLOSING A FUNDING ROUND AT $965 BILLION VALUATION. IT SURPASSES OPENAI FOR THE FIRST TIME.

[00:00:34]DELL SURGES AFTER THE HARDWARE GIANT OUTLOOK FAR SURPASSED WALL STREET ESTIMATES. WE WILL HEAR FROM THE CFO A LITTLE LATER THIS HOUR. LET'S TAKE A CHECK ON THE MARKETS ON THIS HOLIDAY SHORTENED TRADING WEEK.

[00:00:45]THE NASDAQ 100 CONTINUING TO PUSH TWO NEW RECORDS WITH THE MARKET BUOYED BY HOPES OF CEASE-FIRE DEAL COULD BRING IT INTO THE IRAN CONFLICT AND THE RELENTLESS AI OPTIMISM TRADE.

[00:00:57]THE BENCHMARK INDEX UP ABOUT 3% ON THE WEEK.

[00:00:58]MORE THAN 10% JUST THIS MONTH.

[00:01:04]THIS IS AI ENTHUSIASM SENT DELL SHARES HIGHER BY 29%.

[00:01:11]DELL GIVE ALEC THAT FAR SURPASSED ANALYST ESTIMATES IN FUELED BY THE MEN FOR SERVERS THAT POWER AI WORK.

[00:01:17]LET'S TAKE A LOOK AT TODAY'S BIG NUMBER. $1.8 TRILLION.

[00:01:22]THE VALUATION SPACEX IS TARGETING FOR THE IPO.

[00:01:28]THAT FIGURE DOWN FROM THE MORE THAN $2 TRILLION VALUATION BLOOMBERG REPORTED THE COMPANY WAS SEEKING IN APRIL.

[00:01:35]LET'S GET MORE WITH BLOOMBERG'S BENEDIKT KAMMEL.

[00:01:42]WHY ARE WE SEEING A REVISION LOWER FOR A POTENTIAL VALUATION WHEN IT IS EXPECTED TO GO PUBLIC NEXT MONTH? BENEDIKT: THE LISTING IS NOT FAR OFF. IT IS A COUPLE OF DAYS OFF.

[00:01:52]THE PRICING WILL SETTLE IN THE NEXT COUPLE OF DAYS.

[00:01:57]WHAT WE ARE SEEING IS SORT OF THE MARKET TRYING TO FIGURE OUT WHICH WAY THINGS WILL FALL. IT IS A LITTLE LOWER.

[00:02:04]$1.8 TRILLION. IF YOU THINK ABOUT TRILLIONS, THAT'S ALMOST A ROUNDING ERROR.

[00:02:14]THIS IS PROBABLY BOTH SIDES ON THE INVESTMENT BANKING SIDE AND THE BUYER SIDE TRYING TO GET A SENSE OF THE MOMENTUM.

[00:02:23]IT MIGHT BE A CASE OF COMING IN WITH LOWER EXPECTATIONS AND BEAT THEM. THAT MIGHT BE PART OF THAT.

[00:02:28]DIFFICULT TO SAY AT THIS POINT. MUSK CAME OUT WITH A SINGLE WORD RESPONSE SAYING, "FALSE." WE WILL HAVE TO SEE WHO WAS RIGHT IN THE END. THIS IS PROBABLY A POSITIONING GAME GOING ON NOW. YOU DON'T WANT TO COME IN WITH YOUR GUNS BLAZING TO SOON. HAVING SAID THAT, IT'S BEEN ABOUT A WEEK SINCE WE GOT A GOOD SENSE OF THE NUMBERS AS PART OF THE LISTING. THESE ARE PRETTY MIND-BOGGLING FIGURES WE HAVE READ. THE VALUE IS ONE OF THEM.

[00:03:06]ALSO THE TOTAL ADDRESSABLE MARKET IS $28 TRILLION.

[00:03:14]THESE ARE UTOPIAST NUMBERS. THE DIFFERENCE IS NOT THAT BIG.

[00:03:17]TIM: SOME MIGHT SAY OUT OF THIS WORLD PLANETARY EXPANSION.

[00:03:28]JUST ON THAT NUMBER, 18.7 BILLION DOLLARS IN REVENUE IN 2025. IF IT WERE VALUED AT $1.8 TRILLION, THAT WOULD BE PRICED TO SELL MULTIPLE AT 96, WHICH IS PRETTY HUGE. SOFTWARE COMPANIES ARE TYPICALLY 10X. THIS IS STILL HUGE.

[00:03:53]PEOPLE THINK THIS IS A HUGE OPPORTUNITY. IS THAT REALISTIC?

[00:03:58]BENEDIKT: I THINK YOU ARE RIGHT. THE WORD IS OPPORTUNITY AND I THINK PEOPLE ARE BUYING INTO THIS NOT WHERE THING STANDS BUT WHAT THE BUSINESS MIGHT BE IN FIVE YEARS, 10 YEARS, 20 YEARS.

[00:04:12]ONE THING ELON MUSK HAS PROVEN AS YOU CAN BUILD A MARKET FROM VERY LITTLE OR NOTHING. HE HAS DONE SO WITH TESLA AND MIGHT NOW DO AGAIN WAS SPACEX. A LOT OF THINGS HAVE TO GO RIGHT. SOME OF THE THINGS IN THE PROSPECTUS INCLUDE ITEMS LIKE WE WANT TO HAVE ONE BILLION PEOPLE ON MARS.

[00:04:31]-- ONE BILLION PEOPLE ON MARS.

[00:04:37]FUTURE THINKING -- ONE MILLION PEOPLE ON MARS. TIM: WE WILL HAVE TO WAIT AND SEE. BENEDIKT KAMMEL FROM BERLIN.

[00:04:47]THANKS WAS TO UP ANTHROPIC CLOSING OF FUNDING ROUND AT A WHOPPING $965 BILLION VALUATION. IT SURPASSES OPENAI FOR THE FIRST TIME IN THE AI RACE. IT CAME TOGETHER AND A MATTER WEEKS AND A SIGN OF STRONG DEMAND FOR CLAUDE AND ANTHROPIC.

[00:05:01]SHIRIN GHAFFARY JOINS US NOW WITH MORE.

[00:05:08]WE ARE GETTING INSIGHT INTO HOW MUCH REVENUE PER ANTHROPIC HAS INCREASED IN JUST THE LAST FEW MONTHS.

[00:05:13]TALK ABOUT THE DOUBLING WE SAW IT IN SUCH A SHORT TIME. SHIRIN: THAT'S RIGHT. ANTHROPIC IS NEARING $50 BILLION OF RUN RATE REVENUE AND THAT'S A REJECTION OF THEIR ANNUAL REVENUE. THE GROWTH HAS BEEN INCREDIBLE.

[00:05:29]JUST THREE YEARS AGO ANTHROPIC WAS NOT EVEN REALLY A PRODUCT THAT WAS SELLING ANY SOFTWARE. THAT RATE IS SOMETHING INVESTORS ARE VERY EXCITED ABOUT AND WHY YOU ARE SEEING THEM ABLE TO COMMAND A VALUATION THAT IS NOW SURPASSING OPENAI AT 900 BILLION DOLLARS PRE-MONEY.

[00:05:53]THIS SPRING IT WAS NORTH OF $700 BILLION PRE-MONEY.

[00:05:56]THAT IS HOW YOU ARE SEEING ON THESE COMPANIES REALLY BEING NECK AND NECK. OF COURSE, IS STILL EARLY IN THE AI GAME. THESE COMPANIES ARE CONSTANTLY SURPASSING EACH OTHER WITH EACH MODEL RELEASE. TIM: COULD THIS BE THE FINAL FUNDRAISING RUN FOR THE COMPANY IPO'S? SHIRIN: IT VERY WELL COULD BE.

[00:06:18]BOTH OPENAI AND ANTHROPIC ARE EYEING IPO'S AS SOON AS THIS FALL. THE TIMING HERE WILL BE CRITICAL IN TERMS OF HOW THESE COMPANIES ARE STACKING UP IF AND WHEN THEY DO ACTUALLY MOVE FORWARD WITH THEIR PUBLIC LISTING. TIM: THE QUESTION ABOUT THE PRODUCTS THAT OPENAI HAS AN THE PRODUCTS ANTHROPIC HAS, SOME COULD SAY, WAIT A SECOND. WE HAVE NOT LOOKED AT THESE AS COMMODITIES. WHAT ARE THESE COMPANIES DOING TO DIFFERENTIATE THEMSELVES AND WHY IS ANTHROPIC SEEMINGLY THE HOT WIND RIGHT NOW VERSUS OPENAI, OR EVEN OTHER MODEL MAKERS?

[00:06:58]SHIRIN: ANTHROPIC'S HAD A VERY STRONG OFFERING WHAT THEIR CODING AGENTS, CLAUDE CODE.

[00:07:04]THERE WERE EARLY ADOPTERS IN THE INDUSTRY AND WE STARTED TO SEE THAT ROLLOUT TO FORTUNE 500S AND OTHER CUSTOMERS WHO TOOK UP ANTHROPIC'S AUTOMATED SOFTWARE AI TOOLS.

[00:07:16]THAT BEING SAID, IT'S ALWAYS A FIERCE RACE.

[00:07:25]WE HAVE SEEN GOOGLE'S, OPENAI'S, BUT ANTHROPIC FOCUSED ON BUSINESS USE CASES AND NARROWLY FOCUSED ITS ATTENTION THERE. THAT HAS BEEN THE REAL STRENGTH OF THE MARKET. TIM: SHRINK FRA. FOLLOW HER FOR MORE ON BLOOMBERG.COM AND THE BLOOMBERG TERMINAL.

[00:07:42]LET'S STAY WITH ANTHROPIC. APOLLO AND BLACKSTONE ARE WORKING TO BRING ADDITIONAL INVESTORS INTO A ROUGHLY $36 BILLION DEBT FINANCING DEAL TO HELP ANTHROPIC BUILD OUT ITS INFRASTRUCTURE. SILAS BROWN HAS THE DETAILS.

[00:07:56]THIS COULD BE ONE OF THE LARGEST PRIVATE CREDIT DEALS AND CHIP FINANCING DEBT TRANSACTIONS.

[00:07:59]TAKE US INTO THE NUMBERS. SILAS: THEY ARE EXTRAORDINARY NUMBERS.

[00:08:08]THE INTEREST PRIVATE CREDIT FUNDS LIKE APOLLO AND BLACKSTONE AND NOTABLE OTHERS LIKE BLUE OWL HAVE IN LENDING TO BUILD OUT THE AI INFRASTRUCTURE AROUND THESE TRANSACTIONS. THIS IS I THINK THE LARGEST SO FAR. IT IS GOING INTO SYNDICATION DON'T AND PROBABLY BEING SOLD DOWN TO INSURANCE COMPANIES, SOME OF WHICH APOLLO OWNS, AND OTHER ASSET MANAGERS.

[00:08:35]IT HAS BECOME THIS TWO TRACK THING AMONG PRIVATE CREDIT FUNDS WHERE THE LARGER ONES WILL TAKE BIG POSITIONS INITIALLY AND THEN SEEK TO SELL DOWN SOME OF THE RISK THROUGH SYNDICATION. IT IS QUITE AN INTERESTING DEVELOPMENT IN PRIVATE INVESTMENT GRADE CREDIT. TIM: IF YOU LOOK AT THE EQUITY SIDE AND THE WAY VENTURE CAPITALISTS ARE SO EXCITED TO INVEST IN ANTHROPIC, WHAT CAN YOU TELL US ABOUT THE CREDIT SIDE? SILAS: IT MAY WELL BE THE GREAT SAVIOR OF PRIVATE CREDIT. THE BIG PROBLEMS THEY HAVE HAD OVER THE LAST YEAR IS A BUILDING OF CONCENTRATION AROUND SOFTWARE AND SOFTWARE AS A SERVICE.

[00:09:19]A LOT OF CONCERNS ABOUT 20%, 20 5% PORTFOLIO CONCENTRATION IN SOFTWARE AS A SERVICE. -- 25%. WHAT BETTER PLACE TO PARK YOUR MONEY IN THE THING THAT IS DISRUPTING THE INDUSTRY.

[00:09:32]YOU ARE SEEING A LOT OF DEMAND FROM THE LARGER ASSET MANAGERS.

[00:09:36]THINK ARIES, APOLLO, BLACKSTONE. TO TRY TO HELP FUND THE BUILD OUT. ANYTHING TO CONNECT THE INSURANCE CAPITAL THEY MANAGE WITH THESE OPPORTUNITIES IS VERY MUCH THE TOPIC DU JOUR IN PRIVATE CREDIT. TIM: SOMEBODY BROUGHT UP THE IRONY OF INVESTING IN THE THING THAT IS DISRUPTING THE EXISTING INVESTMENTS.

[00:09:59]THE IDEA OF SOFTWARE BEING DISRUPTED BY WHAT CLAUDE CAN DO AND WHAT OPENAI CAN DO. GIVE US A GENERAL OVERVIEW.

[00:10:07]IF WE WERE TALKING IN A DIFFERENT WORLD, WE WOULD BE TALKING ABOUT THE CHALLENGES PRIVATE CREDIT INDUSTRY HAS FACED. COULD THIS BE THE GREAT SAVIOR FOR CREDIT CREDIT? -- FOR PRIVATE CREDIT? SILAS: WHAT TO THE LEADING PRIVATE CREDIT FIRMS WANT TO SPEAK ABOUT? THEY DON'T WANT TO SPEAK ABOUT LEVERAGED FINANCE SUB INVESTMENT GRADE TRADITIONAL DIRECT LENDING. WHAT PRIVATE CREDIT IS KNOWN FOR AND WHAT TO SPEAK ABOUT HIS INVESTMENT GRADE OPPORTUNITIES PUSHING INTO AREAS LIKE AI AND ENERGY TRANSITION.

[00:10:43]THAT IS WHERE THEY SEE THE OPPORTUNITY SET.

[00:10:50]TO NOT BE OVERLY SYCOPHANTIC, THE VISIONARIES OF PRIVATE CREDIT. THE OPPORTUNITY SET MORE IN THE INVESTMENT GRADE SPACE. THAT IS AI, ENERGY TRANSITION, ALL THOSE OPPORTUNITIES THAT HELP MATCH INSURANCE CAPITAL WITH THESE PRIVATE INVESTMENT GRADE OPPORTUNITIES. TIM: SILAS BROWN JOINING US FROM LONDON. GOOD TO SEE YOU.

[00:11:13]HAVE A GREAT WE. COMING UP NEXT, DELL IS STORING.

[00:11:20]THE COMPANY'S SALES OUT THE CRUST ESTIMATES.

[00:11:21]THE STOCK IS UP 30%. MUCH MORE ON THIS NEXT.

[00:11:24]THIS IS "BLOOMBERG TECH." ♪ TIM: SHARES OF DOUBT ARE SURGING AS THE OUTLOOK -- DELL ARE SURGING. SHARES UP 31.5%, THE TOP PERFORMER ON THE S&P, HAVING ITS BEST DAY EVER.

[00:11:56]IT IS FUELED BY A $60 BILLION FORECAST FOR AI SERVERS ALONE.

[00:12:02]HERE IS WHAT KENNEDY HAD TO SAY POST-EARNINGS.

[00:12:07]>> 88% EARNINGS GROWTH AND RECORD CASH FLOWS BUILT ON REAL, DURABLE, AND ACCELERATING GLOBALLY MAN FOR INFRASTRUCTURE NEEDED. IF YOU LOOK AT PRODUCTION AT SCALE, ALL OF THOSE THINGS HAS GIVEN US CONFIDENCE THAAD -- TO ADD TO THE GUIDE. ALMOST 50% INCREASE YEAR ON YEAR. IT IS REALLY STRONG.

[00:12:36]WE ARE LOOKING FORWARD TO THE YEAR AHEAD.

[00:12:41]>> DAVID, IS THIS COMING FROM ONE SINGLE HYPERSCALER CUSTOMER?

[00:12:46]IS THERE MORE GRANULARITY YOU CAN GIVE ME ABOUT WHAT IS HAPPENING IN THE WORLD? COMPLETELY ACKNOWLEDGE THE CPU IS BACK. BUT THERE MUST BE MORE HAPPENING UNDER THE SURFACE.

[00:13:00]>> YES, THIS IS MORE BROAD-BASED AND PREVALENT ACROSS THE ECOSYSTEM. 17% GROWTH IN Q1.

[00:13:07]GUIDANCE SIMILAR IN Q2. YOU MEANT TO THE TRADITIONAL NETWORKING BUSINESS GREW 92% IN Q1. WE ARE EXPECTING STRONG GUIDANCE TO GO INTO THE YEAR. WE HAVE TAKEN UP OUR AI SERVER GUIDE TO $60 BILLION. STORAGE WOULD GROW EVERY SINGLE QUARTER. IT IS MORE PREVALENT ACROSS OUR PRODUCTS, ACROSS OUR VERTICALS, ACROSS OUR CUSTOMER BASE.

[00:13:32]MORE BROAD-BASED.

[00:13:39]AI DEMAND BEYOND THE GPU IN TERMS OF OPPORTUNITIES AHEAD.

[00:13:41]>> CAN YOU QUANTIFY THAT?

[00:13:45]>> IF YOU LOOK AT OUR GUIDE, IT IS UP $27 BILLION.

[00:13:49]WE HAVE TAKEN OUR AI GUIDE UP $10 BILLION TO $60 BILLION.

[00:13:53]THE REST IS IN OUR CORE BUSINESS AND TRADITIONAL AND STRONG ACROSS THE BOARD.

[00:14:02]>> HAVE YOU SET A NEW BASELINE GOING FORWARD OF WHAT THE WORLD IS LIKE FOR THE AI SERVER BUSINESS?

[00:14:08]>> I THINK IT GOES BEYOND THE AI SERVER BUSINESS.

[00:14:12]I THINK IT IS AI DEMAND IN TOTAL ACROSS THE INFRASTRUCTURE STACK. IF YOU LOOK AT THE BROAD-BASED OPPORTUNITIES APPEARING, I THINK AS WE MOVE FROM TRAINING MODELS INFERENCING, THOSE WORKLOADS ARE PRODUCING A NET NEW PLAN TO ATTACK AND BALANCE FROM A CUSTOMER PERSPECTIVE.

[00:14:33]WE ARE SEEING THAT. THE PATIENT ELEMENTS ARE COMING IN PART OF THE OPPORTUNITY IN FRONT OF US.

[00:14:37]WE ARE EXCITED ABOUT THAT. THAT MAKES IT MORE DURABLE GROWTH LONG-TERM.

[00:14:43]>> I APPRECIATE YOU HAVE OUTLINED TWICE IT IS BROAD-BASED. WAS THERE ONE BIG CUSTOMER OR SECTOR IN THE QUARTER GONE OR FOR THE OUTLOOK THAT HAS CHANGED THE TRAJECTORY FOR YOU?

[00:14:57]>> NO, IT IS MORE BROAD-BASED.

[00:15:05]CLOUD, SOVEREIGN, ENTERPRISE CUSTOMERS, YOU HEARD MICHAEL LAST WEEK IN RELATION TO OUR 5000 CUSTOMERS ON THE ENTERPRISE SIDE IN RELATION TO AI AS WE BROAD-BASED OUT THE AI FACTORIES, IT IS GROWING. IF YOU LOOK AT OUR PIPELINE, ALL INDIVIDUAL VERTICALS ARE GROWING IN THEIR OWN RIGHT.

[00:15:24]IT SHOWS THE SCALE AND OPPORTUNITY. TIM: THAT WAS DELCY OH DAVID KENNEDY SPEAKING WITH ED LUDLOW YESTERDAY.

[00:15:38]-- THAT WAS DELL CEO DAVID KENNEDY SPEAKING WITH ED LUDLOW YESTERDAY.

[00:15:44]I WANT TO TALK ABOUT WHAT THE DEPLOYMENT PHASE OF AI LOOKS LIKE. I WANT TO TALK BIG PICTURE.

[00:15:51]WHEN YOU SEE SHARES UP THIS YEAR 232%, YOU LOOK AT THE CHART, THIS IS PARABOLIC. DOES THIS GIVE YOU ANY PAUSE WHEN YOU LOOK AT HOW VALUATIONS HAVE RISEN AND WHAT HAPPENS AFTERWARDS?

[00:16:07]>> THANKS FOR HAVING ME.

[00:16:13]I THINK THE RESULTS FROM DELL ARE STUNNING.

[00:16:15]IT IS NOT JUST DELL. IN Q1, ALMOST ALL THE PLAYERS IN THE AI ECOSYSTEM, ESPECIALLY IN HARDWARE AND SEMICONDUCTORS ALL DELIVERED STUNNING RESULTS THAT BEAT EXPECTATIONS.

[00:16:34]YOU ARE TALKING ABOUT EXPONENTIAL GROWTH IN THE ENTIRE AI ECOSYSTEM. THERE IS A DEEP PROFIT POOL WE ARE TALKING ABOUT. THE COMPANIES WILL NEED EACH OTHER. THAT IS WHY WE ARE SEEING THIS GROWTH BROADENING OUT.

[00:16:55]IN TERMS OF VALUATION, THE VALUATIONS COULD LOOK ELEVATED OR FROTHY BUT THEY ARE STILL IN THE 20'S.

[00:17:07]I DO NOT SEE IT AS A BUBBLE AND STILL SEE IT IS A VERY STRONG INVESTABLE THEME. TIM: WHERE ARE THE INVESTABLE AREAS RIGHT NOW? TODAY, DELL UP 32%.

[00:17:22]MAYBE I MISSED THAT BOAT. IF IT IS BROADENING OUT TO THE DEPLOYMENT PHASE, WHERE ARE THE OPPORTUNITIES?

[00:17:36]>> I AM THINKING THE MOST VISIBILITY IS IN THE AI HARDWARE AND SEMICONDUCTORS SPACE.

[00:17:41]WE DEFINITELY ACKNOWLEDGE THERE HAVE BEEN STUNNING RETURNS.

[00:17:43]IT CAN STILL GO ON. WE SHOULD NOT FIGHT THE TREND WITH THE MOST VISIBLE EARNINGS AND GROWTH.

[00:17:54]I THINK MEMORY IS ANOTHER INTERESTING AREA GIVEN THE TECH EXECUTIVES ARE ALL SAYING MEMORY IS THE BOTTLENECK AND COULD LAST FOR THE NEXT TWO YEARS. I THINK THAT IS A VERY INTERESTING PART. IN TERMS OF AI DEPLOYMENT, WE ARE SEEING TANGIBLE BENEFITS FOR COMPANIES.

[00:18:18]I THINK FOR SOME AREAS OF SOFTWARE, THERE HAS BEEN SIGNIFICANT SELLOFF. THAT PRESENTS OPPORTUNITIES FOR THOSE COMPANIES THAT ONLY ECOSYSTEM TO ENABLE THE AI ENTERPRISE DEPLOYMENT AND ROLLOUT.

[00:18:33]WE SEE SOME OPPORTUNITIES IN THOSE COMPANIES.

[00:18:35]WE HAVE TO BE SELECTIVE IN TERMS OF THE SOFTWARE SPACE.

[00:18:38]TIM: MICRON UP 4.6%, THE COMPANY SURPASSING THE $1 TRILLION MARKET CAP THIS WEEK.

[00:18:49]WHAT ABOUT A BROADENING OUT TO COMPANIES NOT NECESSARILY WITHIN TECHNOLOGY?

[00:18:57]I ASK BECAUSE IF WE TALK TO THE EXECUTIVES AT ANY COMPANY RIGHT NOW WHETHER IT IS IN PAYMENTS, CONSUMER PACKAGED GOODS, BANKING, THEY WILL ALL TELL US THE SAME THING, WE ARE HARNESSING AI TO MAKE OUR PRODUCTS BETTER AND MAKE US MORE EFFICIENT. WHEN DO WE SEE THOSE COMPANIES BE THE REAL BENEFICIARIES OF THE TECHNOLOGY THESE TECH COMPANIES ARE BUILDING AND DEPLOYING?

[00:19:18]>> WE ARE STARTING TO SEE THAT.

[00:19:26]I THINK WE SEE THAT ACROSS MANY TOP PLAYERS IN A BROAD RANGE OF INDUSTRIES. I THINK THE KEY IS THOSE PLAYERS HAVE TO HAVE THE CAPITAL TO SPEND ON AI TO MAKE SURE YOU HAVE THE LEAD OVER OTHER PLAYERS.

[00:19:40]I ALSO THINK THEY DO HAVE TO HAVE SOME SORT OF COMPETITIVE EDGE THEMSELVES THAT THEY COULD REALIZE THE AI POTENTIAL.

[00:19:52]I THINK THE DANGER IS IF THEY DO NOT HAVE A COMPETITIVE EDGE, THEY SPEND ON AI.

[00:20:00]IF EVERYONE SPENDS ON AI, THE ECONOMIC VALUE OF THE SURPLUS WILL BE CAPTURED BY CONSUMERS RATHER THAN THOSE COMPANIES.

[00:20:06]I THINK THE CORE THESIS IS THOSE COMPANIES HAVE TO HAVE A COMPETITIVE EDGE TO START WITH. THAT IS WHY WE HAVE ALWAYS PREFERRED COMPANIES WHO HAVE A QUALITY BIAS IN OUR BIG PLAYERS AND TOP-TIER PLAYERS IN THEIR INDUSTRIES. TIM: JANET FROM LONDON, THANKS SO MUCH, APPRECIATE YOUR TIME.

[00:20:31]LENOVO HAVING ITS BEST MONTH IN MORE THAN A QUARTER-CENTURY.

[00:20:33]WE WILL TELL YOU WHY RIGHT AFTER THIS.

[00:20:35]THIS IS "BLOOMBERG TECH."

[00:20:41]♪ TIM: IT IS TIME FOR TALKING TECH.

[00:21:01]LENOVO LOGGING ITS BEST MONTH IN MORE THAN A QUARTER-CENTURY.

[00:21:05]SHARES DOUBLED IN MAY. FOLLOWING DELL'S BLOCKBUSTER FORECAST, INVESTORS ARE VIEWING LENOVO AS A POTENTIAL INFRASTRUCTURE PLAY. JAPAN'S FINANCE MINISTER ANNOUNCES THE COUNTRY'S MEGABANKS WILL GET ACCESS TO AI'S LATEST MODEL TO COUNTER ESCALATING CYBER THREATS AS JAPAN'S BIGGEST BANKS ARE SET TO START USING ANTHROPIC'S MYTHOS. TAIWAN IS FORECASTING ITS FASTEST EXPORT GROWTH IN 50 YEARS.

[00:21:40]THAT IS FUELED BY AN EXPECTED 40% EXPLOSION IN EXPORTS.

[00:21:44]THE ECONOMY OF THE HUB FOR ADVANCED TECH HAS BEEN ONE OF THE BIGGEST BENEFICIARIES OF THE AI ERA.

[00:21:53]COMING UP NEXT, ANTHROPIC SURPASSING OPENAI FOR THE FIRST TIME IN THE AI RACE AS THEY WELCOME A 900 62 VALUATION.

[00:22:03]WE WILL HAVE -- $965 BILLION VALUATION.

[00:22:07]THE NASDAQ COMPOSITE UP.2%. THE DOW UP MORE THAN.7%.

[00:22:15]STOCKS FLAT ON THE DAY TODAY. DELL UP ON EARNINGS AND THE OUTLOOK A WHOPPING 30% RIGHT NOW. THE NASDAQ 100 UP.3%.

[00:22:25]MORE ON ANTHROPIC IN A MINUTE. IT IS HALFTIME AND THIS IS "BLOOMBERG TECH."

[00:22:34]♪ WELCOME BACK TO "BLOOMBERG TECH."

[00:22:56]LET'S GET A CHECK BACK ON THESE MARKETS AND HIGHLIGHT THE RECORD HIGHS FOR TECH INDEXES. THAT BENCHMARK SET TO POST ANOTHER GAIN ON THE WEEK TAKING THE MONTHLY RALLY TO MORE THAN 10% OVER THE LAST MONTH. 11.6% HIGHER ON THE NASDAQ 100.

[00:23:13]THIS, AT THE AI STOCK BOOM CONTINUES WITH POSITIVE FEELINGS FUELING OPTIMISM ACROSS ASIAN, EUROPEAN AND U.S.

[00:23:20]EQUITIES.

[00:23:22]SPEAKING OF OPTIMISM, ANTHROPIC HAS A MASSIVE $65 BILLION IN ITS LATEST FUNDING ROUND.

[00:23:30]EXPLOITING ITS VALUATION, REBECCA CAN TELL US MORE.

[00:23:35]WHAT WE ARE TALKING ABOUT IS SO ASTRONOMICAL.

[00:23:39]A FEW YEARS AGO WE WERE TALKING ABOUT THIS, NOBODY WOULD BELIEVE THESE VALUATIONS.

[00:23:47]DEMAND TO GET INTO ANTHROPIC EVEN RIGHT NOW AT CLOSE TO $1 TRILLION, STILL MASSIVE FOR THE VENTURE CAPITALISTS?

[00:23:53]>> IT'S PRETTY REMARKABLE. WE REPORTED JUST A MONTH AGO THAT ANTHROPIC WAS FOLDING INVESTOR INBOUND AND WASN'T SURE YET, AND THEN THIS CAME TOGETHER IN A MATTER OF WEEKS.

[00:24:09]THE INITIAL TARGET WAS AROUND $30 BILLION AND CLOSING AT $65 BILLION INCLUDING STRATEGIC INVESTORS LIKE GOOGLE AND AMAZON. IT A LOT OF EXCESS DEMAND FROM THESE FINANCIAL FIRMS. SILICON VALLEY VENTURE CAPITAL FIRMS, THAT FULL LIST IS VERY LONG AS PEOPLE ARE PILING INTO THIS. TIM: ARE INVESTORS IN THESE FIRMS PILING AND RIGHT NOW?

[00:24:40]WE SAW INVESTORS COMING IN LATE. ALMOST AT THAT POINT GUARANTEED.

[00:24:50]HOW MUCH IS NEW MONEY COMING IN VS. EXISTING INVESTORS? REBECCA: WE GOT NEW AND EXISTING INVESTORS.

[00:24:58]THIS IS A REAL MIX OF LONGTIME BELIEVERS, SILICON VALLEY HEAVYWEIGHTS AND CROSSOVERS.

[00:25:09]AND AS WE REPORTED, THE IPO TIMELINE REMAINS UNCHANGED BY THIS.

[00:25:17]THE COMPANY IS NOT PLANNING TO DELAY ITS IPO AT ALL.

[00:25:22]THAT IS SIMILAR TO WHAT OPENAI IS PLANNING AS WELL, SO WE COULD HAVE A GROUP OF REALLY MASSIVE IPOS LATER THIS YEAR.

[00:25:31]TIM: SAY WHAT YOU WANT TO BET VALUATIONS RIGHT NOW, IT IS AN EXCITING TIME TO BE TAPPING -- COVERING VENTURE CAPITAL FOR SURE. THE QUESTION, HOW MUCH IMPACT WILL AI HAVE ON THE WORKFORCE? IS THE MILLION OR MAYBE EVEN TRILLION DOLLAR QUESTION. IT COULD AFFECT MORE THAN ONE IN 10 WORKERS.

[00:25:59]>> OUR HOUSE YOU IS THAT WE ARE GOING TO SEE 50% DISPLACEMENT OF KNOWLEDGE WORKERS. WE THINK IT COULD BE AS SOON AS THREE YEARS. IS IT FOUR, IS IT FIVE?

[00:26:11]AT SOME POINT, AND IT IS IN THE SINGLE DIGIT NUMBER OF YEARS, THIS WILL BE A FACTOR, THIS WILL OCCUR IN OUR VIEW.

[00:26:21]AND YES THERE WILL BE JOBS CREATED BY AI BUT WE ARE TALKING ABOUT NET LOSSES BECAUSE THE TECHNOLOGY IS INCREASING INCAPABILITY FASTER THAN WE HUMANS ARE ABLE TO ADAPT TO IT. TIM: CARSON BLOCK EARLIER THIS WEEK.

[00:26:36]OUR NEST GUEST THINKS THE AI CAN THIS PRIOR TO THE AT THE NATIONAL LEVEL. OVER THE NEXT 10 YEARS, THE TREND RATE COULD RISE TO 2.4%. MATTHEW JOINS US NOW FOR MORE.

[00:26:47]THIS IS WHAT EVERYBODY IS TRYING TO FIGURE OUT INCLUDING THE FEDERAL RESERVE. JAY POWELL IS ASKED ABOUT THIS ALL THE TIME. I CAN IMAGINE KEVIN WARSH WILL BE ASKED ABOUT THIS ALL THE TIME.

[00:27:03]WHERE DOES THE PRODUCTIVITY HIT THE ECONOMY, AND WHEN?

[00:27:09]>> THE PRODUCTIVITY BOOST THE ECONOMY WILL COME GRADUALLY OVER THE COURSE OF THE NEXT 10 YEARS.

[00:27:17]WE DO THINK, AND THESE ARE VIEWS FROM OUR ECONOMISTS I GOLDMAN SACHS, THAT ABOUT 25% OF THE U.S.

[00:27:25]ECONOMY COULD BE AUTOMATED. THAT IS A SCARY NUMBER BECAUSE THAT WOULD SUGGEST 25% OF JOBS ARE GOING TO BE LOST BUT IN REALITY, THE VAST MAJORITY OF THOSE TASKS WILL BE AUTOMATED WHICH WILL FREE UP WORKERS TO PIVOT TO HIRE PRODUCTIVE TASKS.

[00:27:42]WHEN WE THINK ABOUT WHERE THAT IS GOING TO EXIST, WHICH SECTORS HAVE THE MOST TASKS THAT CAN BE AUTOMATED, SOME SECTORS ARE QUITE VULNERABLE, BUT WE DO THINK OVER 10 YEARS IT WILL BE A GRADUAL PROCESS.

[00:28:00]THERE WILL BE NEW JOBS CREATED AS WELL. TIM: THE DISTINCTION BETWEEN ACTUALLY LOSING JOBS AND PEOPLE BEING FREE -- WHAT ARE THEY, ARE THEY CERTAIN JOBS, CERTAIN INDUSTRIES? WHAT SHOULD PEOPLE BE PREPARED FOR IN TERMS OF DISRUPTION?

[00:28:22]>> I THINK THE JOB THAT ARE MOST CLIENT OR HUMAN-FACING ARE MOST AT RISK.

[00:28:30]IT IS THE JOBS THAT ARE REPETITIVE TASKS THAT ARE MOST VULNERABLE.

[00:28:43]WE DO THINK IN SOME CASES SOME OF THE JOB LOSSES, YOU SEEN REFERENCES IN CERTAIN MEDIA.

[00:28:56]DAVID SOLOMON PUBLISHED AN OP-ED WHICH IS THE VIEW THAT WE VERY MUCH BELIEVE I GOLDMAN SACHS THAT IN AGGREGATE, THERE WOULD BE MORE JOBS CREATED THAN JOBS LOST, BUT WE SHOULDN'T TAKE AWAY FROM THE FACT THAT THIS WILL BE A TRANSITION AT THE INDIVIDUAL LEVEL IN CERTAIN SECTORS. TIM: IS THERE A CERTAIN HISTORICAL COROLLARY WE CAN LOOK AT?

[00:29:16]IN THE PAST WE'VE HEARD THIS ERA REFERRED TO AS THE NEW INDUSTRIAL REVOLUTION.

[00:29:24]IN TERMS THE TECH THAT IN YOUR VIEW, YOU BELIEVE IS BEING DEPLOYED AS A RESULT OF THIS INVESTMENT, AS A RESULT OF WHAT IS HAPPENING TO INFRASTRUCTURE RIGHT NOW, WHAT IS A GOOD HISTORICAL COROLLARY FOR US TO THINK ABOUT?

[00:29:47]>> ONE THAT WE WILL ELECT.2, THE MAJORITY OF THOSE JOBS OR OCCUPATIONS DIDN'T ACTUALLY EXIST IN 1940.

[00:29:55]THE INNOVATION OF TECHNOLOGICAL PROGRESS IS ONE OF THE REASONS THE U.S. ECONOMY IS SO DYNAMIC. NEW JOBS ARE ALWAYS CREATED EACH AND EVERY YEAR AND MORE JOBS ARE CREATED THAN JOBS ARE LOST. ONE OTHER THING WE SHOULD BE POINTING TO IS THAT THERE HAS BEEN A DEINDUSTRIALIZATION OVER SEVERAL DECADES.

[00:30:11]THERE ARE MANY NEW JOBS THAT EXISTED HERE THAT DIDN'T EXIST BEFORE. WE SHOULD THINK ABOUT THE DIGITAL ECONOMY, THE INTERNET.

[00:30:18]THAT'S CREATED A LOT OF NEW OCCUPATIONS THAT DIDN'T EXIST BEFORE. THINK OF INFLUENCERS, THINK OF THE VIDEOGAME SECTOR. MILLIONS OF NEW JOBS THAT DIDN'T EXIST BEFORE THESE WERE ALSO OCCUPATIONS.

[00:30:34]WE DON'T THINK THIS IS ANY DIFFERENT. THE U.S.

[00:30:36]ECONOMY WILL ADAPT. TIM: I HESITATE TO ASK THIS QUESTION WITH JUST A MINUTE LEFT, BUT WHAT IF IT DOESN'T? WHAT IF THE PROMISES THAT HAVE BEEN MADE AND THAT INVESTORS ARE BETTING ON DON'T ACTUALLY COME TO FRUITION?

[00:30:55]>> THAT'S A VERY IMPORTANT QUESTION BECAUSE ONE OF THE THINGS WE ARE SEEING IS THAT WE SEE THE ENTERPRISE USES OF AI GENERATING PROFIT ON THE BACK OF THE INVESTMENT THEY WILL BE MAKING. IF THAT OCCURS, YOU HAVE A SELF-PERPETUATING ECONOMIC SYSTEM.

[00:31:17]RIGHT NOW ALL OF THE FUNDING IS PRIMARILY INVESTORS AS WELL AS CASH FLOW FROM OTHER BUSINESSES. THINK OF THE HYPERSCALERS.

[00:31:26]RIGHT NOW THE ONLY SECTORS GENERATING A LOT OF PROFIT ON THE BACK OF AI ARE THE SEMICONDUCTOR COMPANIES.

[00:31:32]AS WE THINK OF THE STOCK PRICES AS WELL AS THE VALUATIONS OF SOME OF THE PRIVATE COMPANIES YOU MENTIONED EARLIER, THERE IS SOME VULNERABILITY HERE IF WE DON'T SEE ENTERPRISE USERS GENERATE THE PROFITS NECESSARY FOR THEM TO CONTINUE INVESTING WHICH WILL GENERATE REVENUE STRAIN AND THEN THE SEMICONDUCTOR COMPANIES. TIM: VERY THOUGHTFUL CONVERSATION, APPRECIATE YOU TAKING THE TIME TO JOIN US THIS MORNING.

[00:32:01]WHAT BEGAN AS A ROCKET START UP NOW A BIG BET ON SATELLITES, AI, AND MARS.

[00:32:09]SPACEX IPO COULD RESHAPE MARKETS.

[00:32:12]BUT IS WALL STREET RUSHING INTO FAST?

[00:32:17]>> SPACEX IS TAKING OFF AND WE ARE NOT JUST TALKING ABOUT ROCKETS.

[00:32:27]>> >> >> WE'VE NEVER SEEN ANYTHING LIKE THIS.

[00:32:31]>> THE INITIAL PUBLIC OFFERING IS EXPECTED TO RAISE AS MUCH AS $75 BILLION, MORE THAN DOUBLE THE RECORD RAISED BY SAUDI ARAMCO IN 2019.

[00:32:43]>> THIS IS THE BIGGEST IPO OF ALL TIME.

[00:32:46]>> WE ARE LOOKING AT $2 TRILLION IN VALUATION.

[00:32:48]>> ELON LONG HAD SAID THAT HE DIDN'T REALLY PLAN ON TAKING SPACEX PUBLIC. THAT WAS BEFORE HE NEEDED TENS OF MILLIONS OF DOLLARS TO POWER THESE AMBITIONS.

[00:33:00]>> THIS MASSIVE VALUATION IS ALSO A TEST. COULD ALL THIS HEIGHT MAKE IT SEEM MORE THAN IT IS?

[00:33:10]>> IT'S HARD TO PREDICT HOW MUCH THE BUYERS ARE BUYING.

[00:33:13]IT KIND OF DISTORTS THE MARKET.

[00:33:16]>> INVESTORS ARE BUYING THE DREAM.

[00:33:19]>> WE ALL KNOW THE DREAM. WHAT ABOUT THE REALITY?

[00:33:29]>> SPACEX IN THE -- AND THE AGE OF THE GIANT IPO.

[00:33:33]AND LET'S JUST TALK ABOUT THAT REALITY.

[00:33:36]SPACEX DOES SEEM TO BE COMING BACK DOWN TO EARTH EVER SO SLIGHTLY. THAT IS ACCORDING TO SOURCES.

[00:33:44]THAT'S BREAK IT DOWN WITH BLOOMBERG INTELLIGENCE.

[00:33:48]CAN'T HELP BUT SMILE WHEN I SEE THOSE NUMBERS BECAUSE COMING BACK DOWN TO EARTH, IT'S ALL RELATIVE WHEN WE ARE TALKING ABOUT THIS BLOCKBUSTER THAT COULD BE THE BIGGEST IPO EVER.

[00:33:57]$1.8 TRILLION. YOU SPENT MANY YEARS VALUING COMPANIES IN AEROSPACE. WHAT IS THE VALUATION PROMISE OF A $1.8 TRILLION MARKET CAP WHEN SPACEX HAS REVENUE IN 2024 OF $14 BILLION?

[00:34:19]>> OBVIOUSLY THOSE NUMBERS ARE QUITE LOFTY.

[00:34:25]WE ARE SPENDING SOME TIME RIGHT NOW DOING SOME OF THE PARTS ANALYSIS ON SPACEX VALUE.

[00:34:40]IN MY FRIENDS ARE SORT OF AT $400 BILLION FOR XAI AND JOHN BUTLER, $600 BILLION FOR THE SATELLITE CONSTELLATION.

[00:34:58]ON THE LONG SIDE, WE ARE LOOKING AT COMPANIES LIKE ROCKET LAB. WE LOOK AT WHAT WE THINK REVENUE IS INCLUDING THEIR INTERNAL LAUNCH.

[00:35:21]THE MARKET SAYS IT IS WORTH $1.2 TRILLION.

[00:35:29]IT'S A VERY HIGH MULTIPLE OF REVENUE THAT GETS AROUND $2 TRILLION.

[00:35:36]DEFINITELY SOME VERY LOFTY VALUATIONS.

[00:35:48]>> TESLA IS NOT VALUED AS AN AUTO COMPANY.

[00:35:55]YOU NEED TRADITION OF VALUATION METRICS.

[00:36:04]IS THAT EXTRA $600 BILLION, IS THAT ELON MUSK?

[00:36:11]>> I THINK YOU HAVE TO LEARN TO BUY INTO THIS IPO VALUATION.

[00:36:14]I THINK YOU HAVE TO BELIEVE IN ELON MUSK AND THE DREAM AS YOU MENTIONED EARLIER.

[00:36:26]LIKE WE SAW YESTERDAY, WE SAW BLUE ORIGIN HAD ONE OF THEIR ENGINES BLOWUP OUT OF CAPE CANAVERAL YESTERDAY.

[00:36:37]THEY ARE ABOUT THREE LAUNCHES DEEP.

[00:36:40]IT'S NOT AS EASY AS ELON MUSK HAS MADE IT LOOK.

[00:36:47]HIS COMPANY SHOT OFF ALMOST 170 ROCKETS LAST YEAR WITH MINIMAL PROBLEMS COMPARED TO WHAT IS GOING ON WITH BLUE ORIGIN.

[00:36:57]SO THERE A TRACK RECORD OF SUCCESS FROM ELON MUSK AND HIS COMPANIES. I'M NOT SAYING THAT MAKES THE VALUATION CORRECT BUT ELON HAS SHOWED A LOT OF SUCCESS IN WHAT HE'S DONE. TIM: GEORGE FERGUSON OF BLOOMBERG INTELLIGENCE. NEXT SO MUCH. GEORGE DID MENTION BLUE ORIGIN.

[00:37:19]WE ARE GOING TO BE TALKING ABOUT THAT IN A FEW MINUTES.

[00:37:23]BEFORE THAT, WE ARE GOING TO HEAR FROM CAROLINA PARADA ON HER TAKE ON ROBOTIC AI.

[00:37:42]TIM: GOOGLE DEEPMIND SAYS HUMANOID ROBOTICS IS ONE OF THE KEY FOCUS AREAS.

[00:37:49]CAROLINA PARADA WHO LEADS THE GROUP SPOKE WITH SHERY AHN AT THE HUMANOID SUMMIT IN TOKYO ABOUT WHY SHE SEES EMBODIED AI AS THE NEXT FRONTIER.

[00:38:02]>> WE WILL BE WORKING ON BRINGING GEMINI INTO THE PHYSICAL WORLD.

[00:38:09]IT BRINGS MULTIPLE MODALITY TO ENABLE ROBOTS TO UNDERSTAND THEIR ENVIRONMENT, TO REASON, AND TO BE ABLE TO TAKE ACTION TO THE POSITION OF HUMAN EXPERTS. SHERY: GEMINI WILL GO INTO SPOT, THE LITTLE DOG, AS WELL.

[00:38:24]TELL US WHAT THE FUTURE LOOKS LIKE. CAROLINA: WE ARE REALLY EXCITED ABOUT GEMINI ROBOTICS BRINGING THE INTELLIGENCE OF GEMINI INTO THE PHYSICAL WORLD.

[00:38:36]THERE IS STILL WORK TO DO. IT IS ABLE TO GIVE YOU THE REASONING AND INTERACTIVITY BUT NOT YET ABLE TO DO HIGHLY DEXTEROUS TASKS LIKE FOLDING ORIGAMI OR PACKING A LUNCH BOX. THAT REQUIRES DEXTERITY HUMANS HAVE AN WE DO NOT REALIZE IT TO MAKE ROBOTS USEFUL. SHERY: WHEN IT COMES TO COMPETING WITH DOZENS OF THESE NEW COMPANIES, NOT ONLY THE U.S., BUT CHINA AS WELL, WHERE IS THE EDGE?

[00:39:11]CAROLINA: THIS IS REALLY AN EXCITING TIME RIGHT NOW FOR ROBOTICS ALL OVER THE WORLD.

[00:39:18]I THINK THE REALLY HARD PROBLEM IS THE EDGE IS UNDERSTANDING THE NUANCE AND COMPLEXITY OF THE HUMAN WORLD.

[00:39:27]A LOT OF WHAT YOU SEE OUT THERE IS MEMORIZED SEQUENCES THE ROBOTS ARE DOING. THE ACTUAL INTELLIGENCE NEEDS TO BE THERE FOR ROBOTS TO OPERATE IN ALL OF OUR ENVIRONMENTS. OUR ENVIRONMENTS ARE CONSTANTLY CHANGING. THERE ARE HUMANS IN THEM.

[00:39:43]THAT IS WHAT IS NEEDED TO GET ROBOTS TO BE REALLY HELPFUL.

[00:39:47]TIM: THAT WAS CAROLINA PARADA ALONG WITH OUR OWN SHERY AHN IN TOKYO. COMING UP, A MAJOR SETBACK FOR JEFF BEZOS'S SPACE AMBITIONS AFTER BLUE ORIGIN'S NEW GLENN ROCKET EXPLODES IN FLORIDA. THAT IS NEXT. THIS IS BLOOMBERG.

[00:40:17]TIM: LET'S GET TO BLUE ORIGIN. THE NEW GLENN ROCKET EXPLODING IN A MASSIVE FIREBALL WHILE UNDERGOING A TEST ON A FLORIDA LAUNCHPAD. BLUE ORIGIN ON X WRITING THAT WE EXPERIENCED AN ANOMALY. ALL PERSONNEL HAVE BEEN ACCOUNTED FOR. WE WILL PROVIDE UPDATES AS WE LEARN MORE. THE WORD "ANOMALY" CAN MEAN A LOT OF DIFFERENT THINGS. WHAT DO WE KNOW ABOUT WHAT HAPPENED LAST NIGHT?

[00:40:47]>> I THINK THE DETAILS ARE STILL TRICKLING IN.

[00:40:50]WE DON'T KNOW A LOT BUT WE DO HAVE SOME VIVID IMAGERY OF THIS EVENT. THIS IS PROBABLY ONE OF THE LARGEST EXPLOSIONS I HAVE EVER COVERED ON A ROCKET IN MY TIME BEING A REPORTER. ALL WE KNOW IS THEY WERE CONDUCTING A TEST. THEY WERE PREPARING FOR THEIR FOURTH LAUNCH OF NEW GLENN. THEY WERE SUPPOSED TO LAUNCH A BATCH OF AMAZON SATELLITES. FORTUNATELY FOR AMAZON, THOSE SATELLITES WERE NOT ON BOARD. NO PERSONNEL WERE HURT.

[00:41:19]THERE WERE NOT INJURIES. THAT IS ALL GOOD.

[00:41:23]BUT THIS IS A PRETTY CATASTROPHIC MOMENT FOR NEW GLENN FOR SURE. TIM: WHAT ABOUT SETBACK, IN TERMS OF MONTHS, YEARS, TO A MISSION OR A GOAL FOR NEW GLENN? WHAT DOES IT DO TO THE PROGRAM?

[00:41:41]>> IN TERMS OF THE TIMELINE, IT WILL DEPEND ON IF THEY ARE ABLE TO FIGURE OUT THE ORIGIN OF THE PROBLEM QUICKLY, HOW FAST THEY CAN FIX IT. BUT THIS IS VERY CERTAIN TO HAVE A VERY BIG IMPACT ON THE SCHEDULE FOR BLUE ORIGIN MOVING FORWARD. IT IS KIND OF HARD TO UNDERSTATE HOW IMPORTANT NEW GLENN IS FOR EVERYTHING BLUE ORIGIN WANTS TO DO. IT IS THEIR MAIN ORBITAL ROCKET.

[00:42:11]IT IS SUPPOSED TO LAUNCH SATELLITES FOR THE COMPANY.

[00:42:16]THEY HAVE A $10 BILLION BACKLOG ON THE VEHICLE WITH CUSTOMER CONTRACTS. IT IS A KEY ROCKET FOR LAUNCHING BLUE ORIGIN'S LUNAR LANDER WHICH IS A KEY COMPONENT OF NASA'S ARTEMIS PROGRAM TO SEND HUMANS BACK TO THE MOON.

[00:42:29]ALL OF THAT IS LIKELY TO SUFFER DELAYS.

[00:42:33]DAMAGE TO THE LAUNCHPAD WILL PROBABLY TAKE THAT OUT OF OPERATION FOR SOME TIME. IT IS NOT JUST THE ROCKET THEY HAVE TO FIX. IT IS THE INFRASTRUCTURE THAT EXPLODED AS WELL. TIM: AT THE RISK OF MIXING METAPHORS, I DO NOT WANT TO PUT THE CART BEFORE THE HORSE.

[00:42:52]DOES NASA PLAN FOR SETBACKS LIKE THIS OR WOULD THEY HAVE TO SAY MAYBE WE HAVE TO RELY ON A DIFFERENT PARTNER?

[00:43:00]>> CERTAINLY. ACTUALLY, NASA DID WORK THIS INTO THEIR DECISION-MAKING. BLUE ORIGIN IS NOT THE ONLY PARTNER NASA HAS. WHEN IT COMES TO BUILDING A LUNAR LANDER, IT IS BLUE ORIGIN AND SPACEX DEVELOPING LANDERS FOR THE ARTEMIS PROGRAM. THEY DID THAT ON PURPOSE BECAUSE OF UNFORESEEN PROBLEMS THAT MIGHT ARISE LIKE THIS ONE.

[00:43:25]THEY LIKE TO HAVE DIFFERENT OPTIONS THEY CAN TURN TO.

[00:43:27]SPACEX IS THE OTHER OPTION THEY CAN TURN TO.

[00:43:31]IT IS STILL TOO EARLY TO SAY IF THEY WILL USE SPACEX'S LANDER OVER BLUE ORIGIN. PERHAPS THEY CAN TURN THIS AROUND MORE QUICKLY THAN I THINK, BUT IT WILL BE SOMETIME.

[00:43:44]TIM: BLOOMBERG'S LOREN GRUSH JOINING US. THAT IS GOING TO DO IT FOR THIS EDITION OF "BLOOMBERG TECH." DON'T FORGET TO CHECK OUT OUR PODCAST. FIND ON THE TERMINAL, APPLE, SPOTIFY, AND IHEART.

[00:43:58]THIS IS BLOOMBERG. ♪