Pełna transkrypcja odcinka Tech Mostly Higher After Democrats Win Control of Congress

in this year's midterms. Bloomberg's Tyler Kendall joining us now with the details. And Tyler, there was so much talk about the Democrats outperforming the blue wave. 00:02:41 Speaker 5: We got that. Is it safe to say it's kind of a new day in Washington now? It's definitely a new day in Washington, Carol. We have essentially now divided government. You have the administration, of course, still in Republican hands, but since both chambers flipped. Centrally, President Trump's legislative agenda is stalled, at least for now. He did say that he will accept the results and that he is going to work with the new Congress in some capacity. What those potential areas look like remains to be seen. He also, of course, made it known that he still has the veto power. That will lead to questions about what, if anything, can get through over the next two years as we look ahead. to 2028. 00:03:16 Speaker 2: But if you look at how Democrats were able to put up these numbers in reliably red states, of course, it all came down to the economy, to affordability, and importantly, flipping some of these reliably red states. Quickly, Carol, I wanted to mention one of the biggest surprises of the night, South Carolina. Incumbent Senator Darlene Graham not able to secure a full term to that seat, but that actually is a potential negative to the AI industry. We saw the industry pour $ 4. 1 million last minute into this race because she was seen as the more amenable candidate to the data center build out. 00:03:48 Speaker 1: Yeah, it's fascinating the races around the state. 00:03:50 Speaker 3: I have a bunch of family in South Carolina, and they have been slowly, it's a lot of East Coast transplants that have been moving down there. So they have seen more, if you will, kind of a diverse political thought. Having said that, I am also curious about gridlock, right? 00:04:03 Speaker 6: Markets. 00:04:04 Speaker 3: Isabel just giving an update on the trade, and we see some relief here in the trade. Gridlock typically good for Wall Street and in terms of investing. I am curious, is that what we're going to expect for the next two years? 00:04:15 Speaker 2: Most of the analysts are saying so, including our own at Bloomberg Economics. The idea that President Trump will always have that veto, that Republicans no longer have the ability to pass legislation through the reconciliation process that essentially allowed them to pass budgetary-related bills on a simple majority. The president's nominees, for example, are going to be stalled since those have to go through the Senate, though there's always workarounds here, right? President Trump could appoint somebody in the acting capacity, more executive orders maybe, but as you well know, Many of those are symbolic or set up legal challenges. 00:04:48 Speaker 3: So it's going to be interesting to watch everything, the ins and outs of our nation's capital. All right, Tyler, thank you so much. Bloomberg's Tyler Kendall joining us right

here in studio. She had a pretty late night, as much of our team did. All right, folks, let's get to data center-related stocks. It's certainly a sector we're watching on this Wednesday, down on a likely slowdown of the AI data center boom, with Democrats now in control of Congress. As we just talked about, we watched several state elections, Texas including Washington, electing Governor Gina Hinojosa. She was campaigning on calling for an immediate moratorium on data center development. A slate of companies are looking to build dozens of campuses in that state in particular. Here to break down his reporting is Bloomberg's Brody Ford. Brody, I got to say, when it comes to Texas and we think about data centers, they account for nearly 30% of the U.S. data center capacity set to come online in 2028. representing by far the latest share of any state. That's according to Semi Analysis. It's a research firm. They put that out ahead of the election. So how are you thinking about this democratic sweep and that AI data center build, especially when it comes to states like Texas? 00:05:54 Speaker 7: A lot of folks I know in the industry said that the biggest race they were watching and worried about was that Texas governor race. And so the fact that it went to Hinojosa, who's campaigned so actively against data centers, is certainly creating some. 00:06:09 Speaker 8: Anxiety, right? 00:06:10 Speaker 7: A lot of these mega projects in Texas are already permitted and getting built online. But when you start looking at the projections for 2028 sites, 2029, there's a real possibility that there becomes a gap. There becomes a bit of a slowdown that, you know, so many of these spending plans are based on months, not years, that it really does present a threat to the build out. 00:06:33 Speaker 1: Right, and commitment. 00:06:34 Speaker 3: And you think about some of the hyperscalers that are counting on these data centers. So we'll have to see how that plays through. All right, Brody, we're going to leave it there. Bloomberg's Brody Ford. You can read more about his reporting. It's on the Bloomberg. All right, well, the Democrats' control of Congress is also likely to usher in more scrutiny of Elon Musk's businesses. We've seen that play out in shares of SpaceX and Tesla, both falling as election results came in. And we continue to see SpaceX down about 4%, Tesla down 3.8% as we speak today. Let's get more on what could happen to the Elon universe. With us right now is Bloomberg's Jordan Fitzgerald. And Jordan, good to have you here. First of all, you know, Elon is someone so connected and associated with this administration. But he also had a big bet on Texas. And we're seeing that play out in the share price. Investors are a little worried. 00:07:20 Speaker 8: They are. 00:07:21 Speaker 9: And thank you for having me today, Carol. Going into this election... Investors were wary of a blue wave for Congress, but that was largely priced in. They knew that if Democrats took the House, took the Senate, then representatives might try and pass legislation that would impede AI, impede the potential merger between Tesla and SpaceX, attempt to hold Musk accountable for his actions with Doge. But there's only so much that Congress can do with Trump still in the White House, with veto power, and without controlling the regulatory bodies that could stand in the way of a merger. What came as a surprise was the blue Texas victories last night with Hinojosa and with Tallarico. 00:08:00 Speaker 1: Where he spent a lot of money. 00:08:01 Speaker 9: Where he spent a lot of money. Elon spent nearly $ 450 million on these midterms alone. And most of the races that he backed didn't go the way he wanted. And with Texas at the state level falling under Democratic control, Hinojosa can, you must and hold his companies accountable without that threat of a Trump veto in a way that is unique to the national level. 00:08:29 Speaker 3: When it comes to the share prices, and something we'll keep an eye on, I mean, Elon has talked about putting together SpaceX and Tesla, right? 00:08:34 Speaker 1: This is not new. 00:08:35 Speaker 3: We've been talking about it here at Bloomberg. What's the likelihood or what's the thinking among the investing community, the Wall Street community, that he can get it done in the next two years, in the next year or so? 00:08:47 Speaker 2: Well. 00:08:47 Speaker 9: Bloomberg has already reported that Elon is focused on getting this deal done before Trump is out of the White House. There's only two years left of this administration. But with Congress falling to the Democrats, investors are saying that actually these next two months before Congress turns over are going to be really critical. And Elon is facing more pressure to push as much of the deal through as he can before Democrats fully take control. 00:09:12 Speaker 1: All right, we will see what will happen. 00:09:13 Speaker 3: It will continue to be interesting to watch certainly all things in the Elon universe. Jordan, thank you so much. Jordan Fitzgerald of Bloomberg News. All right, we're headed for a break. Coming up, everybody, we've got other SpaceX news. The company has selected Qualcomm to supply hardware components for its terrestrial wireless network. Details of that deal and what it means for the U.S. mobile industry, that's coming up next. This is Bloomberg Tech. 00:09:47 Speaker 1: All right, everybody. 00:09:48 Speaker 3: Well, SpaceX has signed a deal to get hardware for its planned U.S. terrestrial wireless network from Qualcomm. It is the latest sign that Elon Musk's rocket and satellite company is committed to challenging the biggest players. 00:10:00 Speaker 1: In the U.S. 00:10:00 Speaker 3: Mobile industry. Bloomberg's Ian King joining us now with the details. Ian, you and Kelsey Griffiths reporting this out. Tell us a little bit more about this relationship and what it means for SpaceX abilities. 00:10:12 Speaker 10:

Yeah, I mean, this is real confirmation, as if we didn't already know, that SpaceX are absolutely serious about this, that they're absolutely serious about going into direct competition with the major U.S. wireless providers, the AT & Ts, the Verizons. And to do that, they're going to have to deploy a lot of very expensive gear, and they are planning to do that, Qualcomm tells us. 00:10:35 Speaker 1: Can they do it? 00:10:37 Speaker 3: I always think about, you know, you know this, people announce relationships and then it can get tricky. We're in a different political environment. I wonder how that might impact things. How do you see it playing out? 00:10:47 Speaker 10: Yeah, I mean, there are lots of variables. There's a lot to happen between sort of then and now kind of thing. We're going to see it start in an incremental way from next year. But according to what Qualcomm says, this is serious and this is something that both of them want to actually make happen. 00:11:07 Speaker 3: Hey, listen, before you go, there's always so much I want to ask you when it comes to anything and everything semiconductors. We're seeing the space down today, watching shares of AMD, which have moved dramatically in the trade. AMD and their results, was it a good report? What stood out for you here? 00:11:23 Speaker 10: Yeah, I mean, after their report yesterday, everybody loved them again, which is interesting because they put out good reports before and had the opposite reaction. So this was look, they very, very firmly said, look, we've got the chips, we've got the supply, and more importantly, we've got the demand well into next year. Next year is going to be another great year for us. So that was a kind of a reassurance play, which the market, at least yesterday when they made it, took at face value and was very welcoming. 00:11:52 Speaker 3: Yeah, and we did see the stock up earlier 6%. Now it's just up a fraction on a percentage basis. All right, Ian, thank you. Ian King joining us there. on the semiconductor space in AMD and also that Qualcomm news with SpaceX. All right, we want to stay with AMD for a moment. Let's get more on the results with John Vinh. He's equity research analyst over at KeyBank Capital Markets. He's got a $ 725 price target and an overweight rating on the company. Shares of AMD right now at 486 and change up four-tenths in today's session. John, we did see interesting market reaction. Was this a good report from AMD? 00:12:27 Speaker 11: Yeah, I would say it was a very good report in the grand scheme of things, right? The data center business grew almost 100% on a year-to-year basis. They're guiding it to be up 50% on a sequential basis. The offset to that is the PC business is obviously under a significant amount of pressure, right? You saw that with Intel missing their numbers. You know, I think AMD in their earnings call definitely talked about seeing the same phenomenon. They're actually expecting PCs to decline over 20 percent Q4. They actually missed on the PC number in the Q3 numbers. So overall, pretty good report, given some consternation about the PC risk. But yeah, I would say pretty positive overall. 00:13:13 Speaker 3: Anything not answered for you on the analyst call? Was there something that needed a follow up, you think, with the C-suite that we didn't quite get? 00:13:20 Speaker 11: I think there's a couple of things, right? Just obviously their outlook for next year that 80% top line growth was extremely robust. Obviously, server CPU on the general purpose server side for Gen Tech workloads is growing up 100% versus 70% previously. And then their KVLs rack scale systems are growing quite nicely. I think there's a little bit of questions around gross margins, right? There's a lot of different mix in terms of their gross margins. The Helios racks that they are deploying, which is growing faster than service CPUs, slightly gross margin dilutive. But I think management kind of said they expect 55% gross margins, plus or minus, throughout the year. But there could be some puts and takes to that. 00:14:01 Speaker 3: John, I want to ask you about that $ 725 price target. I mentioned that AMD right now trading at about $ 487 a share. What gets us to that point? 00:14:14 Speaker 11: Yeah, I think there are broader concerns related to the space that's maybe less specific to AMD. I think the concerns that we're hearing out there is there's broader concerns about whether there's the ability to finance significant CapEx growth into 2028. I think right now everybody knows 2027 is set up to be another banner year for the data center AI space. Data Center CapEx is probably going to be about 170 trillion plus or minus. So the question is, as you go into 28, is there enough financing capacity to support meaningful CapEx growth? And the way that some of the conductor stocks work is if you start to see deceleration growth rates increase. You know, that usually causes some form of a correction in the stocks. But fundamentally, we think in demand is really good. You heard last night that they are not able to keep up with demand. Demand is outstripping supply. But, yeah, I think that's going to be the key debate and questions of whether these stocks can can reach their potential. 00:15:20 Speaker 3: You know, we've got some more chip companies reporting after the close. But before we get there, I do think about the political environment and what it means for data centers and the whole AI supply chain. Is there a risk or how would you quantify the risk to a name like AMD? 00:15:38 Speaker 11: Yeah, I do think there's potential risk. I think it goes hand in hand to some of the concerns out there about 28 CapEx. You know, obviously, given the results of the midterms, you know, it's unclear to me, but I hear that, you know, I feel like the concerns about data centers is more of a bipartisan push versus a blue or red debate. But yeah, if this becomes a real obstacle, that could

contribute to CapEx growth for data center buildouts into 27 and 28. And that could ultimately roll downhill and impact companies like AMD and other AI companies as well. 00:16:18 Speaker 1: Yeah, it makes sense. 00:16:18 Speaker 3: And we certainly will continue that narrative, no doubt. Hey, we've just got about 45, 50 seconds here. We've got Qualcomm. We've also got Arm Holdings reporting after the close. What should we be watching out for? What are you watching out for when they report? 00:16:34 Speaker 11: I think on ARM, right, you know, they're obviously exposed to smartphones. So is Qualcomm. I think that market is potentially bottomed. For ARM, though, on the data center side, they're building out their own data center chip. Also, the deployment of ARM server CPUs we think is doing extremely well. So I think people are going to be focused on that. Same thing with Qualcomm. Qualcomm, obviously, is strategically trying to pivot towards AI, and we'd love to get some more progress and updates on the traction that they're getting there. All right. 00:17:05 Speaker 3: Well, investors, a little bit upbeat because both of those share prices are trading higher ahead of their results. 00:17:10 Speaker 1: Hey, John, thank you so much. 00:17:11 Speaker 3: John Vinn from KeyBank joining us there to talk about the semi-space. Coming up, though, we're going to switch gears a little bit. Uber delivering on profit in its third quarter earnings report, but its rides business is missing the mark. So got to ask, can delivery growth and a multi-billion dollar bet on robo taxis keep it moving? We'll have more in the third quarter earnings results when we come back to you on this Wednesday. 00:17:33 Speaker 1: You are watching Bloomberg Tech. 00:17:48 Speaker 3: Also on our radar this Wednesday, Uber reporting its third quarter earnings before the opening bell today with delivery outpacing its rides business. A quick look at Uber's shares. They are rallying in today's session. Investors seem to like what they got from the company's stock up. about 8.2%, so holding on to its best levels of the session thus far. Joining us right now to unpack the report is Igal Arunian, Managing Director at Wedbush. He has an outperform rating on the stock with a target price of about $ 91 a share. 00:18:17 Speaker 1: Igal, good to have you here. Investors like the report. Do you like it? 00:18:23 Speaker 12: Yeah, thanks so much for having me, Carol. Look, I think it was a very solid report. There were some numbers that were maybe a little bit mixed. We missed on mobility slightly. I think that was driven by some factors that Uber can work through. We got some color on AV as we roll through that. I think that's going to continue to be a big focus for investors. And the delivery business is doing well. So overall, I think it was a net positive. The outlook for 4Q was strong. There's going to be questions that remain to be answered over the next year or two around the AD story. But there was nothing that was critically negative in the print. And so I think with the stock where it was and it's been lagging for the year, the stock would make sense here. 00:19:14 Speaker 3: A lot of it was driver, excuse me, driver supply constraints overseas. Remind everybody about the overseas exposure for this company and how important it is. 00:19:24 Speaker 12: Yeah, I mean, it's important. Uber is fully international and they're in pretty much every market across one or both of their businesses. And, you know, we do see these issues from time to time. Rising gas prices has some impact. The tighter labor market has had some impact. Immigration policies in certain countries has had some impact. These are factors that Uber has faced before, and they've worked through them by giving greater driver incentives and bringing more people onto the network. The positive thing of what it means is that demand continues to be strong, and I think. 00:20:04 Speaker 8: That's more important. 00:20:05 Speaker 12: We expect the supply side to catch up. 00:20:07 Speaker 3: A couple of things I want to ask you about. First of all, when it comes to the delivery business, which was a bright spot, I mean, this is coming just a few days after we got DoorDash agreeing to buy Instacart. Now, it's got to go through regulatory approval, but how much of a challenge is that going to be to Uber and that part of the business? 00:20:25 Speaker 12: This is a big market. Uber's retail and grocery business grew 40% year over year. 00:20:29 Speaker 13: We're still in very early stages. 00:20:36 Speaker 12: Parts of this market and market penetration, both for e-commerce broadly and then also for these third-party networks. And so I think consolidation does help DoorDash and Instacart, but I think Uber is very able to compete in this space. They talked about it a little bit on their call about how some of the grocers are starting to knock on Uber's door and ask about their views on what competition means. 00:21:05 Speaker 8: So we'll see. 00:21:06 Speaker 12: There's going to be a lot that's going to have to evolve and play out, particularly on the regulatory side over the next year. But in this market, you also have to consider Walmart and Amazon, who are two big players. And so what the consolidation does is help local grocers compete against those better. But grocers are going to want to be on multiple platforms, not just on DoorDash and Instacart. And so I think there's an opportunity for everyone. 00:21:32 Speaker 8: It's a very. 00:21:33 Speaker 12: Fast-growing market here. 00:21:34 Speaker 3: I am also curious, when it comes to their Robotaxi strategy, they are relying on a lot of other companies to implement this. And this means maybe a slower rollout. We definitely see it in comparison to Waymo. Is that a failed strategy in your view, or do you think ultimately, longer term, it will work out? 00:21:53 Speaker 6: So not at all. 00:21:55 Speaker 12: And for us,

sort of emphatically, and I think, first of all, the complexity in this market works to Uber's advantage. I don't think anyone's really rolling this out super quickly. There's a lot that needs to. 00:22:08 Speaker 11: Be worked out. 00:22:09 Speaker 12: There's a lot of regulatory requirements. As you expand internationally, that gets even more complex. There's weather elements in different geographies. There are many things to iron out here. I think what we've seen so far is that it's not going to be a winner-take-all race. And I think that that helps Uber's story here. So we're going from, I think they said, 700 autonomous vehicles at the end of the year and their network this year going to thousands over the next couple of years. And I think Uber's positioning is very strong there. 00:22:41 Speaker 3: Egal, we've got to run Egal Arunian over at Wedbush. 00:22:44 Speaker 1: Thank you so much. 00:22:45 Speaker 3: Hey, coming up, former energy policy lead over at Tesla and founder of Luminary Strategies, Arushi Sharma Frank, joining us to. 00:22:51 Speaker 1: Talk about the AI build-out. That's next. 00:23:02 Speaker 14: All right. 00:23:02 Speaker 3: Welcome back, everyone, to Bloomberg Tech. I'm Carol Master in for Ed Ludlow. Let's get back to the market trade. Let's toss things over to Bloomberg's Isabel Lee. And Isabel, we're definitely off our highs of the session here. 00:23:12 Speaker 1: Off our highs, Carol, but still in the green. 00:23:14 Speaker 4: It's a blue sweep and tech stocks seem to be liking it. And after initially selling off overnight, investors are back now pushing the stocks higher in the green. So investors seem willing to look past the political upheaval and instead focus on the green. and what is powering the growth of the U.S. economy, and that is consumer spending, and that is AI boom. So they're betting that both those will stay intact. There's also a shift back into fundamentals, because JP Morgan's trading desk says that the tech route that we saw in the past days, those are a good time to buy the dip, and that is what you're seeing now. Dip buyers coming in at full force. But Carol, it wasn't so long ago when we saw a lot of these tech earnings come out that disappointed investors, and when jitters across the AI spending was really creeping in. But for now, I. 00:23:53 Speaker 12: Guess tech investors. 00:23:54 Speaker 4: are looking at the win. And also, let's talk about two stocks that is very interesting, and that is SpaceX and Tesla. Both are deeply in the red, down by more than 3% and 4% for SpaceX. So this is an Elon Musk story as much as it's a midterm story because no CEO is as closely related to the Republican Party and to President Trump as much as Elon Musk. And the jitters are starting because Tesla and SpaceX are forging ahead with the AI race. These two companies also have a mega merger ahead, so questions around whether Whether this will pass a regulatory scrutiny is also rising. And of course, there's also the access to a military version of the Starlink satellite service. And that is a point of contention between the U.S., Ukraine and Russia. So all of those, Carol, tied together. And this is also a big political setback for Elon Musk, who spent nearly half a billion dollars supporting Republican candidates, all of whom, Carol, or nearly all of whom have lost. 00:24:44 Speaker 3: It's a great setup for our next conversation. All right, Isabel, thank you so much. Let's talk more about how tech is reacting to Democrats winning control of the U.S. 00:24:52 Speaker 1: Congress. 00:24:52 Speaker 3: Bloomberg's Michael Shepard is with us. Mike, I kind of want to start with Elon. I just do wonder how much he might be caught in the crosshairs of the new Congress, the democratically controlled Congress. 00:25:05 Speaker 6: Well, here in Washington, Democratic lawmakers would love nothing more than to bring Elon Musk in for hearings and really use their new investigative powers as heads of key committees to really probe into his dealings with the Trump administration and also into his other business plans to find out what exactly he has been up to with his space business, to look into his relationship with Russia and China and elsewhere. So this will be something that is we're just getting warmed up here. And in fact, we saw a tweet from the incoming head of the House Oversight Committee, Representative Garcia, saying brace yourself in essence. So I think we'll be looking for Elon Musk. But we can also expect other tech CEOs to get similar treatment. And we're talking about Jensen Wang of NVIDIA, Sam Altman of OpenAI and Mark Zuckerberg of Meta Platforms. They're all going to be in, Carol, for this meeting. kind of scrutiny from Democrats who really want answers to what these companies have been up to with their business plans, not only with AI, but with social media, with self-driving cars, and even space exploration. 00:26:13 Speaker 3: Mike, I got to talk about a theme that we have been talking a lot about on Bloomberg Tech today, and that is the data center build-out in general. I mean, do investors, we're going to talk about the credit picture in just a moment, but I'm just curious, do investors have to be a little bit concerned and cautious about whether or not this build-out starts to slow down? 00:26:32 Speaker 6: But we're seeing two different stories play out here today, at least in the markets. When we look at the hyperscalers, the MAG-7 is up today. And that may be a little bit of a rebound or a relief, especially since the president has agreed to recognize the results of the election. and also promised you can take his pledge for whatever it's worth to work with the new Democratic majority. But when you look elsewhere, when you look at the data center-specific stocks like CoreWeave, one of the neoclouds, and Applied Digital, a data center developer, they are down sharply today. And that is probably because of the expectation that

some of the governors elected in last night's contest said, will put more restrictions on developing projects in their states. And we're talking about Texas, we're talking about Ohio, and we're talking about Georgia. Each of the candidates who won in those states came in with a platform that at least partly talked about finding ways to make sure that data center development doesn't have a negative impact on the communities around them, be it electricity bills, be it the environment, be it noise. They want to make sure that there is more regulation in place to ensure that construction of these projects doesn't have any kind of negative outflow on the community. 00:27:43 Speaker 3: Yeah, which is why you see a name like CoreWeave, which is a pure AI data center play, down about 10% in today's session. 00:27:49 Speaker 1: All right, Shep, thank you so much. 00:27:51 Speaker 3: Mike Shepard of Bloomberg there in the nation's capital. Well, we got to talk a little bit about credit risk because gauges for credit risk for U.S. hyperscalers specifically improving today. It's part of broader gains for risk assets in the wake of a blue wave in Washington. Junk bonds tied to data centers opening weaker earlier today. The cost to protect SpaceX debt against default for five years fell as much as 9.3 basis points. Now, on the credit picture and on the big tech companies, a record-shattering European debut for meta-platforms, pulling in 53 billion euro of investor demand for its first-ever euro bond issuance. They've been doing issues here in the US, but they are spreading it out. Want to get into it with Robert Schiffman of Bloomberg Intelligence. This is something you have been following for a long time. You tend to be upbeat. I am curious, after midterms and concerns about whether or not we'll have pushback against the build of data centers, all that money that's being raised for that, Do we need to be more concerned or less concerned or TBD? 00:28:50 Speaker 15: This may shock you, but I'm more bullish today than I was yesterday. 00:28:53 Speaker 8: Why? 00:28:54 Speaker 15: So we've seen three very successful financings just this week. Microsoft came back to the market, way rated. Oracle came back to the market, also issuing equity. And Meta had very successful dollar deals and a record-breaking European order book for their inaugural euro deal. What we've told you consistently is the money is there to fund the AI build-out because the demand for AI is there. There are going to be some haves and have-nots. Obviously, the smaller names, these pure data center names, these neoclouds are going to struggle a little bit more, and we're going to separate some winners from losers. Ultimately, I think CoreWeave can finance itself because, again, this is more a working capital issue than a demand issue, but the credit market... are telling you, at the right price, we're there to finance. You know, Gordon Gekko once said, every dream has its price. So as long as you price a little bit wider, I don't think spreads are going to rally dramatically. We are a little bit tighter today, but I think the confidence that there's capital around, whether it's SPVs, secured chip deals, off-balance sheet transactions, unsecured debt, or even massive amounts of equity, the money is there. And whether or not the political landscape changes a little bit, which I actually don't think is going to change that much, I think there's a lot to run on, less to do afterwards, is that I don't think it's going to really delay any of the build. And I don't see CapEx going down this year or next. 00:30:17 Speaker 3: Any trend in terms of what a Meta or a Microsoft or an Alphabet are having to pay investors when it comes to a debt issuance? 00:30:24 Speaker 1: Have we seen a trend line going a little bit higher? 00:30:26 Speaker 15: Yeah, you know, it's been a double-edged sword, really a whammy from both rates going higher as well as spreads going higher. That said, remember, these AA and AAA names started at historically tight spreads. So some of the names are anywhere between 50 and 100 basis points wider. If you look down the BBB curve, you know, you've got long bonds for Oracle trading in the mid-300s. Seems pretty crazy if you think they're going to stay investment grade like we do. 00:30:52 Speaker 11: Right. 00:30:53 Speaker 15: So the cost of capital has gone up, but the reality is that it doesn't really matter today. The real trade is what happens if you're buying a 30-year bond. What's going to happen over the next 10 years? What are your excess returns going to look like? So right now, they're going to struggle a little bit because every time you have to issue a bond to help fund more, you're going to push concessions back and spreads a little bit wider. But ultimately, I think in the next couple of years, that turns. And when we look at 10-year returns, I think they're going to be phenomenal. 00:31:20 Speaker 1: Still a bull, huh? 00:31:21 Speaker 7: Still a bull. 00:31:22 Speaker 1: All right. Interesting stuff. 00:31:23 Speaker 3: Robert Schiffman, thank you so much. Robert Schiffman follows credit for us here at Bloomberg Intelligence. 00:31:28 Speaker 1: All right. 00:31:28 Speaker 3: Coming up, everybody, former energy policy lead for Tesla and founder of Luminary Strategies, Arusha Sharma Frank, joining us to talk about AI and data centers and, of course, to talk about Elon's world. 00:31:41 Speaker 1: This is Bloomberg Tech. 00:32:02 Speaker 3: All right, everybody, we want to dig into the impact these midterm outcomes could have on the AI build-out. It's been a theme we've been talking about all hour. Arushi Sharma Frank. 00:32:12 Speaker 1: Is with us. 00:32:13 Speaker 3: I'm kind of rushing to get to her because I want to see what she has to say. She's the founder and CEO of Luminary Strategy. She's an expert on the power grid and She's worked on energy policy and compliance issues at Tesla and Constellation.

Arushi, nice to have you here. You're a friend of the show. I want to start big and broad. The elections. 00:32:31 Speaker 1: You've been having conversations, you said, with folks. So many. 00:32:34 Speaker 3: What's the takeaway from what we got and what it means specifically for tech, but also the AI data center build-out? 00:32:41 Speaker 14: Some combination, Carol, of exuberance and panic. And I think exuberance is around the part of understanding how much more tech executives will have to pay attention to what politicians need and want, right? Which is a more new phenomenon in Washington. It's not like every tech company in the U.S. has an apartment in Washington, D.C., I think they might need one for the next couple of years or maybe longer. 00:33:03 Speaker 3: So on issues that impact their citizens. So in other words, in states where utility costs have gone up, water shortages, like things like that. In other words, that's going to become a bigger part of the conversation. 00:33:14 Speaker 1: Oh, absolutely. 00:33:15 Speaker 14: So along with what we saw in Congress last night, we also saw 33 referendum votes against data centers in local polling. Only one in favor of data centers in North Dakota. And that's not something that is unusual. It's just very clear, right? It's a referendum every level of government and every level of public institution and civil society. It's all three moving together. And like one evening is a nice callback to the fact that America still votes. We are still human beings, and we have the power of the purse and the pen. 00:33:44 Speaker 3: Citizens were definitely heard last night in the election. So, Arushi, you understand the connection between data centers and power grids and the power needs. How do we do this in a way where utility prices and power prices aren't impacting so many citizens in a world where the elections, too, affordability was a massive issue? 00:34:03 Speaker 14: Diversification is the biggest strategy in my view. 00:34:06 Speaker 1: So all kinds of power? 00:34:08 Speaker 14: All kinds of power, all sorts of strategies that will minimize the amount of immediate impact on the power grid, but also enable the folks who want to get on the power grid with these large electronic loads to also bring more resilience and infrastructure with them. So that's actually the core of what I do, is I spend a lot of my time working with companies that are turning data centers into grid assets. And large chip companies are at the back of that. 00:34:31 Speaker 1: What does that mean? 00:34:32 Speaker 14: Well, for starters, if the grid is really constrained, if a data center can connect and it brings resources with it, or the data center itself can cut back when the grid is extra strained, then you're helping the grid. So you're an asset to the public system. And this goes to one of the fears that is sort of a wedge issue around the mid-term voting appetite for data centers, which is that people aren't just worried about their power bills and the gas bill and the affordability narrative. It's not just that. It's also they're worried that data centers, if they get on the grid, they won't get off the grid. And if they get off the grid, that move is so big, it takes down the whole grid. 00:35:04 Speaker 3: So Elon Musk tweeted and talked about the elections, but he also talked about, well, maybe we even need more data centers in space at this point. 00:35:12 Speaker 1: I am curious. 00:35:13 Speaker 3: We talked about you worked at Tesla. I am just curious how you were thinking about that company, SpaceX, in a very different political environment in D.C. 00:35:24 Speaker 14: Yeah, well, I was there when the political environment started to shift. I worked from 2020 to 2024. And I think that all of these companies working together, I don't have a comment today on how I feel about all of them working as one public entity together. These potential mergers are not on my agenda at the moment. But I do think that diversification of where chips go is kind of the back strategy of all of this together. So Elon is leading, if you think about it. Tesla uses AI in chips for the purposes of full self-driving and robots, right? Then we have SpaceX, which is using chips in a completely different way, and that's a public company as well. Then you have XAI, which is actually building out the data center economy. for powering all of these utilization needs, and also they're drawing funding and drawing supply from the large model makers like OpenAI. So we have this circle, if you will, but it's not a closed circle, which I think is good because people get worried about AI and data centers as this closed loop of investment bubble, right? We talk about that all the time. 00:36:24 Speaker 1: It's certainly part of the narrative right now. 00:36:25 Speaker 14: But I think that in this case, you've got multiple public companies that helps create the anti-bubble. Because if one strategy doesn't work and we do actually end up putting chips in space, that's not a bad thing. That means that we've created a way for those dollars to go into a space, literally, no pun intended. where we'll get a successful outcome and our dollars are in those companies, right? You and I own these companies one way or another. Or maybe our kids do if we don't. 00:36:48 Speaker 1: Yeah, exactly. 00:36:49 Speaker 2: Right. 00:36:50 Speaker 1: And certainly in terms of the interconnectivity. Arushi, interesting. Thank you so much for jumping in here. 00:36:55 Speaker 14: I am delighted to be here. 00:36:56 Speaker 1: Thank you. 00:36:57 Speaker 3: Arushi Sharma Frank joining us here. She is founder and CEO of Luminary Strategies. All right, coming up, everybody, startups from all across the globe are getting ready today to compete for a $ 1 million investment thanks to Pegasus Tech Mentors. The founder and CEO is going to join us to talk about the Startup World Cup finale taking place in San

Francisco. 00:37:17 Speaker 1: That is coming up next. This is Bloomberg Tech. 00:37:32 Speaker 3: Waymo is accelerating the rollout of its autonomous ride-hailing service. Bloomberg's Emily Chang spoke with the co-CEO, Takedra Mawakana, about how her background in tech PIVOTS prepared her to navigate safety hurdles and also win public trust. 00:37:48 Speaker 13: We're definitely partners. In markets where we don't partner, we definitely compete. And I think that's been a really important part of the relationship. In Austin and Atlanta, we are still partners. And at the same time, we have decided that we will enter those markets at the end of next year. 00:38:04 Speaker 16: Uber wants regulators to require human drivers to be part of the ride-hailing network. Do you see that as legitimate regulation, or is that... A way for Uber to defend its turf. 00:38:14 Speaker 13: I don't see that as a legitimate regulation. I don't think it's relevant to autonomy. There are a lot of human jobs required in the AV ecosystem, and we should all be championing those. But I don't think that autonomy and manned job legislation go hand in hand. 00:38:32 Speaker 16: Is Waymo building a future without drivers? 00:38:35 Speaker 13: Waymo is building a business where the Waymo driver is the only driver that you need. When we show up in new markets, we need partners who have drivers. And those drivers help us build maps. They help us collect data. 00:38:51 Speaker 8: We also need. 00:38:51 Speaker 13: People who will work on the fleet. Will some of those be people who once drove? 00:38:57 Speaker 1: Maybe. 00:38:58 Speaker 13: And that's what we're seeing right now with some of our partners. 00:39:00 Speaker 1: Uber just had a big round of layoffs. 00:39:01 Speaker 16: Is the ride-hailing business model doomed? 00:39:04 Speaker 13: Earlier this year, we surpassed 500,000 trips per week, and there's still Uber and Lyft and taxi cabs in the same lines we're in at the airport and transporting people around. 00:39:17 Speaker 3: You can watch the full interview with Waymo co-CEO on The Circuit with Emily Chang on Bloomberg Originals Thursday at 8 p.m. 00:39:24 Speaker 8: Eastern. 00:39:25 Speaker 3: Well, 200 startups, six continents, and a million-dollar investment up for grabs, Pegasus Tech Ventures is hosting the Startup World Cup in San Francisco. It all starts today. Our founders will be competing to become tech's next big name. Joining us right now is the firm's founder and CEO, Anis Uzaman, who also chairs the competition. We're going to talk about a lot of different things, including the Startup World Cup, in just a moment. But I've got to say, Anis, I've got to ask you, you're an investor now. In SpaceX, are you at all worried about Elon and his companies in trouble, or at least more on the radar because of the Democratic sweep in the elections? 00:40:03 Speaker 17: I'm not worried about SpaceX or anything else to be in trouble. We support all the startups. We support innovation. We're excited about what SpaceX is doing. I mean, they have a great vision, not only launching rockets, but also creating Starlink, which is going to become the next generation broadband internet. 00:40:25 Speaker 8: And the users are growing. 00:40:27 Speaker 17: They also have a great plan to create the data center in the orbit, which I'm very positive about. You know, this is an ecosystem. So SpaceX helps all other startups to actually also shine and grow. SpaceX has been a great area of expansion, and I think SpaceX is leading the way. And many of my startups that I have invested also are following the same path. 00:40:49 Speaker 3: All right, so I do want to talk about, thank you for weighing in on that. I do want to talk about, though, the Startup World Cup. Tell us a little bit about it. 00:40:56 Speaker 1: What is it? Why was this started? 00:41:00 Speaker 17: So we invest all over the world, and innovation does not only happen in Silicon Valley. 00:41:05 Speaker 8: It happens all over the world. 00:41:07 Speaker 17: And we found that many of the other geographies and these entrepreneurs in all other regions of the world, they do not have the opportunity that we have. 00:41:15 Speaker 8: In Silicon Valley. 00:41:16 Speaker 17: So I wanted to connect the whole world to Silicon Valley, to this great platform we have in Silicon Valley. And that's where I started. I started in 2017 with 15 countries. And today we have 200 regions and 60 plus countries are all participating. 00:41:31 Speaker 8: They're all coming to San Francisco. 00:41:33 Speaker 17: And this is actually a platform for connecting them to the next round of funding, connecting them to the media, connecting them to the next round of investors. So this creates opportunity to a lot of entrepreneurs who are not privileged. So in some sense, this is a big cause. It's more than a million dollars. It's also connecting those entrepreneurs so that they can shine. 00:41:55 Speaker 3: Yeah, kind of giving them a community. Financial, yes, but also a community to help them move forward. I am curious that when you look at these companies and how you're thinking about when it comes to technology, where everything is going, whether it's vertical AI, robotics, enterprise automation, what do you think are the trends that investors should be watching out for? What are you going to be watching out for when it comes to these startups? 00:42:17 Speaker 17: So the trend is definitely is biased by AI today. You see everything. You look at healthcare, space tech, biotech, you see anything that has a touch of AI. We are seeing more and more AI companies. We're also seeing a big surge in the space technologies. We're also seeing a lot of biotech coming out, right? So we're seeing expansion of AI in every single sector that we have invested in. You know, every single sector is kind of influenced by AI. So we'll see this momentum going on I know that AI itself is also changing its structure. From generative AI, we're seeing a lot of physical AI. We're going to see a lot of humanoid robots coming out. So things are changing in a different way. So AI is more towards moving towards the physical AI side. 00:43:09 Speaker 8: So that's what the kind of trend that we are seeing right now. 00:43:12 Speaker 3: I am also curious to just to wrap up here. You know, we focus so much on these big AI companies, open AI, certainly Anthropic. But it is these smaller companies that could be the open AI and Anthropics of the future. 00:43:26 Speaker 1: Just got about 30 seconds. 00:43:29 Speaker 8: That's correct. 00:43:30 Speaker 17: I think, you know, we are seeing OpenAI and Anthropic, they're doing great, but they're also leading the pathway for a lot of young entrepreneurs who can come up with the next generation of the AI companies. And the Startup World Cup that we are doing this week on the 6th of November in San Francisco is basically, you know, helping those startups coming up and become the next OpenAI and Anthropic of the world. 00:43:51 Speaker 8: And that's what the goal of this platform as well. 00:43:53 Speaker 1: All right. 00:43:53 Speaker 3: Well, good to hear the outcome and companies on your radar. Anis Thuzaman, thank you so much. And Pegasus, Tech Ventures. Well, that'll do it for this edition of Bloomberg Tech. Don't forget to check out our podcast. You can find it on the Terminal, as well as online on Apple, Spotify, and iHeart. 00:44:08 Speaker 1: Thanks for watching, everybody. This is Bloomberg.