# OpenAI Moves Toward a $1.25 Trillion Value

An episode of [Bloomberg Tech](https://invisiblenetwork.ai/podcast/1611767434), 23 Oct 2026, 43 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/41764a4f-fc64-4e11-89ba-ae7c0030ab5e/3daaf6ba-a990-4313-898a-b4ec0141a9ab/audio.mp3?utm_source=Podcast&in_playlist=9caafc41-289c-4115-995d-ae7c0030ab75

Bloomberg’s Ed Ludlow takes a look at OpenAI's potential fundraising at a staggering $1.25 trillion valuation. Plus, Anthropic's looming IPO could deliver blockbuster gains for some of its biggest investors, with billions of dollars on the line. And, SpaceX is taking another step toward becoming a major US wireless carrier, eyeing access to at least 80,000 cell sites nationwide. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios. Podcasts.
[0:05] Speaker 2: Radio.
[0:06] Speaker 3: News.
[0:13] Speaker 4: Bloomberg Tech is live from the heart of Silicon Valley
[0:17] Speaker 4: with Ed Ludlow in San Francisco.
[0:23] Speaker 1: This is Bloomberg Tech.
[0:24] Speaker 5: Coming up, OpenAI is looking to raise fresh funding at
[0:27] Speaker 5: a staggering $ 1. 25 trillion valuation. We have the details. Plus,
[0:31] Speaker 5: Anthropic's looming IPO could deliver blockbuster gains for some of
[0:35] Speaker 5: its biggest investors with billions of dollars on the line.
[0:38] Speaker 5: And SpaceX is taking another step toward becoming a major
[0:41] Speaker 5: US wireless carrier, eyeing access to at least 80,000 cell
[0:46] Speaker 5: sites nationwide.
[0:48] Speaker 1: Well... We made it.
[0:49] Speaker 5: It's Friday. And actually, in the moment, technology stocks are higher,
[0:53] Speaker 5: but headed for two straight weeks of declines. The first
[0:57] Speaker 5: time we've had back to back weekly drops on the
[0:58] Speaker 5: Nasdaq 100 since July. Not as bad this week and
[1:03] Speaker 5: not as deep a drop as we saw last week. Actually,
[1:07] Speaker 5: a lot of the news flow right now is in
[1:09] Speaker 5: the private markets. I want to get right to our
[1:10] Speaker 5: top story in today's big number, $ 1. 25 trillion. That's the
[1:15] Speaker 5: valuation OpenAI is now targeting in its latest funding round.
[1:19] Speaker 5: Joining us for the details, Bloomberg News reporter Rebecca Torrance.
[1:22] Speaker 5: We had already reported that this round was underway, $ 30
[1:25] Speaker 5: billion raise at $ 1. 4 trillion valuation. Looks like the valuation
[1:30] Speaker 5: is coming off a bit. What else do we need
[1:32] Speaker 5: to know? There are some new names in this round.
[1:34] Speaker 1: That's right.
[1:34] Speaker 6: So, We are now reporting that CO2 management is in
[1:38] Speaker 6: talks to co-lead this round. That's alongside entities from the
[1:42] Speaker 6: United Arab Emirates. We had reported that previously. The total
[1:45] Speaker 6: round size is holding at roughly $ 30 billion, as we
[1:47] Speaker 6: reported at the end of September. But the price has
[1:50] Speaker 6: come down a little bit. We're now looking at a
[1:53] Speaker 6: $ 1. 25 trillion valuation, as you said. That's $ 150 billion down
[1:57] Speaker 6: from the previous price, which is reflecting some price instability
[2:01] Speaker 6: in the broader markets.
[2:04] Speaker 5: A lot of people at the time when we first
[2:05] Speaker 5: broke the story were like, well, why is OpenAI doing this?
[2:09] Speaker 5: Aren't they going to go public? You know, we have
[2:11] Speaker 5: our reporting on when that might happen. It all kind
[2:14] Speaker 5: of played out around OpenAI's Dev Day as well, where
[2:16] Speaker 5: we actually got to speak to Sam Altman and Sarah
[2:19] Speaker 5: Fryer about it. It seems like this is the investors
[2:22] Speaker 5: wanting to do this rather than like OpenAI needs the money.
[2:26] Speaker 6: That's certainly how it's being positioned. I will say they
[2:29] Speaker 6: do have these big commitments. The work that they're doing
[2:33] Speaker 6: is not cheap, so they can certainly use the money,
[2:35] Speaker 6: and this money would be sort of a bridge to
[2:38] Speaker 6: their public listing. They had originally planned to go as
[2:41] Speaker 6: early as this year, but now they're looking at next
[2:45] Speaker 6: year earliest. So this capital will sort of get them
[2:48] Speaker 6: to that next milestone, ideally a public listing.
[2:52] Speaker 5: They'd already raised $ 122 billion round earlier this year. And
[2:57] Speaker 5: I think what Sarah Fry told me when I asked
[2:59] Speaker 5: if they were doing a new round, which she did
[3:02] Speaker 5: not confirm, but she basically said this market demands to
[3:04] Speaker 5: do one, was a lot of that prior rounds capital
[3:07] Speaker 5: sits on the balance sheet. Let's frame this in the
[3:11] Speaker 5: sort of race, neck and neck with Anthropic. What was
[3:14] Speaker 5: Anthropic's last private valuation? We just showed at OpenAI's and
[3:19] Speaker 5: where are we at with all these IPOs?
[3:21] Speaker 7: Right.
[3:21] Speaker 6: So Anthropic's last private valuation was $ 965 billion. OpenAI's was
[3:27] Speaker 6: $ 852 billion. So this private round for OpenAI, if it
[3:31] Speaker 6: does happen, would push it above Anthropic for the highest
[3:34] Speaker 6: private valuation in tech. That said, it looks like Anthropic
[3:39] Speaker 6: is going to go public as soon as November, in
[3:43] Speaker 6: which case it will no longer be a private company
[3:45] Speaker 6: and OpenAI will indisputably be the highest valued private company.
[3:50] Speaker 5: Rebecca Torrance, Bloomberg News. Thank you very much indeed. So
[3:53] Speaker 5: Anthropix's upcoming IPO is set to bring multi-billion dollar gains
[3:57] Speaker 5: to its investors. Iconic, an investment firm that owns a
[4:00] Speaker 5: stake worth about $ 17 billion in the company, could see
[4:04] Speaker 5: the biggest returns. This is one of the most read
[4:06] Speaker 5: on Bloomberg today, and it's no surprise. Bloomberg's venture capital reporter,
[4:10] Speaker 5: Natasha Mascarenas, is with us. There are lots of big
[4:13] Speaker 5: names in Anthropic. Some of them have been there for
[4:17] Speaker 5: a long time. Some of them haven't, but you've just
[4:19] Speaker 5: set out this wonderful piece. Who's going to win? Who's
[4:22] Speaker 5: going to gain?
[4:23] Speaker 4: I mean, this is definitely a story of the biggest
[4:25] Speaker 4: investments leading to the biggest returns, which venture capitalists want
[4:28] Speaker 4: to happen. Concentration is a word we hear a lot
[4:31] Speaker 4: about this year. And in this case, many of the
[4:34] Speaker 4: firms in our story, so Iconic, Sequoia, GIC, they made
[4:38] Speaker 4: their largest investments of all time in this company, expecting
[4:43] Speaker 4: and hoping for it to be their largest returns. But listen,
[4:47] Speaker 4: we have to give credit to the early stage firms.
[4:48] Speaker 4: Anthropic did not get institutionally backed until 2023 when Spark
[4:54] Speaker 4: Capital led its round. It wrote its largest investment at
[4:57] Speaker 4: the time, $ 75 million. And now we expect its stake
[5:01] Speaker 4: to be valued at around $ 7 billion. So it's also
[5:04] Speaker 4: how much you pay to get those multi-billion returns that matters.
[5:07] Speaker 5: We just showed some of the backers of Anthropic. What's
[5:10] Speaker 5: interesting is, wow, institutional money for the first time in 2023.
[5:13] Speaker 5: It wasn't that long ago.
[5:14] Speaker 8: No.
[5:15] Speaker 5: But then like all these what we call strategics come in, right? NVIDIA,
[5:19] Speaker 5: the cloud computing players, and then GIC. Tell me a
[5:24] Speaker 5: little bit more about the more recent history of who
[5:28] Speaker 5: backed those big rounds.
[5:29] Speaker 4: It's rare that you see the biggest returns come for
[5:32] Speaker 4: an investor that just backed it last year.
[5:35] Speaker 7: Yeah.
[5:35] Speaker 4: I mean, in Iconic's case, it had passed on Anthropic before.
[5:39] Speaker 4: In GIC's case, I believe we reported that it's invested
[5:43] Speaker 4: upwards of $ 4. 5 billion in the company with its first
[5:46] Speaker 4: check starting just last year.
[5:48] Speaker 8: Wow.
[5:49] Speaker 4: This is investors trying to get a meaningful stake in
[5:52] Speaker 4: a short period of time. When the S1 does drop,
[5:55] Speaker 4: I know we're both anxiously waiting for it, we don't
[5:57] Speaker 4: expect them to be in that 5% ownership bucket yet.
[6:00] Speaker 4: And so it was really important for us to get
[6:02] Speaker 4: the story out before to understand, hey, they're not going
[6:04] Speaker 4: to be listed in the S1 most likely. So let's
[6:07] Speaker 4: see what they have before then.
[6:08] Speaker 5: And then so on Iconic, you said a $ 17 billion stake,
[6:12] Speaker 5: but that was based off Anthropic's last private valuation.
[6:15] Speaker 9: Correct.
[6:16] Speaker 8: Correct.
[6:16] Speaker 4: We're going to have to recalculate all of this when
[6:18] Speaker 4: we do eventually get pricing.
[6:20] Speaker 5: But obviously, which we don't have, which we don't have.
[6:22] Speaker 4: Two trillion is something that's been reported and discussed. But
[6:26] Speaker 4: that can shift. And I know we're actively chasing that.
[6:28] Speaker 5: Okay, Bimbo, Santosh, and Mascarenas, I wish you a peaceful
[6:32] Speaker 5: and happy Friday, free of anxiety. The best ones, whether
[6:35] Speaker 5: they come or not. Another story overnight, SK Hynix scrapped
[6:39] Speaker 5: its plans for a potential $ 10 billion US listing of
[6:42] Speaker 5: its Soladyne unit after it faced strong opposition from both
[6:46] Speaker 5: regulators and shareholders. This makes it the latest firm to
[6:49] Speaker 5: halt an IPO due to growing investor concerns about the
[6:53] Speaker 5: AI boom in the tech markets. The shares rallied after
[6:55] Speaker 5: the announcement, rising as much as 4.5%, the shares outside
[6:59] Speaker 5: of the United States. SpaceX is seeking to secure at
[7:08] Speaker 5: least 80,000 cell sites across the U.S. to build a
[7:12] Speaker 5: fourth nationwide wireless carrier. A person familiar tells Bloomberg the
[7:16] Speaker 5: company is in lease discussions with Crown Castle, one of
[7:20] Speaker 5: the U.S. 's largest owners of cell towers. This is
[7:23] Speaker 5: the market reaction. Shares of Crown Castle surged on this report.
[7:26] Speaker 5: There was movement in SpaceX. I saw some movement in
[7:29] Speaker 5: some of the carriers as well. Bloomberg's Kelsey Griffiths broke
[7:31] Speaker 5: the story. This all started... At SpaceX's first earnings call,
[7:37] Speaker 5: it was like a big moment where they kind of
[7:39] Speaker 5: dropped the bomb about what they wanted to do. Can
[7:42] Speaker 5: you just go through what you're reporting, what you're explaining
[7:44] Speaker 5: that their latest move is?
[7:47] Speaker 10: Yes, this detail is significant because it is the first
[7:51] Speaker 10: indication that we have that SpaceX is really serious about
[7:55] Speaker 10: building out this ground based network. Up until this point,
[7:58] Speaker 10: they had discussed some strategy around maybe incorporating satellite and
[8:03] Speaker 10: some mobile nodes into their consumer home internet terminals. That
[8:09] Speaker 10: would be kind of a novel way to put together
[8:11] Speaker 10: a network. Now, this reporting shows that they are actually
[8:15] Speaker 10: planning to do things the way that the big wireless
[8:18] Speaker 10: companies do things. That doesn't mean that they won't bring
[8:21] Speaker 10: in some novel elements like coverage from space, but the
[8:24] Speaker 10: TAU releases are a very traditional play for a traditional
[8:27] Speaker 10: wireless network.
[8:29] Speaker 7: Right.
[8:29] Speaker 5: The audience is probably more familiar with Starlink, which is
[8:32] Speaker 5: constellation based Internet, space based Internet. And what we're saying
[8:36] Speaker 5: is like they are looking at a path to Starlink Mobile, essentially,
[8:41] Speaker 5: but they're doing it very much here on Earth. Why
[8:45] Speaker 5: is this cell tower reporting important and the player involved here?
[8:49] Speaker 9: What does that tell us?
[8:51] Speaker 10: So that tells us that SpaceX is looking to scale
[8:54] Speaker 10: up in the same way and on the same level
[8:58] Speaker 10: that these wireless competitors, AT & T, T-Mobile, Verizon, they're
[9:03] Speaker 10: trying to get on their level in terms of ground-based infrastructure.
[9:06] Speaker 10: And up until this point, I don't think that we
[9:09] Speaker 10: had really seen that. Again, in earnings, we did hear
[9:13] Speaker 10: from Musk as well as others that They do plan
[9:17] Speaker 10: to build out this ground-based terrestrial network in addition to
[9:20] Speaker 10: acquiring Spectrum, in addition to continuing to build their satellite
[9:24] Speaker 10: network from space.
[9:26] Speaker 9: But I think this is.
[9:26] Speaker 10: That first indication that they are really seriously looking at this.
[9:31] Speaker 5: At one point in the session, Crown Castle was up 16%
[9:34] Speaker 5: and on track for its biggest jump since 2008, still
[9:37] Speaker 5: up 10% after the report. Bloomberg's Kelsey Griffiths, thank you
[9:40] Speaker 5: very much. SpaceX isn't just thinking big in wireless. Musk
[9:44] Speaker 5: also laying out massive ambitions for AI infrastructure, another sign
[9:48] Speaker 5: that the tech build-out isn't slowing down. But Missouri's Jordan
[9:51] Speaker 5: Klein says investors are increasingly trading on AI vibes, not fundamentals.
[9:58] Speaker 5: Jordan's back with us on the show. I'm trying to
[10:01] Speaker 5: make sense of the trade, not just this week, but
[10:04] Speaker 5: past week. Explain how you see this as being vibes,
[10:09] Speaker 5: not fundamentals.
[10:12] Speaker 1: Yeah, thanks, Ed.
[10:13] Speaker 11: Well, I feel like ultimately fundamentals should drive stock performance.
[10:18] Speaker 11: but lately it's more stocks moving and the price determining
[10:23] Speaker 11: the narrative. You know, we're in the midst of earnings
[10:25] Speaker 11: season and, you know, as an analyst, I think myself
[10:28] Speaker 11: and my clients that I speak to are trained and
[10:31] Speaker 11: their job is to understand what's going on with these companies,
[10:34] Speaker 11: what they're saying, the forecasts, the estimates, and those are
[10:38] Speaker 11: all looking pretty good, but yet the stocks are not
[10:40] Speaker 11: trading as such. Actually, they're selling, you know, good beats
[10:44] Speaker 11: and raises, or maybe if the beats aren't big enough,
[10:46] Speaker 11: they're selling off, but I think it's just more everyone's
[10:49] Speaker 11: nervous that there might be smoke in the movie theater
[10:54] Speaker 11: and they don't want to be caught getting burned up
[10:56] Speaker 11: if things start going lower faster.
[10:59] Speaker 5: Can I just ask you about SpaceX in the context
[11:03] Speaker 5: of what we learned bigger picture? Their reach goal for
[11:07] Speaker 5: next year is to have 20 gigawatts of computer capacity, right? And,
[11:13] Speaker 5: you know, a lot of people would say, do we
[11:15] Speaker 5: extrapolate out from what SpaceX said in the same way
[11:18] Speaker 5: we would do with the hyperscalers to give us a
[11:20] Speaker 5: sort of confidence level of what the next 12 months
[11:23] Speaker 5: looks like? What was your take on that?
[11:26] Speaker 11: Well, I think even their base case of adding 10
[11:29] Speaker 11: additional gigawatts is, you know, probably 70 to 80%. It's
[11:35] Speaker 11: a lot more than what people had thought. You know,
[11:37] Speaker 11: whether they can get to 20 is another story. That
[11:40] Speaker 11: probably is... dependent more on the availability of the power
[11:43] Speaker 11: source as opposed to anything else. But no, I think
[11:47] Speaker 11: it sets a very bullish tone, and it probably sends
[11:50] Speaker 11: a message to the industry that, like, look, we're going
[11:52] Speaker 11: all in. I think Mark Zuckerberg at Meta is doing
[11:55] Speaker 11: something similar where he'd rather have more compute than less
[11:58] Speaker 11: because both SpaceX and I think Meta and all these
[12:02] Speaker 11: guys are working on new capabilities, new features. Things like
[12:05] Speaker 11: agentic AI and they know that those are going to
[12:08] Speaker 11: be very compute hungry and they need to have basically
[12:12] Speaker 11: the plans in place to get this compute set up
[12:14] Speaker 11: now or else they could fall behind and then not
[12:17] Speaker 11: be able to monetize these capabilities.
[12:20] Speaker 5: There are some warning signals in credit markets, for example.
[12:26] Speaker 5: There has been sustained pressure in aggregate over two weeks.
[12:29] Speaker 1: On the AI trade.
[12:31] Speaker 5: I know that you've said that this is being done
[12:33] Speaker 5: on vibes, not fundamentals, but what is the origin or
[12:36] Speaker 5: the source of the anxiety around the AI trade right
[12:40] Speaker 5: now that you're hearing each morning at the desk?
[12:42] Speaker 1: Yeah, well, it's a couple of things.
[12:44] Speaker 11: I mean, first and foremost, I think People are nervous
[12:47] Speaker 11: that all this massive amounts of trillions of dollars of
[12:50] Speaker 11: spending is unsustainable. And that's because either you can't finance it.
[12:56] Speaker 1: Right.
[12:56] Speaker 11: So that people watch the credit markets and rates, particularly
[13:00] Speaker 11: for these. tier two and tier three, um, compute vendors
[13:04] Speaker 11: like a Neo cloud. And then secondly, like why would
[13:07] Speaker 11: anyone build all this and spend the money if there
[13:10] Speaker 11: wasn't enough monetization or revenue potential?
[13:13] Speaker 8: Right.
[13:14] Speaker 1: I mean, it is still an economic decision.
[13:16] Speaker 11: Uh, you know, you don't, invest in something where you're
[13:19] Speaker 11: not sure you're going to get the return. And so
[13:22] Speaker 11: much of AI is new, it's novel, it's evolving. And
[13:25] Speaker 11: so it's hard for investors to see that far out
[13:28] Speaker 11: and say, well, if they're spending $ 2 trillion, let's say,
[13:31] Speaker 11: per year, they can get a return on that. And
[13:34] Speaker 11: every three to five months, basically, we see new features
[13:37] Speaker 11: and capabilities that AI can come in and do or
[13:41] Speaker 11: save And I think that changes the dynamic, but that's
[13:44] Speaker 11: why people are so, I think, laser focused on these
[13:47] Speaker 11: frontier model revenue run rates, right? The anthropic and open AI,
[13:52] Speaker 11: ARR numbers, because they're like, if those don't continue to
[13:55] Speaker 11: accelerate and grow, then there's going to be somewhat of
[13:58] Speaker 11: a mismatch between the spend and the return.
[14:02] Speaker 5: Actually, John, let's keep talking about that. I mean, the
[14:07] Speaker 5: more imminent thing is an anthropic IPO, which the reporting
[14:11] Speaker 5: is they'd like to pull off before Thanksgiving. Again, how
[14:17] Speaker 5: does that impact your day-to-day right now and your clients'
[14:19] Speaker 5: day-to-day in terms of something they're bracing for, what they
[14:22] Speaker 5: think will happen to equity markets more generally?
[14:26] Speaker 1: I think that's a good question, and it's twofold.
[14:28] Speaker 11: One, They need to see this deal, which is like
[14:32] Speaker 11: the most high-profile AI frontier model company, be successful. And
[14:37] Speaker 11: by that, I mean there's various definitions of successful. But
[14:40] Speaker 11: I think in the first 30 days, it's got to
[14:42] Speaker 11: trade well and not basically go down from the first
[14:47] Speaker 11: opening price.
[14:48] Speaker 1: There has to be demand.
[14:49] Speaker 11: There has to be people thinking this is a good investment,
[14:52] Speaker 11: and that's going to be dependent upon the valuation. I
[14:55] Speaker 11: think we'll know all the fundamentals by the time it
[14:57] Speaker 11: goes public. Secondly, and this is also not to be underestimated,
[15:02] Speaker 11: is that if you're a portfolio manager and you're looking at,
[15:05] Speaker 11: should I buy this or own this new issuance, you've
[15:09] Speaker 11: got to find room in your portfolio, in your book,
[15:12] Speaker 11: so to speak, to fund that. And people are going
[15:15] Speaker 11: to want to know, does that come at the expense
[15:17] Speaker 11: of another competitor or a SpaceX, a Tesla, you know,
[15:21] Speaker 11: some of the semi companies, it's unknown, right?
[15:24] Speaker 1: Because it's going to be pretty big.
[15:26] Speaker 11: And if you're a relative manager and you're trying to
[15:28] Speaker 11: keep up with a benchmark, you may need to have
[15:30] Speaker 11: some exposure. If you're a hedge fund, you don't have
[15:32] Speaker 11: to own it unless you think it's going to give you,
[15:34] Speaker 11: you know, alpha.
[15:36] Speaker 5: Well, that's interesting in the irony, you know, SpaceX's fast
[15:38] Speaker 5: track inclusion in some of the indexes. Those managers had
[15:41] Speaker 5: the same calculus before SpaceX went public. Jordan Klein of Missouri,
[15:44] Speaker 5: it's great to catch up, have you back on the show.
[15:47] Speaker 5: Happy Friday. Thank you very much. Okay, Apple's $ 2, 000 plus
[15:51] Speaker 5: iPhone Duo is officially on sale. People around the world
[15:55] Speaker 5: lining up at stores overnight to collect pre-orders or try
[15:59] Speaker 5: their luck. on a walk-in purchase. Large crowds have been
[16:03] Speaker 5: rare in recent Apple launches, but limited inventory for the
[16:07] Speaker 5: foldable phone is drawing people to stores. Customer placing their
[16:10] Speaker 5: orders on Apple's website being quoted a delivery time in
[16:14] Speaker 5: the US right now is the end of January. I
[16:16] Speaker 5: checked this morning, same for me here in California. All right,
[16:19] Speaker 5: coming up, startup Zona raises $ 250 million to fund efforts
[16:25] Speaker 5: to remake the 50-year-old GPS system. We'll speak with the
[16:29] Speaker 5: CEO next. This is Bloomberg Tech. All right, let's get
[16:37] Speaker 5: out to New York where Bloomberg's Isabel Lee is standing by.
[16:39] Speaker 3: Hi, Isabel.
[16:40] Speaker 5: Hi, Ed.
[16:40] Speaker 1: It's time now for Talking Tech.
[16:42] Speaker 12: First up, NVIDIA CEO Jensen Huang announcing another AI investment,
[16:47] Speaker 12: this time into Higgs Field. This is an AI video startup.
[16:50] Speaker 12: The San Francisco-based company is on track to surpass a
[16:54] Speaker 12: billion dollars in annualized revenue. NVIDIA's investment will help fund
[16:59] Speaker 12: the global infrastructure and hiring. Plus, DeepSeq and Minimax winning
[17:04] Speaker 12: approval to deploy models overseas. A Chinese state media affiliate
[17:08] Speaker 12: posting on social media that the companies completed the new
[17:11] Speaker 12: registration process that Chinese AI companies must complete to operate globally.
[17:16] Speaker 12: Also written in the post is that much of Chinese
[17:19] Speaker 12: AI is similarly going to remain free for export. and
[17:23] Speaker 12: SEC examiners stepping up scrutiny of private fund valuations and AI,
[17:28] Speaker 12: focusing on fees, expenses, and valuations in private funds, as
[17:32] Speaker 12: well as how firms prepare for AI-related cyber attacks. The
[17:36] Speaker 12: priorities released by the SEC's Division of Examinations are the
[17:39] Speaker 12: latest sign of regulatory concerns surrounding AI and private markets.
[17:44] Speaker 12: And Sona, a startup... working to improve GPS with a
[17:48] Speaker 12: new purpose-built commercial satellite navigation network, has raised $ 250 million.
[17:54] Speaker 12: The CRSD funding round was led by longtime SpaceX board
[17:57] Speaker 12: member Steve Jurvetson and valued the company at $ 2. 5 billion.
[18:01] Speaker 12: Sona CEO co-founder Brian joins you next after Talking Tech, Ed.
[18:07] Speaker 9: All right, Isabel with the news.
[18:08] Speaker 5: And that's right, Brian Manning is with us. And I
[18:11] Speaker 5: want to start with a congratulations on the round.
[18:13] Speaker 1: Big numbers, Brian.
[18:14] Speaker 5: But what I'd say is let's start with the problem
[18:17] Speaker 5: you're solving for. People will be listening going, GPS? I
[18:20] Speaker 5: thought we cracked that. What's the problem here?
[18:23] Speaker 3: Yeah, I appreciate you guys having us on. And that's
[18:27] Speaker 3: one of the questions I think a lot of our
[18:29] Speaker 3: early investors were asking also is, well, GPS... You know,
[18:33] Speaker 3: it works. It's something that I use every single day.
[18:36] Speaker 3: Where are the challenges? And the world that we came
[18:38] Speaker 3: out of was largely, you know, our CTO came from
[18:40] Speaker 3: the autonomous car world and realizing that the current navigation
[18:44] Speaker 3: systems really just do not support the precision, the power,
[18:48] Speaker 3: the protection that is needed. for the world to evolve
[18:51] Speaker 3: from the hands-on world that it is today to a
[18:54] Speaker 3: hands-off world. And it extends far beyond cars. It extends
[18:58] Speaker 3: into agriculture, into drones, into robotics, into defense. All these
[19:02] Speaker 3: different things that depend on location and time need a
[19:07] Speaker 3: lot better capability than today.
[19:09] Speaker 5: We're basically talking about computing at the edge, and that
[19:12] Speaker 5: can mean literally anything in this day and age. So
[19:15] Speaker 5: what is the technology that Zona is developing that is
[19:19] Speaker 5: proposing that serves as the fix?
[19:23] Speaker 3: Yeah, so there was two big breakthroughs that we made
[19:25] Speaker 3: as a company that really enable us to do what
[19:27] Speaker 3: we do. The first one is that. You know, historical
[19:30] Speaker 3: GPS satellites are these big multi hundred million dollar monsters.
[19:35] Speaker 3: We figured out how to provide extremely high performance from
[19:37] Speaker 3: small satellites that we can actually build for hundreds of
[19:39] Speaker 3: thousands of dollars at scale instead of hundreds of millions
[19:42] Speaker 3: of dollars. And they're built right here in the factory
[19:44] Speaker 3: that I'm standing in. And that's what enables us to
[19:47] Speaker 3: go from satellites that are 20 kilometers away from Earth
[19:52] Speaker 3: down to these small satellites that are 20 times closer
[19:54] Speaker 3: to Earth and enable us just to get massively better
[19:57] Speaker 3: performance than you can with the legacy systems.
[20:01] Speaker 5: Let's talk a little bit about the round then. It's
[20:04] Speaker 5: a big Series D. Congratulations on it again. What's the
[20:08] Speaker 5: priority for you right now, Brian? Where are you going
[20:10] Speaker 5: to deploy that capital to get you going, get you
[20:13] Speaker 5: moving on this?
[20:15] Speaker 3: For sure. It's coming off a huge week for us.
[20:17] Speaker 3: We launched six new satellites actually on Tuesday morning. And
[20:21] Speaker 3: these are some of the first satellites that will actually
[20:23] Speaker 3: start providing the world's first commercial satellite navigation service. And
[20:28] Speaker 3: at this point, we have a pretty massive backlog of customers,
[20:31] Speaker 3: both on the commercial side, as well as government side
[20:35] Speaker 3: that are really just waiting for us to get the
[20:36] Speaker 3: satellites up in the air. So the new capital is
[20:38] Speaker 3: going towards building more satellites in the factory here, getting
[20:41] Speaker 3: them up in the air to deploy the service globally
[20:44] Speaker 3: and expand our capability.
[20:46] Speaker 5: And in August, you had a big approval from the FCC.
[20:49] Speaker 5: Can you explain the significance of that moment?
[20:52] Speaker 9: Why it was unique?
[20:54] Speaker 3: Yeah, so Spectrum is one of the biggest bottlenecks for
[20:58] Speaker 3: any company. Spectrum is a very limited natural resource. And
[21:04] Speaker 3: we've been coordinating for the last five plus years to
[21:09] Speaker 3: figure out how can we share the GPS spectrum efficiently
[21:14] Speaker 3: without causing any sort of interference to it. Because that's
[21:16] Speaker 3: what really enables our service to be able to integrate
[21:19] Speaker 3: directly into the billions of GPS devices around the world
[21:22] Speaker 3: without changing the hardware, with just updating the software. And
[21:25] Speaker 3: we've done a massive amount of engineering. And in August,
[21:30] Speaker 3: we got the full approval for our full network, which
[21:32] Speaker 3: really is kind of the last puzzle piece that gives
[21:34] Speaker 3: us the regulatory approvals that we need to actually go
[21:39] Speaker 3: deploy the service at scale now and start turning on customers.
[21:43] Speaker 5: The what's at stake here that I find fascinating is
[21:46] Speaker 5: that if there was a disruption, it could cost this country,
[21:48] Speaker 5: just the US, a billion dollars a day. And that's
[21:51] Speaker 5: the thing that you're fighting to solve. It's been great
[21:53] Speaker 5: to have you on the program. Zona CEO, Brian Manning,
[21:56] Speaker 5: raising $ 250 million Series D at a $ 2.
[21:57] Speaker 9: 45 billion valuation.
[22:08] Speaker 13: When you think about a bubble, you think about building
[22:12] Speaker 13: capacity and then hoping the demand comes. With AI, you're
[22:19] Speaker 13: building capacity and you're hoping you can keep up with
[22:22] Speaker 13: the demand.
[22:23] Speaker 1: Two-thirds of the U.S.
[22:25] Speaker 14: Economy is capital expenditures right now on technology, whether it's
[22:30] Speaker 14: cloud technology.
[22:31] Speaker 1: Or whether it's AI.
[22:33] Speaker 14: And if we slow down the build-out of this technology,
[22:37] Speaker 14: I think it really does jeopardize the economy.
[22:40] Speaker 1: I don't think that we are living in a bubble
[22:42] Speaker 1: which is personal.
[22:43] Speaker 5: The fear that we are in front of the bubble
[22:46] Speaker 5: is not a justified one.
[22:47] Speaker 9: These bubbles....
[22:50] Speaker 13: If we're going to use that word, often coincide with
[22:52] Speaker 13: these giant technological transformations.
[22:55] Speaker 5: And the companies that are on the other side of
[22:57] Speaker 5: that bubble are the market leaders for decades to come.
[23:00] Speaker 13: Today, there's really an indisputable shortage of compute.
[23:04] Speaker 1: And it's hard to deliver that compute.
[23:06] Speaker 13: And that's what's preventing some of the excesses we've seen
[23:09] Speaker 13: in past what they call bubbles.
[23:13] Speaker 5: Welcome back to Bloomberg Tech.
[23:14] Speaker 9: I'm Ed Ludlow.
[23:15] Speaker 5: That was some of the top figures in finance addressing
[23:18] Speaker 5: fears of an AI bubble this week on Bloomberg Television.
[23:21] Speaker 5: And there was a range of views also reacting to
[23:24] Speaker 5: fears of an AI bubble credit markets. The tech sell-off
[23:27] Speaker 5: has pushed global credit spreads to the highest point in
[23:30] Speaker 5: 17 months, or at least toward it. And the inverse
[23:33] Speaker 5: relationship between U.S. government bonds and AI-focused stocks is has
[23:38] Speaker 5: strengthened to its highest.
[23:39] Speaker 9: Level in a year.
[23:41] Speaker 5: Bloomberg's Sally Bakewell is with us to try and unpick
[23:44] Speaker 5: all of this. I mean, are fixed income markets reacting
[23:49] Speaker 5: to something that's genuinely a concern, something that's real and
[23:52] Speaker 5: in front of them? Or is this something sort of
[23:54] Speaker 5: markets and technicals? And I don't know, it's not really
[23:57] Speaker 5: my strongest point, Sally.
[24:00] Speaker 15: Well, in reality, it's probably a collision of both of
[24:02] Speaker 15: those things that you talked about, both of structural risk
[24:05] Speaker 15: and a kind of rotation out of tech. And this
[24:08] Speaker 15: is playing out in real time, this fundamental debate over
[24:11] Speaker 15: whether this debt-funded AI spending will ever justify itself in returns.
[24:16] Speaker 15: And since the strength of economies will become increasingly tied
[24:19] Speaker 15: to AI, that's driving a measurable flight to quality across
[24:22] Speaker 15: global credit markets. And we have the corporate bond yield
[24:25] Speaker 15: premiums globally at their widest since May 2025. As analysts
[24:28] Speaker 15: talk about this being a more sustained repricing of credit risk,
[24:32] Speaker 15: And then we have this gauge, as you mentioned, of
[24:34] Speaker 15: the inverse relationship between U.S. government bonds and AI-focused stocks.
[24:37] Speaker 15: And it's strengthening to levels last seen a year ago.
[24:40] Speaker 15: And bonds have restored their role as a bit of
[24:42] Speaker 15: a safe haven, which they haven't been so much. And so,
[24:46] Speaker 15: I think, yes, we have this debate playing out in
[24:49] Speaker 15: real time. And it's a bit of investors getting out
[24:54] Speaker 15: of some AI concentration and a bit.
[24:56] Speaker 1: Of flight to safety.
[24:56] Speaker 8: Yes.
[24:58] Speaker 5: The credit risk or the anxiety in credit markets reflects
[25:01] Speaker 5: the simple story that debt is playing a huge role
[25:06] Speaker 5: in financing the AI build-out, the funding of data center projects.
[25:11] Speaker 5: Can the debt market handle it? I think that's the question.
[25:14] Speaker 15: It is the question because, yes, we're seeing this profound
[25:16] Speaker 15: structural shift where global AI expansion in credit markets become
[25:20] Speaker 15: increasingly intertwined. Because the chips that power AI are so expensive,
[25:25] Speaker 15: the debt that will be needed to fund them is vast.
[25:27] Speaker 15: It's more than we've already seen with data centers, which
[25:30] Speaker 15: has already been vast. And so we are talking about
[25:33] Speaker 15: huge sums. So we're going to need to engage debt markets,
[25:36] Speaker 15: project finance, insurance, commercial real estate, among others. And Wall Street,
[25:40] Speaker 15: of course, being Wall Street, has come up with ways
[25:42] Speaker 15: to engineer this. It's fine if you're an Amazon or
[25:45] Speaker 15: a Meta, an investment grade company with lots of access
[25:48] Speaker 15: to large pools of institutional money or, you know, your
[25:51] Speaker 15: own corporate cash. But it's less fine if you're an
[25:52] Speaker 15: AI startup or a Neo cloud that's burning through cash
[25:55] Speaker 15: with no rating or a junk rating. And so they
[25:58] Speaker 15: are coming up with these. This is where it gets
[26:00] Speaker 15: a bit wonky project or structured finance type structures to
[26:04] Speaker 15: fund the expansion.
[26:06] Speaker 5: Real quick, we used to be worried about circular financing.
[26:09] Speaker 5: It seems like concentration risk is the new kind of buzzword.
[26:13] Speaker 1: Well, exactly.
[26:14] Speaker 15: So, what you're seeing is these special purpose vehicles, they
[26:17] Speaker 15: borrow money, they buy the chips, they ring fence the
[26:19] Speaker 15: deal away from corporate balance sheets. This debt is backed
[26:22] Speaker 15: by cash flow from customers and the whole thing is
[26:25] Speaker 15: backed by the likes of Broadcom and Nvidia. Sounds sensible,
[26:28] Speaker 15: sounds fine. But there are risks. It's all concentrating the
[26:32] Speaker 15: risk in this group of about 10 or so companies.
[26:35] Speaker 15: And so, if end user revenue disappoints the issues won't
[26:38] Speaker 15: be isolated. They'll ripple directly back onto the balance sheets
[26:41] Speaker 15: of these mega vendors and major Wall Street banks.
[26:44] Speaker 5: Bloomberg's Sally Bakewell, really top breakdown. And what is, frankly,
[26:47] Speaker 5: one of the most read stories this morning on the Bloomberg.
[26:49] Speaker 5: Thank you very much. I want to turn to private
[26:51] Speaker 5: markets and venture capital. Inspired Capital has closed a new
[26:55] Speaker 5: $ 450 million fund. It's the fourth fund from the firm
[26:58] Speaker 5: that makes early stage bets. And it's backed the likes
[27:01] Speaker 5: of Suno and ShopMy and Inspire Capital founder Alex von
[27:04] Speaker 5: Tobel is with us. I'm delighted to say I'm really interested.
[27:08] Speaker 5: Congrats on raising this fund. I guess, you know, sometimes
[27:13] Speaker 5: we we we are like, OK, venture firms raise funds
[27:17] Speaker 5: from time to time. But I think it'd be really
[27:18] Speaker 5: helpful to say, like, why now? What pushed you to
[27:21] Speaker 5: do this new fund? What was the environment you were
[27:23] Speaker 5: responding to?
[27:24] Speaker 2: So first, I think we're pretty unique, Ed, in that
[27:26] Speaker 2: we had a single day dry close of our fourth fund.
[27:29] Speaker 2: So $ 450 million were an early stage fund. And I
[27:33] Speaker 2: think it really happened on the backs of some exceptional
[27:36] Speaker 2: results happening in our portfolio. We're a highly concentrated firm
[27:39] Speaker 2: here in New York City, but we now have over
[27:42] Speaker 2: 10 unicorns, 10 companies over $ 100 million of revenue, four
[27:45] Speaker 2: over $ 400 million of revenue, one publicly traded company, and
[27:49] Speaker 2: 10 major exits to incredible technology companies. So I think
[27:53] Speaker 2: the results really spoke for themselves. And again, we're early
[27:56] Speaker 2: stage generalists, and it was just a single day dry close.
[28:00] Speaker 2: So this new fund is closed, and we're ready to go.
[28:03] Speaker 5: So I would love to get into the generalist discussion.
[28:08] Speaker 5: Right now, for obvious reasons, we're very focused on AI.
[28:12] Speaker 5: And my understanding is that you're quite good at non-AI
[28:17] Speaker 5: investments and that there are some interesting examples of that
[28:20] Speaker 5: in the portfolio.
[28:21] Speaker 9: Would you talk a little bit about that? Sure, absolutely.
[28:24] Speaker 2: So, you know, I say as the managing partner of
[28:26] Speaker 2: the firm, I wake up every day in 2036. I'm
[28:28] Speaker 2: focusing on what's happening on the other side of AI.
[28:31] Speaker 2: So we have some incredible early-stage investments in quantum computing
[28:35] Speaker 2: companies like Logical, companies on the edge of what we
[28:39] Speaker 2: call physical AI and robotics, companies like Bright AI and TreeSwift.
[28:43] Speaker 2: On the flip side, we have companies like Solace Health
[28:46] Speaker 2: and ShopMy, Solace Health being a major, rapidly fast-growing healthcare
[28:50] Speaker 2: company And so we truly are a generalist firm, but
[28:54] Speaker 2: I think the most important thing is we are constantly
[28:56] Speaker 2: focusing not on the bumps and bruises that are happening
[28:59] Speaker 2: now quarter by quarter, but really on where's the market
[29:01] Speaker 2: going to be in a decade, thinking about the future
[29:03] Speaker 2: of compute, thinking about inference, pulling forward things like quantum computing,
[29:08] Speaker 2: the next wave of medicine for Americans and for our planet.
[29:13] Speaker 5: Those things, though, are still quite aligned with the broad
[29:17] Speaker 5: category that we'd call AI, right?
[29:19] Speaker 7: Yep.
[29:20] Speaker 5: Are there any sectors that you are so high conviction
[29:23] Speaker 5: on that you feel like the rest of the venture
[29:25] Speaker 5: community just isn't paying attention to?
[29:27] Speaker 9: Well, listen, our.
[29:29] Speaker 2: Job has been the world zigs to zag. And I
[29:31] Speaker 2: think what that means is to go where other people
[29:33] Speaker 2: are not going. So we made a number of embeds
[29:35] Speaker 2: in places like InsurTech, companies like Stand, which announced a
[29:40] Speaker 2: $ 70 million raise last week, over a billion. So again,
[29:43] Speaker 2: when things are out of vogue, inspired the very thematic
[29:46] Speaker 2: thesis-driven firm. We ourselves as founders have built and scaled
[29:50] Speaker 2: 10 companies to hundreds of millions of users. We're a
[29:52] Speaker 2: very differentiated firm. And my co-founder is Penny Pritzker. But
[29:56] Speaker 2: so we look at companies that people aren't paying as
[29:58] Speaker 2: much attention to. So on consumer products, products aren't going anywhere. We,
[30:03] Speaker 2: as I said, pulled forward a two-year thesis on the
[30:05] Speaker 2: future of quantum computing and what that will look like
[30:09] Speaker 2: as we get to the other side of AI. But
[30:12] Speaker 2: so again, very thematic and we like to go where
[30:13] Speaker 2: people are not fishing.
[30:16] Speaker 5: Alexa, I'd reflect and I do reflect often on the
[30:19] Speaker 5: show that like the cap tables look different present day.
[30:22] Speaker 5: You see private growth equity and strategics get on much earlier.
[30:28] Speaker 5: Interesting how that might impact early stage. But actually, my
[30:31] Speaker 5: curiosity with your new fund is how different the LPs
[30:34] Speaker 5: are or how different LP interest is present day. They
[30:38] Speaker 5: want to get into these names earlier. Could you talk
[30:40] Speaker 5: a bit about that?
[30:41] Speaker 9: Absolutely.
[30:42] Speaker 2: So first, I'll just say, you know, the Inspired investor
[30:44] Speaker 2: base is truly the best investors on the planet in
[30:47] Speaker 2: the world, and they give our companies majorly unfair advantages.
[30:51] Speaker 1: So I'm really proud.
[30:52] Speaker 2: I think that's one of the reasons why our portfolio
[30:54] Speaker 2: is outperforming. And then to your point, yes, you're absolutely
[30:58] Speaker 2: seeing big strategics wanting to get in. I think if you're,
[31:01] Speaker 2: you know, I sold my company to Northwestern Mutual. If
[31:04] Speaker 2: you're a big incumbent company, you recognize very clearly that
[31:07] Speaker 2: you need to be on the edge of what's happening
[31:09] Speaker 2: in technology. And those talent pools, you want to get
[31:12] Speaker 2: visibility on as quickly as you can. And so we're
[31:15] Speaker 2: seeing a lot of our companies have massive strategic interests,
[31:19] Speaker 2: not just from the acquisition front, but also from the
[31:20] Speaker 2: capital front and huge commercial partnerships. So we're absolutely seeing
[31:24] Speaker 2: that be pulled forward then.
[31:26] Speaker 5: Is there any tangible difference for you in the direction
[31:30] Speaker 5: for exits away from IPOs towards strategic M & A,
[31:34] Speaker 5: something like that?
[31:35] Speaker 1: Sure.
[31:35] Speaker 2: So, I mean, we wake up every day and get
[31:37] Speaker 2: out of bed to find companies that are going to
[31:39] Speaker 2: impact a billion people on this planet. So, again, big,
[31:42] Speaker 2: huge swings where … an early stage generalist looking for
[31:45] Speaker 2: companies that can do a billion of revenue and be
[31:47] Speaker 2: worth 50 billion plus. But when things are not going
[31:52] Speaker 2: as well, I think strategic exits are always available as
[31:57] Speaker 2: an option. But for us, we really focus more on
[31:59] Speaker 2: companies that want to go and be generational iconic category
[32:03] Speaker 2: defining companies.
[32:05] Speaker 5: Alexa von Tobel, founder of Inspired Capital, raising a new
[32:09] Speaker 5: $ 450 million early stage fund.
[32:10] Speaker 9: Thanks so much for being with us.
[32:11] Speaker 2: Thank you so much.
[32:12] Speaker 1: I appreciate it.
[32:13] Speaker 5: Okay, coming up in the show, the battle for your attention.
[32:16] Speaker 5: We hear from NBCUniversal Entertainment chairman Donna Langley how Hollywood
[32:20] Speaker 5: is fighting to win over the next generation.
[32:23] Speaker 9: That's next. This is Bloomberg Tech.
[32:37] Speaker 5: Okay, so the hype around Grand Theft Auto 6 is
[32:40] Speaker 5: already giving PlayStation a boost. Sony's PlayStation 5 unit sales
[32:44] Speaker 5: in the US jumped 22% in September, while the hardware
[32:48] Speaker 5: revenue surged 43%. The higher-end $ 900 PS5 Pro is now
[32:53] Speaker 5: sold out or in limited supply at retailers, and that's
[32:56] Speaker 5: around the world, as gamers gear up for GDA 6.
[33:00] Speaker 5: The highly anticipated title, set to launch November 19th, on
[33:03] Speaker 5: PlayStation and Xbox. And gaming is just one part of
[33:08] Speaker 5: an increasingly fierce battle for our attention. NBC Universal Entertainment
[33:12] Speaker 5: Chairman Donna Langley says Hollywood is competing not just with
[33:15] Speaker 5: other studios and streamers, but with everything from social media
[33:19] Speaker 5: to short form video. Here's my five questions with Donna Langley. Now, today, 2026,
[33:29] Speaker 5: what makes something a hit? What gets people out of
[33:32] Speaker 5: their homes into movie theaters?
[33:34] Speaker 9: It is cultural relevance, authenticity.
[33:38] Speaker 16: If you look at the Odyssey and you look at Obsession,
[33:42] Speaker 16: they couldn't be more different, but they created urgency. It
[33:47] Speaker 16: was excitement for a young audience to have that kind
[33:50] Speaker 16: of a film and a story up there on the
[33:53] Speaker 16: big screen to go see.
[33:55] Speaker 5: If you could, like, rebuild a media organization, what would
[33:59] Speaker 5: you have to do to, like, account for all of
[34:02] Speaker 5: those different mediums?
[34:03] Speaker 16: That's such a fun question. Without doubt, you'd have theatrical,
[34:07] Speaker 16: but you'd have large format. You would be building and
[34:09] Speaker 16: making films for that most premium experience. But I think
[34:13] Speaker 16: that's on one end of the spectrum. They can sort
[34:15] Speaker 16: of choose their own adventure. And then you'd have everything
[34:17] Speaker 16: in between. But you'd have streaming, you'd have television.
[34:19] Speaker 9: But sort of.
[34:20] Speaker 16: Paramount in all of that would be storytelling.
[34:23] Speaker 5: What is Donna Langley watching at the moment?
[34:26] Speaker 16: So the new season of South Park, I have two
[34:28] Speaker 16: teenage boys.
[34:29] Speaker 9: We like co-viewing.
[34:31] Speaker 16: We're watching The Gentleman together.
[34:33] Speaker 9: I love Slow Horses.
[34:34] Speaker 16: And then Ted Lasso is complete co-viewing, the whole family.
[34:38] Speaker 5: Away from television and film, where is the competition for
[34:42] Speaker 5: your eyeballs?
[34:43] Speaker 16: I am very aware that I have to limit myself
[34:46] Speaker 16: on Instagram Reels or TikTok videos because I can go
[34:50] Speaker 16: down the rabbit hole like everybody else. I'm not a
[34:52] Speaker 16: doom scroller, though. that I will not allow myself to do.
[34:56] Speaker 16: And I also have fun trying to beat my own algorithm.
[34:59] Speaker 16: I don't like to be told what to watch.
[35:01] Speaker 5: Your industry, is it the studios and the streamers battling
[35:06] Speaker 5: each other, or you are in competition with the social
[35:09] Speaker 5: media platforms?
[35:10] Speaker 9: We're in a.
[35:11] Speaker 16: Battle for the attention of the audience that we value,
[35:15] Speaker 16: and we value all of our audience, but we want
[35:17] Speaker 16: that young audience. We want to create the cinephile.
[35:20] Speaker 9: Of the future.
[35:22] Speaker 5: And speaking of getting audiences into theaters, A24 has a
[35:25] Speaker 5: surprise hit on its hands. You can see everything. The
[35:29] Speaker 5: nearly three-hour documentary following Elizabeth Holmes in the weeks before
[35:33] Speaker 5: the Theranos founder reported to prison has now grossed more
[35:36] Speaker 5: than $ 23 million domestically as of Wednesday. And that's just
[35:40] Speaker 5: from a limited release in under 1,000 theaters. The film's
[35:43] Speaker 5: set to expand to more screens this weekend. Okay, coming up,
[35:47] Speaker 5: we go live to the Agricultural Commodity Futures Conference in Kansas.
[35:52] Speaker 5: CEO Tarek Mansour joins us next of Kaoshi. This is
[35:55] Speaker 5: Bloomberg Tech. OK, let's get out to the Agricultural Commodity
[36:10] Speaker 5: Futures Conference in Kansas, where Bloomberg's Tyler Kendall is joining
[36:14] Speaker 5: us with Kaoshi CEO Tarek Mansour.
[36:16] Speaker 3: Hi, Tyler.
[36:19] Speaker 8: Hey, Ed, thanks so much. As you mentioned, I'm pleased
[36:21] Speaker 8: to say I'm joined now by the CEO of CalSheet,
[36:24] Speaker 8: Tarek Mansour. Ed mentioned we're here on the sidelines of
[36:27] Speaker 8: this conference, and we should say you and I just
[36:29] Speaker 8: had a very long panel discussion about how Americans are
[36:32] Speaker 8: increasingly turning to prediction markets when it comes to the election.
[36:36] Speaker 8: And if we look at what calci traders are pricing in,
[36:38] Speaker 8: it seems like there is a good chance that Democrats
[36:41] Speaker 8: are favored going into Election Day. And just to start
[36:44] Speaker 8: more broadly, I'm wondering how you're preparing for that as
[36:47] Speaker 8: a company, knowing that there have been policymakers on Capitol
[36:50] Speaker 8: Hill that have indicated they want to rein in the industry.
[36:53] Speaker 9: Well, excited to be here. Thanks for having me.
[36:56] Speaker 7: You know, we're very excited because it really feels like
[36:58] Speaker 7: this is the first election.
[36:59] Speaker 9: Prediction market election.
[37:00] Speaker 7: Obviously we went, you know, the breakout year was 24,
[37:04] Speaker 7: but this is the first one where we're seeing kind
[37:05] Speaker 7: of an institutionalization of the usage of prediction markets. You know,
[37:09] Speaker 7: really majority of campaign, if not all the campaigns now
[37:12] Speaker 7: are reliant and are using prediction market data to inform
[37:15] Speaker 7: their decision making and what's happening in their races. Because
[37:17] Speaker 7: it's one, more accurate, and there's been a lot of
[37:19] Speaker 7: studies about that, and two, it's real time. As news erupts,
[37:23] Speaker 7: the markets move in real time, like traditional financial markets.
[37:26] Speaker 9: So we're very, very excited about sort of the development.
[37:28] Speaker 7: And, you know, really what we're focused on is providing
[37:29] Speaker 7: a platform that is safe, fair, and neutral for, you know,
[37:32] Speaker 7: the millions of Americans that are predicting what's going to happen.
[37:35] Speaker 9: At the election.
[37:36] Speaker 8: Have you been engaging with any policymakers on Capitol Hill
[37:39] Speaker 8: as we look past the midterms? We just had Senator
[37:42] Speaker 8: Ted Cruz indicate that he's going to introduce a bill
[37:44] Speaker 8: that would rein in the industry. Yeah.
[37:46] Speaker 7: We've been engaging on a bipartisan basis with both Republicans
[37:49] Speaker 7: and Democrats, absolutely. I mean, Couch's position has always been
[37:51] Speaker 7: very clear. We're a pro-regulation company. We spend the first
[37:55] Speaker 7: four years of the company getting regulated. And really, the
[37:59] Speaker 7: important thing that we have to do as we kind
[38:00] Speaker 7: of look ahead, you know, we have 30 million customers now.
[38:02] Speaker 7: Americans are engaged in prediction markets. It's one of the
[38:05] Speaker 7: fastest growing companies and industries in America, really, outside of AI.
[38:10] Speaker 7: And we have to set some sensible rules of the
[38:12] Speaker 7: road when it comes to kind of banning certain types
[38:14] Speaker 7: of markets that shouldn't exist, that exist on offshore markets,
[38:17] Speaker 7: policing and banning insider trading and participation from members of
[38:20] Speaker 7: Congress and administration, and then a comprehensive customer protection regime
[38:24] Speaker 7: to make sure that people can innovate and compete and
[38:25] Speaker 7: trade the way they want, but at the same time,
[38:27] Speaker 7: giving them the right guardrails.
[38:29] Speaker 9: Part of the.
[38:29] Speaker 8: Debate on Capitol Hill is echoing what's coming down to
[38:32] Speaker 8: multi-state litigation over sports contracts in particular. It feels like
[38:36] Speaker 8: it is poised to go to the Supreme Court. If
[38:39] Speaker 8: the Supreme Court comes back and says that a lot
[38:41] Speaker 8: of these sports contracts are gambling, what do you do next?
[38:44] Speaker 9: What does that do to Kalshi's business model? Look, I mean,
[38:47] Speaker 9: at the end of the day, Kalshi is a market.
[38:49] Speaker 9: It's an exchange.
[38:49] Speaker 7: And there's this turf battle, right? These turf battles have
[38:52] Speaker 7: existed in the past. They've happened between the state and
[38:54] Speaker 7: the federal government about the Chicago Board of Trade for grain.
[38:56] Speaker 7: They've happened between the CFC and SEC forever. And really
[38:59] Speaker 7: what we're focused on is building the marketplace. Now, at
[39:01] Speaker 7: a high level, that debate sort of boils down to
[39:04] Speaker 7: a very simple question, right? And, like, people kind of
[39:06] Speaker 7: have been sort of talking about the idea of, like,
[39:08] Speaker 7: are people betting on cash versus not betting? Yes, certainly
[39:11] Speaker 7: there's betting on cash going on. There's betting, you know,
[39:13] Speaker 7: people bet on stocks. People bet on oil prices because
[39:16] Speaker 7: speculation is a form of betting.
[39:17] Speaker 9: It looks the same.
[39:18] Speaker 7: The question is not about whether there's betting. The question
[39:20] Speaker 7: is about are you doing it against the house where
[39:22] Speaker 7: the sole purpose of the house is to take your money?
[39:23] Speaker 7: or are you doing it on an open market? That
[39:25] Speaker 7: difference in structure really dictates a difference in regulatory regime,
[39:28] Speaker 7: because on an open market, it has positive externalities, public goods,
[39:32] Speaker 7: and the fact that it brings a forecast that people
[39:35] Speaker 7: are using, where you coded cash markets to figure out
[39:37] Speaker 7: what's going to happen for the midterms, because that's a
[39:40] Speaker 7: forecast that comes from millions of people trading on the market,
[39:43] Speaker 7: and people's ability to hedge. And we see a lot
[39:45] Speaker 7: of people hedging on sports, elections, economic climate, and so
[39:48] Speaker 7: on and so forth.
[39:49] Speaker 8: Our reporting indicates that you're raising money at a $ 40
[39:51] Speaker 8: billion evaluation, eyeing an IPO for next year. I hear
[39:55] Speaker 8: your argument when it comes to this potential Supreme Court case.
[40:00] Speaker 8: But I'm wondering if the court case would influence your
[40:03] Speaker 8: timing or your filing strategy.
[40:05] Speaker 7: I'm not going to discuss IPO timing and filing here.
[40:08] Speaker 7: We'll discuss what we're focused on and what we're heading towards.
[40:13] Speaker 7: What's amazing about Couchy, if you look at our growth
[40:15] Speaker 7: trajectory and the different products that have been growing, our
[40:19] Speaker 7: crypto products have actually been growing faster than our prediction
[40:22] Speaker 7: markets and sports products.
[40:23] Speaker 9: In fact, we're at Atcon today.
[40:24] Speaker 7: Our fastest-growing product line right now is commodities, which is
[40:27] Speaker 7: why we've been expanding into traditional products. We just launched
[40:29] Speaker 7: and announced that we're launching inflation futures. Their incoming compute
[40:33] Speaker 7: futures have been a huge focus for Calshi, and we're
[40:35] Speaker 7: going to, I think, lead the way in that industry
[40:37] Speaker 7: as well.
[40:38] Speaker 9: We're getting into securities and stock exchanges.
[40:39] Speaker 7: So we're very excited about the diversity of products that
[40:41] Speaker 7: we're getting to our 30 million customers and how kind
[40:44] Speaker 7: of the diversification of our product lines is going.
[40:47] Speaker 8: Well, Bloomberg News actually broke the news on inflation futures.
[40:50] Speaker 8: Can you talk a little bit more about your ambitions
[40:51] Speaker 8: in that space?
[40:53] Speaker 7: So markets, what they do best is price discovery. They
[40:55] Speaker 7: predict or they price something. It could be a physical commodity,
[40:59] Speaker 7: like what we're dealing with in this conference, like the
[41:01] Speaker 7: price of grain or oil. It could be an intangible commodity,
[41:04] Speaker 7: like credit, the price of credit of a company and
[41:06] Speaker 7: so on and so forth.
[41:07] Speaker 9: And cash is mentioned, cash means everything in Arabic. It's
[41:09] Speaker 9: to price.
[41:10] Speaker 7: A much larger set of things. So we're getting into
[41:12] Speaker 7: pricing inflation. Inflation has been a big hot issue right
[41:16] Speaker 7: now for people in America. And there hasn't been very
[41:18] Speaker 7: good tools to basically predict what inflation is going to
[41:20] Speaker 7: be over the next 12 months. The same thing applies
[41:23] Speaker 7: for compute and AI and all these questions that are
[41:26] Speaker 7: basically facing us. The one thing that's so interesting is
[41:29] Speaker 7: that with our 30 million customers, And we've seen a
[41:32] Speaker 7: lot of data that Main Street, which is Cal Street,
[41:34] Speaker 7: is outperforming Wall Street at predicting a lot of different things,
[41:37] Speaker 7: including inflation. Our best inflation forecasters on prediction markets is
[41:40] Speaker 7: actually a random dude in Kansas, which is where we
[41:42] Speaker 7: are right now, who, you know, essentially has never really
[41:45] Speaker 7: traded on Wall Street, doesn't come from the typical Wall
[41:47] Speaker 7: Street background, but has been doing an incredible job at,
[41:49] Speaker 7: you know, trading on our inflation markets and making them
[41:51] Speaker 7: more accurate over time. We want to apply that same
[41:53] Speaker 7: thing to inflation futures.
[41:54] Speaker 8: In the final minute, I have you broadly speaking and
[41:57] Speaker 8: looking at the outlook.
[41:58] Speaker 1: Do you ever see.
[42:00] Speaker 8: The perpetual side of the business getting bigger than prediction markets?
[42:04] Speaker 9: In volume, they're already comparable.
[42:05] Speaker 7: So right now, and have a look at the most
[42:08] Speaker 7: recent numbers, but we're doing around a trillion dollars annually
[42:11] Speaker 7: of volume on CalSheet.
[42:13] Speaker 9: A little bit over half of that is predictions.
[42:14] Speaker 7: The rest is amongst our non-predictions of futures and purpose products.
[42:19] Speaker 7: So certainly, I mean, I think these products just take
[42:21] Speaker 7: some time to mature, but our purpose trajectory has been
[42:23] Speaker 7: incredibly exciting. We started crypto, moving to commodities. We're about
[42:26] Speaker 7: to do single stocks, AI, compute. And so, you know,
[42:30] Speaker 7: really the amount of opportunity is really endless right now,
[42:34] Speaker 7: and we're very excited to bring more and more products
[42:35] Speaker 7: to market.
[42:36] Speaker 8: All right. Tarek Mansour, the CEO of CalSheet, thank you
[42:39] Speaker 8: so much for joining us here on Bloomberg Television and Radio.
[42:42] Speaker 8: I'm Tyler Kendall, and I will toss it back to you.
[42:45] Speaker 5: Okay, Bloomberg's Tyler Kendall with Calgary CEO Tyrone Monceau. Thank
[42:48] Speaker 5: you very much. That does it for this edition of
[42:51] Speaker 5: Bloomberg Tech. This is what markets look like going out
[42:54] Speaker 5: of the week. We're up on a Friday, and a
[42:56] Speaker 5: happy Friday to you all. But remember, back-to-back weekly declines
[42:59] Speaker 5: in the NASDAQ 100 for the first time since the summer.
[43:02] Speaker 5: A lot happening in private markets, too. Recap the whole
[43:04] Speaker 5: show on the podcast. On all the Bloomberg platforms and online, Apple, Spotify, iHeart,
[43:09] Speaker 5: thank you for being with us all week long in
[43:11] Speaker 5: the world of technology. This is Bloomberg Tech.

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