# Anthropic in Talks to Buy Startup Decart for $6 Billion

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 13 Aug 2026, 25 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/2657d26b-284a-4531-986e-b4a501183b93/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Paul Sweeney and Lisa Mateo -Ed Ludlow, Bloomberg Tech Anchor, discusses Anthropic being in talks to buy Decart AI for about $6 billion, which would be Anthropic's largest known acquisition. Decart makes software that can reduce the cost of training and operating AI by helping chips work more efficiently, and the potential acquisition is intended to help Anthropic's existing computing infrastructure absorb more demand. -Woo Jin Ho, Bloomberg Intelligence Senior Hardware and Networking Analyst, discusses Cisco Systems shares falling after the company projected $7.5 billion in AI data center sales this fiscal year, which disappointed investors. AI sales will make up about 10% of Cisco's projected total revenue of $72.2 billion to $73.4 billion in fiscal 2027, according to a company statement. -Anurag Rana, Senior Tech Analyst for Bloomberg Intelligence, discusses his piece “Apple's Foldable iPhone Can Turn Flat Units to Fast Sales Growth.” According to Bloomberg Intelligence: “Apple's reportedly $2,000 foldable iPhone can almost triple the size of the ultra-premium segment of that market, with our scenario assuming 10-14 million units sold in the first 12 months.” -Sarah Pinto, Head of Robinhood Ventures, discusses Robinhood Ventures Fund II IPO. Robinhood Ventures Fund II priced IPO of 8m shares at an initial public offering price of $25/shr. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
[0:10] Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
[0:14] Speaker 1: Eastern on Apple Coarclay, and Android Auto with the Bloomberg
[0:17] Speaker 1: Business App. Listen on demand wherever you get your podcasts,
[0:21] Speaker 1: or watch us live on YouTube.
[0:24] Speaker 2: Let's check in with Ed Ludlow. He is host of
[0:27] Speaker 2: Bloomberg Tech. It's based out there in San Francisco.
[0:31] Speaker 3: Ed, we got anthropic. Now, we talked about anthropic.
[0:33] Speaker 2: A lot of folks are saying, I want to wait
[0:35] Speaker 2: and see this IPO perspective because this could be very interesting.
[0:38] Speaker 2: But they're not waiting. They're out there doing some business anthropics.
[0:41] Speaker 2: They're gonna be buying an egg guy startup here, talk
[0:43] Speaker 2: to us about that.
[0:45] Speaker 4: Yeah, this is a startup called Dcart, an Israeli startup
[0:48] Speaker 4: that does two things. They work on world models. World
[0:52] Speaker 4: models literally AI models that try to understand the world
[0:56] Speaker 4: more rooted in real world physics. They're trained on things
[0:59] Speaker 4: like video data. It's beyond text. But the second thing
[1:03] Speaker 4: that they do is have a software platform that makes
[1:06] Speaker 4: chips better at running AI, you know, optimizing basically. And
[1:10] Speaker 4: it seems like based on our reporting that's the bit
[1:13] Speaker 4: Anthropics interested in. So it's a six billion dollar deal
[1:16] Speaker 4: we're reporting citing sources. We don't know the structure of
[1:20] Speaker 4: the deal, but in the context what you just said,
[1:23] Speaker 4: it would be in Thropics' biggest acquisition to date and
[1:27] Speaker 4: with an IPO right around the corner. You know, it's
[1:29] Speaker 4: interesting timing, but it kind of speaks to the operational
[1:32] Speaker 4: technical challenges that Anthropics still has.
[1:35] Speaker 5: Is this out of the ordinary though for Anthropic though,
[1:38] Speaker 5: because they really make these big acquisitions. This is a
[1:41] Speaker 5: big one. I mean, but they've been really spending heavily,
[1:44] Speaker 5: you know, computing power, they want to develop new products.
[1:47] Speaker 4: Yeah, I don't know, six billion dollars doesn't seem very
[1:49] Speaker 4: big to me when you think about the balance sheet.
[1:53] Speaker 4: I mean, the way that I look at it is
[1:54] Speaker 4: Nthropics raised even this year, you know, north of one
[1:57] Speaker 4: hundred billion dollars, and most of that sits on its
[2:01] Speaker 4: balance sheet, you know, in you know, even the money
[2:04] Speaker 4: it raised prior to this year probably still sits on
[2:07] Speaker 4: its balance sheet. And we are seeing valuations of very
[2:12] Speaker 4: specific niches that some of these startups occupy be at
[2:18] Speaker 4: that level, be high. You know, there is a lot
[2:20] Speaker 4: of activity and the frontier labs. The hyperscalers have used
[2:24] Speaker 4: M and A to acquire those specialisms. In this case,
[2:28] Speaker 4: you know dcarts is that that software to optimize the
[2:32] Speaker 4: stack and make the chip run better.
[2:35] Speaker 2: Ed do we know anything more about a potential IPO
[2:38] Speaker 2: of Anthropic that timing thereof, I mean, we're just we're
[2:41] Speaker 2: mentioning SpaceX is now back above its IPO price, presumably
[2:45] Speaker 2: that that bodes well for the tech IPO space, but
[2:48] Speaker 2: anything go on timing.
[2:49] Speaker 4: Yeah, I mean the Bloomberg reporting is still that it's
[2:52] Speaker 4: this fall. I mean, with respect as a British person
[2:55] Speaker 4: who's lived in the States for almost a decade, I
[2:57] Speaker 4: still have no idea what the full actually means. It
[3:00] Speaker 4: seems an unspecified and infinite period of time.
[3:04] Speaker 3: But that's what we've reported.
[3:06] Speaker 4: I think, you know, late September, earlier October is what
[3:09] Speaker 4: we had previously reported, and so it's kind of full
[3:12] Speaker 4: steam ahead. And you make a really interesting point, which is,
[3:14] Speaker 4: you know, I think I reported this at the time
[3:16] Speaker 4: right once the SpaceX perspectors hit open, AI and Anthropic
[3:20] Speaker 4: had a good chance to read it and decide what
[3:23] Speaker 4: to do, and you know, whatever their psychology was behind
[3:26] Speaker 4: closed doores. Ultimately they both filed confidentially with the SEC
[3:30] Speaker 4: and SpaceX you know, was a led the way in
[3:34] Speaker 4: that respect.
[3:34] Speaker 5: And I'm going to stick with SpaceX since you mentioned it.
[3:37] Speaker 5: There was time actually Decart could be acquired by SpaceX,
[3:41] Speaker 5: but Elon muskaid, it's not true, fake news, not happening.
[3:45] Speaker 5: So why would that company be of appeal to SpaceX?
[3:49] Speaker 4: Well, perfect summary. There were reports that SpaceX had offered
[3:53] Speaker 4: wanted to offer similarly six billion dollars I think it was.
[3:58] Speaker 4: The report was that it was an all stock propos
[4:01] Speaker 4: and Elon Musk said that it was fake news. As
[4:03] Speaker 4: you said, same logic as Anthropic, you know, with the
[4:06] Speaker 4: greatest respect to Dcar, And again this is all Bloomberg's reporting, right.
[4:10] Speaker 4: You know, Anthropic has not confirmed this acquisition, nor DCAR.
[4:14] Speaker 4: But their work in world models is interesting. It is
[4:17] Speaker 4: not unique. There are others working in world models. You
[4:20] Speaker 4: know that the property that folks are interested in is
[4:22] Speaker 4: that software that just makes the chip better from an
[4:27] Speaker 4: economics perspective and operationally at running AI models and in
[4:30] Speaker 4: a world where you know the the economics of leasing
[4:34] Speaker 4: out compute capacity, running your own models on your own
[4:38] Speaker 4: compute capacity is so important, and there is a supply constraint.
[4:42] Speaker 4: There is not enough compute to meet the demand for
[4:45] Speaker 4: running AI models that would make that software particularly interesting.
[4:49] Speaker 4: And it kind of goes back to your question on
[4:50] Speaker 4: the valuation right of and the six billion dollar scale
[4:54] Speaker 4: of the deal.
[4:55] Speaker 2: And cost of using AI, the token cost. We're here
[5:00] Speaker 2: seeing stories ed CFOs and managers were saying, whoa, whoa, whoa, whoa,
[5:03] Speaker 2: What are you using AI for? What am I paying for?
[5:06] Speaker 2: What do we know about just the user cost experience.
[5:10] Speaker 4: Yeah, so there are two different parts of that that
[5:14] Speaker 4: the cost of running a model is measured on a
[5:17] Speaker 4: dollar per million input tokens and a dollar per million
[5:21] Speaker 4: output tokens basis. And so when we get releases from
[5:25] Speaker 4: say like Kimmy K three from China, one of the
[5:29] Speaker 4: reasons that was such a big news story is that
[5:31] Speaker 4: it was a high performance model, highly capable, but it
[5:35] Speaker 4: was priced quite reasonably against how the absolute top us
[5:40] Speaker 4: models were priced. A token spend is a budgeting issue
[5:45] Speaker 4: that basically technology companies around the country, some of them
[5:49] Speaker 4: have got wrong. So if you're the CFO, you have
[5:52] Speaker 4: to assign a budget right how much money you're going
[5:55] Speaker 4: to allow your engineers to spend to run AI models.
[5:59] Speaker 4: And because some of these companies have consumption basis arrangements
[6:03] Speaker 4: with the Frontier Labs. A customer of Entropy OpenAI is
[6:07] Speaker 4: consumption based. They just burned through them and then you
[6:10] Speaker 4: have to go to the CFA and go, oh, actually, yeah,
[6:12] Speaker 4: you know, I said I'd spend ten I spent one hundred,
[6:14] Speaker 4: and then you're in trouble.
[6:16] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[6:23] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[6:27] Speaker 1: weekdays at ten am Eastern on Applecarclay, and Android Auto
[6:30] Speaker 1: with the Bloomberg Business app. Listen on demand wherever you
[6:33] Speaker 1: get your podcasts, or watch us live on YouTube.
[6:37] Speaker 2: Let's break down the numbers from Cisco what it means
[6:39] Speaker 2: for the tech space. Wu Jinho, Senior technolog channel from
[6:42] Speaker 2: Bloomberg Intelligence. He's based down there in our Princeton campus,
[6:46] Speaker 2: which talked to us about Cisco. What did we learn
[6:48] Speaker 2: with their earnings results?
[6:50] Speaker 6: Yeah, hey, Paul, so Cisco results, I mean they're quite
[6:54] Speaker 6: quite frankly, to put it in a nut shell, sales
[6:56] Speaker 6: on White Hot right, AI close to doubling and fiscal
[6:59] Speaker 6: twenty twenty seven based on their guidance, and then their
[7:02] Speaker 6: core networking business, which is the you know, the basic
[7:07] Speaker 6: stuff that connects all of our computers, that's going to
[7:09] Speaker 6: grow at a fair double digit pace as well. So
[7:13] Speaker 6: from a demand standpoint, it's great. Cisco is the only
[7:18] Speaker 6: name that's read on my screen today on the terminal,
[7:22] Speaker 6: and I think people are a little bit spooked on
[7:25] Speaker 6: the gross margin side for the rest of the year.
[7:26] Speaker 5: So where investors hopes just too high or maybe was
[7:29] Speaker 5: Cisco just to conservative? I mean, what's your take.
[7:33] Speaker 6: So from from a revenue standpoint, I don't think it
[7:35] Speaker 6: was it was too high, Lisa, Quite frankly, I'm pretty
[7:39] Speaker 6: pleased with the results because, like we all knew that
[7:42] Speaker 6: AI was going to be strong, and then the core
[7:44] Speaker 6: networking is continues to outperform. Uh And but that that's
[7:47] Speaker 6: the issue right there, right, you have a higher hardware mix,
[7:52] Speaker 6: and hardware in the face of a memory inflation is
[7:55] Speaker 6: going to put a drag on gross margins.
[7:58] Speaker 7: You know. The head fake was.
[8:00] Speaker 6: At the fourth quarter gross margins was at sixty six percent,
[8:03] Speaker 6: first quarter guidance was at sixty six percent, and all
[8:06] Speaker 6: of a sudden, it looks like it's going to be
[8:07] Speaker 6: closer to sixty four to sixty five percent in quarters
[8:10] Speaker 6: to two quarters four. But at the end of the day,
[8:13] Speaker 6: I think it's going to be a temporary impact and
[8:16] Speaker 6: a gross margins should start to improve if we look
[8:18] Speaker 6: past twenty seven.
[8:19] Speaker 2: So what are the pressures on the gross margin here?
[8:22] Speaker 2: Where's that coming from the cost side?
[8:25] Speaker 6: Yeah, so you know, just a pinpoint where the gross
[8:29] Speaker 6: margin pressures are. You know, they did implement some pricing
[8:32] Speaker 6: increases in twenty twenty six, uh and and that kind
[8:36] Speaker 6: of diminishes going into the second half of the year.
[8:39] Speaker 7: At the same time, I don't.
[8:41] Speaker 6: Know if those you know, future cost increases are going
[8:44] Speaker 6: to keep pass keep pace with the.
[8:48] Speaker 7: With the memory increases. Right.
[8:50] Speaker 6: That's one and number two. At the end of the day,
[8:53] Speaker 6: they're selling a boatload of hardware, a boatload of hardware,
[8:57] Speaker 6: and we all know that hardware margins are just good
[9:00] Speaker 6: at software margins now, I will tell you, Paul, there
[9:03] Speaker 6: is some software attached related to their hardware products, but
[9:08] Speaker 6: those are more on a recurring basis and not on
[9:12] Speaker 6: a perpetual basis. So it will take several quarters for
[9:15] Speaker 6: the software margins to catch up.
[9:18] Speaker 5: So is this restructuring to kind of move toward AI.
[9:21] Speaker 5: Is it the right move because it's putting them in
[9:23] Speaker 5: a lot of competition. You have Broadcom, you have Hulett
[9:25] Speaker 5: Packard Enterprise. Is it the right move for the company?
[9:28] Speaker 7: Well?
[9:29] Speaker 6: Quite frankly, I've used Cisco as one of the goldilocks
[9:32] Speaker 6: of AI. It's like, you don't have too much AI
[9:36] Speaker 6: and you don't have too little AI.
[9:38] Speaker 7: Right, it's just right.
[9:41] Speaker 6: So you're actually getting a fair amount of growth from AI.
[9:44] Speaker 6: Right at the end of the day, like I said,
[9:46] Speaker 6: the AI business is doubling, the optical business is probably
[9:49] Speaker 6: going to continue to grow through twenty twenty eight and
[9:52] Speaker 6: into twenty twenty thirty. Quite frankly and quite and even
[9:55] Speaker 6: though it might be a modest drag on a gross margin,
[9:58] Speaker 6: over the long term, you're getting a up on better
[10:00] Speaker 6: scale right from a competition standpoint, and you make a
[10:03] Speaker 6: good point. You know, they do have the silicon one
[10:06] Speaker 6: product that goes head to head to someone like Broadcom.
[10:09] Speaker 6: But quite frankly, some of the hyperscalers are looking for
[10:12] Speaker 6: an alternative to someone like an Nvidia or Broadcom, and
[10:15] Speaker 6: Zisco is one of the few companies that can offer that.
[10:17] Speaker 6: They have the chip capacity to give it to the
[10:19] Speaker 6: cloud providers, so they might be in the sweet spot
[10:22] Speaker 6: of picking up a little bit of share, not too much,
[10:25] Speaker 6: but a little bit of share from the bigger silicon players.
[10:28] Speaker 2: So we're you know, most of the big tech companies
[10:31] Speaker 2: have reported or we're still waiting for Nvidia and a
[10:33] Speaker 2: couple others. What's the narrative or has the narrative changed
[10:37] Speaker 2: on AI, the spend, the return.
[10:40] Speaker 3: Where are we on that narrative right now? Which when
[10:42] Speaker 3: you talk to.
[10:42] Speaker 6: Yes, look, I mean if you look at super Micro
[10:46] Speaker 6: results yesterday and also some of the other smaller picked
[10:50] Speaker 6: and shovel guys like Lumentum and Coherent the other day,
[10:54] Speaker 6: I mean, the spending on the cloud is really really
[10:57] Speaker 6: starting to ramp up. Right.
[11:00] Speaker 7: We're still in like I.
[11:01] Speaker 6: Would say, the third inning, and twenty twenty seven is
[11:03] Speaker 6: going to be the ramp of phase into twenty twenty
[11:05] Speaker 6: eight as well as into twenty twenty eight as these
[11:08] Speaker 6: AI infrastructure buildouts continue to keep pace. Now where it
[11:12] Speaker 6: hasn't really started to pick up and Cisco is started
[11:14] Speaker 6: to see it is on the corporate IT side, and
[11:17] Speaker 6: that's going to be a positive read through for someone
[11:19] Speaker 6: like adele or HPE, which reports later in the month
[11:22] Speaker 6: and early in September.
[11:25] Speaker 5: Hey, woudin getta s two at the same point, Like,
[11:27] Speaker 5: we've been hearing a lot about the AI space and
[11:30] Speaker 5: what's been going on there as well. But when we
[11:33] Speaker 5: start hearing about new clients, are are they getting anyone
[11:37] Speaker 5: anywhere let's say new or what's on the horizon for
[11:40] Speaker 5: the company?
[11:41] Speaker 6: Yeah, So look, the sovereign space as well as the
[11:44] Speaker 6: neocloud space is still relatively new for someone like Cisco, right,
[11:48] Speaker 6: But again, I do think that they fulfilled the sweet
[11:51] Speaker 6: spot where given that given their enterprise expertise, they could
[11:56] Speaker 6: play a very good.
[11:56] Speaker 7: Middleman for the neocloud guys.
[11:59] Speaker 6: Who need a little bit more as well as the
[12:00] Speaker 6: sovereigns who need a lot more handholding than someone like
[12:05] Speaker 6: let's just say a Fox corn Ye can provide.
[12:08] Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this.
[12:16] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[12:19] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[12:23] Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
[12:26] Speaker 1: you get your podcasts, or watch us live on YouTube.
[12:30] Speaker 2: Let's stay in the world of technology we can do that,
[12:33] Speaker 2: And I want to talk to annorag Ronie. He's a
[12:34] Speaker 2: senior techanos for Bloomberg Intelligence. Apple is going to bring
[12:38] Speaker 2: in a foldable phone two thousand dollars.
[12:42] Speaker 3: I don't know. I'm not a foldable phone. I don't know.
[12:46] Speaker 2: Andrew Anuraga, thanks much for joining us here talk to
[12:48] Speaker 2: us about Apple.
[12:50] Speaker 3: And a two thousand dollars foldable iPhone.
[12:53] Speaker 7: Yeah.
[12:53] Speaker 8: So first to hoard, you have to thank Mark German
[12:55] Speaker 8: for all the reporting that he has done on this topic. So,
[12:58] Speaker 8: first of all, Samson has a voldable phone that came
[13:01] Speaker 8: out seven years ago. So the big question is why
[13:03] Speaker 8: did they take Apple so many years to come out?
[13:05] Speaker 8: And you know what Mark bills us is that Apple
[13:07] Speaker 8: was not happy with the crease in the middle of
[13:09] Speaker 8: the phone when you fold the thing. And so Samsung
[13:12] Speaker 8: has a new display which is helping out Apple to
[13:15] Speaker 8: solve that problem.
[13:16] Speaker 3: So now here is the thing.
[13:18] Speaker 8: We are coming to a point where the unit shipments
[13:21] Speaker 8: are not growing for Apple, largely because or it may
[13:24] Speaker 8: not grow next year because they're most likely going to
[13:27] Speaker 8: raise rates. When they announced their next line of phones
[13:30] Speaker 8: coming up the first or the second week of September.
[13:33] Speaker 8: So the big question is, well, what can you do
[13:35] Speaker 8: to go out and increase you know, average selling price.
[13:38] Speaker 8: So the promac sells it about twelve hundred dollars, and
[13:41] Speaker 8: that's I think where most of the users for this
[13:44] Speaker 8: device will go. The real Apple crazy the enthusiast which
[13:49] Speaker 8: only buy the brand new phones out there, and they
[13:52] Speaker 8: buy the promacs. That's about twelve hundred dollars. So if
[13:55] Speaker 8: you are able to just shift that buyer from a
[13:58] Speaker 8: promax to affordable, well that's a sixty seven percent increase
[14:02] Speaker 8: in average selling price for that. So I think that's
[14:04] Speaker 8: what's going to happen next year because remember, because of
[14:07] Speaker 8: memory pricing, everything is getting more expensive, and that's where
[14:11] Speaker 8: what we anticipate is going to happen with Apple as well.
[14:14] Speaker 3: But enter are people going to buy it?
[14:16] Speaker 5: I mean, I see, I'm looking at your notes here
[14:18] Speaker 5: says Apple's first fobile phone generate twenty to twenty eight
[14:21] Speaker 5: billion of fiscal twenty twenty seven revenue in your scenario
[14:25] Speaker 5: based on ten to fourteen million units at the average
[14:28] Speaker 5: selling price of about two thousand dollars. I mean, is
[14:30] Speaker 5: that right?
[14:31] Speaker 3: You think people are going to buy into us?
[14:33] Speaker 8: Look that's actually, to be honest, if you look at it,
[14:35] Speaker 8: half of Apple's phone or half of Apple's total revenue
[14:39] Speaker 8: comes from the iPhone. So it's still this very small
[14:41] Speaker 8: portion of that total or number. I know, you know,
[14:44] Speaker 8: twenty four billion is a big number by itself, but
[14:46] Speaker 8: your Apple on any given year sells about two hundred
[14:49] Speaker 8: and fifty million phones out there. So out of that,
[14:53] Speaker 8: you know, selling about ten to twelve million phones in
[14:56] Speaker 8: year one is not that big of a deal because
[15:00] Speaker 8: as I said, there are enough people that buy the
[15:02] Speaker 8: promas or the pro every year. You know, you can
[15:05] Speaker 8: see combined that's about thirty forty percent of any new
[15:09] Speaker 8: year phones. It's just proing the promac. So it's a
[15:12] Speaker 8: very sizable market. And you know, Apple buyer on the
[15:15] Speaker 8: higher end is fairly affluent.
[15:18] Speaker 2: So talk to us about just give us an update
[15:19] Speaker 2: where we've got your anat on China both from an
[15:24] Speaker 2: end selling market as well as you know, the supply
[15:27] Speaker 2: chain aspect. Where are we with China these days?
[15:30] Speaker 8: Yeah, So one thing that's happened with Apple over the
[15:34] Speaker 8: last three quarters is they have gained a lot of
[15:36] Speaker 8: share in China, and that's because they did not increase
[15:40] Speaker 8: their price of their phone over there, while the competitors
[15:43] Speaker 8: have So if you look at their iPhone results, I
[15:45] Speaker 8: mean it's just been staggering twenty plus percent for the
[15:48] Speaker 8: last couple of quotos at least, and we have never
[15:51] Speaker 8: seen that. I mean, it always used to be high
[15:52] Speaker 8: single digit growth and we attribute a lot of that
[15:56] Speaker 8: to share gain. So when we see them coming out
[15:59] Speaker 8: with the next iPhone iteration, I'm really keen to see
[16:02] Speaker 8: if they're going to raise the rates throughout the entire
[16:05] Speaker 8: chain of fronts, everything from the lower end or the
[16:07] Speaker 8: higher end, or or they're only going to target the
[16:10] Speaker 8: higher end of the market. I think if they leave
[16:13] Speaker 8: the lower end alone, I think they're going to go
[16:15] Speaker 8: out and gain more market share in China. What you're
[16:18] Speaker 8: mentioning is Paul going back three years, they lost some
[16:21] Speaker 8: share in China because of Jami coming up with their models.
[16:25] Speaker 8: But I think these guys have done a very good
[16:27] Speaker 8: job of capturing phone market. Now another thing, Mark Governman
[16:30] Speaker 8: has said it's possible the next series of the phones
[16:32] Speaker 8: may have a red iPhone, and that if it comes out,
[16:36] Speaker 8: you know, that's another thing that's going to entice the
[16:38] Speaker 8: Chinese market because frankly, speaking, the US market is saturated.
[16:42] Speaker 8: China and India are the two really big markets for
[16:45] Speaker 8: them to go after, and China being the more affluent
[16:48] Speaker 8: between the two countries.
[16:50] Speaker 5: Anraic something you point out in this article, it's a
[16:52] Speaker 5: new leasing plan. Can you explain this, caud You say
[16:55] Speaker 5: he's going to give shorter replacement cycle for the foldable.
[16:58] Speaker 8: Yeah. If you remember, just about three or four weeks ago,
[17:01] Speaker 8: Apple launched something called the Apple Upgrade Plan. It's like
[17:05] Speaker 8: leasing your equipment directly from them on a two year
[17:08] Speaker 8: or three year basis. So typically, you know, you keep
[17:11] Speaker 8: your phone for four or five years, but if you
[17:13] Speaker 8: get on this leasing plan and you know, let's say
[17:15] Speaker 8: you pay fifty five dollars normal phone not obviously the affordable,
[17:19] Speaker 8: and you just have to return it back to them
[17:21] Speaker 8: after two years or three years, depending on what you use.
[17:25] Speaker 8: They increase this for watches, they did it for max,
[17:30] Speaker 8: they did it for iPads. And what we think that
[17:33] Speaker 8: happens is for people who are just thinking about a
[17:35] Speaker 8: payment plan and not so much buying, you know, twelve
[17:38] Speaker 8: hundred dollars up front payment, this is going to go
[17:41] Speaker 8: very well for them and tap into an end of
[17:44] Speaker 8: the market that they are not used to. Second, they're
[17:47] Speaker 8: going to raise the rates of refreshes of the device.
[17:50] Speaker 8: So what that does, that's also helps in the revenue
[17:52] Speaker 8: growth because again, as I said, we are coming to
[17:55] Speaker 8: a point at least in the US that you're you know,
[17:57] Speaker 8: you have a saturated capacity of getting new users to
[18:02] Speaker 8: jump on the bandwagon.
[18:05] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[18:12] Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
[18:16] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[18:19] Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
[18:22] Speaker 1: you get your podcasts, or watch us live on YouTube.
[18:27] Speaker 2: Business Development Companies you maybe heard them by the acronym
[18:30] Speaker 2: BDC's there. They are a type of closed end fund
[18:33] Speaker 2: that provide retail investors exposure to a diversified portfolio of
[18:37] Speaker 2: private companies in their early stage. One such company went
[18:41] Speaker 2: public today on the New York Stock Exchange. That would
[18:44] Speaker 2: be Robinhood Ventures Fund to ticker r v II. Sarah Pento,
[18:50] Speaker 2: head of Robinhood Ventures, joins us live from the ny SE. Sarah,
[18:55] Speaker 2: thanks so much for joining us here. Talk to us
[18:57] Speaker 2: about the IPO. Why take Robinhood Interest Fund too public.
[19:02] Speaker 9: Thanks so much for having me. It's so exciting to
[19:04] Speaker 9: be here today.
[19:05] Speaker 3: So there's so.
[19:07] Speaker 9: Much happening in the technology market with early stage companies,
[19:12] Speaker 9: particularly now with the advent of AI, creating amazing innovation
[19:17] Speaker 9: and wealth creation, and historically that wealth creation has been
[19:21] Speaker 9: incredibly hard to access for most investors. Right, you have
[19:24] Speaker 9: to be accredited, you have to know the right people,
[19:27] Speaker 9: you have to have really high investment minimums, and then
[19:30] Speaker 9: there's no liquidity once you invest in private venture funds.
[19:33] Speaker 9: And so really with Robinhood Ventures Fund too, we are
[19:36] Speaker 9: bringing innovation to this market, to bring early stage venture
[19:40] Speaker 9: to everyone.
[19:41] Speaker 5: Well, can you give us an idea of how many
[19:44] Speaker 5: private companies does include, like what different sectors? Can you
[19:47] Speaker 5: break it down for us?
[19:48] Speaker 9: Yes, of course. So we chose to focus on what
[19:50] Speaker 9: we think is an end of one unique ecosystem for
[19:54] Speaker 9: early stage companies, which is why Combinator the storied accelerator
[19:58] Speaker 9: incubator based in San Francis, Cisco. They produce about five
[20:03] Speaker 9: to eight hundred companies a year, and we plan to
[20:05] Speaker 9: invest in about one hundred and fifty companies a year,
[20:08] Speaker 9: So over three years, this fund could have up to
[20:11] Speaker 9: four or five hundred companies, which for an early stage
[20:14] Speaker 9: strategy makes a lot of sense because you want to
[20:17] Speaker 9: have that diversification in order to be able to invest
[20:21] Speaker 9: in some of the companies that were really early when
[20:25] Speaker 9: you invested in them, but go on to be worth
[20:28] Speaker 9: tens hundreds of billions of dollars.
[20:31] Speaker 2: So eight million shares, I guess it was a total
[20:35] Speaker 2: underwriting here.
[20:37] Speaker 3: What are the u SUIP proceeds here?
[20:39] Speaker 9: So use of proceeds is really capital for the team
[20:43] Speaker 9: to invest in the next generation of innovative, innovative companies
[20:47] Speaker 9: from artificial intelligence to deep tech companies that are building
[20:52] Speaker 9: in the financial sector, in healthcare and space and defense.
[20:56] Speaker 9: And we will write checks in every single ycom vinator batch,
[21:00] Speaker 9: probably about one hundred or to one hundred and twenty
[21:05] Speaker 9: a year, and every check is in the hundreds of thousands,
[21:11] Speaker 9: and so that capital will be used to make those
[21:13] Speaker 9: investments that will be added to the.
[21:14] Speaker 5: Fund any investment minimums. What about fees for people who are.
[21:18] Speaker 9: Interested, Yes, for sure. So we decided to use a
[21:24] Speaker 9: tried and true model which is for fees, which is
[21:27] Speaker 9: the venture capital model. So two percent management fee, twenty
[21:30] Speaker 9: percent performance fee. To align incentives between the managers and
[21:35] Speaker 9: the investors, and it'll be the fund size will be
[21:40] Speaker 9: somewhere between two hundred and twenty and two hundred and
[21:42] Speaker 9: fifty million dollars depending on the green shoe exercise.
[21:46] Speaker 2: So, in the venture capital community today, Sarah, do you
[21:51] Speaker 2: have to have you have to be an AI play
[21:55] Speaker 2: to raise money today?
[21:57] Speaker 9: That is a very good question and the answer is
[22:00] Speaker 9: not necessarily. What you have to be is really an
[22:05] Speaker 9: innovator who has a compelling story. And so what we
[22:08] Speaker 9: look for is we look for these founders who are outliers,
[22:11] Speaker 9: who have an amazing vision and who will beat the odds,
[22:15] Speaker 9: because right the odds for these early stage companies is
[22:18] Speaker 9: probably that they won't be able to displace the incumbents.
[22:21] Speaker 9: But what's amazing with being a tech investor is time
[22:26] Speaker 9: and again you see companies that start out really small
[22:29] Speaker 9: and go on to become the next defining company of
[22:32] Speaker 9: their generation.
[22:33] Speaker 5: Well, I'm looking through your list here, and you have
[22:35] Speaker 5: some pretty well known yc alum. I'm looking at open
[22:38] Speaker 5: ai stripe like Airbnb, companies like this.
[22:43] Speaker 9: Yes, y Combinator is an extraordinary ecosystem. They've gone on
[22:46] Speaker 9: to create over a trillion dollars of value over one
[22:50] Speaker 9: hundred unicorns and decacorns to your points, Companies like DoorDash
[22:55] Speaker 9: and Airbnb and Stripe have come out of Y Combinator.
[22:58] Speaker 9: Sam Altman was deeply involved before and while he was
[23:03] Speaker 9: founding open Ai. Our first on Robinhood Ventures one has
[23:07] Speaker 9: invested in companies that came out of Y Combinator or
[23:10] Speaker 9: whose founders went through Y Combinator, like Boom, Supersonic and
[23:15] Speaker 9: Stripe and Ramp. So we're incredibly proud to be working
[23:20] Speaker 9: on a fund now that is focused on that ecosystem.
[23:23] Speaker 2: So your fund IPO price twenty five, it's training at
[23:27] Speaker 2: twenty three dollars six cents right now?
[23:29] Speaker 3: How do you investors?
[23:30] Speaker 2: How does the market typically value a structure like yours,
[23:35] Speaker 2: a fund like yours?
[23:36] Speaker 9: Yes, of course. So as a manager, we will publish
[23:39] Speaker 9: a NAV every single quarter and the share price will
[23:44] Speaker 9: will trade based on supply and demand, sometimes at a premium,
[23:50] Speaker 9: sometimes at a discount to NAV. But frankly, here at
[23:54] Speaker 9: Robinhood Ventures were focused on creating the best possible portfolio.
[23:58] Speaker 9: We control the inputs to make sure that people can
[24:01] Speaker 9: buy and sell every single day if they so desire. Obviously,
[24:05] Speaker 9: this is a portfolio that will generate its most appreciation
[24:10] Speaker 9: in my opinion, if you buy and hold it over time.
[24:13] Speaker 9: A lot of these companies will take years to become
[24:16] Speaker 9: worth a billion plus, but it is, in my opinion
[24:20] Speaker 9: again well worth the waits because some of them will
[24:23] Speaker 9: become again defining companies of the next generation.
[24:27] Speaker 5: So you're trying to bring private market access to retail investors.
[24:31] Speaker 5: So I'm just curious. Are companies staying private longer than
[24:35] Speaker 5: maybe they used to?
[24:37] Speaker 9: Absolutely, companies were definitely staying private longer than they used to.
[24:40] Speaker 9: When I started my career, if you were worth ten
[24:43] Speaker 9: billion dollar plus, it was standard to go public. And
[24:45] Speaker 9: now look at SpaceX and Anthropic and Open AI. We
[24:49] Speaker 9: have companies that are worth close to or north of
[24:52] Speaker 9: a trillion dollars and are still private, which is absolutely unprecedented.
[24:58] Speaker 1: This is the Bloomberg and Intelligence podcast, available on Apple, Spotify,
[25:03] Speaker 1: and anywhere else you get your podcasts. Listen live each
[25:07] Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com,
[25:10] Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.
[25:14] Speaker 1: You can also watch us live every weekday on YouTube
[25:18] Speaker 1: and always on the Bloomberg terminal

Shows are listed from Apple Podcasts' charts and directory, and Podcast Index where it is used. Every show and episode belongs to its publisher and plays from the publisher's own feed; this site hosts none of them.