Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London. We're the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. on Apple, Spotify, YouTube, or wherever you get your podcasts. Bloomberg Audio Studios. Podcasts, radio, news. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, Cisco shares jumped the most since 2011 after the company's earnings results will break them down. Plus, China's Xi Jinping gives a warning to President Trump on Taiwan but tells US tech CEOs China will open up more. And AI chipmaker Cerebris raises $5.55 billion in its US IPO, seizing on the surging demand for semiconductors. will be joined by the CEO later this hour. Cisco is our top story and it is actually rising with the rest of the market. We're up 15% on track for our biggest jump since 2011. After the open, we hit 17%, putting Cisco on track for its best day since 2002. It's a pretty simple story. Hyperscalar demand. Calendar year, 26, $9 billion, up from a previous forecast of $5 billion. $4 billion of that will translate into actual revenue, sales, on the income statement in this year. There are many more threads, but Cisco is finding its place in this AI infrastructure story. Let's get out to Bloomberg Equities reporter Ryan Vlaselica. I think, Ryan, the best place to start is what has the sell side reaction been to this? What are the analysts saying the main thread of their enthusiasm for Cisco has been this morning? Analysts are very positive and very optimistic that Cisco will be able to continue kind of putting up these numbers that we saw this past quarter. There is a lot of optimism that Cisco is now really part of the AI infrastructure firmament. It showed very strong demand, as you said, from the hyperscalers. It's pointing to very strong growth going forward. I think there's been a growing realization this year that the sort of optical and networking companies are a huge part of the whole data center build out. And obviously we have seen no end of demand and growth for data centers related to AI. And Cisco is really well positioned in that. It's a legacy company. It has a wide product suite that people are using here. It seems very well positioned and it does seem like analysts are really sort of, you know, seeing additional confirmation of this trend. Ryan, there's so much to pack into Bloomberg Tech today. People are saying, why are you starting on Cisco? The markets team is looking at the equities market widely. And Cisco is a big factor in kind of the feel good that's out there. Networking is your cables, your switches, your routers. That all goes into real data centers, right? But the other part of the story is Cisco's discipline. They're cutting about 4,000 roles. How did the company kind of spin that as a positive in that sort of feel good around AI in the market today? Well, they talked about how they are really focusing and prioritizing AI. You mentioned the job cuts. It does seem like all of their investments are really geared toward this in market in particular. So there is a lot of optimism about that. And I would just say, as I'm sure you remember, Cisco was one of the major companies of the dot-com era build-out. Now, it saw huge growth at that time, and it only recently surpassed its dot-com era high. So there's a certain amount of poetic justice, I guess, in the fact that AI is a thing that is finally bringing it back to record levels. It does seem like it is now becoming a real part of this technology build-out, just as it was in the internet tech build-out. Ryan, you and I were not doing this in the dot-com era, but in the here and now, Cisco is a big story. Bloomberg's Ryan Blaselica on the equities desk. Thank you so much. Another stock we're watching is Klarna. Looking at shares also up 15, 16 percent. The company posted just one million dollars in first quarter net income, but it beat estimates swinging from a ninety nine million dollar loss a year ago. This in the fintech space, right? Revenue jumping 44 percent to one billion dollars driven by higher interest income, growth in debit card signups, partnership fees. It's another one that we had to fit in in a very busy Thursday morning. Today, all eyes are on Cerebrus. The company set to begin trading after pricing its IPO at $185 a share, raising $5.55 billion, the biggest US IPO of the year so far. It has been mayhem in the market so far. Shares were indicated at one point to open at $400 a share. $400 having priced at $185. I think we're now back down at $350 a share as of one minute past 8 Pacific time, one minute past 11 a.m. Eastern time. Bloomberg's Bailey Lipscholz has been my partner in tracking the chaos of this IPO for a good few days now. Let's start with the math, yeah? The indicated opening price, well beyond $185 a share. What's that telling us? It tells us that there's untapped demand. And when you look at a deal like this more than 20 times oversubscribed, we reported before it even launched, there was $10 billion of demand. So these are huge numbers. This is the hottest stock, at least from an IPO perspective, this year, bar none. The big question, Ed, you asked me, you know, look at the market cap of where this could open. If we're getting closer to $80 billion, talking to folks on the buy side, they're still saying, you know, if NVIDIA is worth $5 trillion, who's to say that this company doesn't easily trade closer to $100 billion? I don't know what you've been hearing about that from your side, though. Yeah, exactly. That brings us back to what is Cerebrus? What does it do? Well, it is a full stack, vertically integrated supercomputer maker. NVIDIA makes largely the chips that the server trades these days. It doesn't build its own servers. Dell does that. Supermicro does that. Cerebrus does the full send package. But even at $100 billion, it's a drop in the ocean. Why is the market so enthusiastic about its technology? What else do we know about this company's financials or its customer backlog? The big thing initially when they tried to go public call two years ago was concentration risk. So G42 was pretty much their only customer. They've expanded that. Now you have OpenAI and others in the big pitch. And at least when I talk to folks on the buy side is how broad base can that be? If we're dealing with a market, especially as it relates to building some of the compute and everything that goes into building out the AI future. If this is just the start and we're in early innings, what does this ultimately look like? call it five years from now. And the big question is, back to your point earlier, if this is just a drop in the bucket, there's a pretty much massive potential as it relates to going forward, though. Again, all things considered, we've seen semiconductor index up, what, 30% since they started this process? I would say indicated opening prices, they're on the Bloomberg terminal. They're not always right. Who knows what will happen when trade starts with Bloomberg's beta Lipschultz, please don't go far. Stay with Bloomberg Tech because coming up later this hour, we will speak with Cerebra's CEO, Andrew Feldman. And if you're on the socials, hit me up. I welcome your questions. Now, coming up, China's Xi Jinping gives a warning to President Trump on Taiwan. We're going to have those details next. This is Bloomberg Tech. One of the most important summits in human history. And the two presidents, President Xi and President Trump, have such a wonderful relationship. This is an incredible opportunity for us to rely on the relationships to build a much, much better partnership. Did you get any specific customers for your chips for the H200? We didn't really talk about it. I'm here to support the president and to represent the United States. That was NVIDIA CEO Jensen Wang speaking to reporters in Beijing and telling Bloomberg the company hasn't really discussed the H200 chips during the president's trips to China. He's there to support President Trump. What was discussed, though, is Taiwan. Xi Jinping, through state news agency, calling it, quote, highly dangerous situation for the world's biggest economies. Let's get out to Bloomberg's Tyler Kendall, who joins us from Beijing. There are many threads. We also have the breaking news of the last 15 minutes. The president saying that Iran was discussed and that there is some sort of agreement there. What do we need to know? What's the latest from China? Well, Ed, at this point, as you're saying, there are a lot of different threads that we could pull on here. I can't say that the overarching theme appears to be that the efforts here in Beijing are aimed at stabilizing ties between the U.S. and China rather than overhauling them. If we start with the latest news, President Trump out saying that Xi Jinping has pledged not to supply Iran with any weapons and that it's going to help get Iran to the negotiating table. Perhaps this will help make some progress when it comes to what has been gridlock in those ongoing discussions, as well as a reopening in the Strait of Hormuz. though we would be remiss if we didn't point out that from the Chinese readout, we didn't really get any indications that China is willing to go further in terms of helping to ease that conflict, saying instead that they had extensive dialogue about the situation in the Middle East, but not really giving us any firmer details there. Another point where there appeared to be a mismatch in terms of the public readouts from what happened behind closed doors was, as you mentioned, that issue related to Taiwan. as Chinese President Xi Jinping basically threatened that Taiwan could derail the U.S.-China relationship. That was not mentioned when it came to the U.S. readout in this. And in fact, we just heard from Secretary of State Marco Rubio, who appeared to downplay that the concerns were raised after we really saw U.S. officials in recent days signal that there would not be a change when it comes to U.S. policy regarding Taiwan. Now, we can say, though, that there was a more optimistic tone reached when it came to the economic issues, including the fact that Chinese President Xi Jinping did appear to signal a move towards greater openness, telling tech execs in the room, including Elon Musk, Tim Cook, Jensen Wang, who traveled with President Trump, in part, quote, that China's door to the outside world will only open wider. though despite the messaging we haven't really seen tangible signs yet that any steps have been taken but Chinese state media did report that these executives told Xi Jinping directly that they highly value the Chinese market and Ed as you well know this U.S. business delegation includes these companies that already have high exposure to the Chinese market but also companies like Micron which have seen some of their products barred over cybersecurity concerns here in China We can say at this point there still a lot that we are waiting for potential purchase agreements when it comes to agriculture Boeing aircraft or energy products from the U But the dialogue does continue. These pair of leaders do have bilateral meetings going into tomorrow as well. Bloomberg's Tyler Kendall with everything you need to know out of China so far in the meeting between President Trump and China's Xi Jinping. Thank you very much. And let's get the broader picture with Michelle Guider, CEO of the Crack Institute for Tech Diplomacy at Purdue, also served as Assistant Secretary of State for Global Public Affairs under the first Trump administration. You understand how this works and you understand what's at stake. And like here on Bloomberg Tech, right, I want to start with Taiwan, because for a very long time you've been coming on this program. And we've been talking about Taiwan in the context of America's dependence on that nation for semiconductor supply. Right. I'm literally talking about TSMC and the manufacturing footprint in China, in Taiwan. Apologies. Have we learned anything new here on Taiwan? What did you make of President Xi's statement, I suppose, through the state agency? Nothing's new here. I think the position that China has taken on Taiwan being really important to them when it comes to U.S.-China relations has been the case for quite some time. We know that General Secretary Xi Jinping has been pressuring the president on arms sales to Taiwan for a while. So that's not new at all. And neither is the United States position on maintaining the status quo. As Secretary Rubio said, there's been no change on the U.S. position here with regards to Taiwan. But as you had mentioned, the ties between Taiwan and the United States are strong. They run deep. Semiconductors are a critical piece of that. And there's been a lot of collaboration with TSMC building out here in the United States increasingly more over time. And I think ultimately the status quo hasn't changed. A red headline on the Bloomberg terminal just before we came on air. President Trump saying that President Xi offered help on Iran and pledged not to send weapons to Iran. The president has said that it wouldn't be an important topic of conversation. But actually, if you look at what markets are saying and what people are saying on socials, It's a key issue, particularly on how it would have a bearing on the Strait of Hormuz. It's been one of several key issues. I think it's not surprising that they talked about Iran. It was looming over this entire 36-hour summit. The fact that you had mentioned this breaking news that President Xi is going to stop supporting the Iranian regime is a positive step. And I think one that the United States would welcome. So, again, not surprising. And I think overall the big picture on this is, you know, this is a 36-hour summit on all of these agenda items and ultimately micro-movements in a much bigger picture here of the United States and its long-term view to achieve the golden age of America and retain our leadership across the world. And China is on its own path to China rejuvenation. And the big question is who gets there first? And did the 36 hours in this summit help the United States move incrementally faster toward our vision? I just want to disclose to the Bloomberg Tech audience that President Trump, in those comments about Iran and President Xi's commitment for Iran, that was part of a Fox News interview, a clip that Bloomberg reviewed. Michelle, would you kindly draw on your experience from participating in the first Trump administration? What does it take to put a delegation like this together that includes Elon Musk, Jensen Wong, picking them up in Alaska for the refuel stop on Air Force One and taking the world's most important tech CEOs to China as part of a high stakes meeting between President Trump and President Xi? Yeah, these things take a lot of preparation historically, and especially in terms of what you want the meetings to be about, the readouts coming out of these meetings. However, I will say this. This type of delegation is unprecedented. And I think if you look at how the president has been agile and maybe non-traditional in his work, so are these tech CEOs. They move fast and they're disruptive and it's easy to hop on a plane in Alaska and go to China. So I'd say, you know, there's a lot of planning at the same time with this administration, with these types of disruptive tech leaders. There's also a lot of room for ad-libbing and improvisation. And I think that's what we're seeing here. Michelle Goida, CEO at the Crack Institute for Tech Diplomacy at Purdue. Thank you very much. Now, coming up, we're going to get out to Napa Valley for our own Caroline Hyde, set to speak with the CEO of Ericsson on the sidelines of the Spark Global Leadership Summit. It's coming up next. This is Bloomberg Tech. I'm Francine Lacroix, an award-winning journalist, and I've got a new podcast, Leaders with Francine Lacroix from Bloomberg Podcasts. I've interviewed everyone from heads of state to fashion icons about the news of the moment. But I've always been curious, who are these people as leaders? I don't think there's one right way to be a leader. Make decisions. A poor decision is always better than no decision. Listen to new episodes every other Monday. Follow Leaders with Francine Lacroix wherever you get your podcasts. nuclear power is trying to make a comeback but the resources required are in short supply from uranium mining to enrichment the supply chains being reshaped by geopolitics lobbyists rising energy demand new technologies that's the focus of bloomberg primer this week listen to this global investment in nuclear energy since 2020 is estimated to be around 300 billion dollars with ambitious plans in Europe, North America and Asia to revive or kickstart their nuclear energy sectors. Every step of the supply chain, from mining to enrichment to building reactors, is highly regulated and controlled. Because a single misstep could be catastrophic and erode the public trust nuclear has worked decades to regain. It's a real shift from when I came of age and everyone was worried about nuclear war. because the process of enriching uranium for nuclear fuel, same technology that they use for enriching uranium to make nuclear weapons. Catch the full episode of Primer on Bloomberg.com and YouTube. Let's get over to the Spark Global Leadership Summit in Napa, where our own Caroline Hyde is standing by. Caro. It is a tough life being hosted by Concello here in Napa Valley. And I'm very pleased to say I'm joined by a giant in telecoms. based in Sweden. Ericsson is a global company and Bori Ekholm is here with me, who is the CEO. All right, tell me about the China exposure you have. You have supply chain there, you have consumer and competition is really what you have from China. What did you make of the relationship between US and China that we just saw overnight? Thanks for having me. That's a great question to ask. Very hard to answer, actually. We like to do that in journalism. No, I know. I know. But I I think there is, you know, China started out, as I often look at the old telecom movie from China, right? It actually started out as being a prioritized sector in China. So they had almost 100 vendors, if you go back 30 years. They consolidated into really two that became fierce competitors in over a decade. Huawei being one key one. Huawei, of course, being the biggest. And they started out being, of course, low cost and fairly simple. Today, they're, of course, a phenomenal competitor. And it's the one that we benchmark ourselves with and say that's the one we need to beat, actually. We need to win on technology. We need to win on cost position. So for us, the competition with China is front and center and has been. And I do believe that for the rest of the world to compete with China, you need to lead on technology. But you've been outspoken in the past, sort of pushing against this idea of sort of a focus on your own country and banning in Sweden. They pushed out Chinese competition. And you actually at the time said that's the wrong thing to do. In the U.S., that is your key markets now are the U.S., the Japan, there are other nations. How do you think about China being excluded and should they be? You know, the way to think about China is actually it's multi-prone. So if you take telecom again, it's a scale game. They have scale in their domestic market. That's a market you need to be in. But more importantly, what was also clear is that given the development in China economically and use case wise, you saw data consumption grow much faster in China than anywhere else in the world. That led them to lead on or demanding certain technologies ahead of the rest of the world. So unless you're on the same development curve as they are in China, we're not going to be able to bring those solutions globally. So if we take in our case, we have what's called massive MIMO. Basically, it's a way to increase capacity in the radio network. They needed that earlier than in the rest of the world. And therefore, if you're not there when that happens, you don't develop the technologies at the same pace as they do in China. So I think it's a much more interdependent world. You need to think of the world as being interdependent. And you're dependent on geopolitics, tariffs, inflationary pressures, the Strait of Hormuz again front and center today. How are you managing that? You know, we actually took a decision a number of years ago now to say that we have three home market. So that was recognizing the US because it's a front-runner market. Big India in those days was big. Today it's starting also to be front-runner on technology. Japan, Japan is very big in telecom and also an early adopter of telecom. So we said, that's markets we need to win in to make sure that we combat the scale of China. So we did that. then we said we need a flexible supply chain in order to manage any disturbances so we built a factory here in the u.s how big is your manufacturing now here in the u.s we manufacture pretty i mean a large portion of what's supplied to the u.s is manufactured here in the u.s so we built that in 20 commissioned it about 2020 so we were ahead of the really supply constraints in that sense and the tariff issues. So we've been able to use that manufacturing footprint, R&D footprint, to actually manage a bit of the geopolitical exposure. Now we look at the markets today, an extraordinary ramp higher on the back of AI. AI is the excitement in your area as well. Look, you've got competition with Nokia, who has got a strong relation with NVIDIA, and they've gone big into data center briefly. How are you thinking about the AI opportunity? We think of the AI opportunity as a massive opportunity for us for the simple reason that AI will ultimately move out to the physical world, call it industrial AI, physical AI. And that's going to require inference at the edge of the network to manage the latency requirements, et cetera. And then connectivity will be needed. So we will start to enter a world where everything has to be connected. So when everything is connected you can connect them with wires It just simply doesn work You going to need a terrestrial cellular network to provide the backbone to scale AI So I think of AI yes it going to fundamentally change the economy It's going to be a driver of productivity. It's hugely positive. And for us, it will be a benefit because we will see a new type of traffic coming in the network. Borei Eichhorn could talk to you more. I'm luckily going to be talking to you in a panel a little bit later here at the Spark Leadership Summit, hosted by Consolo. Ed, back to you. All right, coming up, Cerebrus IPO time, the big conversation. This is Bloomberg. Welcome back to Bloomberg Tech. To our TV viewers and radio listeners around the world, we're joined by Andrew Feldman, Cerebrus CEO. Cerebrus priced this IPO. Andrew, $185 a share above the top end of the marketed range. I'm looking at the Bloomberg terminal. Shares indicated to open $350 a share. Your reaction to that? Pretty good day, huh? How do you feel? I mean, did you see this coming? There's some mechanics to it, right? But I know you. I know you like to, let's be honest, you like to talk about what's happening in AI, The big focus on inference, Cerebras' place in it. But this is the biggest IPO of the year so far. What does it mean to you and your employees and your backers? It's one of the biggest tech IPOs in history, and it's the biggest semi-IPO in history. We couldn't be more proud. This is the culmination of a decade of work, of countless late nights and long weekends. We are enormously proud and excited and ready to get back to work and start working on the next great thing. Again, the market is indicating shares to open at $350 a share. Let's see where we're at when trading starts. But you're being priced in as a major player in this field now. What evidence would you point to that you are, in fact, a major player? A lot of focus is on the concentration in the relationship with OpenAI. Tell me about some of the other frontier labs or other names that you have some concrete talks with. Sure. In the last four months, we announced a deal with OpenAI that's north of $20 billion from 750 megawatts of compute. We also announced a major engagement with AWS where our equipment would be deployed in their data centers. I think those are obviously the largest, but there are dozens of others that are in what used to be a big deal in the $10 to $50 million category. And so there's just an extraordinary demand right now for fast inference. We're the fastest, not by a little bit, but by more than an order of magnitude. We're 15 times faster than the next nearest competitor. And as AI has become useful, everybody wants it to be fast. Nobody wants to wait. On that, 21x on performance and also a lot of emphasis on the dollar per token, right? That is the metric that the field cares about. But that's on paper. You just talked about the AWS relationship as an engagement. When does the word engagement end and real revenues start to show up for you from those relationships? Sure. We signed a binding term sheet with AWS, as described in our S1, and we're working through the master agreement. I think in dealing with organizations of that size, it takes a little time to dot all the I's and cross the T's. But we are extremely confident that they will be an enormous channel for us and a partner in delivering our technology to large enterprises and medium-sized enterprises around the world. I think they are one of the preferred cloud providers for just about every enterprise on Earth. And so an opportunity to have your solution embedded in their offering as part of their bedrock offering, that's a huge win for us. We're live on Bloomberg Television and Radio. This is a Bloomberg Tech takeover. And we're speaking to Andrew Feldman, the CEO of Cerebrus, whose company just priced the IPO at $185 a share and is indicated right now, I'm looking on the Bloomberg terminal, maybe to start trade at $350 a share. Andrew, I think you know this about me. Whenever we have a big moment to have a conversation like this, I always go to the Bloomberg Tech audience. What do they want to know? And actually, the first question is, what was your attitude toward retail investors? Why did you not do more for the retail investor in this big moment for your company? We were more than 25x oversubscribed. There was a lot of hard decisions that needed to be made. and nobody got what they wanted. And we did our best. It's about all you can do when there's 25 times more demand for your stock at the institutional level and at the retail level than there are shares to be sold. So we're really proud of the way we chose to do it. We thought we did it with integrity. And I think we are very comfortable with the ending allocation. Full stack, fully vertically integrated. And what I mean by that is you literally build the supercomputer top to tail, right? So NVIDIA will do the tray, not just GPU, but then Dell, Supermicro will assemble it. Dell's margins, low teens. NVIDIA's margins, mid-70s. Your margins, 40%, 41%. And what I'm trying to help the audience understand is why that strategy of owning everything top to tail is going to pay off in the long run. And I would say the other question I get for you is what's the future outlook for margins based on your plans? Well, I think a couple of things. I think we have obviously opportunities to improve our cost structure. You know, we did half a billion last year in sales. That means we put 250 million in the supply chain. Obviously, that's not an efficient spot. As we grow, we will have more leverage in the supply chain and our cost of goods will come down. I think we have an opportunity to increase prices. I think the demand for fast inference is overwhelming this minute. And so I think in the long run, we'll be really proud of our gross margins and where they will sort of wash out as we hit scale. I've got a question for you from a terminal client via IB. Thank you for the question. Everyone's tuned in right now, Andrew. They want the detail. And so one way that people look at it is that, you know, this is custom silicon, but Cerebris isn't a chip per se. It's like wafer level. Right. Is there a reason why you can't just sell that versus the whole server? Yeah, that's a good question. for the entire 70-year history of the computer industry, every previous effort had failed to build a chip of this size. So for your audience, this chip is the size of a dinner plate, while traditional chips are the size of a postage stamp. And not only had everybody failed until we succeeded, but several tried to copy us and have since failed as well. part of what we were capable of doing and able to do was that we were able to use not just the chip but also our expertise in packaging and in system design to solve some of the problems and build a truly compelling solution, right? You don't just get 15 or 18 or 20 times faster than the competition because you built a good chip. That's one of a collection of different things that enable that sort of performance. You can build a great chip and the system vendor, the ODM, can nibble away at your performance by not delivering the right amount of power or the right amount of I.O. There's a reason why NVIDIA then sought to control the I.O., the NVLink, because they didn't want others to nibble away at their performance. And so by building the system, we were able to optimize all parts. I mean, you could ask the same thing about Porsche. You know, why don't you sell just engines, right? It turns out that that's an I-11 is a beautiful car because of the engine and everything else they put in it. Andrew, the team's telling me we've got to go, but I've got to ask you, $5.5 billion, what do you use the proceeds for? And actually, how flexible can you now be in allocating capacity to new customers? We just have 30 seconds. Oh, I think we will use it to increase capacity. We are excited to bring many new customers on board. There's tremendous demand for what we're doing. I think we can be aggressive on that front. Andrew Feldman, Cerebra CEO, pricing the IPO 185, indicated to open $350 a share. Thank you for your time. now coming up tom hale the aura ceo discusses the future of wearables we're going to go back to the spark summit next this is bloomberg tech this is caroline hyde and i'm ed ludlow inviting you to join us for bloomberg tech a daily podcast focusing exclusively on technology innovation and the future of business every weekday we bring you the top headlines from the world's biggest tech companies. From finance to defence, AI to entertainment, and from startups to the magnificent seven. We highlight the latest stories of the people and companies pushing the tech sector to new frontiers and the politics that shape global tech markets. We do this all every weekday, then bring you the most important conversations and analysis in our podcast. Search for Bloomberg Tech on YouTube, Apple, Spotify, or anywhere else you listen. Join us every afternoon on your commute home and stay ahead of the tech news cycle. That's the Bloomberg Tech Podcast. I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco. Subscribe today, wherever you get your podcasts. Let's go back to the Spark Summit where our own Caroline Hyde is standing by. I am the Cancelo Spark Summit right here in Napa Valley. And with wine comes a focus on your health. And many might be looking at their aura ring today as to see how they're feeling after a day in Napa Valley. And I'm joined by Tom Hale, of course, the CEO of Aura. And we're so exuberant in the market, whether it be personally, about artificial intelligence. I'm interested as to how you're seeing your own product iterate. We're all about now prediction, not just assessing how I might feel on the day or the inputs that I'm getting, but predicting how I might in the future. Yeah, we've been doing AI for many years. The thing that's most interesting is that the predictions that we make generally are short-term. You might be getting sick in a couple of days. Your cycle's coming in a couple of days. And And they're very accurate because they're short-term. But I think where this starts to get really interesting is if you can make predictions over a longer time frame, you starting to help people understand how their behaviors can bend the curve on their health outcomes or maybe even ultimately on the cost of health care And I think this is really disruptive but also really positive because one of the biggest problems with health care is there's just simply not enough care to be provided for everybody. And AI lowers the cost and provides access and provides medical information. It has to be high quality. It has to be scientifically validated. It has to be accurate and good. But that opportunity exists. And so we're pretty excited about how AI can transform health care. And the moment an Oura Ring is deemed a general wellness product, but there could be even further ways in which you move within the medical space. That requires FDA approval, particularly for blood pressure, for example. How are you thinking about that, getting the science on board? Well, our view is that we want to be as aligned with the FDA as possible. We want to make sure that what we do is in the path of scientific and medical validation. That includes the FDA. So we're working closely on multiple submissions. Blood pressure is certainly one of them. And we're currently running something called the Blood Pressure Profile Study. That's almost 300,000 people who are taking cuff measurements and comparing to the predictions that the ring is making. So we will have a data set that will support the idea that what this does is accurate, validated, clinically relevant. Until that time, we'll probably operate as a wellness device, which means that we can provide insight, but not something that's like a diagnosis. We'll stop short of that. Look, the FDA doesn't have someone at the top right now. Does that affect the way in which you work with them? Yeah, not really. I think we're very excited to see how we can work with CDRH, which is the division of the FDA that focuses on that. So we're working with the rank and file, the people who are focused on medical devices, and we have a great collaboration with them. You have a great collaboration with Apple, but you're also kind of frenemies in some way, dare I say it that way. You've taken some significant talent from them. Well, I think the interesting thing about how Apple and Aura interact is that it turns out that almost two-thirds of Aura ringwares have a second wearable, most often a wrist wearable and most often an Apple Watch. So we're actually highly complimentary. Now, going to the people, there's great talent. Apple has produced some of the icons of health and hardware. And I think having some of those people join our team has been an incredible, I don't know, we feel very proud of the people who have joined us. And we've got some great connectivity with Apple as well. I'm a long-time independent software developer on the Apple platform, so we have a lot of people that we have been working with for years. Software developers are not cheap in this age of AI. How are you thinking about your talent more broadly? So for us, the interesting thing is about a year ago, people were like, wow, I mean, hardware's hard. Why are you doing hardware? And of course, the first rule of software school is you don't do hardware. So I've obviously missed that class or lesson in software school. But it's worked out okay. Because now what people tell us is they say, we can't believe how resilient you are to the AI disruption to software. Turns out hardware is very, very attractive right now because you can't vibe code atoms. Yes. Right? You can't just summon them into existence. And so interestingly, I think for Aura, steering the way we have and having always been a hardware company with a very strong software backing, it's actually been really advantageous. And investors look at us and they say, good, we're so glad that you're not in the software space and that you're a hardware provider. And you've just been luring more investment and you've got a bigger market cap on the private side. I'm interested as to whether there's any inflationary pressures your investors are worried about. How are you thinking about manufacturing in this age of supply chain? We think about Hormuz. We think about China today. Yeah, I don't think we've really had seen the impact of inflation on demand, which is good. We've certainly seen some inflation impacts on kind of supply chain, but nothing material. And interestingly, the last year, of course, there was all this drama about tariffs. And I think as a company, we were quite lucky. One, we actually announced an intention to have a factory built in the U.S. And so that's actually one really interesting outcome of that. It's just underway. You know, we'll let you know when it's all rolled out. But at the same time, I think we also were able to, because we manufacture around the globe, be very careful to sort of manage the tariff issues very effectively. Tom Howe, could speak to you for much longer. The CEO of Aura, fascinating to catch up. We hand it back to you from the Cancelo Spark Summit here in Napa Valley, Ed. Okay, more interviews to come out of the Spark Summit throughout the afternoon. Tune in for a conversation with OpenAI CFO Sarah Fryer, 8.30 p.m. Eastern, 5.30 p.m. Pacific. Elon Musk is taking Grok to Wall Street. Sources tell Bloomberg that heavyweights like Morgan Stanley and Apollo are testing XAI's Grok Chatbot as SpaceX, now parent of XAI, prepares for an IPO. Bloomberg's Carmen Arroyo breaks the story wide open. No surprise that you wake up. It's one of the most read stories on the Bloomberg terminal and Bloomberg.com. There's so much detail in the report about the XAI strategy, the players involved. Give us as much of that detail as you can. Sure. Thanks for having me, Ed. Basically, XAI is trying to boost their corporate client roster ahead of the IPO. And John Shulkin, who's been the chief revenue officer at the company, has been really driving this strategy. In order to do that, they've mainly gone to Wall Street clients that have previously worked with Musk companies before. Among them is Apollo, which helped finance XAI's access to chips. It's Morgan Stanley, which is one of the go-to banks that has worked with Musk for years. And it's also Valor Equity, which is a venture capital firm that has backed Musk companies for a long time. They're testing GROC and they're using it alongside other AI models. But this is happening while, like, you know, Anthropik and OpenAI are really trying to fight for the same piece of the pie. So the adoption is going very slowly. No, so one real quick interesting thing is that actually in your reporting, they're not using it necessarily for work. Is that right? Like on desk work in those firms? They're trying to adopt it and use it along other AI models, but the chatbot has been falling behind on coding and financial implementation, which is why XAI is trying to really ramp that effort up. And they've been trying to move more stuff internally to work on training Rockford financial modeling and boosting also the sales team. So they're trying to really prepare the chatbot for that use case, but it's not really being ready for it yet. also reporting that John Schulking is stepping back as chief revenue officer, of course, a partner at Valor, now an advisor, Reed Carman Story, Bloomberg's Carman Arroyo. Thank you very much. All right, coming up on the program, Alphabet is taking the AI race to the global bond market. I'm going to discuss that next. This is Bloomberg Tech. Time now for Talking Tech. And first up, Hon Hai, also known as Foxconn, reported a 19% jump in quarterly profit, says the U.S. will gradually become the company's largest AI server, Production Hub. The company's become a key AI hardware player by assembling servers that house NVIDIA accelerators. Plus, China's tech leaders are facing a reality check. Alibaba narrowly missed revenue targets this morning as e-commerce wars blunted its cloud surge, while Tencent reported its slowest growth in over a year. And AdTech is eyeing a potential $4 billion debut in Hong Kong. The optical connectivity specialist is reportedly seeking to raise at least $500 million or more at a valuation of $3 to $4 billion, according to sources. Big story on the terminal. Alphabet is taking the AI race to the global bond market. After a blockbuster $17 billion sale at home, the Google parents now tapping the Japanese yen market for the first time. Bloomberg's Tassos Voslos joins us to explain big tech's move into what is international debt rights. That's the evolution here, looking at international markets outside of its home. Why? Well, at some point, you have to. If you look at issues this year, for example, non-financial corporates in the US, which is the deepest, biggest credit market in the world, 40 cents out of every dollar that was raised came from the tech sector, which is rather large. So you have to think in order to avoid saturating even the biggest market in the world, you actually have to look at every corner out there. So hyperscalers, in particular Alphabet, but also Amazon, have taken steps to diversify that. So they've tapped every big market they can imagine. So it's been euros, pound sterling, it's been Swiss francs, and now we're looking at the yen market. So it's pretty much a global race in order to finance this massive capex spending that we're going to see in the next few years. Right. And then in the euro bond market, we're talking about the second biggest credit market. Why is it different this time around, Tassos? Like, we've done a lot of breaking news on this show in corporate bonds. Is there something new here? There is, actually. And we've had mega deals in the past where you have tens of billions of dollars being issued in a single day. The problem, well, the difference with that is that that was a one-off. Usually, it's on the back of M&A. You have to raise massive amounts of cash in order to do that. But once you've done that, then you can just absorb the company you've just bought. The difference here is that because CAPEX spending is going to be so large in the next few years, hundreds of billions of dollars, you have massive deal after massive deal, which is a conundrum that investors are facing. They want to be involved in them, but the main issue is that another massive deal is just around the corner. So, the previous one is going to weaken the back of that. So, that trend of big deal after big deal is something that we haven't seen before, pretty much in the history of the credit market. Bloomberg's Tassos Fossos, thank you very much. Let's get back to Cisco before we leave today. Today's big number, $9 billion. That's how much the company expects to get in orders from hyperscalers in calendar 26, up from previous $5 billion target. Suggests this company's AI shift is showing a payoff, right? Cisco, welcome to the AI party. That's part of the story. And And the share is really reflecting that. We're up 15% on track for the best day for Cisco since 2011. At the open, 17% gain. Put them on track for their best day since 2002. Networking, routers, switches, cables. Make those components the story again. Wonderful. That does it for this edition of Bloomberg Tech. Standing by for Cerebras to start trading. Priced at $185 for its IPO, indicated to open $350 per share. Check out the podcast, a stunning show. To recap, Apple, Spotify, iHeart, and on Bloomberg, this is Bloomberg Tech. This is Tom Keen inviting you to join us for the Bloomberg Surveillance Podcast. It's about making you smarter every business day. I'm Paul Sweeney. We bring you complete coverage of the U.S. market open. We cover stocks, bonds, commodities, even crypto, all the information you need to excel. And I'm Alexis Christophorus. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that through conversations with the smartest names in economics, finance, investment and international relations. We do all this live each and every weekday that bring you the best analysis in our daily podcast. Search for Bloomberg Surveillance on Apple, Spotify, YouTube, or anywhere else you listen. On the East Coast, listen at lunch. 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