China's Moonshot, Netflix's Slump & Greylock's $1.5B Bet | Bloomberg Tech 7/17/2026

>> BLOOMBERG TECH IS LIVE FROM THE HEART OF SILICON VALLEY WITH ED LUDLOW IN SAN FRANCISCO. ED: THIS IS BLOOMBERG TECH. THE GLOBAL AI RACE IS ACCELERATING AS CHINESE STARTUP MOONSHOT SAYS ITS LATEST MODEL CAN COMPETE WITH THE BEST FROM OPENAI AND ANTHROPIC. NETFLIX SHARES TUMBLE AFTER THE STREAMING GIANT WARNS OF SLOWING SALES GROWTH FOR A SECOND STRAIGHT QUARTER. AND ONE OF THE OLDEST VENTURE FIRMS JUST RAISED $1.5 BILLION FOR ITS 18TH FUND. WE SPEAK WITH A PARTNER. TECHNOLOGY STOCKS UNDER PRESSURE ALL AROUND THE WORLD THIS FRIDAY AND THE CATALYST IS A SURPRISE OUT OF CHINA. MOONSHOT HAS UNVEILED A $2.8 TRIL -- TWO POINT 8 TRILLION PARAMETER MODEL THAT THEY SAY CAN COMPETE WITH OPENAI AND ANTHROPIC. IT CHARGES $15 PER MILLION OUTPUT TOKENS, DRAMATICALLY CHEAPER TO USE THAT MANY PEOPLE -- LEADING AI MODELS. INVESTORS ARE DRAWING PARALLELS WITH LAST YEAR'S DEEPSEEK MOMENT AND QUESTIONING WHETHER THE AR INDUSTRIES ENORMOUS SPENDING SPREE IS BECOMING HARDER TO JUSTIFY. HERE'S WHAT'S MOVING AND HERE'S WHERE THE PRESSURE IS. WE ARE OFF SESSION LOWS WITH THE NASDAQ 100 DOWN. STOCKS ALMOST OUT 3%. IT IS ON TRACK FOR ITS BIGGEST WEEKLY DECLINE SINCE APRIL 2025. RIGHT NOW, IT IS TRADING AT ITS LOWEST LEVEL SINCE ABOUT EARLY TO MID MAY. THE NASDAQ 100 IS NOT FAR OFF THAT WEEKLY MILESTONE EITHER, ABOUT A PERCENTAGE POINT AWAY FROM ITS BIGGEST DROP SINCE APRIL 2025. THE INDIVIDUAL MOVERS, THE COMPUTE NAMES WE ARE LOOKING AT. APPLE IS NOW DOWN SIGNIFICANTLY, MODESTLY. IT IS VERY CLOSE AND AT ONE POINT DID OVERTAKE NVIDIA AS THE MOST VALUABLE COMPANY BUT BASICALLY THE MARKET IS UNDER PRESSURE GENERALLY. LET'S GET TO MIKE SHEPARD AND TALK ABOUT CHINA AND AI. LET'S START WITH MOONSHOT. TRY TO GET AS MUCH OF THE DETAIL OF THIS RELEASE AS POSSIBLE AND THE MARKET REACTION IS CLEAR, BUT WHAT ELSE DO WE KNOW? MIKE: THIS REALLY DOES PUT CHINA ON THE MAP. ONCE AGAIN WITH A MODEL THAT RIVAL SOME OF THE BEST COMING FROM SILICON VALLEY. IT ALSO ECHOES IN A WAY, AS YOU ASK AROUND TOWN AND WANTED TO, SOME OF THE COMPANIES -- AROUND TOWN IN WASHINGTON, SOME OF THESE MODELS THAT CHINA IS PUTTING FORTH MAY HAVE BEEN BUILT ON THE BACKS OF THE PRACTICE OF DISTILLATION WHERE RESULTS ARE HARVESTED FROM THE OUTPUTS OF AMERICAN AI MODELS TO BUILD THIS RIVAL GENERATION OF CHATBOTS IN CHINA ON THE CHEAP. CHINA HAS REJECTED A LOT OF THOSE CLAIMS, YET IT CERTAINLY IS A FRICTION POINT BETWEEN THE U.S. AND CHINA IN THIS BROADER GLOBAL RACE TO DOMINATE EMERGING TECHNOLOGY OF AI. ED: CHINESE PRESIDENT XI JINPING HAS BEEN OUT STAKING HIS CLAIM FOR LEADERSHIP IN THE FIELD OF AI, TALKING ABOUT CHINA'S DOMESTIC PROWESS IN AI BUT ALSO TAKING POLICY ACTION TO SUPPORT WHAT WE SEE FROM MOONSHOT. WHAT DO WE NEED TO KNOW ABOUT WHAT PRESIDENT XI HAS BEEN SAYING THIS WEEK? MIKE: REARLIER TODAY, HE MADE A DEBUT APPEARANCE AT THE SHANGHAI WORLD AI FORUM. THIS IS AN EVENT HELD ANNUALLY THERE. THIS REALLY SIGNIFIED HIS PERSONAL STAMP ON CHINA'S PUSH TO LEAD IN AI. EARLIER THIS YEAR, THE GOVERNMENT BEAR HAD AGREED TO PUT AS MUCH AS $295 BILLION FOR BUILDING A NATIONWIDE INTERCONNECTED NETWORK OF COMPUTING HUBS, DATA CENTERS TO REALLY POWER THE NATIONWIDE PUSH TO ENSURE THERE IS ENOUGH COMPUTE TO GO AROUND TO SUPPORT ALL OF THE STARTUPS THAT ARE DEVELOPING MODELS LIKE KIMI AND OTHERS WE HAVE TALKING ABOUT ON THIS PROGRAM. XI IS ALSO MAKING THIS NOT JUST A MESSAGE ABOUT CHINA, BUT ABOUT THE WORLD. HE'S CALLING FOR AI'S TO BE SOMETHING DISTRIBUTED MORE EQUITABLY AROUND THE WORLD. HE PITCHED THIS MESSAGE TO THE GLOBAL SOUTH, SAYING HE WANTS TO SEE AI FOR ALL COUNTRIES, NOT JUST THE RICHEST AND MOST POWERFUL. THAT REALLY PLAYED TWO CONCERNS WE'VE HEARD FOR DECADES FROM DEVELOPING NATIONS THAT THEY ARE THE LAST TO BEAR THE FRUITS OF ANY BIG TECHNOLOGICAL ADVANCE. AI, MANY COUNTRIES IN THE GLOBAL SOUTH HAVE BEEN WATCHING ADVANCES BY THE U.S. AND CHINA, WONDERING WHERE THEY WILL GET A PIECE OF THE ACTION AND XI IS MAKING THE OFFER THAT IF YOU SIGN UP WITH US, YOU WILL GET YOUR FAIR SHARE. HE IS ALSO CALLING FOR SOME GUARDRAILS ON THE TECHNOLOGY. HE SEES JUST LIKE OFFICIALS IN THE U.S. DO SOME OF THE SECURITY RISKS POTENTIALLY NOT ONLY TO CHINA'S NATIONAL SECURITY BUT THE GLOBAL SECURITY. HE'S ALSO CALLING FOR COOPERATION WITH THE UNITED STATES AND OTHER COUNTRIES WHEN IT COMES TO DEVELOPMENT OF AI. ED: MIKE SHEPARD IN D.C. THANK YOU. THE SURPRISE RELEASE OF KIMI'S A MESS OF MARKET STORY AND THROUGHOUT THE HOUR, WE WILL GET DIFFERENT PERSPECTIVES ON WHAT THIS MEANS FOR AMERICAN AI. WE WILL CONTINUE TO TRACK THE MARKET MOVES BUT YOU CAN SEE THE NASDAQ 100 UNDER PRESSURE. THAT IS IN THE EQUITY MARKET. THE AI TRADE IS NOT JUST HITTING STOCKS, IT IS WEIGHING ON BONDS FOR DEBT SOLD BY TECH GIANTS TO FUND MASSIVE AI INVESTMENT IS UNDERPERFORMING AS INVESTORS GROW MORE CAUTIOUS ABOUT THE SECTORS SPENDING SPREE. THE BOND MARKET, THIS PREDATES THE HEADLINE OVERNIGHT ON KIMI BUT IF YOU LOOK AT PORTFOLIO PERFORMANCE, WE MADE A LOT OF NEWS HEADLINES ABOUT THE ISSUANCE OF THE DEBT, THE NEED FOR CAPITAL. TELL US HOW THAT HAS GONE FOR THOSE BONDS IN THE INTERIM PERIOD? >> A FEW MONTHS AGO, PEOPLE WILL WARNING THAT THE DEBT IS BUILDING TOO FAST WITHIN PORTFOLIOS AND INDICES. WHAT IF SOMETHING ACTUALLY GOES WRONG? IT IS NOT DRIVEN BY THE SAME THING WHICH EXIT RATHER CONFUSING FOR INVESTORS WHO MAY HAVE BOTH EQUITIES AND BONDS IN THE PORTFOLIO. SOME OF THEM ISSUED BY THE SAME HYPERSCALER BECAUSE IN THE CREDIT MARKET, THE MAIN CONCERN NOW IS WHETHER THE DEBT IS BEING BUILT UP TOO FAST AND BY TOO MUCH, MORE THAN THE MARKET CAN ABSORB. THE AI RACE IS HEATING UP AND YOU CANNOT POSSIBLY LOSE OUT. YOU HAVE TO SPEND LOADS OF MONEY AND YOU HAVE TO RAISE AS MUCH IS YOU CAN FIND BECAUSE -- WHICH IS WHY WE ARE SEEING A DOWNTURN IN BONDS, IT IS ACTUALLY HAPPENING ACROSS THE WORLD, NOT JUST THE U.S. ED: I WILL READ YOU SOME OF THE DATA FROM YOUR REPORT, IF THAT'S OK. 79% OF THE SECTOR'S BONDS SOLD SINCE EARLY 2025 ARE CURRENTLY INDICATED IN A WIDER SPREAD COMPARED TO THE FIRST DAY OF TRADING. EXPLAIN THAT TO US. THE OTHER POINT BEING THAT PRICE MOVING IN VERSE THE YIELD, THE PRICE HAS FALLEN FROM THE ISSUE PRICE ON AVERAGE ACROSS THAT BUCKET. WHAT'S GOING ON? TASOS: THE REASON WHY WE ARE USING SO MANY METRICS IS BECAUSE DIFFERENT INVESTORS MAY BE USING DIFFERENT BENCHMARKS THEMSELVES, AND EXPLAINING TO THEIR INVESTORS WHETHER THEY ARE ACTUALLY PERFORMING WELL OR NOT. WHICHEVER METRIC YOU USE, WHETHER IT IS TOTAL RETURN, THEY ARE ALL NEGATIVE. WHAT THAT SHOWS IS WHICHEVER YOUR APPROACH HAS BEEN TOWARDS THAT SECTOR HAS NOT WORKED OUT, WHETHER YOU TRY TO ELIMINATE ONE RISK OR ANOTHER. EITHER WAY, YOU ARE IN THE RED BUT WHAT I NUMBER OF ACTIVE INVESTORS HAVE BEEN TELLING US IS I DON'T EVEN WANT TO HOLD THEM AT ALL BECAUSE UNLIKE STOCKS WHERE IF THE AI FUTURE IS AS BRIGHT AS SOME PEOPLE THINK, AND YOU END UP HOLDING IN AI WINTER, THE STOCK WILL GO THROUGH THE ROOF. BECAUSE OF THE MECHANICS, YOU ARE GETTING PAID BACK -- FACE VALUE -- THE UPSIDE IS RATHER LIMITED BUT THE DOWNSIDE COULD BE SIGNIFICANT. ED: TASOS WITH THE CREDIT MARKET OF WHAT'S HAPPENING AI AND HYPERSCALERS. COMING UP, ANOTHER TOP STORY. NETFLIX IS UNDER PRESSURE. THE STREAMING GIANT IS WARNING OF SLOWER SALES GROWTH. WE WILL SPEAK TO PHILLIPS SECURITY TO FIND OUT WHAT THE STORY IS WITH NETFLIX. THAT IS NEXT. THIS IS BLOOMBERG TECH. ♪ >> WE BELIEVE IT TAKES GREAT ARTISTS TO MAKE SOMETHING GREAT AND AI IS NOT CHANGING THAT. AI WILL GIVE PEOPLE BETTER TOOLS TO BRING THEIR VISIONS TO LIFE. MOVIES ARE BEING MADE BY PEOPLE WHO MAKE MOVIES. AI IS PROVIDING BETTER TOOLS TO MAKE THEM EVEN BETTER. ED: THAT WAS THE NETFLIX CO-CEO SPEAKING ON YESTERDAY'S EARNINGS CALL. NETFLIX SHARES, AT ONE POINT IN THE SESSION, ON TRACK FOR THE BIGGEST DROP IN FOUR YEARS. DOWN MORE THAN 8%. THE COMPANY OUTLINED A BIGGER ROLE FOR AI AND POINTED TO ADVERTISING AS ITS METS DESK -- IT NEXT GREATER GROWTH ENGINE. THE COMPANY IS BEGINNING TO WORRY THAT THE COMPANY'S BREAKNECK GROWTH IS STARTING TO SLOW. JOINING US NOW IS HELENA WANG, A BUY RATING ON NETFLIX. THEY ARE LOOKING FOR A STORY BEYOND SUBSCRIBER GROWTH. IT WAS SO INTERESTING TO GO THROUGH HOW THEY WILL USE AI. ADVERTISING, LIVE CONTENT. FOR YOU, WHAT WAS THE MAIN TAKEAWAY FROM THIS NETFLIX PRINT AND WHAT WAS SAID ON THE CALL? HELENA: I GUESS IF YOU JUST LOOK AT QUARTER RESULTS ITSELF, I WOULD SAY IT IS STILL OVERALL BROADLY IN LINE. SO, MEMBERSHIP TRENDS HAS BEEN REALLY HEALTHY. THEY RECENTLY INCREASED THEIR PRICE AGAIN EARLIER THIS YEAR IN THE MARKETS WITH U.S., MEXICO AND SPAIN THAT CONTINUES TO BE WELL ACCEPTED. IT IS ON TRACK TO DOUBLE ITS REVENUE THIS YEAR, SO THAT HELPS. MARGINS ARE HOLDING UP FAIRLY WELL. I WOULD SAY THE RESULTS ARE PRETTY HEALTHY. ED: HOW LONG DID NETFLIX SAY JUDGE JUST BY TRADITIONAL FINANCIAL METRICS? YOU LOOK AT THOSE METRICS, PRETTY GOOD. THEY ARE TALK ABOUT HOW NETFLIX WILL BE DIFFERENT AS WELL, THE PLATFORM I MEAN. MORE LIVE CONTENT, VIDEO PODCASTS, CREATORS, CLOUD GAMING. I AM LOOKING AT THAT AND SAYING I WANT TO NETFLIX IN THE EVENING, SIT DOWN, STREAM A SHOW OR FILM. WHAT ABOUT THE REST OF THE DAY? TO ME, IT SEEMS LIKE NETFLIX IS THINKING ABOUT HOW DO WE GET INTO THE ADDRESSABLE MARKET FOR PEOPLE'S EYEBALLS MORNING THROUGH EVENING. IS THAT WHERE YOU ARE SEEING? HELENA: YEAH, ANOTHER CHALLENGE THEY ARE SEEING IS THEY ARE FACING A LOT OF COMPETITION THAT IS NOT JUST FROM TRADITIONAL STREAMING PLATFORMS. THEY ARE COMPETING A LOT OF SCREEN TIME WITH SHORT VIDEO SUBSCRIBERS TO SERVICES LIKE YOUTUBE SHORTS AND TIKTOK VIDEOS. BECAUSE CONSUMER BEHAVIOR IS NOW CHANGING. NOW EVERY TIME YOU GO HOME, YOU ARE NOT JUST ON YOUR TV, YOU ARE SPENDING A LOT OF TIME ON YOUR PHONE AS WELL. THEY ARE DEFINITELY COMPETING WITH THE LIMITED SCREEN TIME PEOPLE HAVE. FOR THEM, THEY ARE ALSO TRYING. THEY ARE TRYING TO STRENGTHEN THEIR ENGAGEMENT. THEY ARE TRYING TO DO A LOT OF THE LIFE ADVANCE, PODCAST AND MOBILE FEATURES. IT WILL DEFINITELY BE A LONG-TERM CHALLENGE FOR THEM. ED: THEY ARE TALKING ABOUT USING AI IN THREE DIFFERENT WAYS. IMPROVING THE PRODUCT, LOWERING COSTS, AND EXPANDING MARGINS. YOU TALKED ABOUT MARGINS EARLIER. FOR THE STOCK, WHAT IS MOST MEANINGFUL FOR NETFLIX TO COMMUNICATE ON THEIR USE OF AI? HELENA: I THINK THE USE OF AI IS INEVITABLE BECAUSE IT IS NOW EXTENDING TO ALL ASPECTS OF THE INDUSTRY. I THINK THE REASON THAT THE MARKET IS REACTING VERY NEGATIVELY IS BECAUSE THEY ARE GIVING A RELATIVELY SOFTER GUIDANCE FOR THE THIRD QUARTER REVENUE. I WOULD SAY IT IS STILL CONSIDERED PRETTY HEALTHY GROWTH. JUST COMPARED TO THE GROWTH WE HAVE BEEN SEEING EARLIER, IT IS CONSIDERED SLIGHTLY SOFTER. NETFLIX IS A BUSINESS WHERE EVERYTHING IS GOING RIGHT, SO NATURALLY INVESTORS EXPECTATIONS ARE RELATIVELY HIGH. THEY ARE REALLY NOT TOLERATING ANY OF THE MINOR DISAPPOINTMENTS THAT COMES WITH IT. ANOTHER REASON IT IS NOT DOING WELL IS BECAUSE THE CONTENT IS NOT AS COMPELLING COMPARED TO LAST YEAR. ED: SORRY TO INTERRUPT. I'M SO GLAD YOU ENTERED THE CONTENT SLATE. I GET YOU HAVE TO MODEL ON CERTAIN METRICS THE GROWTH OF THIS BUSINESS, BUT WHAT ARE YOU WATCHING? IT STILL COMES DOWN TO CONTENT IS KING. HOW IS NETFLIX DOING ON THAT FRONT? HELENA: I WOULD SAY THE CONTENT SLATE IS NOT EXCITING WHEN YOU COMPARED TO LAST YEAR. THIS YEAR, THEY DO HAVE SOME EXCITING LIKE 72 HOURS WITH KEVIN HART AND HAVE NFL GAMES LEADING UP. COMPARED TO LAST YEAR, THEY HAD "WEDNESDAY" AND ALL THIS EXCITING CONTENT. THEY HAD SQUID GAME. ALL OF THESE ARE VERY POPULAR THEY MANAGED TO BRING A LOT OF SUBSCRIBERS ONTO THE PLATFORM BECAUSE OF THAT. NETFLIX IS A COMPANY THAT HAS A LOT OF HIGH EXPECTATIONS. INVESTORS ARE CONSTANTLY LOOKING FOR SIGNS THERE IS GOING TO BE RE-ACCELERATION IN THE WEAKNESS. IN THIS SECTOR, WE ARE NOT REALLY SEEING THAT. ED: WE JUST SHOWED LUCAS SHAW WHO LEADS OUR COVERAGE OF SCREEN TIME. HE WAS WRITING ABOUT HOW NETFLIX CANNOT GET ITS AUDIENCE TO STICK WITH A SHOW. THEY START AND DO NOT STICK WITH IT. WHY DOES THAT MATTER? HELENA: IT DOES MATTER BECAUSE IT COMES DOWN TO YOUR ABILITY TO PERSUADE YOUR CUSTOMER TO STAY ON YOUR PLATFORM. I WILL SAY RIGHT NOW, I DO NOT SEE CLEAR EVIDENCE THAT ENGAGEMENT IS DETERIORATING. ACTUALLY, THERE ENGAGEMENT IS STILL IMPROVING COMPARED TO 2025. I WOULD SAY RIGHT NOW THERE IS NO CLEAR SIGN THEY ARE LOSING ON THAT. OVERALL, WOULD STILL SAY WE ARE VERY POSITIVE ON NETFLIX ESPECIALLY WITH THE RECENT PRICE CORRECTION. RIGHT NOW, THERE IS A STOCK PULLBACK. WE THINK IT IS A GOOD OPPORTUNITY. ED: HELENA LONG OF PHILLIP SECURITIES BACK ON "BLOOMBERG TECH," THANK YOU ON ALL THINGS NETFLIX. WHY GEMINI'S LATEST DELAY HAS INVESTORS QUESTIONING WHETHER THE COMPANY IS LOSING GROUND IN THE AI RACE. THIS IS "BLOOMBERG TECH." ♪ >> TIME FOR TALKING TECH. IT IS ON TRACK TO BE CHINA'S FIRST AI WITH $1 BILLION IN ANNUAL SALES. IT ACHIEVED FULL SALES TARGET IN JULY. IT IS IN ITS SECOND ROUND OF FINANCING THIS YEAR AND SEEKING CAPITAL FOR INVESTORS AT A $188 BILLION VALUATION. THAT WOULD MARK A 40% JUMP ACHIEVED EARLIER THIS YEAR. IT HAS LONG BEEN REGARDED AS AN ATTRACTIVE CANDIDATE FOR IPO. THE JAPANESE MEMORY CHIP MAKER HAS LOST MORE THAN HALF OF ITS MARKET VALUE FROM ITS JUNE PEAK. AT THAT POINT, THE COMPANY WAS JAPAN'S HIGHEST VALUED FIRM. CONCERNS THE RALLY HAS GONE TOO FAR. ED: THE AI RACE IS MOVING SO FAST THAT EVEN A FEW MONTHS MAKE A BIG DIFFERENCE. BLOOMBERG IS REPORTING GOOGLE IS MONTHS BEHIND ON THE RELEASE OF ITS NEXT FLAGSHIP AI MODEL, RAISING NEW QUESTIONS ABOUT WHETHER IT IS FALLING BEHIND RIVALS OPENAI AND ANTHROPIC. MANDEEP SINGH WRITING A REACTION PIECE TO THE REPORT. THIS COULD BE ASSIGNED SIGN RECENT HIGH-PROFILE DEPARTURES HAVE HURT FRONTIER DEVELOPMENT. MANDEEP JOINS US NOW. AN INTERESTING AND DETAILED REPORT FROM BLOOMBERG NEWS. GO DEEPER INTO IT. MANDEEP: WE HAVE SEEN FABLE 5 AND THE LATEST OPENAI MODEL HAVE HAD A STEP UP IN TERMS OF FUNCTIONALITY. CODING IS WHERE GOOGLE SEEMS TO HAVE MISSED THE BOAT WITH GEMINI. I WOULD EXPECT GEMINI TO BE RELEASED SOONER AND NOT BE TALKING ABOUT KIMI 3 STOXX [INDISCERNIBLE] A STEP UP. ED: I'M GOING TO JUMP IN HERE BECAUSE I THINK MANDEEP'S ZOOM IS HITTING TECHNICAL ISSUES. SORRY ABOUT THAT, MANDEEP. WE WILL COME BACK TO THE STORY. THE RACE IN MODEL DEVELOPMENT WITH KIMI K3 IS TODAY'S TOP STORY. THE COMPANY IS PREPARING A SWEEPING UPDATE TO ITS IPAD LINEUP, PLANNING ITS BIGGEST IPAD MINI OVERHAUL IN FIVE YEARS COMPLETE WITH AN OLED DISPLAY. SPARE A THOUGHT FOR IPAD MINI. IT HAS BEEN A WHILE SINCE WE TALKED ABOUT THAT PRODUCT LINE. A LOT OF DETAIL IN THE NEW STRATEGY. WHAT DO WE NEED TO KNOW? >> APPLE HAS A JAMPACKED PORTFOLIO THE NEXT FEW YEARS. PART OF THAT IS AN OVERHAUL OF THE IPAD LINEUP. YOU'LL SEE ONE OF THE BIGGEST UPDATES TO THE IPAD MANY WHICH MEANS THE DISPLAY QUALITY WILL BE UP THERE WITH THE IPHONE OR IPAD PRO. THIS HAD BEEN A LONG TIME COMING, SOMETHING TECH ENTHUSIASTS HAVE BEEN CLAMORING FOR. YOU WILL SEE UPDATES FOR ALL THE OTHER IPODS NEXT YEAR THAT INCLUDES NEW IPAD AIRS AND A NEW ENTRY-LEVEL IPAD. IN THE BACKDROP, APPLE HAS MADE ALL OF THE IPADS MORE EXPENSIVE BECAUSE OF THE MEMORY SHORTAGE. SOME WENT UP BY $100, SOME $150, SOME $200. NOW YOU NEED UPGRADES TO THE PRODUCT TO MAKE THEM MORE WORTHWHILE IN THE COMPETITIVE ENVIRONMENT WHERE YOU HAVE GREAT TABLETS FROM OTHER COMPANIES LIKE AMAZON, SAMSUNG, AND THE LIKE. ED: THIS IS THE FIRST OPPORTUNITY YOU AND I HAVE HAD TO DISCUSS APPLE'S AI PLAN FOR CHINA. THERE WERE SOME DEVELOPMENTS THIS WEEK IN HOW THEY ARE ABLE TO PUT AN AI PRODUCT INTO THAT MARKET. COULD YOU EXPLAIN THE BASICS? MARK: RIGHT NOW APPLE INTELLIGENCE INSIDE THE UNITED STATES AND THE REST OF THE WORLD FOR THE MOST PART USES MODELS FROM APPLE ON DEVICE, IN THE CLOUD, AND THERE ARE PARTNERS FOR SOME FEATURES THAT APPLE DOES NOT DO SO WELL. SEARCH, THEY WORK WITH GOOGLE AND OPENAI AS A FALLBACK FOR SIRI. IF YOU ASK SOMETHING IT DOES NOT KNOW THE ANSWER TO, IT WILL QUERY CHATGPT IF YOU ALLOW IT TO. FOR CHINA, FOR SEARCH, THEY ARE WORKING WITH BAIDU. THE OPENAI REPLACEMENT, THEY ARE WORKING WITH BAIDU. CHATGPT IS NOT AVAILABLE IN THAT PART OF THE WORLD. THEN THERE IS THE ALIBABA COMPONENT. THE PHONES IN CHINA WILL CONTINUE TO USE THE ON DEVICE APPLE MODELS, BUT THERE WILL BE A LAYER ON TOP USING ALIBABA AI TECHNOLOGY THAT I CALL A CENSORSHIP FILTER. THIS WILL KEEP THE PHONE IN CONSTANT CONNECTION WITH THE CHINESE GOVERNMENT. AS THERE ARE UPDATED MODELS HITTING THE IPHONE, APPLE IS ALWAYS UPDATING MODELS IN THE BACKGROUND, THOSE WILL NEED TO BE APPROVED EVERY SO OFTEN WITH THE CHINESE GOVERNMENT. THIS TYPE OF CENSORSHIP FILTER IS WHAT OTHER COMPANIES IN CHINA WHO OPERATE HAVE TO DO, WHILE WEIGHT AND THE OTHER PHONE PROVIDERS WHILE WEIGHT -- HUAWEI AND OTHERS. ED: A LITTLE OVER A MONTH AFTER THE BLOCKBUSTER IPO, SPACEX'S EXPERIENCING SETBACKS. THE STOCK REACTED. THE STOCK IS GENERALLY UNDER PRESSURE. THAT STORY NEXT. A REMINDER, OVERNIGHT, MOONSHOT RELEASED KIMI K3. THERE IS A BIG FOCUS ON TRAINING COSTS AND ECONOMICS. RIGHT NOW, THE MARKET IS ASKING ITSELF, DO WE NEED TO RECONSIDER ALL OF THE MONEY GOING INTO AI FROM AN AMERICAN PERSPECTIVE? AND DO WE NEED TO THINK AGAIN ABOUT THE MOTIVES FOR SOME OF THESE AMERICAN COMPANIES? WE ARE GOING TO HAVE THAT CONVERSATION NEXT. NOW, IF I'M LUCKY, WE ARE GOING TO CUT TWO TO BEAUTIFUL PICTURES OF SAN FRANCISCO. WE WILL BE RIGHT BACK. THIS IS "BLOOMBERG TECH." ♪ ED: WELCOME BACK TO BLOOMBERG TECH. U.S. TECHNOLOGY STOCKS UNDER PRESSURE. NASDAQ 100 DOWN SIGNIFICANTLY BUT ON THE WEEK THE SUCH A SETTING FOR ITS BIGGEST WEEKLY DROP SINCE APRIL OF 2025. NASDAQ 100 IS NOT FAR OFF THAT COME ABOUT A PERCENTAGE POINT FROM BEING IN THE REALM OF THE SAME MILESTONE. CHINA'S MOON CHART WITH A SURPRISE RELEASE OF KIMI K3, THE MARKET RECALCULATING A LOT OF THE SPENDING THAT HAS, IS, AND WILL HAPPEN ON AI DEVELOPMENT IN THE INFRASTRUCTURE SIDE. NVIDIA THE BIGGEST POINT DRAG. ONE STORY WHICH IS KIND OF CHOPPED AND CHANGED IS THAT ONE MOMENT IN THE SESSION APPLE OVERTOOK NVIDIA AS THE WORLD'S MOST VALUABLE COMPANY. WE WILL DO THE MATH ON THAT A LITTLE BIT. IT'S CLOSE. AGAIN, WE ARE IF YOU ARE A FEW HOURS FROM THE SESSION BEING CLOSED. OVERNIGHT, SPACE. A STARSHIP ROCKET MISSION FAILED TO LAUNCH YESTERDAY. IT WOULD HAVE BEEN ITS 13TH STARSHIP TEST FLIGHT. RIGHT AT LIFT OFF PLUMES OF SMOKE ERUPTED, OR STEAM FROM THE LAUNCH TOWER. THERE WAS AN ENGINE FAILURE. THIS IS T NOT THE FIRST TIME. WHAT ELON MUSK SAID IS THAT THE NEXT LAUNCH ATTEMPT WOULD HOPEFULLY COME IN THE NEXT FEW DAYS. WHAT WAS INTERESTING ABOUT IT IN THE MOMENT AND AFTER HOURS TRADING THE STOCK REACTED IMMEDIATELY AND THERE WAS A DECLINE OF ABOUT 4%. ALREADY IN THE SESSION YESTERDAY SPACEX'S SHARES HAD DROPPED BELOW THE IPO PRICE. THE COMPANY IS FACING TURBULENCE A MONTH AFTER ITS HISTORIC IPO. DAMPENING EUPHORIA POTENTIALLY FOR NEWLY PUBLIC COMPANIES. JOINING US NOW IS ANTHONY HUGHES. WE ARE SHOWING IT THE SCREEN. JUNE 12, TO PRESENT DAY. WHAT HAS BEEN THE MARKET'S DIGESTION OF THE BIGGEST IPO OF ALL TIME? ANTHONY: AFTER ALL THE HYPE LAST MONTH WE HAVE SEEN A BIT OF A HANGOVER IN THE IPO MARKET WITH THE MOMENTUM TRADE COMING OFF AT THE SAME TIME. THE AI TRADE COMING OFF. IT IS NOT UNUSUAL THAT THE BIG IPO MIGHT SORT OF PULL BACK HERE GIVEN SOME OF THE TECHNICAL DYNAMICS ONCE THE PRICE SORT OF SETTLES DOWN IN THE MARKET SETTLE DOWN THAT THE STOCK COMES BACK. OBVIOUSLY IT'S A BIT CONCERNING FOR INVESTORS IN SPACEX THAT IT'S ALREADY TRADING AT A DISCOUNT OF ABOUT 3% TO THE IPO PRICE. WE HAVE ALL THE STOCK TO COME OUT FROM LOCKUP AS WELL. OVERALL THE IPO MARKET HAS LOST A LOT OF STEAM HERE MAINLY BECAUSE OF SPACEX AND THE AVERAGE RETURN FROM IPOS THIS YEAR HAS REALLY EVAPORATED TO ZERO. ED: I WOULD MAKE A POINT THAT SPACEX IS DOWN 5% IN THE FRIDAY SESSION IS IN PART BECAUSE OF THE SCRUBBED STARSHIP TEST 13 LAST NIGHT. WE ARE MEASURING THE SUCCESS OF AN IPO BASED ON THE FIRST 30 DAYS OF TRADING. FOR THE BANKERS AND THE INVESTORS THAT PARTICIPATED THIS WAS A SUCCESS. THEY WOULD SAY THEY PULLED THIS OFF WELL. ANTHONY: YEAH. AT THE TIME WHEN SPACEX WENT PUBLIC IT WAS A VERY WELL EXECUTED PROCESS. I THINK AS TIME GOES ON AND THE STOCK IS GOING TO TRADE MORE ON THE NEWS, THE FUNDAMENTALS AND NEWS FLOW HERE. THERE HAS BEEN SOME BAD NEWS FLOW INITIALLY HERE BUT IT IS A LONG -- FOR A LOT OF INVESTORS THAT GOT BEHIND SPACEX IT IS A LONG-TERM PROPOSITION. ANYONE FAMILIAR WITH WHAT HAPPENED WITH TESLA KNOWS THERE'S PLENTY OF UPS AND DOWNS ALONG THE WAY. INVESTORS WILL BE HOPING THE PRICE PERFORMS A LOT BETTER. ED: ANTHONY HUGHES ON SPACEX, THANK YOU VERY MUCH. FROM SPACEX TO THE NEXT GENERATION IS SPACE START UPS, TEXAS IS BECOME OF THE CAPITAL OF THE CAPITAL THE COMMERCIAL SPACE INDUSTRY. WHAT IS DRIVING THAT BOOM AND WHAT DOES IT MEAN FOR THE STATE'S ECONOMY? BLOOMBERG ORIGINALS HAS THE STORY. >> FOR MOST OF SPACEFLIGHT HISTORY NASA AND GOVERNMENT OR NATIONSTATES WERE REALLY THE BIGGEST PLAYERS IN CHARGE. THAT HAS RECENTLY SHIFTED. >> THIS WAS A FRONTIER WE BELIEVE FOR A LONG TIME. IT WAS ONLY THE PLACE FOR GOVERNMENTS TO BUILD AND INNOVATE. >> WE ARE SEEING A DEMOCRATIZED SPACE SECTOR WITH A LOT OF SMALLER PLAYERS AND A LOT OF LARGER COMMERCIAL PLAYERS AS WELL. >> WITH THE GLOBAL SPACE ECONOMY CURRENTLY VALUED AT OVER $650 BILLION, ONE AMERICAN STATE IN PARTICULAR IS BETTING BIG ON THIS RAPIDLY GROWING SECTOR. >> GOVERNOR ABBOTT COMING TO YOU FROM THE GREAT STATE OF TEXAS. >> TEXAS IS A GOOD SNAPSHOT OF THE NEW DIRECTION THAT SPACE INDUSTRY IS TAKING. THE BIGGEST TENANT IN TEXAS IS SPACEX. THEY HAVE SET UP SHOP WITH THEIR STARBASE FACILITY ON THE SOUTHERN TIP OF TEXAS. ANOTHER BIG TENANT IS BLUE ORIGIN IN WEST TEXAS OUTSIDE OF VANHORN. AND YOU ALSO HAVE A BIG CLUSTER OF COMPANIES IN HOUSTON, THE HOME OF. SPACE, INTUITIVE MACHINES, AND IN CENTRAL TEXAS YOU HAVE FIREFLY AEROSPACE WITH ITS ROCKET FACILITY AND DEVELOPMENT CENTER. >> LAST YEAR THE TEXAS SPACE COMMISSION GAVE OUT $150 MILLION IN GRANTS TO SUPPORT SPACE BUSINESSES IN THE STATE. IT IS DUE TO DOUBLE THAT BY THE END OF THIS YEAR. >> WILL WE WANTED TO DO WAS MAKE IT WELL-KNOWN THAT THOSE COMPANIES WHO HAD ALREADY DECIDED TO BE SET UP HERE IN TEXAS, THAT THEY DID NOT LEAVE AND ARE ALSO HELPED TO EXPAND THEIR EXISTING FOOTPRINT. >> AND LIFT OFF. THE CREW OF ARTEMIS II NOW BOUND FOR THE MOON. >> FROM AN ASSET STANDPOINT, BECAUSE OF THE COMPETITION THEY ARE LOWERING THE OVERALL COSTS. THAT ALLOWS US TO BE ABLE TO DO MORE. >> HUMANITY'S NEXT GREAT WAY TO BEGIN. ED: WATCH THE FULL BLOOMBERG ORIGINALS STORY ONLINE AND ON THE BLOOMBERG TERMINAL. LET'S GET BACK TO APPLE WHO AT ONE POINT SURPASSED NVIDIA THIS MORNING AS THE WORLD'S MOST VALUABLE COMPANY. LIKELY BENEFITING FROM THIS BROADER ROTATION IN THE TECH SECTOR OUT OF THE BIG SPENDERS ON AI. JOINING US IS RYAN FOR CELICA. I KEEP GLANCING AT THE TERMINAL. CHANGING HANDS A FEW TIMES BUT I THINK NVIDIA IS NOW SLIGHTLY BACK AHEAD. THAT HAS BEEN THE STORY. RIGHT? APPLE DOESN'T HAVE THE BIG DOLLAR STORY AROUND AI. NVIDIA HAS BEEN THE PRINCIPAL BENEFICIARY OF EVERYTHING IN THE LAST FOUR YEARS. RYAN: THAT IS WHAT IS INTERESTING ABOUT THIS TRADE RIGHT NOW. WHAT USED TO BE SEEN AS A REAL RISK FOR APPLE, THAT IT WAS NOT AGGRESSIVELY PURSUING AI THE WAY THAT SOME OF THE OTHER BIG CAP TECH COMPANIES ARE, THAT HAS BECOME A REAL ASSET. IT DOESN'T HAVE THE CAPEX RISK THAT'S BEING PRICED INTO MICROSOFT, THE TYPICAL EXAMPLE. IT'S BEEN BENEFITING AS A SAFE HAVEN. THE CHIP SPACE UNWIND AND WE SEE QUESTIONS ABOUT HYPERSCALERS SIDE OF THE MARKET, IT'S BEEN PUSHING HIGHER. I THINK IT IS UP MORE THAN 20% AND A COUPLE OF WEEKS. THAT'S A HUGE GAIN FOR A COMPANY OF THIS SIZE. IT'S REALLY BECAUSE OF ITS OWN UNIQUE PATH THAT IT'S CHARTING WITH NAI. IT DOES HAVE THE FOLDABLE IPHONE COMING OUT THIS YEAR. IT HAS THE AGENTIC AI SISRI DIGITAL ASSISTANT BUT WE WILL START TO SEE A BIG IPHONE UPGRADE CYCLE GOING OUT THAT WILL HELP OVERSHADOW THE INCREASE IN HIGH MEMORY TO PRICES. IT DOES SEEM LIKE THE FACT THAT APPLE IS NOT PARTICIPATING IN AI THE WAY OTHER S ARE IS THIS TO MACHINE THE COMPANY. ED: I SEE THE PHILADELPHIA SEMICONDUCTOR INDEX ON THE WEEK ON TRACK FOR ITS BIGGEST WEEKLY DROP SINCE APRIL OF 2025. WE HAVE TALKED A LOT ABOUT MOONSHOT AND KIMI K3. MORE TO COME ON THAT BUT YOU AND THE TEAM WRITING THAT THE STOCK TO SET TO FALL INTO A BEAR MARKET. THAT IS BIG. RYAN: THERE'S BEEN A REAL REVERSAL AND MOMENTUM IN THE CHIP SPACE. THERE'S CONCERNS ABOUT THE INDEX UP SOMETHING NEARLY DOUBLE YOUR TODAY. A HUGE GAIN AND STILL UP QUITE SIGNIFICANTLY FOR THE YEAR, EVEN THOUGH IT HAS PULLED BACK SOME. THERE'S A LITTLE BIT OF PROFIT TAKING REVERSAL IN MOMENTUM. AS WE ARE DISCUSSING THIS WHOLE QUESTION ABOUT HYPERSCALER R.O.I., THAT IS FEEDING INTO THE CHIP SPACE AS WELL. IF THE COMPANIES DOING ALL THE SPENDING ON AI ARE NOT SEEING A DRAMATIC RETURN ON THAT, IF IT IS NOT FLOWING THROUGH TO THEIR REVENUE, THE ISSUE IS, ARE THEY GOING TO START PULLING BACK ON SPENDING? IS THE PEAK EARNINGS BEING PRICED INTO THE CHIP SPACE RIGHT NOW? WHERE DID THEY GO FROM THERE IF THE HYPERSCALER START PULLING BACK? CHIP STOCKS LIKELY WAS HE WEAKER GROWTH GOING FORWARD IS THE CONCERN. ED: BRIAN, THANK YOU VERY MUCH INDEED. COMING UP, LET'S TALK ABOUT PRIVATE MARKETS. ONE OF THE OLDEST VENTURE FIRMS IN THE WORLD JUST RAISED $1.5 BILLION FOR ITS 80TH FUND. THERE'S A LOT OF RELEVANCE TO WHAT IS HAPPENING AROUND THE WORLD. SAAM MOTAMEDI AT GREYLOCK WILL BE HERE ON BLOOMBERG TECH. STAY WITH US. THIS IS BLOOMBERG TECH. ♪ GREYLOCK PARTNERS RAISED $1.5 BILLION FOR ITS 18TH FUND DEDICATED TO FOUNDERS AND THE EARLIEST STAGES OF AI, CYBERSECURITY, AND FINTECH. JOINING US IS GREYLOCK GENERAL PARTNER SAAM MOTAMEDI. IT IS GOOD AND TIMELY TO HAVE A DEEP MARKETS AND CAPITAL CONVERSATION. IN AGGREGATE, WE SEE A LOT OF THE MOST ESTABLISHED FIRMS RAISING FUNDS WITH REGULARITY. THIS IS THE 18TH FUND AT SOME SCALE. EARLY-STAGE FUND, $1.5 BILLION. WHAT DO WE INFER FROM THAT? SAAM: THANKS FOR HAVING US ON THE SHOW. WE JUST LAUNCHED OUR 18TH FUND. GREYLOCK OVER THE LAST SIX DECADES HAVE BEEN PARTNERING WITH ENTREPRENEURS WHEN COMPANIES GET STARTED, COMPANIES LIKE AIRBNB, FACEBOOK. AND WE ARE EXCITED TO BACK A NEW GENERATION OF AI ENTREPRENEURS. WE HAVE PARTNERED WITH MANY OF THE EARLY AI LEADERS, DATING BACK MANY YEARS BEFORE AI WAS OBVIOUS. REWIND TO 2019, WE BACKED BASE 10, SERVING SOME OF THE LEADING APPLICATION COMPANIES. WE BACKED CRUST AI, ONE OF THE LEADERS IN SERVICE AI. WHEN CALLING MARRIOTT, WE ARE TALKING TO A CRUST AI AGENT. WI THINK ONE OF THE BENEFITS OF OUR HISTORY IS WE HAVE SEEN MANY OF THESE TECHNOLOGY WAVES. WHEN WE THINK ABOUT THE AI WAVE AND CONNECTED BACK TO THE MOBILE WAVE, WE ARE ONE TO TWO YEARS AFTER THE IPHONE MOMENT. I THINK WE WILL LOOK FORWARD AND MANY OF THE DEFINING COMPANIES OF THIS GENERATION HAVE YET TO GET STARTED. THIS FUND IS ALL ABOUT FINDING THOSE ENTREPRENEURS AND HELPING THEM BUILD. ED: I'M CURIOUS ABOUT WHAT COMPANIES THEY ARE FORMING. YOU GOT INTO ANTHROPIC IN SERIES F AND LATER ROUNDS. THOSE ARE THE LEADING FRONTIER LABS. WITH THE NEW 18TH FUND, YOU ARE NOT NECESSARILY GOING AFTER THE MODEL LAYER. WHAT ARE YOU FOCUSED ON? SAAM: WE THINK IS IT -- WE THINK OF IT AS THREE LAYERS AND WILL INVEST IN ALL THREE. WE SEE NEW COMPANIES GETTING BUILT AROUND NEW DATA DOMAINS AND APPROACHES. WE WILL BACK NEW COMPANIES AT THAT LAYER. THERE IS A BIG OPPORTUNITY IN INFRASTRUCTURE. THE ENTIRE STACK WILL BE REWRITTEN AROUND AGENTS. TODAY WE HAVE COMPANIES LIKE BASE 10 AND INFERENCE, SNORKEL, AND DATA. WE BELIEVE WE WILL SEE AN AGENT CLOUD GATE CREATED. JUST LIKE WITH THE CLOUD, WE WILL SEE SIMILAR SERVICES FOR THESE NEWLY WORK -- THESE NEW WORKLOADS. AND ON TOP OF THAT, APPLICATIONS. WE ALREADY HAVE COMPANIES BUT WE WILL SEE A PROLIFERATION OF APPLICATION COMPANIES NOW THE AGENTS ACTUALLY WORK. WE ARE SIX MONTHS INTO MODELS THAT CAN POWER LONG-RUNNING AGENTS. WE ARE SEEING AMAZING RESULTS. RESOLVE AI BUILD AGENTIC ON-CALL ENGINEERS. COINBASE, DOORDASH, FIREWORKS, ENGINEERS DO NOT HAVE TO WAKE UP IN THE MIDDLE OF THE NIGHT WHEN THERE IS AN INCIDENT BECAUSE THE RESOLVE AGENT CAN HANDLE IT. THAT IS AN EXAMPLE OF AGENTIC AI HAVING A HUGE IMPACT. WE ARE JUST GETTING STARTED IN THAT YEAR OF TECHNOLOGY. ED: WE NEED TO TALK ABOUT MOONSHOT AND KIMI K3. PUBLIC MARKETS IS WHERE YOU SEE THE DRAMA. WHAT IS YOUR INTERPRETATION OF THAT? WHY A $20 BILLION STARTED FROM CHINA TOPPING A BENCHMARK AND PEOPLE LOOKING AT THE ECONOMICS AS CAUSE FOR THIS REACTION? SAAM: I WOULD START BY SAYING IT WAS AN AMAZING RELEASE YESTERDAY. LARGEST TO BE RELEASED, 2.8 BILLION PARAMETERS. THEY SHOWED A LOT OF INTERESTING TECHNIQUES FROM AN EFFICIENCY PERSPECTIVE. IT IS REALLY IMPRESSIVE. I THINK IT IS GREAT MODELS LIKE THAT AND THE ONE THAT CAME OUT THE DAY PRIOR CONTINUE TO GIVE VIBRANCY TO THE OPEN SOURCE ECOSYSTEM WHICH IS AN IMPORTANT PART OF OUR OVERALL AI ECONOMY. I THINK THE REACTION OVER THE LAST 24 HOURS IS PERHAPS PREMATURE. A COUPLE OF POINTS. IT REMINDS ME OF WHEN THE DEEPSEEK MOMENT HAPPENED LAST YEAR. WHEN WE LOOK AT THE NEW KIMI MODEL, THERE ARE COUPLE THINGS. BENCHMARKS ARE IMPERFECT. YOU CAN TAKE A MODEL AND MAKE IT VERY STRONG ON A SET OF BENCHMARKS. I DON'T THINK IT IS UNTIL IT HAS TIME TO PERCOLATE IN THE REAL WORLD WE GET A TRUE SENSE FOR THE TRADE-OFFS AND WHAT REAL-WORLD PERFORMANCE LOOKS LIKE. THE SECOND IS THE DISCUSSION AROUND COST. I THINK THE DISCUSSION MISSES THE POINT. IT IS VERY FOCUSED ON TOKEN COST. WE THINK ABOUT THINGS MORE IN TERMS OF TASK COST. NOT EVERY TOKEN IS EQUAL. I WOULD MAKE TWO POINTS AS IT RELATES TO THE COST PROFILE. KIMI K3 IS MUCH MORE EXTENSIVE PER TOKEN THAN KIMI K2. ED: WE DO NOT KNOW WHAT IT COSTS TO TRAIN KIMI K3. WE HAVE AN IDEA ON K2. SAAM: CORRECT. THE PER TOKEN COST IS MORE. IT IS NOT PARTICULARLY TOKEN EFFICIENT. IT USES MANY MORE TOKENS THAN THE OPENAI OR ANTHROPIC MODEL. I THINK THIS CONCLUSION IT WILL LEAD TO PRICE EROSION FOR THE FRONTIER -- ED: IN THIS CASE, LET'S SAY IT IS ANTHROPIC AND OPENAI. SOME MAKE THE ARGUMENT IF A $20 BILLION VALUATION CHINESE START UP, WE DON'T KNOW THE TRAINING COST, BUT THEY ARE SAYING $3 PER MILLION TOKENS ON THE INPUT SIDE. IF THEY CAN DO THAT, WHY ARE WE VALUING ANTHROPIC AT NEARLY $1 TRILLION? SAAM: I THINK BOTH ANTHROPIC AND OPENAI HAVE MULTIPLE MODES. THEY HAVE SIGNIFICANT REVENUES. THESE ARE THE FASTEST GROWING COMPANIES IN HUMAN HISTORY. THE REVENUES ARE NOT JUST ON THE BACK OF THE MODELS BUT FIRST PARTY PRODUCTS. THE LAST TIME I WAS ON THE SHOW, YOU LOOK AT THE SUCCESS ANTHROPIC HAS HAD WITH CLAUDE CODE AND CLAUDE TAG. IT AND OPENAI ARE FULL STACK AI COMPANIES. ED: IT HAS BEEN TOO LONG SINCE YOU'VE BEEN ON THE SHOW, TWO YEARS. WE ASSUME THE BEST MODEL WORKS. IS IT AS SIMPLE AS THAT? SAAM: IT DEPENDS ON HOW YOU TO FIND BEST MODEL. I WOULD BE CAREFUL TO JUMP TO THE CONCLUSION KIMI IS NOT COMPETITIVE WITH THE BEST. ON SOME BENCHMARKS IT RELEASED, IT IS COMPETITIVE WITH ONE GENERATION PRIOR. WE DO NOT KNOW WHAT IS COMING OUT FROM ANTHROPIC AND OPENAI IN THE COMING MONTHS. IT HAS BEEN REPORTED THERE ARE SIGNIFICANT NEW RELEASES COMING OUT FOR THOSE MODELS. WE HAVE A PARTICULAR CHECK POINT IN TIME WE ARE COMPARING IT TO. I THINK WE WILL SEE A LOT OF EXCITING RELEASES IN THE COMING MONTHS. ONE BROADER POINT IS IF YOU THINK ABOUT THE OVERALL SIZE OF THE TOKEN ECONOMY, IN 2023, OPENAI'S WAS PROCESSING 30 MILLION TOKENS PER DAY. IN MARCH OF 2026, THEY ANNOUNCED 15 MILLION. IN LESS THAN THREE YEARS OF GROWTH 50 TIMES. I THINK WHEN WE ARE TALKING IN 2030, THE OVERALL TOKEN ECONOMY WILL BE TWO ORDERS OF MAGNITUDE LARGER. THERE IS ROOM FOR THE ECONOMY AND APPLICATION LAYER TWO GROWTH. THE ONLY MISTAKE ONE CAN MAKE IS UNDERESTIMATING THE OVERALL SIZE OF THE WAVE. ED: I HOPE TO HAVE YOU BACK WITH SOME REGULARITY. CONGRATULATIONS ON THE FUND AND YOUR SUCCESS AT THE FIRM. COMING UP, FORGET SUPERHEROES. CHRISTOPHER NOLAN AND THE BLOCKBUSTER BUSINESS NEXT. THIS IS "BLOOMBERG TECH." ♪ ED: LET'S GET BACK TO NETFLIX. THEY SAY THE RESULTS REINFORCE THE BEARISH NARRATIVE, SEEMING A SLOWDOWN IN REVENUE GROWTH WHILE PLATEAUING ENGAGEMENT KEEPS SENTIMENT SUBDUED. MANDEEP SINGH THE AUTHOR OF THAT RESEARCH. THE MAIN POINT? >> THE MAIN POINT IS THEY SOMEHOW HAVE TO TURN THE NARRATIVE AROUND ON THE DECELERATION IN REVENUE GROWTH. WE HAVE SEEN IT COME DOWN FROM 16% IN THE FIRST QUARTER TWO 14% IN THE SECOND QUARTER AND NOW 11.7%'S GUIDANCE FOR THE THIRD QUARTER. THE NARRATIVE IS ANCHORED BY SOLID DOUBLE-DIGIT MID-TEENS GAINS. UNLESS WE SEE THAT PICKING UP ALONG WITH A PICKUP IN ENGAGEMENT AND SUBSCRIBER GROWTH, I THINK IT WILL BE HARD TO GET BEHIND THE WHOLE NETFLIX THESIS. ED: AFTER THE SHOW, THE PRODUCER IS RUNNING TO AN IMAX SOMEWHERE IN NEW YORK CITY TO WATCH "THE ODYSSEY." IS THIS GOING TO BE THE BIG ONE OF THE YEAR? >> IT ABSOLUTELY IS. BELIEVE IT OR NOT, THE TICKETS WENT ON SALE OVER A YEAR AGO. THEY SOLD OUT WITHIN MINUTES OF THE IMAX AND PREMIUM FORMATS. THIS IS GOING TO BE HUGE. WE GOT THE NUMBERS FOR THE THURSDAY PREVIEW RELEASES, HIGHEST EVER THIS YEAR. I THINK THIS COMBINED WITH ALL OF THE BUZZ, THE FACT IT WAS SHOT WITH THE IMAX CAMERA. CHRISTOPHER NOLAN HAS ALWAYS EVENTIZING FILMS. I THINK WE WILL SEE THAT TRANSLATE INTO A STRONG BOX OFFICE. ED: THANK YOU VERY MUCH. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECH." THE PICTURE IN FINANCIAL MARKETS AND EQUITY IS THERE IS A LOT OF RED. WE ARE SIGNIFICANTLY OFF SESSION LOWS. BUT THE CATALYST WAS CHINA'S MOONSHOT RELEASING KIMI K3 AND THAT CAUSING CONCERNS OF WHY WE ARE SPENDING ALL THIS MONEY IN AMERICA IF I START UP IN CHINA CAN DO IT AT A MUCH DEEPER LEVEL -- IF A START UP IN CHINA CAN DO IT AT A MUCH DEEPER LEVEL. NVIDIA DOWN. APPLE LOWER. AT ONE POINT, APPLE WAS THE MOST VALUABLE COMPANY. THIS IS YOUR CALENDAR. THIS IS WHAT WE ARE BRACING FOR. IT STARTS IN EARNEST OVER THE NEXT SEVEN DAYS. DON'T FORGET TO RECAP THE SHOW ON THE PODCAST. YOU CAN FIND IT ON BLOOMBERG PLATFORMS AND ONLINE. HAVE A GREAT WEEKEND. FROM SAN FRANCISCO, THIS IS "BLOOMBERG TECH." ♪