Anthropic in Talks to Raise $30 Billion at $900 Billion Value

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1:46Scarlet Fu:is Ed Ludlow. He's our B-Tech anchor. We tried to convince him to come after. He couldn't walk over. I know, but I think he has to get ready for his own show coming up. So Ed is joining us right now from our San Francisco Bureau. And Ed, the big story here in the Bay Area, in Silicon Valley, is Anthropic, the AI startup. Intox raised$30 billion. That would give it a$900 billion valuation. I mean, this company just gets bigger and bigger, more and more valuable every time we talk about it.

2:15Ed Ludlow:it's been a bit of a roller coaster in the sense that the story started with Ampropik basically rebuffing its investors. Its investors were like kicking down the door saying, let us give you some money and here's how we think you should be valued. And they just weren't interested for quite a number of weeks until this week, where this is like a real live situation. They kind of accept that the idea of raising 30 to 35 billion dollars makes sense right now through the private markets. And, you know, the discussions are around a$900 billion valuation, but probably a fair bit higher than that, which if it happens, you know, we're reporting it could close even by the end of May, it would be the world's most valuable AI startup.

2:56Ed Ludlow:But if you're keeping track, it would mean it would be more valuable than OpenAI, which is a good bit of rivalry to be covering. And after the show's over, I'm going to cruise on over to Sand Hill Road, see some of my buddies there. I want to talk to them about IPOs. I mean, talk to us about the IPO pipeline for all you guys out here. This is going to be a big, big year, potentially. Yeah. So much time spent down Sand Hill Road. It's not just like the VCs and the mutual funds, late-stage private growth equity, but if you are cruising and you're using your Tesla for self-driving, you can almost go that far in a Waymo, actually.

3:35Ed Ludlow:Then the people you meet there are really interesting, and they all have skin in the game around the IPO this week, which is Cerebrus, right? And, you know, evaluation around$35 billion. It's been a real hot ticket. It will be the biggest IPO of the year so far in terms of dollars raised. But, you know, the problem that Cerebrus will have is that we're all waiting on SpaceX and it's very difficult for the market to look past that one that's likely to be late June or July.

4:03Scarlet Fu:To what extent are these AI companies looking at market conditions when they consider listing because for every other company, that would be paramount. But I mean, it feels like we're talking about a different economy entirely for these AI companies.

4:16Ed Ludlow:Yeah. Sometimes it's really important to say like, we just don't know. It's not in the reporting. But if you take Anthropic as an example, we had reported that they would go public in October of this year. Now they're raising a big chunk of change in the private markets. And the sort of broader story was like, why bother going public, right? If the private markets can supply you the liquidity that you need to fund your operations and invest in the compute that you need. No point. There's also the kind of idea that we're in a three line race between SpaceX, OpenAI and Anthropics all go public in a single calendar year.

4:51Ed Ludlow:And like Paul, you'll know there is not infinite liquidity for people that matter to participate in three IPOs at that scale, probably. So the reason I say we don't know is, you know, maybe Anthropics not going to go in October now. Maybe it's next year. Maybe everyone's waiting on SpaceX to see if at that scale Anthropic or OpenAI could pull off an IPO at a valuation that's north of a trillion dollars or whatever it ends up being. And with those two in particular, Scarlett, like really interesting point, there's the public benefit corporation or the charitable arm of each, which complicates the structure of an IPO, which hasn't really been worked out yet as far as I know.

5:33Ed, for better or worse, you are the Elon Musk whisperer. SpaceX, talk to us about the timing of that potential IPO.

5:40Ed Ludlow:Yeah, I mean, we broke the story first week of May, I believe, that they had filed confidentially. And, you know, if we were right about that, which I'm sure we were, then that S1 or that filing will be made public by the SEC very, very soon. Very soon, like in a matter of days. so they could do it in late mid to late June but you know again timing is everything and you know as we speak you know there will be ongoing uh conversations with with investors but remember like look past Elon Musk a little bit SpaceX has got talent beyond him and you know the CFO Brent Johnson handles a lot of that when Shotwell the president um handles all of that um as does Jared Birchall who's like Elon's sort of private finance guy and straddles all his companies So, you know, it's all in the works.

6:57Scarlet Fu:Get the news you need in just 15 minutes. Start your day with Bloomberg Daybreak, the podcast with a global view on the stories that matter. I'm Nathan Hager. And I'm Karen Moscow. Join us each morning for curated stories on current events, politics, business and foreign relations. Plus one conversation on the day's biggest developments all in just 15 minutes. Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter. Listen to Bloomberg Daybreak each morning on Apple, Spotify or anywhere you listen. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m.

7:34Scarlet Fu:Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We're broadcasting live from the Eisner Amper West Coast Real Estate Summit in San Francisco. And out here in SF, it is all about AI. Everybody is into it. It has revitalized this city post-pandemic, which is a beautiful thing because I'm a huge fan of San Francisco. Right now, we're going to check in with Tarun Rossoni, CEO at Groove AI. My notes tell me that Groove is an enterprise AI services platform that helps businesses move from AI experimentation, which is where I am, to full-scale deployment.

8:14Tarun, thanks so much for joining us here. How do you get your clients, the companies you deal with, from experimenting with AI to really deploying it fully in their business? What do you do there? Thank you so much for having me here. So we help companies understand how AI adoption can be improved in their environment, thinking about security, data, and the underlying governance and infrastructure that they need to securely adopt AI in their environment. And to adopt AI within the enterprise, security, privacy, trust, and governance are very important parameters before you get into AI adoption.

8:54Scarlet Fu:So at this conference, the Eisner Ampers West Coast Real Estate Summit, where there's a lot of folks in commercial real estate, they're investors or they're principals. What is your message? What is the message of an AI company to these folks in the real estate industry? Yeah, as you know, AI requires a lot of infrastructure. The underlying infrastructure is energy, data centers, a lot of compute. And the compute requirements are 10 ,000, 100 ,000 X bigger. So real estate group is a very important part of this build-out. And the message here is very simple. There is going to be a lot of demand and needs for these AI inference data centers that are going to grow in the next three to five years.

9:38And it is going to require us to build inference clusters at the edge. the last mile and the edge has always been very important. So the real estate group plays a very big role in that last mile and edge. So when you work with your clients, are you talking to the chief technical officer? Are you talking to the CEO? Are you talking to the board? I mean, my question is, are companies just broadly defined here, how much are they really into AI? At what level are they trying to really grasp it and attack it? Yeah, this is a great question. So at the board level, every board is talking about AI right now.

10:21That's their biggest focus. And AI is compounding. So the sooner you start, the more compounding benefits you derive out of AI. At the C level, every CEO's first concern is, is this something I can trust? Is this going to help me keep my enterprise secure? Is this going to help me take it forward? At the CTO, CIO, CISO level, the concerns are more around how do we make sure our business lines, our service groups can adopt this very efficiently.

10:53Scarlet Fu:And it's going to be at varying rates of adoption for different companies depending on how management feels about it, how committed the staff is as well. But in the physical build-out of AI, the data centers, the infrastructure, we're in California right now, but that's not necessarily where the data centers are being built, right? I mean, it's being clustered across the country. Yeah, so all of the AI data centers that have been built in the last three to five years were purely focused on energy efficiency. Where could they find the lowest cost of energy, and how could they build a massive training cluster?

11:27Scarlet Fu:So that's not California. That's not California. Definitely not California. But as we go from training to inferencing, where everybody starts adopting and using more AI, that is going to require us to build these clusters very close to tier one, tier two cities, because that is where the users are. And that is where the consumption of AI is going to occur. You've mentioned security a couple of times here. I can't even imagine the security risk of AI. I mean, it's bad enough to have somebody's account hacked, but if you're going to have some of these AI agents taking over the world here, I'm thinking Arnold Schwarzenegger type stuff here.

12:07It could get bad out there. How do you think about, what are the security conversations you're having with your clients? Well, the first conversation I have with my clients is, are you using AI to make your security better? And that I think is the more important part.

12:19Scarlet Fu:Are they? Majority of them are not. And that's what we do first is we use AI to actually make your security better. And then we use security in everything you do with AI. So when you start doing that, you automatically improve the trust factor within every enterprise. If you had to give one piece of advice to the folks attending this conference, investors, developers, who are trying to understand how AI fits into what they've built up, what they have been working on, what would it be? I think the first one would be AI is only going to grow from here and it is very real. And every enterprise is going to adopt AI at a much more faster pace than they did with the internet, than they did with the mobile, than they did with the cloud.

13:05We are at a very starting stage of this. So the infrastructure required to build this AI is going to be a massive investment. Think of it like the electrical infrastructure we built in the last 100 plus years in the world. the transport infrastructure we built in the last 100 years in the world. AI should be thought of the same way in terms of the infrastructure buildup. Stay with us. More from Bloomberg Intelligence coming up after this.

13:30Scarlet Fu:What if you could have even more and more and more help to pursue your goals? At LPL Financial, we offer more ways for advisors and their clients to thrive. So what if you could? Paid advertisement investing involves risk, including potential loss of principal. LPL Financial LLC member FINRA SIPC. The Bloomberg Sustainable Business Summit returns to Singapore on July 22nd. Our fifth annual Asia Pacific Summit will explore how business and finance leaders are shaping the next phase of globalization by strengthening resilience, advancing climate adaptation and driving a multi-speed energy transition across Asia's diverse markets.

14:05Scarlet Fu:Join us for solutions driven discussions, interactive workshops and networking opportunities. Learn more at Bloomberg Live dot com slash SBS dash Singapore. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We are broadcasting live from the Eisner Amper West Coast Real Estate Summit here in San Francisco. Before we leave, I got to give some credit to Sebastian, our technical director. Got us all set up out here in San Francisco.

14:41Been so smooth. So smooth. And he makes it done. But now I've got to throw them under the bus big time. I come in this morning. I say, hey, go make a Starbucks run. What do you want? Here we go. Listen to this. Tall matcha. I'm already done at that point. Tall matcha with banana cream cold foam. Don't tell any of my boys back home that I made that order. But you did. You put in the order. And it came back. It looked actually like okay if you like green drinks in the morning. I'm not sure how that works. But we're here in San Francisco. Happy to be here. This is one of my favorite towns. Always has been.

15:10When people come from Europe and say, hey, I've got three or four weeks with the family. Where am I going? I want to say, yeah, do the Vegas, the New York, whatever. You have to spend three or four days in the Bay Area hanging out in San Francisco. That's how cool this part of the world is. Ned Siegel joins us here, Chief of Housing and Economic Development for the City and County of San Francisco. Ned, thanks so much for joining us here. Good morning. Thanks for having me. Tell us how you guys, when you came into office and you looked at the city and the county of San Francisco, what was your to-do list to get the city back?

15:40Well, first of all, San Francisco is the most beautiful city in the world.

15:43Ed Ludlow:Agreed. Second, we have this incredible mindset of innovation and anything is possible with a culture that is so much bigger than our footprint of 850 ,000 people. And so we have all of the tools available to us to realize our potential. And the last year and a half have really been about making it easier for people to do the things that they're best at in San Francisco, cleaning up the streets, making this a safe, great place to raise a family. And so the list always starts with clean and safe because that's foundational to so many of the things that we do, whether it's for a company or for a family.

16:22And then we think about the mental health and drug crises on our streets. And then we think about our economy and all the things we need to do to revitalize our economy. We feel like we're on a really good start.

16:31Scarlet Fu:You work very closely with the new mayor, Dan Lurie, and he has made permitting reform a big, big issue. And this has to do with how easy or in San Francisco's case, how difficult it's been for a small business to open a business, to just be able to get stuff done. What did it look like before? What does it look like now? Well, I'd say we've changed it in two ways. One is there's clearly a mindset in City Hall from people who've been there for decades and those of us who've only been there for a small amount of time that we want to fix the small problems and make it easier. And that message has become crystal clear to small businesses.

17:05So they come to us with ideas. they open a business or a second store that they may not have before because they know that we're on their side and that we're trying to help them. That mindset has helped tremendously. It's not enough though. We've passed 20 pieces of legislation to make it easier to build housing and to start or run a small business. Now get this. If you want to paint your logo on the window of your store, you don't need a permit anymore. I know it sounds like something you maybe didn't need a permit for before, but now you don't need a permit for it today. If you want to put tables and chairs outside your bar or restaurant.

17:39You don't need to come see us once a year when you should be at your bar or restaurant, and you don't need to pass$2 ,500 a year for that permit. Those are two great examples, but there's so many more of where we're just knocking down challenges that we put in front of people. These things were all there through good intent, but there were too many of them, and we're trying to remove as many of them as we can. It's funny you mentioned the outdoor dining. My Uber coming in, I did not take the Waymo. I tried it. Take my Uber coming in. I saw people sitting outside with the lights out in the restaurants having some outdoor seating.

18:11We're used to that in the city, in New York City. I hadn't seen that before too often in San Francisco.

18:15Scarlet Fu:Well, it's kind of too cold for that, for one thing. You're telling me it's colder in San Francisco than it is in New York? Yes, because of the month of the year. Because of the month of the year it is. No, it's, you know, the coldest winter I ever spent was the summer I spent in San Francisco. That's cool. Talk to us about just the business community here. AI has been such a big development globally. But boy, the epicenter is right here in San Francisco, isn't it? It really is right here in San Francisco. It's incredible. You can walk just a few blocks from where we are today. And those companies that you hear about changing the world, wherever you are in the world, they are right here.

18:49And their employees are living here. They are going to dinner here. They are raising families here. And the mayor, myself and others, we're also asking them to be a part of helping San Francisco realize its potential. That means chipping in, whether it's through volunteering or contributing capital to some of the real opportunities that we see for public-private partnerships as well.

19:09Scarlet Fu:So it's not just office demand. That gets a lot of the headlines, but it's also conventions, tourism, the visitor's economy. Paul and I are here. We're spending money at the Four Seasons of Arcadero. We're spending money in the city today. We're attending the Eisner Amper West Coast Real Estate Summit. What is that like to try to get companies to get back in here and commit to building up a presence again in San Francisco. How is that different from building affordable housing and reducing the red tape for small businesses? Well, it's all linked. Those same things that you do for small businesses or for families to make it easier to have a home, those ladder up to the work for businesses as well.

19:46Because if you run a big company and your team can't live in the city where you operate, that's hard for them. And they're going to choose to be somewhere else. If there aren't restaurants and small businesses to patronize, They're not going to want to have their employees come downtown. They're not going to ask them to come back five days a week. So first of all, that work is really important. But second of all, just like we were talking about small businesses where we need to be cheerleaders, we need the big companies to know that we are open for business and we're open for feedback. We're on the phone with them all the time.

20:16We're touring them around downtown hand in hand, showing them the progress that we've made and talking about the work that's still in front of us. And then we're talking about how we know we need to be principled, predictable, and transparent, whether it's around our tax code or our permitting processes or what all the things that ladder up to them running a big, successful company here. We've always been a place where people start big start companies. Over time, we tend to export those companies. We need them to be comfortable that this is a great place not just to start but to stay for a really long time.

20:51How about affordability? 30 seconds left. That's a big issue. Talk to us about how you're approaching. affordability? Well, we passed something called the family zoning map in December. The mayor signed it in January. This is a roadmap to build more height on transit corridors and denser in neighborhoods. We need a lot more people to live in San Francisco. Dan Doctoroff, who had a job like mine in New York, he said to me once, he said, if a city isn't growing, it's dying. And we know that we need a roadmap for people to build against, and that will ladder up to affordability over time.