Intel to Sell $15 Billion in Stock After AI Boosts Demand

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1:50Let's get a little techie for you. The Nasdaq's up 14 points today. Not much going on out there, but there's a lot of news flow out there in the tech space, as there typically is. And for that, we'd like to check in with our buddy Matthew Bloxham, Bloomberg Intelligence Senior Technology Analyst. He covers a bunch of stuff, and he does it from London. Hey, Matt, thanks for joining us here. I mean, Intel coming to the market. Here's another big tech company coming with a big equity raise. It seems like these guys have an insatiable need for capital. Yeah, they do. That's right. So, what,$15 billion, roughly 3 % of the market cap.

2:24So, it's not that big. But, you know, I think it's still always a little bit surprising when these companies come to market for equity. You know, they raised, I think,$6.5 billion in debt earlier this year. Fairly expensive coupons, kind of 4.65 % through to 6.2%. So, I guess, you know, they're looking to balance their capital needs across different parts of the balance sheet structure. Yeah, the valuation's pretty full right now. I mean, if you look forward a couple of years, it's on 50 times earnings. So, I guess, you know, the management team taking the view that, you know, if there was ever a time to raise some equity, this is a relatively quote-unquote cheap time to do it.

3:06You know, that they, along with everybody else, have quite substantial investment needs. Compared to some of the big tech names, their capex is pretty low, probably about$20 billion this year, maybe rising to$26 billion next year. But this gives them a good cash cushion to pursue the current projects and who knows, perhaps even consider some acceleration of what they're doing. What about Meta this morning? They've just introduced a new AI model called Muse Glimmer. I guess it's an open source AI model meant to compete with the Chinese model DeepSeek. It's up this morning. How do you feel about it?

3:44Yeah, you know, I think we're at a fairly early stage of how the whole AI foundational model play is going to evolve. Yeah, this is quite a different position to the likes of OpenAI and Anthropic who work with closed models. Gemini, Google with Gemini is a little bit kind of mix, have some open source models and some closed models. and Meta very much kind of pinning six fortunes to the flag of the open model and, you know, really trying to kind of make a big difference. And Mark Zuckerberg today in an essay being somewhat critical of some of its competitors and saying that really we should be democratising AI and putting it in the hands of the user.

4:29So I think, you know, open to see how widely adopted this will be and what it means for the kind of longer term economics, both the matter and the industry. But certainly an interesting move. And I think as much as anything, the language and the rhetoric that Zuckerberg is using around this push. Matt, you know, as being in these markets for 40 years, it's always surprised me in a negative sense how Europe writ large basically missed the whole technology revolution. All the tech is in the US and Asia and things like that. But is the same thing happening with AI? Will Europe just kind of outsource it to other people and not participate?

5:14It does, unfortunately, seem that way. We have Mistral as, I guess, the most well-known European AI model, but it sits in the shadows of the US and the Chinese alternatives. So, yeah, you know, it's a perennial problem for the region. Obviously, there's a kind of big, really big introspective process going on right now about Europe 2035 and what funding is needed to kind of really close the gap and genuinely make Europe competitive enough. The numbers are eye-watering. And even if the money was there, I think there's so many kind of structural and cultural issues about the way Europe works that are very serious obstacles they have to get around.

6:00and all the time they're trying to figure those issues out. The US and China are running full steam ahead. So it does, I would think, the base case scenario would be that Europe continues to be a taker of technology from other parts of the world. Stay with us. More from Bloomberg Intelligence coming up after this. When your options are limited, so are your opportunities. At Cibo, the global exchange that pioneered options trading, we offer more ways to move with the market. From VIX and SPX options to global market data solutions, SIBO helps investors diversify, manage risk, and stay ahead of whatever the market does next.

6:41SIBO. Life is better with options. Your investments could be too. There are risks associated with SIBO company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers. This is the Bloomberg Tech Minute brought to you by ChachiPT. Now with ChachiPT Work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares.

7:26Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode.

8:03Available on Plus and Pro Plans.

8:20Design for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. 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. I'm looking at Microsoft.

8:57This is a name, Stacey, Tom and I, Tom Keenan and I, for the longest time, we're saying, just as of a week or two ago, why is this stock down 25 % year to date? This is Microsoft. I guess it was thrown out with a lot of those software stocks. I thought AI was going to put them out of business, but this is Microsoft. It's Microsoft, and it's one of the magnificent seven. Yeah. I mean, you know, so sure enough, they put up a good print last week, good earnings. Stocks erased all those losses now up three or four percent on the year, five percent for the year. So how about that? More news out on Microsoft today.

9:32They're going to raise a next gen AI chip production next year. It's pretty interesting. That's according to the information. Anurag Rana joins us, senior tech analyst for Bloomberg Intelligence. Anurand, it's really amazing how the market has kind of gotten a new appreciation, if you will, for the Microsoft story that I think was really people were questioning. And is Microsoft at risk from AI? How do you think about it? Yeah, I mean, you're absolutely right. There was that risk of disruption from some of its product from AI. But there was another risk or there was another narrative that when you look at the three hyperscale cloud providers, Google, Amazon and Microsoft, Google's chip has just taken off.

10:11I mean, their TPUs are all the rage in the market. And Amazon's actually come out with their own print that, you know, they are making tens of billions of dollars with their own chip as well. So what happens is when you are looking at this fight of everybody expanding into AI data centers, they do need chips. They are all running to NVIDIA. But two of the three providers talked about having their own chips. Now, Microsoft was not in that game at that point. They have their own chip, but it's not widely embraced. But today's report, when it talks about that they're going to go out and increase the production of their own chips, which means customers may be ready to use those.

10:50And if that's the case, their cost of spending into that capital expenditure boom will start to go down, in a sense, down on a relative basis or per token basis. So it's a very good news for them in the long run. Well, Microsoft might be having a very good day, but Apple is having a pretty rotten day. What's going on with them? Apparently, it has something to do with hardware not coming out the way that they're hoping. No, I don't. I mean, I think that's a different somebody's downgrade. That's a different story. But when you look at Apple, and let's go back to that time period when Paul talked about when Microsoft was down, you know, 25 % or so for the year.

11:28You know, at that time, what was happening was everybody was worried about ROI on AI trade. This is before earnings season. You know, you saw Google. Everybody was worried about them. But at the same time, everybody loved Apple because they were not spending that much money. But after the results, what's happened is people are relatively more comfortable going back to the AI trade or going after the risky assets. And given Apple's valuation where it was at that point, it was well in the 30s. We are seeing some sell off on that and people buying more of the AI trade. So I think there's a little bit of factor shifting there, not so much about one product or the other.

12:05Do your clients, your investors, big tech companies, do they like free cash flow? And are they upset if they don't get free cash flow? So two different things. Once they are looking at this massive capex going in, they're seeing what is the benefit of that for these companies. So if Microsoft was able to show, you know, SQL churn improvement in Azure sales growth, Amazon was able to show that. Google was able to show that. So I think they're getting a little more comfortable that these companies know what they're doing when they're spending, you know, hundreds of billions of dollars at that time.

12:38The second group is somebody who doesn't want to be a part of this trade and say, you know what? I like Apple. I have$100-plus billion in free cash flow over there. They're buying back that stock. iPhone's doing well. It's gaining share in China. So there are, I mean, you could say there are a couple of buckets of people who are looking at this trade from different lenses. What about in the hardware sector? Apparently, there's a big smartwatch lineup that's getting ready to be released. Obviously, there's the folding phone everyone has been waiting for. How is Apple looking in the hardware sector?

13:09So when you look at the watch itself, It doesn't move the needle for Apple. It's an accessory that goes with the phone along with it. I mean, you're not going to just buy a watch without being in the Apple ecosystem. That's a very unlikely thing. But one of the things Mark Gurman's talked about it, when you look at some of the other wearables, you look at the Aura Ring, which is just a phenomenal product right now for a lot of people to track their sleep. You're looking at products that are coming out in the market without a screen. Garmin just launched one. I mean, I've ordered it, but it's on backlog for me.

13:43When you look at a Voop, these are all bands that you could use to track a lot of these, you know, sleeping and, you know, just your normal vitals without the need of a screen-oriented product. And that's what I think you're going to see down the road. But that, to be honest with you, does not move the needle. The foldable does because Apple's been behind. They don't have a foldable phone right now. And iPhone accounts for over 50 % of Apple sales. So if they are able to come out with a foldable device, I think it's going to create a lot of buzz next year, especially in emerging markets where if people are not worried about the price of it, which Mark Gurman thinks is going to be around$2 ,500.

14:21I think that's going to be a very, very cool factor that we will see within the next one month. Stay with us. More from Bloomberg Intelligence coming up after this.

14:33This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

15:21The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro Plans. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, The thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals.

16:00Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Amazon Health AI presents Painful Thoughts. Why did I search the internet for answers to my cold sore problem? Now I'm stuck down a rabbit hole filled with images of alarmingly graphic sores in various stages of ooze. I can clear my search history, but I can never unsee that.

16:42Don't go down the rabbit hole. Amazon Health AI gets you the right care fast. Health care just got less painful. 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. Seems like it's a quiet day, but there's a lot going on out there in the equity capital markets. Intel started this morning. They're going to sell$15 billion in common stock to fuel some of their AI demand boom. We've got some IPO filings. We've got some stocks I thought were meme stocks.

17:22I'm not sure if they still are, but we had Bailey Lipschultz in to kind of explain it all to us. Bailey Lipschultz, Bloomberg News, senior equities reporter. First, was GameStop's potential bid, it was$56 billion for eBay, was that ever considered real or legit? It was always kind of laughed at, really speaking. That's what I was doing. It was a market, I don't want to bash it too much, but it was basically seen by most on Wall Street as kind of a marketing campaign from Ryan Cohen, who is the now head of GameStop. He was a big driver behind that 2021 meme stock mania around GameStop, become the largest shareholder, one of the largest shareholders leading the company.

17:57He was a co-founder of Chewy, made his name through that. So it was broadly seen as kind of a interesting thought, but resoundingly rejected by eBay back in May. He said he was going to come for him one way or another. And ultimately, according to our reporting, now considering pulling that bid. Why does GameStop want eBay? I mean, the market seemed quite disappointed this didn't happen or isn't going to happen potentially. Well, the big debate always was you want to make a$56 billion takeover when you have a market value of$8 billion and you have cash and equivalents of$8 billion. So there's a huge gap that you have to bridge at some point.

18:35Yeah, yeah. You know, if you work on Wall Street, there are levers you can pull. But the reason I think we're seeing eBay shares down a little bit again is just given kind of that option, the call option potential of this being something that could work out. Cohen basically has really been vocal in bashing eBay management, talking up the potential synergies that they could see. Again, eBay downplayed those banker or analysts were really like$2 billion in proposed energy. Still feels like a bridge too far on the potential merger. This is a company that Cohen has been either publicly leading or behind the scenes leading for quite some time.

19:12And the big question has been, what does it actually look like? What do you look like if you're a game retailer in an era where people download games? All right. Data center company Switch, good name, filed confidentially for a US IPO. What do we know about Switch? Data center REITs are hot. Anything around data center is hot. We had reported back in July, early July, the company was kicking off a private funding round led by Anderson Horowitz. That would raise$2 billion. Equity value, or enterprise value, excuse me, approaching$50 billion. So our reporting that they filed confidentially on Friday, working with B of A, Citi, Goldman, JP, and Morgan Stanley, the who's who, and that that funding round was either complete or near complete.

19:57And then Ben Horowitz, co-founder of Anderson Horowitz, would be joining the board. So now the big question is, as we reported, targeting a November IPO, how quickly does that come together? Will the market still be there? And if you're doing a$2 billion private raise, IPO is probably going to be much larger. All right. Well, apparently Form Labs, which makes 3D printers, is also in early talks with potential advisors for an IPO. Talk about that business, the 3D printer business. Is that like a big, is that the next big thing? 3D printing was all the rage. I want to say in 20 and 21, everyone went public.

20:31My 30-year-old son was doing, probably still is doing it. And that was the big push. You just look at 3D systems, trades under the ticker DDD. it hit its peak at 55 bucks a share of trades for less than four right now. So the time had been much hotter in 20 and 21, but form labs backed by soft bank did have bankers come in for, for bake off. We have at least one person saying they should target a raise of about$500 million. The big question comes back to they are profitable and they are a soft bank company. And so what problems are you solving for? Why are you going public? Soft bank has a number of needs.

21:06And if you're a 3d printer company, could be interesting to just see if you want to scale. They did announce that they had annual revenue north of$250 million. Tom from the Upper East Side writes in and asks for a SpaceX quote, 133 bucks. We're getting close back to that IPO price of 135. What does that mean for kind of the IPO market in general? The broader sentiment has become mixed, partly because SpaceX traded below, partly because SK Hynix, the largest non-US company listing here, with their record fundraising, trades a lot like an EKG. The big question now is, we are expecting Anthropoc to go public September, October timeframe.

21:46How can the market digest and write down another, you know, large IPO, open AI, kind of waiting in the wings, potentially early next year? We're in an IPO market that still is hot, but very much can be touch and go. And SpaceX kind of is emblematic of that. Again, 133 now, just south of 135, but popped up like 50%. Do we have any sense of that insider shares that were eligible to be sold last week? Do we know what happened with those? Did anybody actually sell their shares or do we know? Well, we won't know because normally you would know if an investor owns more than 5%, they have to file. Elon Musk is the main one.

22:24And then Valor, who's taken on their own share sale project. And then Google are the only three, according to our data, who would have to file for that. So a lot of this could be happening behind the scenes. But when you see a stock rally like it has after the lockup expired, it's broadly seen as either a short covering investors were hoping for more of a kind of dash to the exits or be just simply insiders not rushing to sell. Stay with us. More from Bloomberg Intelligence coming up after this.

22:54This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

23:42The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com today by selecting Work Mode, available on Plus and Pro Plans. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals.

24:21Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Amazon Pharmacy presents Painful Thoughts. Of course I see my coworker in light at the pharmacy. Can he tell I'm picking up prescription hemorrhoid cream? I'm probably standing weird. Why is he smiling? He knows. He's going to call me Hemroid Lloyd tomorrow.