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25:10And so all these folks who had equity in the very early days of making it a for-profit have made significant returns since then. Their stake has grown so much. And so I think what we've seen from Musk's lawyers is an attempt to show that Altman has maybe not been truthful to the board in the past. His motives have not always been clear. So while he may be saying one thing about his commitment to the mission, I think they're trying to have the jury ask some questions about whether he's telling the truth there and whether that's really where his motivation is. Bloomberg to Madeline Mecklenburg. We'll let you get back to that courtroom.

25:44We appreciate you. Checking in on eBay and GameStop shares. Well, apparently the$56 billion takeover offer from GameStop is deeply non-credible nor attractive, according to eBay itself, Ed. We have clearly something that now could become some sort of proxy battle. It could become hostile takeover where Ryan Cohen goes directly to shareholders of eBay. But thus far, a company that is worth a quarter of the company it's trying to bid for hasn't managed to convince the board. Yeah, the offer was$125 a share, 50 % cash, 50 % GameStop stock. eBay is at$107. and there were concerns about actually how GameStop would come up with the financing of that offer.

26:27What happens next? Yeah, and question, of course, all about whether or not this could remain an investment-grade company if combined. And that seems to be a key issue that our reporting shows, the resources showing that that TD offering, not enough if it's not investment-grade, Ed. Not the end of that story.

26:50Welcome back to Bloomberg Tech. Generally speaking, we're seeing technology stocks down and quite significantly. The Nasdaq 100 off by almost 2 % now. And actually, semiconductors and chips are the mainstay of that decline. There's two parts to it. We saw an astonishing rally, in particular in chip stocks, that as of yesterday's close were up 70 % year to date. So we're taking a timeout, a breather. But the Philadelphia Semiconductor Index down almost 6 % and on track for its biggest drop since the last week of March. We did get a pretty hot inflation print this morning. And our equities desk is saying in the global markets wrap that that's part of it, the whole in rally in the rally we see in stocks, Caro.

27:29Now, Intel is an interesting case study, one of those taking a breather. It had been driven by reports of a potential deal with Apple and a strategic pivot into the AI. Intel was staging a comeback and in a blazing rally added over 400 billion dollars in market value in just six weeks. But short interest is near a 52-week high, suggesting that for some, today might be the day to bet against the momentum. Ryan Vlastelica joins us with, for once, some good timing on the piece you put out this morning. I joke. I joke. Explain the short interest piece to me. How does that work? Why would it drive the stock like this?

28:06Sure. So as you mentioned, Intel has seen some really tremendous momentum in the stock price over the past few weeks. I think it's up more than 200 % since late March. So that's a very attractive opportunity for a lot of short sellers who are expecting that this momentum will not only reverse, but reverse in a pretty dramatic fashion. Because in addition to how much the stock has moved up, the multiple is at an all-time high, over 100 times estimated earnings. So you have a high valuation stock that's already seen some pretty significant gains. It's not really a surprise that people are betting on a reversal.

28:41even though a lot of short sellers are saying when you have a company like this with so much positive momentum, so much fundamental momentum, it's very difficult to pick a top and really ride the move down. So a lot of confusion here, but certainly some people are betting on a reversal. And they're looking pretty clever today, at least as we're currently trading off by more than 10%. What's interesting, though, is that the analyst community still think one should be buying this stock. What is it, 17 buys, only three sells, even though the price target is a little out of whack with where it currently is, Ryan?

29:14I would say the consensus is a little bit more muted on Intel relative to some other big tech names. I think there's far more hold ratings than there are buys. But I do think people are warming up to this story. There was a lot of skepticism for years about will they be able to get their foundry business, you know, back at the top of the line, the industry standard. And there's been a lot of optimism that they are showing some progress on this turnaround. It was a very ambitious move. It's cost them a lot of money. There's been a lot of skepticism, but lately we are seeing very strong results.

29:46We had this report about potentially working with Apple on chip making, which would be a huge validation for the chip making business. So there are some very positive signs here. But like I said, the multiple is very high. There's a lot of questions out there. And the stock has already seen a pretty significant move. And that's benefited the U.S. government for one. Bloomberg's run for Delica. Thanks so much. Always great reporting. Now, let's talk about a growing number of venture firms who are pumping ever larger sums into leading startups, OpenAI, Anthropic. But our next guest is taking a different approach.

30:16Bennett Siegel is a co-founder of A-Star, which targets seed stage startups, checks three, five million dollars. It's just closed its third fund, 450 million dollars in total. That's a large seed round fund, but perhaps small versus multi-stage VC fundraisers that we've seen of late. So, Bennett, I'm pleased to welcome you here into the New York studio. go. Seeds rounds have become astronomically large in many ways. So are you doing what you've always done? Are you having to change with the times? How is your VC model looking? Well, first off, thank you for having me. I think we right now live in a world of giants, both on the venture capital side and the company side.

30:52And we've really stuck to our craft, which is early stage investing, backing founders with an idea of raising a few million dollars and looking to build a giant of tomorrow. And we wanted a fund size that allowed us to execute on this strategy where we could be a close partner to these founders. As funds get larger, incentives shift and they increasingly put larger amounts of capital into later stage rounds. And you see that with Anthropic and Open AI raising many billions of dollars. We tend to start more at the ground floor and have crafted our fund and our team to be a partner to founders when it's not obvious and before the technology is clear and before the market opportunity is present.

31:30But the size of the seed rounds, even when a product hasn't developed, I mean, you're thinking, what was it, reporting around $2 billion being raised by Thinking Machines Lab. You're thinking about safer superintelligence, again, a$2 billion seed round. I know Ed's going to come in with the avocados and the mangoes, but how do you stick to your knitting? Or you just ignore those sorts of companies? No, it's a great question. I think there's a bifurcation in the market. I think there's traditional seed rounds, which increasingly companies started by younger founders, graduates from Harvard, MIT, Stanford, they're raising what we call a more traditional seed round of between three to five million dollars.

32:04In many cases, they're building on top of foundational model companies. So they're leveraging the technology and the capital invested in Opinion, Thoropic, and we've backed a number of those companies and they build them what we call the application layer. On the flip side is exactly the types of rounds you're talking about. It's typically researchers that are spinning out of established model companies. They're raising in many cases, could be hundreds of millions, could be billions of dollars out of the gate to go and do research and perhaps commercialize a future technology. We've largely avoided those rounds and those rounds have been led by companies like Andreessen Horowitz and others.

32:37We will pick our spots, but in many cases, founders don't really need$500 million out of the gate, though in this capital markets environment, they're able to get it and there are funds that will back them to do so. Bennett, before co-founding Astar, You did four years at KOTU, and I imagine focused on slightly different scale and domains. But would you just reflect a little bit on the difference in your experience, what that was like investing out of KOTU versus the seed stage at these check sizes and round sizes? Yeah, it's a great question. I think incentives do matter, and there's a reason that funds increasingly raise larger amounts of money over time.

33:16And when they raise larger quantumness of capital, they tend to invest at the later stages and they tend to focus on large dollar deployment. You know, KOTU is a multi-stage fund. They invest venture through public markets. Most of the focus tends to be on the growth stages when there's already clear winners and you could invest hundreds of millions of dollars in a company and look to earn a multiple on that. You know, where we play at the seed stage, we're investing, typically it starts out at a couple million dollars. We're backing a founder before there's an idea, before there's consensus around a market, and we're working with them to build their business.

33:47The beauty of our model is we can actually make venture type returns and we can make 100, 200, 300 times our money, but we have to go and find these incredible opportunities early and it takes many years for the companies to sort of grow and mature. The other aspect of our model, which is different from Co2's, will continue to invest, which we've done in our best companies over time, and be one of the largest shareholders in the cap table. So it'll be much more concentrated with a handful of companies that we hope will go from inception stage to the public markets over a decade or longer. What Caroline was referring to about coconut rounds, avocado rounds, mango seed rounds is I wrote a column a few months ago that it's pointless saying seed because in some cases the entry level is so high.

34:29But you're committed to this two to five million dollar level. You know, that's that would counter that, that the seed market is alive and well and true to its definition. Look, we're going to play the game in the field. We've modestly grown in fund size. We started out with a$300 million fund. We're now in fund three of$450 million. So we see inflation in round size. And our goal is to partner with the best founders in Silicon Valley. So we will do what we need to do to accomplish that. That said, it's still rare for founders to raise$100 million out of the gate with no product or prior track record.

35:06That is a rare, I would say, circumstance of particularly researchers coming out of labs. Well, we've seen in other cases, for instance, with a company called Decagon, which is one of the leaders in AI customer support. It's one of the killer use cases of AI where you could replace a lot of folks in the call center functions. You know, we co-led a seed round at a$22.5 million valuation. In less than three years, the company is valued at nearly$5 billion, and we've invested in every single round and worked with them to build the business. I think there are a number of examples like that where you can do a lot with less capital.

35:38And in fact, it forces discipline on the teams and the companies. Decagon, founded by Jesse Jang and Asher and Srinivas, I think, have been on this program. Bennett Siegel, ASTAR co-founder, not enough time, but really interesting look at that earlier stage of investing. Thank you very much. Now, coming up, we're going to speak with SAP CEO Christian Klein. As the company debuts its autonomous enterprise platform, this conversation is next. This is Spilling Back Tech.

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39:36And what is it that your customers can now do, Christian, that they couldn't do before? Thanks a lot, first of all, Ed, for having me. Yes, today we launched the Autonomous Enterprise, and we have record attendance here at Sapphire, and I see only thousands of customers very excited about the Autonomous Enterprise, because we showed our customers today that while the large language models are getting better and better, they don't know anything about your business data and your business processes. And as part of the autonomous enterprise, there is our new AI platform. And here we are infusing the brain of every company, which is the ERP, into the platform so that the agents also not only have the large language models, but also that they have the context of how a company runs.

40:21And then on top, we had customers like AT &M, JP Morgan Chase, who have proven that with these agents, you can really deliver accurate, compliant and reliable results. Christian, how are you showing that productivity? What sort of data, what sort of statistics are you able to show your clients? Actually, we showed together with JPMong Chase that they can close the books faster now by 30%. We have shown with H &M that the turnover in their commerce shop is now better because of our personalized agent. We have shown that inventory got reduced by 10 % because actually our agents work with each other And the demand agent actually signaled the inventory agent, hey, how to optimize and how to optimize procurement.

41:06So we really could also connect the story very well from the front office into the fulfillment functions, which is the power of SAP. I very recently spoke to AWS CEO Matt Garman, an AWS partner of SAPs, but they are also moving into this exact domain. How much pressure are you feeling, Christian, to offer this sort of all-encompassing, agentic platform? Because if you don't, someone else will. Yeah, for sure. But look, take AWS. They're actually a great partner. I mean, Matt and I talk regularly. And because, you know, as a matter of fact, not all data of the world sits in SAP systems. And with AWS, we are now partnering to also build a harmonious data layer.

41:49Because, of course, still agents, they can't compensate for broken data modules. And as part of our new SAP business AI platform, we also now harmonize data, SAP, non-SAP data. And then we infuse it into the agents. So we see AWS, Microsoft. We had NVIDIA here on stage. We have Databricks, Snowflakes. They are all now joining our platform to harmonize business data. And these are the partnerships we need to deliver highly accurate AI. Is it the accuracy that you think wins people over from worrying that you're going to lose out competition? That's the heart of where it's going. like everyone's a frenemy but also the labs serious competition how do you fend off the software anxiety yeah caroline exactly i guess the heart of the new platform is clearly our context layer because the brain of every company is the erp i mean we have over 7.5 million data fields in there we have thousands of business processes and that knowledge sits in our platform and this is clearly how the platform also can differentiate you can use any commodity llm you want, people can bring their own modules, what they would like to use.

42:52But then on the platform, these agents immediately get the context what only SAP has. And that's our way to win. And that's how SAP will differentiate. Christian, NVIDIA CEO Jensen Wong's formula or equation is very simple. More compute, more tokens, more revenues. Do you have any case studies with customers where you can say there's actual real revenues through the agentic work they've done with SAP? Yeah, I had Jensen actually with me on the keynote today and he clearly said he, of course, wishes us best luck, first of all, as a customer to SAP. But then second, obviously, in order to get higher consumption of compute and chips, I mean, you need consumption at the top where the real value creation happens.

43:37And that's why when we actually now can build an autonomous supply chain for NVIDIA, I mean, they see this immediately also in the hardware consumption. And this is where also NVIDIA and SAP are partnering up to build the autonomous enterprise. Christian Klein of SAP, you know, Sapphire event, we very much appreciate you joining from Florida. Thank you.

44:01Ford, well, it's set to open a nearly$3 billion battery plant in Marshall, Michigan, bringing new manufacturing jobs and investment to the United States. The facility will use technology, though, licensed from China's CATL, supplying lithium-ion phosphate battery chemistry, an arrangement drawing some scrutiny amid U.S.-China tensions. This comes, of course, as President Trump heads to China this week for talks with President Xi Jinping. So joining us, we've got a roundtable. Newberg's auto reporter Keith Norton and senior tech editor Mike Shepard. And Keith, I start with you, because what is the relationship like between Ford and CATL?

44:32Has it been rosy throughout the ability to build out this manufacturing site? Yeah, CATL is in Marshall, Michigan right now, training workers, helping get this plant off the ground. It's due to open this year. Ford takes great pains to say it is fully owned by Ford and the workers are employed by Ford. It is just a licensing deal. But they've had a good relationship to develop these lower-cost LFP batteries that are central to Ford's efforts to overhaul its EV strategy and deploy more affordable EVs in 2027. But Mike, this relationship, though rosy, hasn't been particularly well loved by some people in Michigan, but even on the halls of Congress, right?

45:18How has this been sitting, this sharing of technology between China and U.S. giants? Well, in general, there has been a lot of reluctance to allow this kind of a partnership. Anything that remotely touches on advanced technology immediately draws concerns from lawmakers here in Washington who really fear the leakage of technology to China, but also the potential leakage of data and other information that could jeopardize U.S. national security. And we have seen that, of course, in the battle over TikTok. And then more recently, we have seen this in terms of legislation at the state level and even introduced here at the national level this week in Washington, aimed at restricting Chinese purchases of land and also investments in businesses here for those various security reasons.

46:08And it's important to know, Caro, that CATL itself is the focus of some of those concerns. The company in 2025 was added to this Pentagon list of companies that the U.S. government believes support China's military. Keith, do you not have a great sense of deja vu? Didn't you and I write about a CATL licensing deal in 2023 that sections of the Republican Party then said was a Trojan horse? What's different? Yeah, so there continues to be these concerns, as Mike is saying, about ties to the Chinese Communist Party with CATL. But here's the reality, Ed. You cannot pursue an EV strategy without dealing with the Chinese.

46:53The Chinese control 80 percent of the world's capacity for batteries, and that is the most costly component of an electric vehicle. CATL has half of that. So they're the battery giant that you must deal with if you want to have an electric vehicle strategy. What that story at the time showed, Shep, and became true in the first few months of this administration was there is a scale of China hawkishness, right? Ranging from we need complete access and work with China to let's not do any business with China. And when the president goes with that entourage of CEOs in the next 24 hours, that spectrum of hawkishness will also be a part of the political story.

47:37Well, it certainly will. And we will see that follow the delegation with the president. And these are the concerns that surround the ability of China, for example, to purchase advanced AI chips from NVIDIA. And a notable absence, of course, as noted early on the program, is NVIDIA's Jensen Wang. And also the Iran conflict itself will barge into these talks and really perhaps restrain the ability of unfettered dealmaking by some of these companies. They'll be looking for smaller wins, perhaps, in the Chinese market. And then we'll come up the question, of course, of what can China do for the U.S., which is what Donald Trump has tried with other trading partners like Japan, South Korea, the European Union, encouraging them to invest here in the U.S.

48:25as part of trade negotiations. The challenge is, though, reaching some sort of a grand bargain with the U.S. would require much more complex talks on issues ranging from tariffs to market access in China. And then also the even more sensitive question of rare earths and whether China would relax its position in terms of handling the chokehold that it holds over those elements that are critical to manufacturing in so many areas, including autos, but across the economy. I mean, rare earths is where it's at when it comes to battery technology, Keith. And I go back in many ways to market access, because with one breath, you'll hear the Ford CEO working on this relationship with CATL.

49:09And in the second breath saying, but we don't want Chinese made cars or autos coming to the United States. So that's something that's got to be balanced. Exactly right, because the United States is still well behind the Chinese in EV technology, maybe a decade behind. And of course, the Chinese auto industry is supported by its government, so they have lower costs. So Jim Farley, the CEO of Ford, says keep the Chinese out, but we also value our partnerships with the Chinese and we want to do more of them. So, yeah, it's a very fine line that they're treading here. And they do need Chinese tech if they want to have EVs, but they also would be swamped by Chinese competition if Chinese EVs were allowed into America.

49:53Bloomberg's Keith Norton and Bloomberg's Mike Shefford, thank you very much. OK, before we go, let's take a look at today's big number,$135 billion. That's how much Netflix says it has spent over the past decade making films and TV shows in more than 50 countries. The stats are part of a new website called The Netflix Effect that the company is using to show how it boosts local economies. Netflix says the impact goes beyond direct employment, for instance, highlighting how South Korea, Caro, saw a 25 percent spike in airline bookings. And just think, new film, Narnia and the Magician's Nephew, actually going to be having a long run in theaters.

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