Databricks Raises $4 Billion, TikTok Finds Its Shopping Stride

0:00Donald Trump is rewriting the Washington rulebook and reshaping the global economy. If you're trying to connect the dots behind the headlines, Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, head of government and economics at Bloomberg. Every week, I'll bring you a smart, focused conversation with reporters and experts from Washington, Wall Street and beyond. Listen to new episodes every Wednesday and follow Trumponomics wherever you listen. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy.

0:38Bond markets are massive, murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com slash audio. That's Vanguard.com slash audio.

1:14All investing is subject to risk Vanguard Marketing Corporation Distributor. Bloomberg Audio Studios. Podcasts. Radio. News.

1:29Bloomberg Tech is live from coast to coast. with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, Databricks raising over$4 billion as its valuation skyrockets to$134 billion. We have the details on the relentless investor demand for AI-oriented tech companies. Plus, we talk the future of US-China tech relations with Jacob Helberg, Undersecretary of State for Economic Affairs and founder of the Hill and Valleys Forum. This, while shopping on China's TikTok Live, is catching on in the US. We'll explore how big the experience might become for users. But first, we talk about not particularly large moves in the market right now.

2:12We are unchanged on the NASDAQ 100. It is a noisy jobs report that we tried to digest, but it does come across as a slowing data set that we see for non-farm payrolls. Unemployment ticks higher. The market tries to digest. Bitcoin, though, just ticking up about 2%. We're at 87 ,962. It has been under pressure over the last few trading days and, in fact, could be the fourth ever annual loss for Bitcoin more broadly. But as we see nervousness around the overall public market phase, what about the private market phase? Databricks, another tell, raising over$4 billion in a new funding round that values the private software firm at$134 billion.

2:50Bloomberg's Brody Ford joins us now to discuss what just seems to be relentless. Even though we have AI anxiety in the public markets, we are all in in the private sector, it feels. What a big valuation. I mean, Series L, is it? I mean, this is one of these companies that, you know, for as long as I can remember, an IPO was six or 12 months out, but they just keep raising money from the private markets, and it's clear that private investors are happy to keep giving it to them. Right now, if you're able to tell an AI story, and for Databricks, that is, we're going to get all your data together and make it easy for you to run LLMs on it, then investors will be lining up.

3:26And I mean, this is a company with very clean financials, with a lot of momentum. And so, you know, my guess is in six months, we'll be here again talking about the series, whatever letters after L. It maybe gets to Z. Ali Gozzi has said, look, I wouldn't be running a cash positive business if I didn't want to be tapping the public markets at some point. And it seems to be trying to also do secondary sales for employees. They are a competitor of Oracle and Snowflake in the public markets. Again, we're worrying about Oracle and exposure to leases for data centers. Yeah. How much anxiety are you hearing about around Oracle?

3:59So Oracle disclosed a big jump in its leases. In a three-month period, they inked$150 billion in leases. $150 billion. And of course, that's over the next 15, 19 years. But you break it down, that's what? Around$16 billion a year in lease payments for the coming decade and a half. That's significant. That's a lot of money that, you know, was not necessarily known about. We knew they were leasing data centers, but probably not quite to this scale. And so it's just one more data point that's giving folks indigestion about how much is it going to cost to really get the AI data centers up and running.

4:34Indigestion is a nice turn of phrase for it. Ready forward. We'll see how this market digests as we enter the end of the year. Let's get more of a market perspective on that. Let's go to Carol Schleif. She is the chief market strategist at BMO Private Wealth. Carol, that anxiety around Oracle, around companies that have been tapping the debt markets to finance the AI, well, focus on infrastructure. Do you think it's the right moment to be going into these sorts of names or to be pulling back? I think it's very interesting because, as you know, there's been a lot of chat on the street, if you will, about are we in a bubble, are we not in a bubble?

5:09But the fact that investors are being very discerning, they're putting money in private companies, they're putting money in some of those public companies. But then they're also pulling back from companies where they're not necessarily approving, if you will, of the total package or don't like the surprises for increased spending or increased commitments. And so that discerning nature is really constructive. And we are big believers. In fact, one of our core big three macro themes that we'll be introducing in our capital market assumptions is Industrial Revolution 4.0. And we think AI is just part of it.

5:44There's a lot bigger, broader spend, but we are definitely in a revolution that's taking this economy and putting it in a whole different place. I mean, Carol, go deeper on what discerning is. Discerning$134 billion valuation for a private company that agreed has a revenue run rate of some$4.8 billion. An$800 billion market valuation for SpaceX in the private market. So it wants to be worth$1.5 trillion when it IPOs in 2026. What spells out discerning to you? What are the financials you need to see? I think discerning spells out somewhat if we just take the public markets and we look at, for example, when you had five of the Mag7L report in the same week.

6:27And they all, for the most part, beat expectations. And yet some stocks rallied and some declined because of investors listening through to this story. So there's a piece there where investors want to participate in the industry, in technology in general, and they're trying to figure out where. I think there is always that allure. It's tough to get your head around the financials, even though a number of different entities now are trying to provide us index on private companies. And I saw last week that the CBOE and others are looking to want to write options and futures on private companies. So there's different ways to participate in it.

7:07But investors want a foot in that market, because I think for anyone who lived through prior periods, you don't want to miss out on not having on having everything on the sidelines. But Carol, is that democratization or is that frothiness and a desire to just get in on super high valuations? Yeah, I think we're still trying to figure that out. For me, it's a way of parsing risk in different places it's sort of like too that we've seen this evolution of the prediction markets where in the old days you had a you know your traditional 60 40 portfolio if you were nervous about markets you had to trim equity exposure now you have different ways to to sort of execute on that that risk nervousness you might go buy a levered etf or if you own a single a highly concentrated position on one name you might go out and say well i'm going to buy an option or or or a single strategy etf or a single stock etf on that that's levered to the downside just to offset some of my potential risk so there's different ways to play it which we're still trying to figure out you know does it get frothy and frothy gets when everyone runs in the same direction and we push these things all parabolic and despite the fact that they've been running for, what, three years now?

8:28They're not parabolic yet. Yeah. And therefore, is the proof point yet again earnings season? Is that where you start to see that actually valuations are in line? Because the P.E. valuations aren't out of whack if you're really seeing the revenue that they're bringing. And more broadly, we see productivity broaden out. Yeah. I think it's very interesting because actually when you looked at the last earnings season, when you got to the end of it, you looked at forward earnings. NVIDIA was trading with a lower forward P.E. ratio than Walmart was. And so part of that is is the movement of of those earnings we need to get for all of us.

9:05I can't wait till we get into the December report season. Sooner or later, we will have some sort of a handoff from all the the focus and concentration around just those seven or 10 or 15 names. And we do need to see more broadening in the markets because there's been a lot of interesting stuff going on in a lot of other sectors as well, or some that are second and third iteration of related to technology and some that are totally unrelated, but are benefiting or will benefit from increased use of robotics and technology and down the road when we have a breakthrough in quantum. Carol, you're already excited for January 20th when Netflix kicks off our tech earnings season.

9:47wishing away our end of the year, but it's so great to have you on to really push us forward to what your key areas of focus are. Caroush Life, always great on the show, Chief Market Strategist at BMO Private Wealth. Coming up, we're going to be joined by JetBlue CEO as the airline prepares to open its first airport lounge. This is Blumog Tech.

10:20JetBlue, while it's preparing to open its first airport lounge just ahead of what's expected to be a busy holiday travel season. Bloomberg's Lisa Abramowitz joins us now from John F. Kennedy Airport. We're a very special guest. Thank you so much. Yes, Caroline, I am here with Joanna Garrity, the CEO of JetBlue, in the very first lounge. It is fashioned like an art deco New York City apartment from the 1940s, 30s, 70s, 30s. Okay, I think I got it right. Joanna, thank you so much for being here before the launch later this week. I want to start with just how this fits into the strategy of JetBlue right now to make the airline truly profitable for a sustainable period of time.

10:59Yeah, thanks for the question. Great to be here and have you in Blue House, JetBlue's first foray into lounges. This is very much part of our jet forward strategy. We've been working very hard for the last several quarters on really turning towards premium and trying to make sure that we're offering more opportunities for customers who want to pay a little more. And the lounge is part of that. Our transition to a first-class product next year, a domestic first-class product, will be part of that. Our premier card, or even more as a cabin. And really excited to start seeing all of that come to life in 2026.

11:30All of the big airlines have talked about loyalty and how important loyalty and premium offerings is to their profitability going forward. How is it different for JetBlue? Because there isn't the sort of obvious business customer that typically fuels the loyalty offering. I mean, we're a leisure carrier. We tend to get, you know, a nice share of business customers because they love the product. You know, we're back at the top for net promoter scores, so really proud of that. But at the end of the day, this is really designed around trying to make sure that customers who travel for vacation have a reason to come back again and again.

11:59Providing with a little oasis of peace and, you know, really through our loyalty program. We want to reward people who choose JetBlue because they love the product, the service, and what we offer. You have already offered Mint and other premium rollouts. How has it been going? It's been great. Mint's been a very strong source of revenue for JetBlue for well over the last decade. And so we're not new to this. We have a brand that definitely associates with more of a higher-end leisure customer, providing more to customers at a very reasonable fare. We want to make sure that we offer something for everybody across the full spectrum, whether you want sort of a dial-down experience, still free Wi-Fi and great legroom and great snacks and drinks, TVs.

12:37But then if you want to pay a little more, you have the opportunity for a lounge, our Mint class for Transatlantic. And then when we launch Domestic First later this year, that's going to be a great product offering for customers who want a little more. So I was shuttled into here through very long security lines and lots of people with screaming children trying to get to different destinations for their warm holidays. This is the busy season. How is it looking in terms of demand, given the fact that there were some hiccups in the past couple of months? But at this point, people are getting back to what they originally had.

13:05Yeah, 2025 has been a very tough year, whether it was the macro setback or the government shutdown or the list goes on and on. We're really looking forward to the holiday season. Bookings are coming in strong as we go into 2026. We're optimistic that the consumer is healthy and that we're going to start really ramping up the initiatives that we have been working really hard for the last year to execute to and seeing the benefit as we move through 2026. How long do you think it'll take before you start to actually turn profitable and sustain that? You know, our goal next year is to break even from an operating margin perspective.

13:36And that's the first step back to profitability. We have a great team here. Everybody's pulling for us. We're doing all the right things, whether it's our focus on operational reliability, net promoter score, all the premium products that we're launching, our laser focus on costs. And really trying to make sure that we're delivering a great product offering for customers. Because JetBlue has this wonderful brand and this sense of people want to love us and they want to see us succeed. And 2026 is going to be our year with everything we've put into place. Because 2025 was not the year for a lot of airlines.

14:06Tough year for airlines. There were a lot of issues. And you talk about the government shutdown. This has been a big discussion among a lot of the airline CEOs where they've said we just can't make up that kind of revenue. So there will be some sort of hit. Have you disclosed any kind of revenue loss as a result of some of the shutdown? You know, we haven't disclosed any kind of revenue loss. You know, we've said that we remain on track for Q4. And I think we're pleased with what we're seeing in terms of bookings coming in for the for the balance of the month. We definitely saw some softness, obviously, during the government shutdown.

14:34But we're recovering coming out of that. I think most have shared that. But it was definitely an impact. And unfortunate that the airlines were put right in the middle of that shutdown. All the great air traffic controllers and the TSA workers, they need to be cast as essential workers. We really need to make sure that, if anything, this industry is so essential to our economy. I mean, think about all the people who are traveling for weddings and funerals or doctor's appointments that were displaced because we couldn't get on the same page in Washington, D.C. So we're really hopeful that we've turned a page there and that we can move forward, looking at that end of January date with a little bit of nervousness.

15:08But I'm confident that D.C. will pull it together and get us in the back end of that. Yeah, somehow being an airline CEO probably wasn't in your bingo card that you'd be well focused on health care legislation with your fingers crossed heading into January. I'm wondering how much you're hoping to attract a new class of customers versus capitalizing the ones that you have that might be willing and able to pay a little bit more with some of the new offerings. It's a little bit of both. We know we have customers today that want our first class product. And so it's really offering that to them so that they can buy up when that opportunity presents it.

15:40But it's also making sure that we're competitive with the industry. Everybody's moved towards premium. We're going to continue to move towards premium because it is a resilient customer segment. But we're not going to forget the folks that fly in our coach product. I mean, they're just as important. We want to make sure that JetBlue offers something to everyone. It really does feel a little bit like the Sharks and the Jets when you speak to some of the airline industry CEOs where they talk about, you know, it's become a game of consolidation and it's become a game of the big fish really dominating the fields in a lot of different ways.

16:08They say it's going to be very hard to be a more budget focused airline. How do you fight back? How do you create a viable business model at a time when you do see this consolidation of profitability and travel in the biggest airlines? I mean, it's definitely hard. We talk about the need for a more level playing field. When four carriers have 80 percent of the domestic seats, that's a real problem. You know, we fight very hard in D.C. to try to make sure that we're heard, that the challenges we face, whether it's cost pressures, the lack of scale, the lack of, you know, consolidated purchasing, the inability to get access to gates.

16:42We just bid on a gate, a Heathrow slot, and we were denied it. And so, you know, while I maybe understand why it went to a legacy larger carrier, those are little things that add up over time. And the smaller carriers really need to be given a fair shot to win in this environment. And that's not happening right now. So we're focused on what we can control. We're focused on a whole series of initiatives under our Jet Forward program. It's getting us moving in the right direction. I'm excited about what it's going to bring. But we do need the government to kind of make that a more level playing field so smaller carriers can more effectively compete.

17:13In the meantime, you do have this cooperation with United. You've been expanding in a host of different places. Is that the template going forward? Maybe not consolidation due to the recent issues, but in terms of the previous merger that was denied. But going forward, having some sort of partnership with major airlines to expand the roots. So we've got 50 airline partners across the globe. And now we have the Blue Sky Partnership with United. That is most certainly a part of trying to provide more utility to our loyalty program and providing a broader global network for our customers. When eventually in Q1, they can book a JetBlue flight on United.com and vice versa through our interline agreement.

17:50And so we're excited about what it's going to bring. Does it solve the problem fully? No, it doesn't. But it's definitely a meaningful revenue initiative that gets us back moving in the right direction. Do you anticipate consolidation at any point in your future? Is that sort of on the back burner? That's on the back burner. We're really focused on Jet Forward. You know, I'm really excited with the progress we're making. We're seeing it. We're seeing improved operational reliability, improved customer scores. We have not let the grass grow under our feet in 2025. We've executed a whole series of revenue initiatives.

18:18We've kept our costs under control despite pulling a point and a half capacity this year. So 2026 really is the year that we should reap the benefits of all these initiatives that we put into place in 2025. Before I let you get back to celebrating the new launch, I do want to just ask you about the recent incident with a pilot, a Ford JetBlue plane that was in the route between Curacao and JFK. There was a close call with a U.S. Air Force jet. Do you have any more information about what happened there to make sure that it doesn't happen again? Yeah, I'm really proud of our pilot. He reported the event, and we trained them for situations like this.

18:55We reported the incident to the government. We're waiting to hear the results of their investigation. But just pleased with how our pilot handled it and how air traffic control handled it. There's a whole series of safety nets in place in the national airspace system. And the pilot is the last line of defense. And he absolutely did his job, did it well. and my hope is that doesn't happen again. Joanna Garrity, thank you so much for being with us. Joanna Garrity, the CEO of JetBlue. I'll send it back to you. Great looking lounge. Bloomberg's Lisa Rabamowitz. Great interview. We thank you. Coming up, is the EV revolution stalling or shifting gears?

19:29Our discussion next is Bloomberg Tech.

19:40Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com slash audio.

20:22That's Vanguard.com slash audio. All investing and subject to risk, Vanguard Marketing Corporation Distributor. Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London. We're the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now.

20:56And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. on Apple, Spotify, YouTube, or wherever you get your podcasts.

21:35It's really about moving to more profitable vehicles. You know, we're going to make in Tennessee now an affordable pickup truck. So these are going to be better investments for the company profit. And all those hybrid sales, you know, those are really profitable vehicles for us. The Ford CEO Jim Farley speaking with Bloomberg's Matt Miller yesterday as the company announced that it's going to take a$19.5 billion charge tied to an overhaul of its EV business. For more Bloomberg's Craig Jodell joins us. You cover all things automotive. And really, this comes in the context of the U.S. and Europe re-envisaging what their relationship with the EV fuel is looking like.

22:13Yeah, I think with what we've seen just in the last day, day and a half at this point, it's really a matter of sort of plenty of blame going around, right? But this is a case where the consumer absolutely has not been ready to go fully electric universally. I think manufacturers like Ford have learned that the hard way. And I think they have some mistakes to wear here in terms of bringing out electric vehicles that were just too expensive, not supporting them with enough charging infrastructure. And then you have, I think, policymakers, too, where you have a lot of criticism of the approach that the EU has taken and the need on Brussels' part to kind of back down from this 2035 policy that kind of all along was seen by the industry as really a stretch.

23:03And the closer we get to it, the more real doubts have emerged about us being able to come anywhere close to that ambition. And Craig, that ambition, just to remind us, was an effective ban on combustion engines? Yeah, it was 100 % reduction in emissions by 2035. I think you have to sort of throw it effective in there in that there are lots of loopholes and sort of ways in which you can sort of preserve at least some role for combustion engines with offsets and so forth. But this was absolutely going to be a very difficult ambition for this industry. And it will remain so even with some of these changes that we're learning about today out of Brussels.