Musk’s Mega Plan for Chip Manufacturing

23:14And the good news for him and for shareholders is we probably don't have to imagine a time with Tim Cook not at Apple for at least another 10 years or so, right? Because when he steps down as CEO, he will stay involved at the company in some sort of capacity, probably executive chairman. but the wheels are in motion for Tim Cook to step down in the next half decade at the very latest and be replaced by John Ternus, the Senior Vice President of Hardware Engineering. He's responsible for the development of all of Apple's products. Obviously, those generate 80 % or so of Apple's revenue. He's worked at Apple for about half his life, just under 25 years.

23:56He understands the culture. This is someone who would be more product-focused than Tim Cook. but in many ways operates like Cook and would surprisingly be a continuity choice. Mark, what steered you to really feel that he is the heir apparent? What's been happening underneath the hood of Apple that makes you think this is the guy? There's a lot going on. Internally, there's been a very steady expansion of his responsibilities. He's received oversight a couple of years ago of Apple's Vision Products Group, which is responsible for the in-development smart glasses, which are a big upcoming product launch for Apple.

24:32He's taken over the robotics teams. At the end of last year, he took oversight of Apple's design teams, so software design and hardware design. That's a very critical role in the company. That's something that only people like Tim Cook, Johnny Ives, Steve Jobs, people of that ilk have overseen in the past. He's 15 years younger than Cook. He's about 10 years younger than any other option for Apple's next CEO on the company's executive team. Apple has been putting him front and center in product announcements. He introduced the MacBook Neo earlier this month, which is obviously a big business lever for Apple, for the Mac.

25:11Specifically, the day after the introduction of that computer, he was the one who went on Good Morning America to talk about it. These are traditionally things that the CEO, Tim Cook, has done for years for major new products, but now it's Ternus doing it.

25:23Caroline Hyde:Mark, very, very quickly, where does Apple's strategy with AI, generative AI and voice-based AI fit in with this story? You know, the big question is if Apple is going to try to evolve into an AI company or a software and services company. If that's the case, Ternus is probably not the right pick. But I do believe they are going to be a hardware company at heart for the foreseeable future, which makes Ternus front and center of the action. Thanks, Mark Gurman. As always, with one of the most highly read pieces, we so appreciate you joining on it. Thank you. Coming up, Elliot. Well, it's said to take a big stake in synopsis, pressing for changes amid AI pressure.

25:59That's up next. This is Bloomberg Tech.

26:10Caroline Hyde:Welcome back to Bloomberg Tech. The status of the war in Iran is a big driver of markets, particularly for technology. You look at the Nasdaq 100 pushing higher, outperformance in the Philadelphia Semiconductor Index, the president easing off on threats with Iran and talking up the talks that are taking place. There's been outperformance for chips all year long. One reason being that the region is a principal producer of both helium and sulfur, critical elements in chip production coming out of Qatar, Saudi Arabia and the UAE. And supply is tight, was impacted by the Strait of Hormuz. But it's oil, Brent, the global benchmark, now below$100 a barrel again.

26:47Caroline Hyde:A really sharp turn of events overnight, Caroline. But continuing to try and link this to the tech sector, because while it seems like talks might yield an end of the war in Iran, there is not yet an end to the war in Iran. Good context. Let's talk a little bit more with Bloomberg's tech equity reporter, Carmen Reineke. And look, at the moment I'm looking on the Nasdaq 100, only 12 stocks are in the red. NVIDIA leads the charge. Tesla are up in terms of points perspective. But where do people go in this period of volatility? Yeah, so I think when we see things kind of go more risk on, there's so many flows back to big tech because those are the names.

27:19You know, they have a lot of excitement. They have these solid balance sheets. You know, overarchingly, they're what works. So there's what have worked, at least in the past, for investors. And something that we've actually seen recently is that a correlation between the Equal Aid Index and the Magnificent Seven has become less tethered. And while that maybe sounds like it's not a good thing, it actually could mean that there's some outperformance coming for tech. So the last time this happened was in 2023, right before we saw these huge gains from the release of ChatGPT and all of the AI frenzy that's come into the market.

27:51So with things especially looking better, potentially with the war in Iran, we're seeing maybe some more risk on coming back. Valuations have been really washed out from the Mag7. And this really could be a good moment for investors to buy and start feeling better about that sector.

28:06Caroline Hyde:Carmen, you make a technical analysis and look at the correlation, as you said, but you also speak to the street. And one of the conclusions you reach in the piece is that analysts do see big tech, mega cap tech, MAG7 reclaiming leadership in the market. What are the reasons why? Well, one of the reasons that we're really seeing is that there had been some large flows from big tech into international equities, sort of around some of the AI fears, sort of that the gains, the momentum in this trade, it started to peter out. That's something we've seen over the last few months. But now with the macro sort of shifting back, we could really start to see some inflows coming back into big tech, back into those US equities and into some of the areas of the market that have previously worked that have sort of been on hiatus maybe in terms of gains over the last few months.

28:54One of the biggest players in the market, you'd say was BlackRock, just across all benchmarks, all indices. Look, Larry Fink has done one of his really important notes to his investor base. And he's worried about AI and the inequality that's brewing, particularly about access to some of the equity markets. How do you think that could be playing through? You know, I think this is such a good point. And it's something that I always try to remember as we're speaking about markets, that they're just real people on the other end, right? Like this is so important for anyone investing in a 401k or 403b.

29:24What he is saying is basically because gains have been so strong in some of these big companies, it could make the disparity of inequality larger in the market if you're not participating. So it just speaks to the fact that if you can be engaged in the market, if you can be invested, you want to be taking advantage of these gains in technology and in AI. And so he was looking at some ways to potentially level the playing field.

29:49Caroline Hyde:Blumos Carmen Reineke, thank you very much. Elliott Investment Management is said to have taken a multi-billion dollar investment in synopsis. That's according to sources. The activist investor is pushing for changes at the chip design software maker as broad concerns loom from AI's impact. Let's bring in Bloomberg's Liana Baker, who leads our coverage in the U.S. of deals. I have to say, Liana, you know, Cara and I just had a conversation with the CEO. I think it was last week. Cara can correct me if I'm wrong. That's what we talked about. how a threat is your business from AI that basically either renders it redundant or less valuable.

30:25Caroline Hyde:What's Elliott's play here with Synopsys? So Synopsys plays in a really interesting space, the EDA space, Electronic Design Automation Software. It's a duopoly with a company called Cadence. They're kind of the Coke and Pepsi of the industry, and you can't make a chip without them. So Elliott is trying to see, you know, what are these stocks that could benefit long term from AI and the growth of AI. And with NVIDIA, you know, being an investor in Synopsys, they kind of view this one as a long-term winner, but the stock has underperformed and there's a lot of things the company could do to raise margins, maybe they raise prices because they're in this really lucrative duopoly.

31:03They have a lot of levers to pull to maybe, you know, boost the top line.

31:09Caroline Hyde:Caro hit me on the IB. It was March 11th that the CEO was on the show. Could you explain the activist investor part of the story? I guess the mechanics of how it works. So Elliott takes a stake and then what happens? So Elliott is one of the world's biggest activist investors. And they've been in a lot of tech names over the years. Western Digital, they're in Pinterest right now. And what they do is they work behind the scenes. They sort of indicated in the statement, if you read that Jesse Cohen, the head of activism at Elliott, said that, you know, things are sort of constructive with the company.

31:43So they're trying to help Synopsys, you know, get these things in order and make a few changes at the company that long term will benefit both Elliott and Synopsys and all the shareholders. Yeah, Synopsys response so far, Liana, because, of course, its shares have been under pressure leading into this. Liana? Oh, the response. Sorry, you're showing it on the screen. So that's Jesse Cohen's response, who's the Elliott partner. But the company synopsis has sort of said they take all shareholders into account and they're clearly engaging here with Elliott and they haven't put out any statement that makes it sound like things could get ugly or in a fight because that's the flip side.

32:26when you bring an activist into your stock, things could go the other way. In this case, it seems like things are friendly and it won't go to a proxy fight or anything like that, but that is a risk when you have an activist in your shares. Yes, Synopsis saying in an email sent a statement that it doesn't comment on specific conversations with an individual in shareholders, but the board of directors and management team regularly engage with shareholders on a range of issues. Liana Baker with all the news on the latest activist engagement. Meanwhile, let's talk about the bond market. JP Morgan has kicked off that sale of$8 billion in junk debt to fund the record leveraged buyout of Electronic Arts.

33:02That's according to Source. Now, JP Morgan earlier amended the EA buyout debt package, increasing the size of a US dollar loan offering by a billion dollars while trimming back the bond sale by the same amount. Ed, what have we got?

33:14Caroline Hyde:OK, coming up, we're going to speak with K2 Network CEO Shlomo Kramer about their latest innovations in cybersecurity amid growing geopolitical threats. There's a lot to do with Iran and then cyberspace. This is Bloomberg Tech.

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34:29Caroline Hyde:The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand, but by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. Travel smarter, not harder, at America's Best Value In by Sinesta, with convenient locations from coast to coast and value-packed comfort at every turn.

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35:39Caroline Hyde:The RSA conference kicks off this week right here in San Francisco, bringing together thousands of cybersecurity leaders and policymakers amid rising global tensions and digital threats. Cato Networks is among the companies attending, and CEO Shlomo Kramer joins us now. And frankly, and I think obviously, what is happening with the war in Iran will be discussed by you and your colleagues. You know, Iran poses at a nation state level a cyber threat to this country, the United States. What are you seeing? What are you hearing? And what are you talking about with colleagues this week? So obviously the cyber threat from Iran and other adversaries is serious.

36:18But imagine a room full of Iranian cyber warriors and then transformed that to an army, to an agentic army of AI agents.

36:33Caroline Hyde:You're saying that Iran has competence in that domain. I'm saying that the future delivers a much more radically dangerous threat landscape than what the present says through the AI transformation. I think about what Kato does, and I'm trying to summarize it for everyday people that might not know. Instead of having a box on your premises in terms of networks and your own firewall and your own VPN, you just offer a cloud-based solution for all of it. Exactly. It's a cloud-based solution. Think of blockbusters moving to Netflix. So if an enterprise or company of any size in this country does face a threat from Iran or any other threat actor, what's the benefit of going through that technology?

37:21You don't need to be a technologist. You just connect to the cloud network, very simple, through an agent or a small box. and you are protected wherever you are, wherever your applications are, wherever your critical assets are in minutes. Of course, you're an Israeli-based company, and we hope that colleagues are safe at Cato Networks. But I'm interested as to what Shlomo is happening at the moment when you mention agent. Now, before the Iran war erupted, and we focused on that conflict, of course, from a humanitarian perspective, we also were thinking about the market impact before this of software, of being disrupted by generative AI, of the latest plug-in suddenly sending cybersecurity stocks lower.

38:02How have you seen and digested that move in the market? This is a very good question. Thank you for asking it. AI, like any other technology revolution, and this is perhaps the biggest in my life, has beneath it a set of technologies and capabilities that are required, that are enablers to this technology, like in the case of AI, compute energy and cyber. Cyber is essential for the enterprise to consume AI because without security, enterprises will not consume AI. Above that layer of technology, there are the winners, There are the neutrals and there are the road kills of this new AI technology.

38:55And obviously, this is exactly where investors do not know how the card will reshuffle itself and are very hesitant in terms of investing. I will call it almost a freeze. Yeah. But in that sense, cyber is absolutely a winner. And that goes back to my previous comment about the warriors of cyber versus an army of agentic attackers. The threat landscape based on AI is going to change dramatically and for the worse. So cyber is key in addressing that threat and is going to be, unfortunately, a huge beneficiary from that transformation. Unfortunately or fortunately, if you happen to have the CEO of Cato Networks and it's currently privately funded, you might be looking at the public markets.

39:52At what point, Shlomo, do you think you will to beef up the business, continue to grow, will need to turn to broader investment areas? So we are as a growth company, continue to invest heavily in our growth. And we will, you know, consider all options, both private and public funding in order to continue to drive this. We are in the very early in the cycle of this category of network security. It's called SASE. I didn't invent the name. And, you know, a decade from now, this is going to make Cato the largest leader in modern network security.

40:35Caroline Hyde:SACI, Secure Access Service Edge, which basically, again, I'm trying to make it digestible, but you combine firewall, threat protection, secure gateways, everything into one single cloud-based platform. Can I ask you this? This week in RSA, let's put geopolitics to one side and threat level. What's the threat within industry on who's innovating and using competence in artificial intelligence to add value to their products? Like, who is it that you look at and go, wow, they're doing really good things? So the key to answer this question is who is using AI in order to fight AI? Who is implementing AI capabilities?

41:17Because that is the only way to fend off this army. Like the Gentic Swarm defense against a Gentic Swarm offense. Exactly. And companies such as Cato. but many other companies already have been using AI for many years and are doubling down on that. And there are companies that not. And that is going to determine the winners from the losers.

41:41Caroline Hyde:Shlomo Kramer, Kato Network CEO, here with us in San Francisco in town for RSA this week. Caro, plenty more headlines about. There is, Ed. It's time now for Talking Tech. And first up, a comeback concert by K-pop group BTS drew a smaller crowd than expected. Now, that led the shares of the agency that represents them, Hybe, to their largest decline since 2022. The group's return after a four-year hiatus has high stakes for Hybe, which, despite acquisitions of labels from Hollywood to Latin America, has had sluggish profit growth due to BTS's time on the sidelines. Plus, Sony, while it's nearing a$1 billion deal to sell a majority stake in its home entertainment business to a Chinese rival, TCL, that's according to sources.

42:21The company's announced an agreement in January for a home entertainment joint venture that includes Sony's Bravia television brand. And startup Kandu AI has raised$225 million from investors, including Maverick Silicon, SoftBank and Synopsys. Now, the company's CEO, that's Shrijan Linga, is former Goldman Sachs managing director. He has pivoted the startup towards AI infrastructure since taking over last year. ever.

42:47Caroline Hyde:Sticking with Chips, tune in to The Close tomorrow afternoon for a conversation with Rene Haas, Arm's CEO. That's at 3.30 p.m. in New York, 12.30 p.m. Pacific time. All right, coming up, I'm going to speak with Mitchell Green of Lead Edge Capital after the closing of its Fund7 with$3.5 billion in commits. What's next? This is Bloomberg Tech.

43:19Caroline Hyde:Lead Edge Capital has announced the closing of its Fund7 with$3.5 billion in commitments, bringing its total capital raise since inception to$9 billion. Here to discuss is Lead Edge Capital founder and managing partner, Mitchell Green. And it's great to have you back on the show. Let's just start with the basics,$3.5 billion for Fund7, what the intention is, the strategy, the thesis in how you deploy out of this fund. Sure. Well, Ed and Caroline, thanks so much for having me on. Thesis continues to be as the same as it's been in funds three, four, five, six, seven. This will just be a continuation of what we're already doing.

44:00We have a very specific framework, which we call the Lead Edge 8, which is certain financial criteria are a 10 million plus in revenue or you're growing 25 % plus a year. We'll continue to do that across the life cycle of different types. Literally, we can lead a primary around, put money on the balance sheet of a company. We can buy out early investors or early employees. We can fund a continuation vehicle from an investor that needs to get out. We can buy an entire company in a buyout. It's really like the full life cycle. And then actually, we also invest in some companies when they're public as well.

44:37Caroline Hyde:The rules-based approach is very interesting. whether you call it venture capital or private growth equity, because I'm curious how it works in practice. So if you're saying, okay, we only invest in companies that reach these criteria, do you find them or do they find you? It's a great question. So the way we've always sourced, and it's the way the three of us who run the firms, our backgrounds are at Best for Venture partners and insight. So we have a team of about 18, 22 to 24 year olds that pick up the phone and call companies all day long. Gone are kind of the days of cold calling company or actually leaving voicemails.

45:18But our team of 18, 22 to 24 year olds think of these people as a lot of former college athletes, people that were debaters, people that were entrepreneurs. We want people that are really persistent because the great company doesn't call you back right away. Sometimes call that CEO half dozen times before they call you back. Right. But again, we'll speak to about 9 ,000 companies a year. And if I said you had to meet all eight criteria, it'd only be about 90 or 1%. But we say that if you meet at least five, it's about a 10 % yield. So at 9 ,000 companies, 900 meet five or more criteria, due diligence on 150 to do five to seven deals a year.

45:59Mitchell, I can't help but feel that those ex-college athletes and those 22 to 24-year-olds are going to be very well helped or maybe disrupted by AgenteKI. And I want to hear your play on the whole software investment thesis because this is what caught my attention.

46:19Yeah, so what I would say is, again, Again, as long as the person that works at Liage, a 22 to 24-year-old, is on the other end of a phone talking to another human being, like a CEO or CFO of a company, human -to-human interaction is still really, really important. However, where AI can be really helpful now is, and where I did this, you know, the three of us who run the firm all started our careers doing this 15, 20 plus years ago. And, you know, today, an analyst or an associate, cold calling companies, can use AI to be a lot more educated when talking to an entrepreneur. You know, they can have done a bunch of research that would have taken a couple hours before, and they can do it in five minutes.

47:13You can chat to our Claude. You know, they can look up all the competitors. They can get the value prop. They can ask, like, what do you think the right questions to ask are? So actually, AI, it can help you find more. If you say, hey, I just spoke to ABC company, like Toast and the restaurant point of sale system, give me all the competitors so I can then call them as well. So it actually, like, makes the analyst associates even more powerful. And Mitchell, how many, therefore, of the calls do you think will still be going to software companies that have been beaten up that you think still look attractive?

47:41Because that has been the narrative that AgenteKI is coming to eat their lunch and therefore they're going to see significant pressure on their ARRs and their future growth. For us, it's always been about software is a very broad word, right? There's lots of different types of software companies. Just like if you say I'm going to Europe. there's lots of places in Europe you could be like, oh, in Europe it rains a lot of places in Europe it doesn't rain so for us software, so we're looking for companies and we always look for companies that have very high gross dollar retention now again you might say, well, AI is going to change all that well, then you're looking for software companies that have a moat, that have that own the data that are systems of record that tend to sell to large enterprises you know you could have most, you know, if you have people on here from most banks, most banks still don't even allow their employees to access, you know, access AI from their systems.

48:41These big enterprises, when they buy software, want security. You know, look, you've been able to buy open source software for decades. Yet companies like Elastic and Grafana and Databricks and Red Hat exist because they provide an enterprise level on top of what was already free software. And I think you're going to continue. And again, we invest outside of software as well. We invest in consumer internet. We invest in marketplaces. We invest in financial exchanges. We invest in payments companies like TransferWise. But yeah, we will continue to definitely invest in software. Mitchell Green, LeadEdge Capital.

49:16Come back as you deploy that seventh fund. Congratulations on the fundraise. Talking about the use of AI, for that, you need infrastructure. We can talk about that now. Nscale, a UK developer for AI data centers, is now one of Europe's most valuable startups after raising$2 billion in a recent round, which now values the company and a cool$14.6 billion. Now the AI hyperscalers are also looking to this particular company because they want to be looking for more compute, but also they've got some significant leaders coming in, directors, including former British politician Nick Clegg, Sheryl Sandberg as well, longtime chief operating officer of Facebook and its parent Meta.

49:53And I'm very pleased to say we can welcome the leadership now. NScale CEO Josh Payne, along with Sheryl Sandberg. It is a joy to have you both on the show. And Josh, some huge ambitions from NScale and just the computing power that you can bring online, the revenues you're going to be generating in the next few years. Just talk to us about how you achieve that, that necessary infrastructure, Josh.

50:14Caroline Hyde:Well, thank you, Caroline. It's great to be here. You know, firstly, what I'll say is this is the fourth industrial revolution. This market is moving so fast and we're still at the beginning. We're talking about a technology that is going to lead to automated drug discovery, the extension of human life, truly autonomous agents. And the only thing that prevents that future is access to the scarce resource, which is the compute. And so N-Scale solves this problem. We buy and build and deploy all of that infrastructure to allow for these products to be built and operated. And so not only is there just huge demand for the sector, but we're capturing it.

50:49And there's huge demand for your expertise, Cheryl, and to join boards. Why did you choose Josh? Why did you back N-Scale? Why on the board? Well, the funny part of the story starts with his part, which is...

51:05Caroline Hyde:Well, so thinking about how I build the next great AI platform, what was most important to me is speaking to executives that have built great platforms before of global scale. And so certainly none better than Sheryl Sandberg. And so I tried for some time to get an introduction to Sheryl. And upon finally doing so, we scheduled a 30-minute call. And the first thing that she said to me was, I don't do boards and I don't do these calls. Right. So it was an inauspicious beginning, but I didn't do boards and I didn't do these calls. But what I saw in Josh, 90 minutes into our 30-minute phone call, was what I considered real visionary leadership.

51:44Over the next few weeks, as he was trying to get me to consider joining the board, he went away and he wrote a letter to his management team. And the only person I'd ever seen write like that was Mark Zuckerberg. This combination of a relentless, relentless desire for great, relentless desire for execution. You know, and from my point of view, I joined Google when it was at 250 people, left at 20 ,000. I joined Facebook when it was 550 people, left almost 100 ,000. So the opportunity to work with a founder I believe in, I joined right as the company was about 300, 400 people, so that same spot, and try to take some of the lessons we've learned and help a company I believe in this much scale really matters.

52:29I also really believe in the power of AI. I think we're at the very beginning. I started my career in global health. AI is going to mean that anyone in a remote village anywhere in the world could get skin cancer diagnosed at the same efficacy rate as someone in the Mayo Clinic. But that is going to take a build out and a build out of infrastructure and compute. And I really believe in Josh and N-Scale's ability to do that. So I'm happy to be here.

52:56Caroline Hyde:Josh, the term NeoCloud has actually also become quite broad. When I talk to people about N-Scale, they say, well, N-Scale is modular. How do you set yourselves apart from the other NeoClouds out there, many of whom come on this program and make quite similar pitches? Yeah, so I think the key distinction with N-Scale is we are fully vertically integrated. Again, if you think about the challenge for the sector, it's actually landing the infrastructure on the ground and getting it plugged in. And the true scarcity, given the demand in the sector, is the land, the power, and then the chips. And so, by and large, the neocloud sector is not really vertically integrated in that they don't own their own land and power.

53:37Caroline Hyde:N-Scale does. We own the land and power, we own the chips, and we own the software, delivering an end-to-end service to the counterparty. In addition, we recently acquired a company called American Intelligence Corporation in West Virginia, which adds an even further segment to that, which is the ownership of the power. This is a behind-the-meter site, which means that we're effectively taking natural gas and producing our own energy, which means it's not connected to the local grid and therefore subject to any kind of price increases for consumers. Cheryl, it's great to have you back on Bloomberg Television and on Bloomberg Tech.

54:14Caroline Hyde:You said, I don't do boards historically. With this role, with N-Scale, I think a lot of people are really interested if you go back to being an operator. with time if you would join the executive ranks at Nscale and whether you do or don't, kind of operationally, how you think you can help the company grow. So I've joined as both a board member as an advisor. I'm spending real time with Josh and his team. I have no plans to go on board full time. They have an incredible exec team. And my goal is to help them scale, help figure out how we structure, how we do corporate governance. I've helped recruit some other great board members.

54:53Nick Clegg, you mentioned, joined the board with me. Sue Decker, who has decades of experience chairing audit committees and in the financial world, and work with them to really scale their company. What I see in Josh is two things, is real ambition, like real ambition to make a difference in how the AI build-out happens, make it sustainable, make it clean, commitment to local jobs as we scale and build. but also a commitment to excellence, to hiring the best people, to getting people into the right jobs, to structuring so that we can really execute. And it's been, it already has been a great pleasure to work this closely with someone I believe in.

55:35And also, Caroline, I know you always care about this, a really strong team of senior women. Head of AI infrastructure, CFO, head of security. josh before me uh hired what he considers who he considers the best people and a lot of great women in those jobs i love that because it's something i'm passionate about it's something that you spent your career advocating for cheryl is diversity within the ranks of talent but also you're advocating as well for clean energy and i i noticed you got one other board seat with teradot and that is about carbon neutrality so josh i ask you what about carbon neutrality for west virginia because that's about the actual gas how do you think about that in the longer term Yeah, sure.

56:16Caroline Hyde:So broadly, the company thesis is to take sustainable energy and convert it into intelligence. So we first do this in the north of Norway. So we operate in the north of Norway using only hydropower. The north of Norway has such a large oversupply of energy due to basically the seasons. Effectively, during the winter, all of the glaciers melt over. And then in the summer, they all melt and create enormous waterfalls. And the Norwegian government has built large hydropower dams to capture that energy. But the challenge is it can't be exported. And so it's got to be consumed in region. So N-Scale is building some of the largest AI infrastructure projects on the European continent in the north of Norway, taking otherwise stranded energy and converting it to intelligence.

56:57Caroline Hyde:The same goes for our projects in Texas, as an example. In Texas, you've got a similar oversupply of renewables and other energy, but it's in remote location. So we're building some of the largest infrastructure projects in North America in this location in order to convert that to intelligence. Now, in West Virginia, we're doing the same thing, but slightly different. In West Virginia, we're producing our own energy. One of the challenges with the North American grid is constraint. And so we felt that producing our own energy with natural gas generators, i.e. behind the meter, was the best way to scale sustainably, but also not impact local prices and the grid.

57:41Caroline Hyde:Cheryl, you're very used to being inside companies that are just truly global, right? Listening to what Josh is saying, N-Scale gets a lot of credit because it's kind of a leader in Europe. It is a footprint in the United Kingdom, but we've just been talking about America. How much do you want, Josh, I know he's sitting next to you, to shift gears a little bit and move this company and himself to the U.S.? Do you want him to focus on the Middle East, where there is the capital, there is the will, there is energy supply, for example? Well, I'll let him answer that. But certainly this is global, right?

58:18This is a global company started in London and continuing to expand all over the world. Yeah, so I mean, today we're operating in five countries.

58:31Caroline Hyde:We have plans for 15. Naturally, North America is the center of the universe for artificial intelligence, both with startups, with larger customers, with access to capital. And so naturally, I spend a lot of my time here. But as Cheryl said, this is a global market and I'm spending most of my time on a plane as a result. That's a very familiar tale that your peers have told us on this program too. N-Scale CEO Josh Payne, N-Scale board member and advisor Cheryl Sandberg. It's great to have you both on the program. That does it for this edition of Bloomberg Tech. Tune in tomorrow for a special edition of the show live from the Hill & Valley Forum in Washington, D.C.

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