Nvidia Hits $4T Market Cap, SpaceX's Path to a $400B Valuation

23:18A Rivian-backed startup that's developing small EVs is getting valued at a billion dollars in new investment from Green Oaks Capital. And the company called Also Inc. was spun out of Rivian earlier this year. Also, well, it hasn't revealed specifics, but said its tech platform will be applicable to e-bikes, microcars and neighborhood EVs. Meanwhile, French AI startup Mistral is in talks to raise as much as$1 billion in equity from several investors, including Abu Dhabi fund MGX. It's all according to sources. For more, we go out to Bloomberg's Mark Bergen, who helped break this story. And just focusing on Mistral here, They've already raised about a billion before in equity, but they're also looking to the debt markets as well.

23:59That's right. It's a move that we've seen Elon do with XAI. I mean, these are incredibly compute computational intensive businesses, especially if you're trying to build language models and kind of keep up with the frontier of OpenAI and Google. Mistral has, I think, tapped the brakes a little bit on that being a direct competitor to OpenAI, but they still want to be in this sort of generative AI model game. And that's very expensive, both for, as we've talked about a lot on the show, for hiring engineers. And then it's very expensive for these big data center projects that they announced earlier this year.

24:33So that's why we believe they're actually not only raising this equity round, but also seeming to raise probably almost half as much in debt. Wow. And go back to those data center announcements, because Abu Dhabi is involved in that, too. Just tell us about how much this is political in many ways. I think so. I mean, this is partially, we've seen a bilateral agreement coming out a few months back to the UAE in France, talking about building the biggest data centers in Europe. MGX was part of that. There was a commitment of somewhere between 30 to 50 billion euros in funding for data centers across France.

25:08MGX has basically taken a portfolio strategy. If they go through with this deal, we've also reported that they're in talks to invest with Anthropic. They've invested in OpenAI. They invested in XAI. They are getting behind sort of every major player in this AI race. I believe they're probably going to do something similar with infrastructure. We may do see something similar on the energy and on the chip side as well. It's interesting because we've heard perhaps some pieces, and surprisingly within the contracts that are signed when you're giving money, is of course you can't be sharing information when you're invested in so many of these startups.

25:42But if you're looking at Mistral versus XAI or OpenAI, Where are those niche? Because they're not more broad anymore. Right. They're not more broad and they're not necessarily as commercially successful or building the sort of cutting edge models. I mean, their niche has been and their selling point is sort of we are an open source alternative. We are the sort of sovereign AI. We will come in and kind of build you these AI services that can live in a private cloud. They're targeting governments. They've started working on defense in France and Europe in a time when sovereign AI is certainly like a marketing term thrown around a lot, but it is something that's become much more politically critical where countries and companies in Europe are looking to rely on local tech as much as they can.

26:27Is Mastral like the pinup for Europe right now? I mean, right now they are, they're certainly the highest, this would make them the most valuable. I think they're probably the most valuable. We don't have an evaluation for Wave, which is a self-driving company based here in the UK. I think there's been a little bit of wavering enthusiasm for Mistrel. I don't think people have been as impressed with their models, but there's certainly a lot of energy and certainly a lot of investor money tied up with their success. Bloomberg's Mark Bergen coming to us from London. We appreciate it.

27:02Welcome back to Bloomberg Tech. Let's take a look at these markets that are very close to record highs. We have the Nasdaq 100 currently powering up four tenths a We're shaking off some of that trade anxiety and we're seeing some of the key leaders of the pack drive us from a points perspective. Yes, Apple is lower, particularly worrying about tariffs for them again today. But let's look at what is really on the points perspective driving us higher. NVIDIA. We have at one point hit$4 trillion in market capitalization. Never been seen before. We're up more than 2%. It's a record high for the AI darling.

27:34Amazon also helping contribute from a points perspective. Microsoft too. That's got an upgrade. but Amazon doing well at 1.3%. NASA's Prime Day is in full swing. We are stretching now over four days this year, up from two in 2024. There remains to be seen whether that will entice shoppers and sellers alike. This, of course, in the context of rising tariffs and rising prices. Let's get more on the inside track. Jamil Ghani is with us, vice president of Amazon Prime. And you're really already seeing, Jamil, Adobe Analytics, saying that U.S. retailers drove close to$8 billion in online spending on July 8th, up almost 10%, the single biggest e-commerce day so far this year.

28:17Is sentiment good, therefore? Yeah, we just started the event yesterday, so it's very early, but we're really pleased by the engagement that we're getting from our customers and our members. Not only is the event twice as long, so four days, as you mentioned, but we're also offering more than double the number of deals that are 50 % off or more. That's driving engagement across the millions of deals we have in 35 categories. So we're really pleased, but it's very early, of course. Why make it four days? And how is that affecting the pace of spending, do you think? Well, we listened to our members, and they told us they needed more time to shop the millions of deals that we offer across our entire store.

28:58This gives them that. We're also offering new AI tools to get a more personalized, more targeted experience. That allows our members to shop both the needs that are on their list, but also the wants. And you see that in the data already. The top categories that our members are engaging with are health and personal care, apparel, beauty, home, kitchen. And really, it's stretching the entirety of the store, and members need time to shop it. And so we've given them double that time. Needs and wants, that's an interesting way of putting it. We've seen a lot of spend galvanizing groceries, for example, in some of the competitors.

29:36Is that an area you're feeling you're having to make more inroads in, really show that you can discount at this particular time? You know, grocery and everyday essentials, which is the broader definition we use internally to describe those things that a busy household needs to keep running and, you know, deal with all the things that come their way. And we're investing heavily. That's the fastest growing part of our store. and some of the items that are really resonating with our members during Prime Day already are like Dawn Platinum Power Wash Dispray, something that my household, your household likely has it under the cupboards.

30:10It's also Crest 3D white strips, Amazon Basic AAA batteries. It's these essentials that you need for modern life. But it's also the other end of the spectrum. Beauty is a really exciting part of our store. MediCube has a number of fantastic products on sale. One of the top products so far is their Zero Pour Pad. So you can see just even in the data of what members are scooping up in terms of savings, it's stretching from, you know, the things you need to do in order to keep life moving all the way to what you would consider more wants as well. Things you might have had on your list for a while.

30:45Apparently white teeth needed to keep life moving, Jamil. Talk to us about Gen.AI, though, because you just mentioned how that's helping it become more personalized. How's Rufus, the shopping assistant, doing? How more broadly is Alexa Plus doing? Because I think it was Adobe again saying that we're going to see more than 3 ,000 % increase in the use of Gen AI in this particular spending spree. Yeah, Caroline, you're absolutely right. We've been investing for years, from the very beginning of Amazon to the beginning of Amazon Prime, which is celebrating its 20th anniversary this year, in all forms of AI.

31:16This year, we're bringing Rufus, as you said. Rufus is smarter about Prime Day. Rufus is smarter about your interests and can respond to natural language queries and bring back those deals that match those interests. We also have a product called Interest where you can go in and with a simple set of statements, you can say, I'd like to remodel my living room in mid-century modern. Please show me deals that are less than$100. And it will proactively make that into the recommendations you see throughout the store. We also have shopping guides for those items that are a bit more considered. You know, I'm in the shopping mode for a laptop for my eldest daughter, who's eight.

31:54I don't buy a laptop that often, and these AI-powered shopping guides have been invaluable. And then lastly, Alexa Plus is rolling out. Millions of members have access now, and they're using it to check, you know, the timing for Prime Day, but also to get recommendations on deals and to be alerted when something that they've looked at previously is now on sale. Okay, so you're in the market to help your eight-year-old. But what's interesting is Amazon seems to be in the market to lure more young adults, right? That is such a push right now. Why is that the area you want to make inroads? Well, we recognize that, you know, Prime exists to deliver three things.

32:32Convenience, savings, and entertainment behind one simple membership. And we hold ourselves to the bar of delivering disproportionate value. Everybody today, and likely always, wants to make a dollar stretch. And for younger customers, that's more true than maybe for most. And so we're reinventing our young adult program. Prime for young adults is 50 % off. But now on top of that, we also are offering an evergreen 5 % discount that for Prime Day is 10%. So our members can not only avail the great deals across the entire store that we've been talking about, but also add to it 10 % in categories that they really care about, like beauty, apparel, electronics.

33:13And so we're really proud of that program, that offering to that key customer segment. See how much they love the LeBron ads too. Jamil Ghani, great to have some time with you, Amazon Prime Worldwide. Meanwhile, coming up, we'll dive into how China is building data centers throughout the country's deserts in a bid to fuel Beijing's AI ambitions. This is Bloomberg Tech. The people who seem to get more done than everyone else. They're not working longer hours or running on more caffeine. They've just stopped wasting time on the stuff that doesn't move work forward. Switching apps, re-explaining context, hunting for files.

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36:37China is betting big on AI. We know this. But in a new Bloomberg investigation, we have found Chinese companies driven to build data centers in some of the most remote regions of the country to fuel Beijing's AI ambitions and looking to buy 115 ,000 NVIDIA chips to power them. Bloomberg's Jackie DeVolos joins us now for more. So on the edge of the Gobi Desert, a modest county called Yiwu, I think, has massive AI ambitions. What draws them there in particular? Why that spot? Because this is in the Xinjiang region. And a lot of us know about that region because of the controversy around labor issues, religious persecution.

37:21But it's also one of the most energy-rich places in China. It's rich in solar, it's rich in wind, and it also has abundant coal energy, which is needed to power this massive AI infrastructure undertaking, Caroline. It is one of the largest that we've seen come out of China. And in many ways, it's almost garnering the same kind of clout as the U.S.'s Stargate. This is a huge undertaking. 36 data centers are planned and 70 percent are expected to be housed within a single compound, 70 percent of that capacity. It is massive when you think about just how much AI compute power China needs to kind of get up to speed to the U.S.

38:08But, of course, the big question coming out of this story is how will they obtain these NVIDIA chips, 115 ,000, to really get that power off the ground? That's so poignant because we know that China has energy, but it doesn't have the scale needed to create their own semiconductors, sophisticated ones, as far as we understand. Now, NVIDIA did weigh in and have been saying that ultimately this isn't what they believe is currently occurring. They say trying to cobble together a data center from smuggled previous generation products makes no business or engineering sense. So where is this 115 ,000 NVIDIA chips coming from, Jackie?

38:46Well, reporters that put together this story really combed through tender documents, investment approvals, and other reporting that really didn't explain this, not in those documents. And perhaps it's for a reason, because these are banned chips. China is not supposed to have access to them. Since October of 2022, these chips have been banned. So it's not clear exactly how this would occur. But of course, one avenue is through smuggling. And even U.S. officials have said that such a smuggling operation would be too complex. So it is ambitious, but it's not clear just what measures they would need to take.

39:28Obviously, the United States has been taking a closer look at other countries where such smuggling could help China, Thailand and Malaysia being two countries. But this is a major focus for the Trump administration, which has really started to ramp up those efforts to curtail China's ability to get access to these chips, Caroline. Sort of a replacement to the AI diffusion rule. Bloomberg's Jackie DeVolos. Fantastic roundup. Thank you. Let's keep discussing how the U.S. can compete with China's growing AI efforts. We're pleased to welcome to the show Jason Oxman, President and CEO of the Information Technology Industry Council, alongside New America Senior Fellow Sam Sachs.

40:07And Sam, I start with you because you've been assessing, analyzing Chinese tech policy for decades at the moment. What do you make of their belief system that they could access NVIDIA chips like this? Would they? I mean, I know you're about to go out to China for a key AI conference. I'm headed to Shanghai for the World AI Conference at the end of the month. And the reality is both China and the United States are focused on getting the infrastructure necessary to win the so-called AI race. Now, whether it's actually a race is a separate question. But data, energy, computation and human capital are all critical inputs to this.

40:48And massive investment in infrastructure is top of mind for leaders in both countries as they seek to do it. Now, the question of chips is also colliding with the tariff battle. Export controls and the question of whether the Trump administration will loosen its grip on China's access to the advanced technology, advanced semiconductors, is going to be a key question as these negotiations take place. Let's therefore talk about what the executives are wanting at this moment. And Jason, you represent the most innovative companies in the United States. So how do they think about this so-called competition with China?

41:25Are they thinking that they need to race? And where are our bottlenecks more broadly here? It's very real. And if we go all the way back to the very second day of the Trump administration, you saw a big announcement, Project Stargate, as Jackie mentioned. Companies like OpenAI and Oracle and SoftBank and NVIDIA investing$500 billion in AI capability here in the United States. It's definitely a race, and the primary competitor in that race is China. China has aspirations to compete globally on AI. We need to win the race here in the United States. So what the technology industry is really looking for is an environment that's conducive to investment in the U.S.

42:03You saw it with Project Stargate. You've seen a lot of other announcements. Apple announcing$500 billion as an investment in the U.S. IBM announcing$150 billion. The list goes on. It's up over$2 trillion at this point. But there's certainty that's necessary. We got a little bit of that last week with the big, beautiful bill passing and restoring the tax incentives for investment in manufacturing, accelerating the incentives for investing particularly in manufacturing and technology in the United States. The next thing we need is some trade certainty and a move away from tariffs as a trade strategy and into trade agreements so we can expand that investment in the United States as well.

42:37Well, Sam, weigh in here on the trade negotiations with China in particular and whether there will be any wiggle room to be seeing what China ultimately wants is access to certain semiconductors. Will that be a bargaining chip that could be loosened in some way? So a year ago, I was in Beijing and I heard from interlocutors, we will not come to the table. And this was before the tariff battle. This was just regular tensions. We will not really come to the table to work things out with the U.S. unless export controls are lifted. And a year ago, that was an impossibility. But when the two sides met in London last month to try to get things back on track, we had the Secretary of Commerce, Howard Letnick, included in the negotiations alongside Treasury Secretary and USTR, which meant export controls are now on the table.

43:27The question is, how far will they go? In April, we saw NVIDIA's H20 chips put on the export control list. Those were designed to be compliant with China's market. But we don't know, will they lift that? Will the Trump administration lift that? Are they going to go even further and unwind some of the Biden administration controls on advanced semiconductors, equipment? We saw loosening on electronic design software just in the last week or so. So there's a lot of room to work with. And the question is what specific tools will be acceptable to the hawks in the Trump administration when China is eager to get sort of at this issue that has been front and center for them for a long time?

44:12I know this is a hard one for you, Jason, but to single out a few of your members, AMD and Vidya, they want access still to China. Do you think that's ever going to be something that they're managing to convince that they can do that safely? There is a way to balance the national security interests that Sam made reference to with the economic interests of American companies. Ninety-five percent of the people that live on the planet do not live in the United States. And if we deny American companies access to global markets, we're denying them the opportunity to really expand economically and succeed.

44:45There is a way, and the Trump administration has been moving in this direction, to make sure that the Chinese Communist Party doesn't get access to the most sensitive technology for its military purposes. The Biden administration tried this with the AI diffusion rule that you mentioned. They did it in a very poor way. They restricted access to our allies around the world, getting access to American AI technology and semiconductor technology. That rule has been scrapped. We're moving forward and ensuring that we make a legitimate national security approach, not harbor that economic interest as well.

45:20In other words, we can't, in the name of national security, deny American companies access to the rest of the world. We can balance it correctly. We can make sure that those markets are open and accessible, but make sure that the national security interests are protected as well. Sam, many would say that some of the moves on limiting copper, for example, into the United States is about national security in the longer term to make it more self-sufficient, but that takes decades. Just tell us about some of the certainty that's necessary. I think of rare rare earth elements, rare earth metals, so dependent on China.

45:53That's a big bargaining chip of China versus the U.S. But thus far, there hasn't been the sort of support coming necessary from the administration to allow us to mine it more in the United States. That certainty isn't there. The thing about rare earths that everyone will say is they're not that rare, but they're really dirty and it will take a long time. And do we actually want those industries here? But certainly, I think there's been an emphasis on reducing bottlenecks because these These are choke points that can be weaponized against the United States. And Beijing realized that they'd stumbled upon an incredibly important choke point.

46:26Looking at where the negotiations stand right now and on rare earths specifically, you know, when the two sides came back to the table, they said, we have a deal. I noticed two things from the Chinese side specifically on rare earths. One, they agreed that they were going to loosen their controls and speed up approvals. but they're only going to be granting licenses for six months at a time, which means Beijing wants to keep this in their back pocket as leverage. And the second is we've heard that U.S. companies in the process of applying for those approvals have been subject to very invasive questions from the Chinese government for sensitive business information.

47:04So we're not out of the woodwork yet, and I think it's yet to be seen what the Chinese government is willing to give on rare earths. Very briefly, Jason, the other key bottleneck is talent. Have we got it here? Yeah. So China is racing to deploy that AI talent. The Trump administration just last week announced a new AI education initiative that ITI and a number of our member companies signed on to to develop the homegrown talent that we need. We also need to attract the best and the brightest from around the world. Most technology companies that we're familiar with were started by first or second generation immigrants.

47:36And we need that next generation of AI talent to happen here, to start their companies here, to stay here. So we need to attract them as students. And we also need to educate the workforce to make sure that we have the best AI talent here in the United States doing that invention, doing that creating and job descriptions that we want to see out there. What a great conversation. Jason Oxman from the Information Technology Industry Council right here in New York, along with Sam Sachs from New America. It's been wonderful having you both. Thank you. Meta, it is investing$3.5 billion in Esselor Luxottica, purchasing a minority stake in the company as it boots his AI glasses ambitions.

48:11It's all according to sources. Some more Bloomberg's Kurt Wagner joins us. You help break this story. Basically, they are the maker of Ray-Bans and Oakleys that power the meta AI story. That's right. This is a company that Meta has been partnering with on the product side for several years now. You mentioned the Ray-Ban meta glasses, the Oakley glasses that they just announced last month. So this is a company it's had a long relationship with. And actually, this investment has been expected, but now it's final. And what I think it does, it ties these two companies together in a more formal way, but it also signals how much Meta continues to believe in this idea of AI glasses as the future, right?

48:48I mean, this is not a small investment. This is a sign that they are not only building these things, but that they're kind of putting their money where their mouth is here, and this is the future for them. Yeah, they want to profit from the upside as well as they deepen that tie. Kurt, just pivoting to another AI story, and one is ex-AI and just looking at X, I mean, how do you react to Linda Iaccarino saying she's no longer going to be CEO? Yeah, well, I was surprised, not because we haven't been talking about this for a while, right? I think everyone's sort of been wondering how long she would last since she took the job two years ago.

49:21But I was just at Cannes Lions in the south of France a few weeks ago, and she was there. She was representing X. She was on stage. She was in meetings with partners and advertisers. And so I kind of thought that she would be around a little longer because of that. But look, this is a job that I've said from the beginning is incredibly hard, especially when Elon Musk is the owner of this company, because he does not do things that make selling advertising on X an easy proposition, right? So her whole job is to make X seem safe, brand friendly. And when you have, you know, Musk out there doing the things that he tends to do, it is a tough gig.

49:55And so I'm not surprised that, you know, two years in, she's decided to move on. And 30 seconds. It's also hard when Grok, the chatbot, is doing the things it's been doing. Anti-Semitic commentary was what was reported yesterday, but they've got a big update tonight. They do. There's a live stream tonight about Grok 4. You mentioned the timing of yesterday when Grok was spewing this really vitriolic stuff of anti-Semitism, things like that, that a lot of people took issue with. And so it'll be interesting to see how they address that, if they address that tonight on the live stream. But we're expecting that late tonight, Pacific time.

50:31Forever busy. Bloomberg's Kurt Wagner. Thanks for bringing us the story. Now that does it for this edition of Bloomberg Tech. Do not forget to check out our podcast. Find it on the terminal, as well as online on Apple, Spotify, and iHeart. This is Bloomberg Tech. The people who seem to get more done than everyone else. They're not working longer hours or running on more caffeine. they've just stopped wasting time on the stuff that doesn't move work forward. Switching apps, re-explaining context, hunting for files, those aren't small inefficiencies. They're hours wasted every week. Superhuman Go gives you those hours back.

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