BlackRock Weighs $10B Investment in SpaceX IPO, Microsoft’s GitHub Alarm, Genspark COO on AI Apps

0:13Stephanie Palazzolo:Welcome, everyone, to The Information's TI TV. My name is Akash Pasricha. It is Monday, May 18th. We've got an action-packed week ahead of us, a couple things to put on your radar. Google is hosting its annual IO developer conference. Meta is scheduled to begin a big round of layoffs that will account for about 10 % of its total headcount. And NVIDIA is reporting its first quarter results on Wednesday after the closing bell. It's also a big week for Elon Musk with the expected launch of SpaceX's Starship scheduled now for Wednesday. If that goes well, it would mean big things for the upcoming SpaceX IPO.

0:51Stephanie Palazzolo:Of course, the launch has been delayed at least three times in 2026 alone. so we will see if things take off or not. On the show today, the information published exclusive reporting about Microsoft executives sounding the alarm over GitHub. We'll talk about the outages that it's been experiencing shortly. We also have exclusive reporting around BlackRock's potential interest in the SpaceX IPO. I'll then talk to the co-founder of AI platform, GenSpark. We'll talk about pricing, competition, models, and of course, ROI. And lastly, we will wrap the show with some exclusive data from our generative AI database on how concentrated revenue is in the sector.

1:31Stephanie Palazzolo:It's going to be a fun show, so let's get right on into it. GitHub is causing Microsoft more and more problems. Activity on the platform is surging, but so too are issues and outages. I want to bring on Aaron Holmes, our Microsoft reporter who published an exclusive story with those details today. Aaron, welcome back to the show. It's great to have you here. We had you on the show a couple weeks ago. You mentioned that GitHub had some problems with outages. You published a deeper dive on the platform today. What's changed since we last spoke to you? Yeah, so essentially I have learned that these outages that GitHub has been suffering are basically resonating with some of its biggest customers, and heard that some of those customers have actually been complaining to Microsoft and getting essentially refunds on, you know, some of the time that there were outages.

2:23And, you know, that's starting to obviously impact some of the bottom line at GitHub. And on top of that, I think, you know, I also just kind of learned more broadly that the executives who lead GitHub are trying to really push to fend off the rising competition that GitHub Copilot is seeing from Cloud Code and from Cursor. And that at this point looks like, you know, an all-out effort to improve Microsoft's own AI coding models so that GitHub Copilot has more of a moat compared to competitors like OpenAI and Anthropoc.

2:56Stephanie Palazzolo:So we'll get into all those parts of the story shortly. I want to go back to the fundamental cause of the outages. Do we know why these outages are occurring? You know, there's a lot of different factors that seem to be kind of creating this unique situation. So the company itself has pointed to rising traffic on GitHub, which is, you know, being driven by people using AI coding agents who can effectively upload and edit code on GitHub much more rapidly and more frequently than a human ever could. Not all of that increase in traffic is leading to new revenue, though, because GitHub does not charge for basic things like, you know, uploading code or editing code with your own third-party AI agent.

3:40At the same time, we also know that GitHub is moving from Google Cloud to Azure, and that migration has caused some issues, according to the company. There's also just been a lot of churn at GitHub. A lot of the leaders that were previously leading it have moved to other parts of Microsoft or out of the company entirely. So I think that all of these things are kind of coming together to create a somewhat challenging situation for GitHub. but the company has said that they are making some fundamental changes to how they, you know, develop and host the platform that in theory should help with the outages that they've been seeing.

4:15Stephanie Palazzolo:So I didn't realize this, but GitHub, which is owned by Microsoft, they were actually using Google Cloud this whole time? They weren't using Azure? Yeah, they've used a mix of different cloud providers. They were acquired by Microsoft in 2018 and originally wanted to get on Azure pretty quickly, but it ended up taking just a lot longer than the company had planned for. but this year they are officially trying to make the Azure migration happen fully and once and for all. Right. So one of the interesting parts about your story, Aaron, is you also talked about who's leading GitHub or rather, you know, there being sort of a bit of a, not a void, but a question mark as to who is actually leading, who's in charge over there?

5:00Yeah, so the most senior executive leading GitHub is Jay Parikh, who Microsoft hired from Meta a couple years ago and specifically has been leading all of the kind of internal businesses that basically sell developer tools. So GitHub kind of became a natural fit for Parikh to take over. However, last fall, former GitHub CEO Thomas Domke left Microsoft. And since then, there hasn't been a dedicated CEO just on GitHub. There's also been some other big departures. Asha Sharma was leading product at GitHub or within the core AI org that includes GitHub and then left to become the Xbox CEO earlier this year.

5:43Julia Lusin, who was leading the developer division at Microsoft, also had some oversight of engineering at GitHub, and she just announced her retirement. So it is definitely a period of transition where a lot of the most senior folks who had been leading GitHub have moved into new roles.

6:00Stephanie Palazzolo:So then I just want to understand then what Microsoft is doing then to address these outages because they have a lot more traffic. And again, we should remind folks here, GitHub is in the business of basically people who develop code. They upload their code, and it's a place that they can sort of share access to these code repositories, I think it's called. And so we are in an environment where it's a lot easier to generate code. There's a lot more code being uploaded, more traffic, more outages, lack of leadership. What is GitHub ultimately doing to solve the problem? Or what do they tell you that they're doing?

6:34Yeah, and it's not even just the outages. We also know that GitHub's margins have come under pressure recently, in part because they were serving GitHub Copilot on a per-seat pricing model. and the fact that more people were using the AI tools without necessarily paying more to use them compressed margins last quarter. So not only are they trying to, you know, sort of stop the outages that have annoyed customers, they also recently overhauled pricing to essentially raise prices for most of the AI features on GitHub. And as I reported in the story, you know, leaders have also been looking into potential new ways to scale how much they charge customers with how much third-party AI agents use the platform.

7:17Obviously, they don't want to do that in a way that would further alienate any customers, and it's not clear exactly what course they're going to take there, but it has become pretty urgent to overhaul pricing to make sure that they're not subsidizing the use of these costly AI tools on their platform.

7:33Stephanie Palazzolo:So when you talk to GitHub customers then, or people using the platform, how high are the stakes here? Because another layer of your story is you talk about the competition that is mounting against GitHub. You've been on the show previously talking about how OpenAI was thinking about developing their own rival to GitHub. In your story, you talk about the threats that even some of the larger AI labs could pose to GitHub. You know, is this a type of platform where customers are saying, hey, I'm just going to switch. It's very easy for me to go. Or is this kind of a harder migration that might be a bit slower?

8:11You know, I think we've seen some smaller customers that told me that they were considering switching. We also saw Mitchell Hashimoto, the co-founder of HashiCorp, say that he was moving his open source project Ghosty off of GitHub. However, when I talk to larger customers, they do say it would actually be very costly and kind of annoying to move their code bases that they keep in GitHub into a competitor like GitLab. You know, it's pretty straightforward forward for a large company to also host its own code repository. That's what companies like Meta, for example, have done for years. And I think that that option is there.

8:49But currently, you know, doing that would be a bit of a pain for large customers. So I haven't heard of any large enterprises that are actively moving out of GitHub. And I think that to some degree, the switching costs involved with moving away are, you know, keeping GitHub from bleeding customers for now. So I think that, you know, if GitHub is able to sort of staunch the flow of people being annoyed by recent outages, they are likely going to be able to hang on to those big customers. However, you know, the more that developers use tools like Cursor or Cloud Code on an individual basis means they might not be necessarily storing that code in GitHub versus just storing it locally or elsewhere.

9:28And that's another kind of real concern that GitHub is facing now.

9:32Stephanie Palazzolo:Great. Aaron, I want to thank you for coming on. That is Aaron Holmes, our Microsoft reporter, here at The Information. BlackRock is considering a major investment in SpaceX's IPO. That is according to exclusive reporting from Corey Weinberg, our Deputy Bureau Chief of Finance. I want to bring on Corey to share with us what he knows. Corey, welcome back to the show. Another big week in SpaceX IPO land. Whenever the S1 drops, we are eagerly waiting. What did you find out about BlackRock? BlackRock is obviously a classic, huge asset manager that invests in a ton of IPOs, and they've been pretty hot on the SpaceX train.

10:17I've been trying to talk to my sources to understand, you know, who are the big buyers of this deal? SpaceX needs$75 billion, or that's what it's been sort of talking about raising. That's the biggest IPO in history by sort of at least a factor of two. And from people who have been around IPOs for a while, billion-dollar-plus investments in a deal like this are rare. You can count them on two hands once over. And so what I've been hearing from sources is BlackRock has at least been discussing investing as much as$10 billion in this IPO that can get their hands on it. $5 to$10 billion is the range that I reported.

11:08That could change as we get closer to deal time, depending on the price. But the upshot is BlackRock is all in. And why are they all in?

11:18Stephanie Palazzolo:What's the calculus here? The calculus, at least from if you listen to the CEO of BlackRock's public comments on Elon Musk, the calculus is Elon has delivered returns time and time again with Tesla and now with SpaceX coming to the public market. And that sort of tells the whole story for them. Larry Fink brought Elon Musk onto the main stage at Davos earlier this year, and he started his conversation with Musk by telling this sort of financial elite audience, look at the compounded returns that this man has brought to bear. Imagine if all the pension funds sort of had invested alongside Tesla when it went public, just how good their returns would be.

12:10So you have a CEO of BlackRock almost talking up Musk as he's planning this huge financial event.

12:18Stephanie Palazzolo:So if BlackRock puts$5 billion,$10 billion, they put money in, would there be ripple effects? I mean, would this send a broader message then to investors given BlackRock's stature? Or is this really just a top-down, is this a deal between the CEO of BlackRock and Elon Musk? How high are the stakes here for this investment? I think sources on the buy side, sort of in the investment world that I talk to, are trying to discern who are the big incremental buyers of this IPO. And knowing that sort of BlackRock is in for a big sum does send a strong demand signal to the rest of the market, especially because some bearish commentary that I've heard from sources is sort of this idea of, well, so many of these large mutual fund complexes already own SpaceX in some form from the private markets.

13:19fidelity investments one of the largest mutual funds that you would expect to invest in an ipo for instance already has a humongous uh spacex stake and you right you talked about in the story

13:32Stephanie Palazzolo:it was like this idea that blackrock is almost playing catch up here yeah blackrock is playing catch up in the spacex game they have invested you know privately for i think the last eight years or so, but their stake, they haven't invested nearly as much as Fidelity for sure. And then also not as much as some other large public crossover investors like Bailey Gifford and Franklin Templeton. Corey, I just want to give people a little bit of a primer here on whenever the S1 does flip and people are going to rush to it. And these documents are sort of quite meaty to get through. What is the first page, you know, as you're flipping through?

14:20Stephanie Palazzolo:I mean, where are you going to go first in the S1? What's the most interesting part that you're going to be looking for? I think there's a few different places. One is I think people should actually read the kind of management discussion section that are in these S1s. This is an area of every IPO document where companies get to explain sort of their vision for the business. And that's useful framing. So I wouldn't, you know, it's sort of this long section. There's paragraphs, you know, many paragraphs. And it can look quite dense, but it's worth reading. The juiciest parts, I think, will be sections like related party transactions, which sort of are supposed to show where have there been significant deals between Musk's companies, between insiders and SpaceX.

15:21You know, those are usually some areas where investors will find red flags in terms of sort of intermingling of deals. And then you also have, I think people are going to fixate on the sort of compensation, executive compensation section, especially because it's Musk. Because as we've reported, he has a couple huge moonshot grants that give him a lot more equity as he if he brings SpaceX to Mars and if he launches an insane amount of compute into space. So I think those are kind of going to be a couple of juicy sections. But overall, I find people don't read these documents enough in full. And, you know, set aside an hour and just, you know.

16:08An hour? You get through it in an hour? Really?

16:10Stephanie Palazzolo:A glass of wine. Well, if you're getting through a whole less one in an hour, I mean, that's, there's a lot. The SpaceX IP, it might take me a little longer than that. First read, I think, you know, yeah, you do a first read in an hour and then, you know, come back to it. Great. Okay, Corey. Well, I want to thank you for coming on. That is Corey Weinberg, our Deputy Bureau Chief of Finance, here at The Information. If you live in New York City, chances are you may have seen Subway ads for GenSpark. It is one of the loudest campaigns on the trains. Saw one this morning, actually. I want to bring on the co-founder and COO of GenSpark, Wen Sang, to share more about his company's strategy.

16:49Stephanie Palazzolo:Wen, welcome to the show. It's great to have you here. Good morning, Akash, and excited to be here. So I've seen the subway ads, okay? I see it's, you know, it's got the, there's the mock diagram of the train and it's emulating the path that you go from a single idea to generate a PowerPoint deck. Is that what GenSpark is all about, generating AI PowerPoint decks? Well, it is what we're about, but it goes way beyond that, no cash. So essentially what GenSpark is, we build AI agents for the 1 billion plus knowledge workers. So the world is going through fundamental shifts right now. In the past, we human beings, we are the workforce.

17:31We are the production engine. For us to achieve real business goals, we have to go through the busy work, all the grunge work. You craft documents word by word. You build presentations pixel by pixel. You build financial models cell by cell. Well, with GenSpark, you no longer have to do that. Everybody gets elevated to the level of a Jamie Dimon. You don't see Jamie typing hard to get presentations done, right? You just have a fleet of analysts running your pockets and they run around, they get a busy work done. That's what JetSpark is all about. Jamie Dimon has people doing it for him though.

18:04Exactly. He has people doing it for him. Yes. We put AI agents in your pocket to do those work for you.

18:11Stephanie Palazzolo:Okay. All right. So it's the busy work. It's spreadsheets. It's documents. It's PowerPoint presentations. I see the whole suite. My question is when, I mean, I was just using Claude yesterday. I mean, Claude has, you can install Claude into Excel. And, you know, I think Gemini now, they have their own way of developing PowerPoint decks as well. So how is it that you are going to compete with the large AI labs, which very easily can develop their own applications the way you have? True, true, Akesh. Clearly, this is the direction everybody believes in, right? So it goes with even big tech giants like Microsoft, Google, and so on.

18:53So we all see the value of asking the help from AI to get all the busy work done for us so that we human beings can take a step back and then think and be strategic and creative. But when it comes to what is so special about Genspark is we released the world's first mixture of agents tech architecture. What that means is we sit on top of 70 plus state-of-the-art models. We work with OpenAI, Anthropic, Google, and all the open-weight models. And we orchestrate the, you know, we call on the perfect model for the right task at the right time in order to take advantage of the strength of all of these different models.

19:30Because as you know, all these models are good at different things. They have different strengths. And it is important to not get biased by one of them, but being able to summon all the models at once to get onto your tasks. So we understand the importance of allowing not only the individuals, but also our enterprise clients to have access to the greatest and latest models all at once, instead of them feeling that being locked into one model provider. And then when someone else launches a new model, they just can't have access to it. Yeah, that is extremely important.

20:03Stephanie Palazzolo:Let me ask you a question. You guys have put up some big numbers and I should say we didn't mention it at the outset, but I mean, the last valuation you guys got was 1.25 billion. I believe this was in the fall of 2025. You're looking at me. Was that not the latest round? The latest was actually 1.6 billion. 1.6 billion. Okay. My apologies. So 1.6 billion and the latest revenue figure is what? So we grew from zero to$250 million annual run rate within 12 months. That was toward the end of March. So my question for you is, companies like you that grow their revenue profile so quickly, how confident are you that this is sustainable revenue?

20:45Stephanie Palazzolo:I mean, we hear about these experimental budgets, these trial periods, you get a lot of companies quickly, and then there's the churn risk. What are you doing to prevent that? Are you seeing any churn? So just as any company of cash, everybody has a certain amount of churn. So it's only natural that you get discovered early on, and then some people decided they wanted to keep using it. Some people decided this is not necessarily right for them. But for us, what is important we found is that the growth is like a wildfire. We're just getting started. We're all in a very early stage of this whole AI revolution.

21:19But what we found is output quality is essentially the most important thing. What I mean by that is we human beings are actually pretty smart. It's pretty easy for us to tell am i you know wasting my time burning tokens teaching ai and not getting what i want or it's one prompt the job is done so we built a technology uh not only it has access to 70 plus soda models but we've also built out 150 plus in-house tools uh to ensure that the large language models they would have the right tools to use in order to do the real world work because lms are just like brains they don't have arms and legs we built arms and legs for them with that we have seen users loving our product and taking advantage of the product, making a lot more money than they pay to us.

22:04And essentially, yeah, the output quality is the key.

22:07Stephanie Palazzolo:So in other words, the 250 million end of March in annual recurring revenue, that has continued to go up. You haven't seen that dip at all in any way. I would say we're really just getting started. Think of it because, I mean, there are over a billion knowledge workers. That goes to solo entrepreneurs, bankers, analysts. also, you know, a lot of people working in the enterprise environment. And today, if you compare the impact of AI versus internet, it's way not there yet. It's not touching. Yeah. How are you guys dealing with the issue of rising prices for the models? I mean, so 70 models, right?

22:45Stephanie Palazzolo:And yet it's expensive. It's getting more expensive. We've done reporting on this and you're an application layer company. You are sort of subject to the prices that the models will charge you. I imagine this is having an impact on your margins. I don't know if you're passing these costs on to your customers. You're smiling. I feel like this must be a top-of-mind issue for you. Well, yeah, look, I guess. Everybody's paying premium to Frontier Labs. There's no question. And the Frontier Labs would pay premium to Media. That's just the state of the world. But the reality is this, I guess. You know, GVD 4.5 is a fine model, okay?