Yet another record high. The close yesterday. Futures a little bit lower this morning. 30 minutes till the start of the cash trade. I'm Matt Miller, Danny Berger is on assignment. Bloomberg Open Interest starts right now.
Coming up: stocks drift as the U.S. and Iran exchange strikes and President Trump rebuilds his tariff wall. Meanwhile, SpaceX pushes ahead with its IPO, reportedly planning to sell shares at $35 apiece for its blockbuster listing. And Partners Group caps private equity withdrawals as a sign investor anxiety is spreading beyond private credit to private equity.
Stocks to watch today include Macy's. It boosted its forecast for the year as it sees growth in its luxury business. You can see the shares up 2% plus in the premarket. Palo Alto Networks raised its guidance and were up as much as 13% before falling due to, I guess, much higher expectations. And Marvell is surging again today, up 10% after Nvidia CEO Jensen Huang said it could become a trillion company earlier this week at a conference in Taipei.
Let's dig into this with Bloomberg Tech co-host Ed Ludlow. So Ed, Jensen Huang's comments continue to drive up shares of other companies. This just shows, I guess, the power of the godfather of AI.
Yeah, it's a pretty simple story. And if you go and watch the clip, it's literally seven seconds of Jensen walking on stage. There's some handshaking and preamble and he says, 'next trillion dollar company, by the way.' So a 33% gain on Marvell yesterday, it went markedly higher in the premarket today.
What does Marvell do in Nvidia's context?
It is the silicon that does everything. Connect the cluster. You know, the GPU is the most important part of the rack. We know that. But petabytes of data need to flow between those servers and sometimes between different data centers. And so all the silicon underpins the switches, the optical technology, the networking gear. That is Marvell. On the other hand, they also play in the ASIC space where they go to the hyperscalers and help them do the hyperscalers' custom silicon. So they're kind of also a little bit in competition with Nvidia, but not in this context, right.
Interesting story. We'll continue to talk about the ramifications of the things that Jensen has said. Outside of AI, kind of, to SpaceX, we're looking at $35 shares, right?
Yeah, I think we're at a stage now where, you know, we're hearing $35 a share. Reuters has reported that right now SpaceX is going to do $35 a share and offer about 556 million shares. The target raised $75 billion, the valuation $1.75 trillion. It's related to AI because SpaceX's pitch is a future where AI is the vast majority of the total addressable market they're going after. And that pitch or that story is going to play out this week. The roadshow will kick off in the next 24 hours.
It's unusual, right? You don't typically say this is the share price, this is how many shares we're going to offer. You do a roadshow. You have a price range. You market those shares. And then when it comes to pricing and listing, the market works it out.
So this is unusual. It's atypical, but it is also completely in line with everything that we've been reporting for some weeks now. You know, Colin and I had said that the $1.8 trillion was the valuation they were really going after when out in the news cycle it was north of $2 trillion. And the one thing I would just note is that the kind of last piece of tangible information we have, Matt, is go back to May 15th. Friday night, we broke the story that SpaceX had done a stock split, five for one, which took the private market shares down to about $105 a share. So right now, if they go at $135, it's 30% above where their private shares currently are.
And by the way, are we expecting this to start trading on Elon Musk's birthday? Will this be a present to the future trillionaire on what, June 28th?
So what we've said is that the IPO could price on June 11th. But, you know, like I'm going to take a pause, even with the $35 a share being set. So unusual. It's not how IPOs typically work. This will be the biggest IPO of all time. Pricing June 11th would indicate trading would start earlier than that. But we've also been crystal clear in the reporting. It could go later than that into the late part of June. We also put in one story that, you know, there was a great consciousness of the July 4th weekend, where I believe the public holiday in the United States is the Friday. Right. So it's messy. My heart rate from this point is elevated for a number of weeks.
Well, I mean, you're up all night, you're breaking news, you're doing incredible interviews. And we love to see you out in San Francisco hosting Bloomberg Tech. That kicks off his show at 11, but he's working round the clock anyway. Tuned in to a special edition to, wait, is it today or tomorrow? It's today. Tomorrow you're going to hear from guests including the co-founder of Anthropic, Dario Amodei, and Meadows chief investment officer as well.
In retail news, Macy's posted strong sales and raised its outlook this morning. The CEO, Tony Spring, telling Bloomberg's Romaine Bostick, who is sitting to my left, quote, 'The customer remains resilient. The customer at the middle and high end remains interested in newness and fashion. The customer at the low end is more choiceful for good reason. Things are more expensive.'
Yeah. Tony Spring uses that word a lot. I thought, though, the way he used it this quarter was a little bit different. And he talked about this idea how that spending was actually continuing, and he saw that carrying over into the rest of this calendar year. That's a big reason why they raised their fiscal year guidance. But he also said that he was very clear about this. They're spending on the things that are new, they're spending on the things that are unique, the things that are like replenishing, like just going in to get a new white shirt or whatever like that. They're seeing a little bit more pressure there. So basically saying there's not a lot of pullback in spending, but there's not a lot of indulgence either, he said. It's an interesting balance, and he's keeping a close eye on the situation with the economy and obviously with gas prices.
Well, and I would guess with tariffs as well.
Yeah. Especially when the justification now for tariffs centers around, you know, difficult labor conditions. Yeah. I asked him about this. This story broke overnight with the Trump administration kind of trying to reconstruct its tariff policy from the ground up. He said those assumptions are already sort of baked into their guidance right now. But the assumption right now is that they will be relatively stable. Basically not saying the tariffs will go up, tariffs go down, but they've accounted for that. And he also is very, I thought he was very sobering in the way he sort of talks about Washington and the idea that he seems to understand that it is, let's say, volatile. That's my word, not his, but they are sort of keeping an eye on that. But they think they can hold the line on price, meaning their own cost, but also the prices that they are passing on to the country, by the way. So Bloomingdale's is obviously their high end, 10% comp sales growth year over year.
Okay. That's what I was going to say. The Macy's store itself, that Macy's store brand is like 1.6%, which is an improvement over what it was in the past. But this is still, to a certain extent, a luxury story for Bloomingdale's. They've really leaned into that. They've also got, of course, a big boost by sort of, I guess, the withering, if you will, of the Saks empire, which is Neiman Marcus, Saks, and Bergdorf Goodman. Although that could change when Saks comes out of bankruptcy later this year.
All right. Very cool story. Great reporting. Romaine, thanks so much. Romaine Bostick, of course, host of The Close. And you'll see, typically, you'll see an all-time high on his show every day at 4:00 on stocks. We're going to have an interview, by the way, on that program. Romaine will be with Katie Greifeld, the CEO, Tony Spring of Macy's, coming on at 4:30 p.m. this afternoon.
Now, Partners Group is the latest firm to cap withdrawals from one of its evergreen private equity funds after redemptions neared 10% in the second quarter. I spoke with the CEO, David Layton, about how private credit concerns are starting to spread into other areas of private assets.
You do see that some of this redemption pressure that started in private credit, it started to make its way over into other asset classes. Institutional investors continue to make up 80% of our clients. Individual investors make up about 20% of our client base. And indeed, it's that individual investor segment where you see most of this redemption pressure coming from.
Here to discuss is Bloomberg finance reporter Noah Noelle, and she joins us, Adam Zurich and Noelle. You know, I guess when I first saw this, my initial thought was in private credit, we had bankruptcies with First Brands, with Tricolor, and then the SaaS apocalypse as concerns. What are the issues in private equity beyond, like the Grizzly short seller report for this company specifically?
Yeah, that's a great question, Matt. So in this instance, Partners Group is a pioneer of the semi-liquid evergreen fund. And so you have a number of individual investors who can invest in funds with as little as $10,000. So you attract people through that. Some people who may not fully understand that private equity does not have the same liquidity as traditional assets. So I think a number of individual investors in this instance have just got a bit skittish. And that's led to the dynamics we're seeing right now.
So it seems like evergreen private equity funds, which means it's not a fixed, you know, five to seven year investment where your money's locked up, but you can, it's semi-liquid, I guess, like private credit funds we're so familiar with, should attract more retail investors than institutional investors. Is that the case? If they attract more retail investors?
Yeah, exactly. So there's been a big push within to kind of market these funds to retail investors and wealth clients. And Partners Group has said that a number of the redemption requests came from this segment of clients. Whereas institutional investors, they have a far better understanding maybe of the fact that, oh, and a long-term view of their investments, which maybe a retail investor doesn't typically have.
All right. Noelle, thanks very much. Noah Noelle out of Zurich. She covers Partners Group for us. Next hour we're going to have more on private markets. By the way, Danny Berger speaks with Ares CEO Michael Arougheti. But before that, she'll speak with Bridgewater Associates founder Ray Dalio right here on Open Interest. An interview you don't want to miss.
Let's take a look at what's going on in markets after, I believe, a sixth consecutive record high. After nine consecutive weeks of gains on equities, we have a little bit taking a little bit of a breather here, although not too much. S&P futures down about two-tenths of 1%. In terms of the single stock stories that we're following for you today, Intel is part of a consortium of chipmakers powering the first enterprise agentic AI cloud. We'll discuss that with the CEO of one of those companies, SambaNova. Later this hour, Broadcom will report earnings today after shares added more than $280 billion in market value in the last four sessions. And GameStop reported strong sales growth as well as a $2 billion buyback, though shares up almost 9% in the premarket. Coming up, a big bet on wealthy clients. Citizens CEO Bruce Van Saun joins us next to discuss the bank's growing private banking business. This is Bloomberg Open Interest.
Let's get now to High Interest. Look what's making headlines around the world. At least ten Trump administration officials reported financial stakes in SpaceX worth as much as $44 million before SpaceX's highly anticipated IPO. Ethics experts say the situation is unprecedented because SpaceX is a major federal contractor with deep government ties. Some officials were cleared by ethics officials, but critics say the investment could still look like a conflict of interest.
CBS News has fired longtime 60 Minutes correspondent Scott Pelley after a tense confrontation with new leadership. Pelley reportedly challenged newly appointed executive Nick Bolton and accused CBS News chief Wendy McMahon of undermining the program. Following his dismissal, Pelley said the show's leadership and values are no longer recognizable.
Private credit is moving into luxury. Ferrari's, the London hedge fund Fashion Capital, is launching a platform to finance, buy, restore, and resell rare Ferrari race cars and collector cars. The venture will start with $75 million and aims to raise $500 million, highlighting how private lenders are expanding into niche assets beyond traditional loans.
Citizens is betting big on private banking. The business has become a key growth driver for the bank, with private bank deposits now topping $6.6 billion. Joining us now at the desk is Citizens Financial Group chairman and CEO Bruce Van Saun. Bruce, it's great to have you here. I was looking over your quarterly numbers. Obviously very strong, and you must be pleased. How tied is this to this huge AI infrastructure investment boom that this country is going through?
I certainly think that creates a tailwind, but we saw a really great opportunity back in '23 when the West Coast banks failed. We tried to buy all of First Republic. JPM ultimately was awarded the business, but the talent didn't see themselves fitting into that model. So we said, 'You win.' We've always been looking for a way to get into the business. Let's go hire the very best people from First Republic. Hire some teams on the West Coast, Boston, New York, Florida. And let's make a go of it to occupy that void once First Republic went down. And it's been an incredible journey. So we now have that business to over 600 people, as you say, over $16 billion in deposits, about $8 billion in loans, and $10 billion in client wealth assets. And I think we're building it even better than how it operated at First Republic. So the 2.0 version actually brings together a much bigger bank with a strong capital markets capability, very strong consumer product capabilities, so we can do more for the customers. We've been building up the wealth side of it and doing a bunch of lift-outs, providing integrated solutions for customers. And that kind of white-glove level of service is pretty unique at First Republic. We're probably in the seventh inning of getting there, but making a lot of progress to deliver that fully. And the results are impressive. It's now 10% of our bottom line and growing probably to the mid-teens, and we're making a 25% ROE on the business where First Republic as a company never got above an 11% ROE.
So I mean, you're using, I guess, high-value human capital, right. But you're also using AI in your business in the day-to-day. How does it help Citizens Bank?
Oh, yeah. It's, so we have an effort called Reimagine the Bank. That's re-architecting all the fundamental processes of the bank, from onboarding customers to dealing with complaints and fraud issues. And so between gen AI and agents, having kind of a human, agentic workforce, we can deliver much better quality service at much more efficient cost points. And so the net result of that should be an improved customer experience, more retention of high-value customers, and revenue growth that comes along with some of the expense saves.
There's so much talk about the K-shaped economy. It's become cliche to even use the phrase, but do you see that in your business as well? I mean, the high end is doing very well. Is the bottom end having, is that consumer cracking?
I don't think they're cracking. I think they're adapting. And so one thing that all market participants, individual, small businesses, bigger companies have had to be over the last, you know, five or six years with lots of challenges in the macro environment has been adaptable and resilient. And so folks, I think, are at the lower end, a little more stretched because wages didn't keep up with inflation. They're slowly gaining on that. But now we see the spike in inflation, which may kind of push the catch-up period out a little into the future. But anyway, they're readjusting how they spend their money, but they're still spending. That fundamental thing that's really important is unemployment is low and people have jobs. As long as we have that, I think the lower-end customer holds in.
And I mean, it's not only about consumers for you, obviously. The regional banking business lends heavily to local businesses to power that growth. How does that look? How does that sector look to you?
That looks quite good. Again, so whether it's small business up until some of our mid-corporate companies, they've all, I think, been adaptable and resilient. They're having good years. They're maybe a little cautious given the uncertainty in the environment in terms of going full-on offense. But anyway, I think they're still investing. They're still trying to grow. They have better access to talent than they did kind of back in the pandemic. So feeling pretty good about that.
And those who are borrowing, or the credit that you're providing, how secure is it? I mean, do you see cracks in that?
So we don't see any real adverse credit. Maybe because last year at this time, we would have been talking about First Brands and Tricolor and these. It seems like maybe they were just idiosyncratic issues. They really were. And, you know, those were really fraud-related. So there wasn't anything hugely systemic in terms of the private credit vehicles being overleveraged and having chosen bad deals and deal structures. So there'll be a period of, I think, consolidation here in private credit, where they pause a little bit given some of the challenges they're facing. But private credit is here to stay. We have great relationships with the key players there. We do more than just extend credit. We give a lot of advice, and we have capital market services we can deliver to those customers. So those are a key customer base for Citizens.
How are the businesses you work with there in the commercial lending side? How are they dealing with these tariffs? I was just talking with Romaine Bostick about, he's focused on retailers, you know, and they obviously are dealing with volatility as we watch President Trump rebuild his tariff wall.
Yeah, I think, you know, again, being flexible, working on supply chains, figuring out where to source things. So if this happens, what do we do. I think everybody's gotten quite good at that scenario analysis and scenario planning. So, you know, some of it can get pushed on to customers. Sometimes you just have to be a little sharper with the vendors. But I don't think it's causing massive impact on inflation. It's more the war and the impact on energy prices, which basically affect almost everything that's made.
Right. Bruce, this has been a really useful look at your business. Thank you so much for coming in and talking to us here on Open Interest. Bruce Van Saun, Citizens Financial Group chairman and CEO.
Now, Bloomberg's Global Credit Forum is underway right now. Our chief Wall Street correspondent, Sri Natarajan, is speaking with Jay Clayton, U.S. Attorney for the Southern District of New York, former SEC chairman. Let's listen in for a minute.
And then one additional thing. You look for the two places you look, and everybody in this room knows this. Liquidity mismatch. You know, am I borrowing short, lending long, and don't have relief if all of a sudden people demand their money back or prices change? What is their hidden leverage? Significant hidden leverage across a sector that when it becomes exposed, prices are going to drop precipitously. So you look for those two things, and then if you find them, you look for whether there's a transmission mechanism throughout the rest of the economy. That's the difference between what I would say is a sector risk and a systemic risk. I think that's sort of the framework for looking at all these things.
And when we spoke back at the start of the year, you talked about this idea that there are areas of concern for you in private markets, even if most of the market is in good shape. What are those areas of concern for you?
What I think I said was to the extent there are areas of concern, including ones that maybe I don't see or I'm not sure I agree with, I don't see a transmission mechanism through the rest of the economy. So okay. And look, if people make lending mistakes, that's part of an ordinary operation of a market. If we over-lent to software firms, okay. But maybe we under-lent somewhere else. The market just, that's the way we look at these things. But I did say that I think the bank executives who criticize private credit, they have two points. One is they ought to be allowed to do it. Like, you know, as long as it's, again, operating well, they should be allowed to do it. The second one is on the marks and the transparency of the marks. We can do a better job because we can eliminate the question of whether people are marking something in book A at 100 and marking it at book B at 90, because 100 is good for them here and 90 is good for them there. Like, that's something that can be eliminated.
How do you eliminate them?
I think, you know, you require a modicum of reporting. That's actually pretty easy to deal with. And on inspections, like the SEC does lots of inspections.
That is Jay Clayton, the U.S. Attorney for the Southern District of New York and former SEC chairman, speaking at Bloomberg's Global Credit Forum. You can continue to watch this conversation and more on your Bloomberg terminal. If you type LIVE GO, you can also use the QR code as well as on your screen. There you see it. Go ahead and put that on your phone and connect instantly to our live events.
A check on the markets ahead of the opening bell. After another record high close yesterday in the cash trade, we see futures down about two-tenths of 1% on the S&P. Nasdaq futures actually gaining more than one-tenth of 1%. The ten-year yield rising almost five basis points to 4.4887 to go out five significant digits, and Brent crude rising $0.48 to $97.50 for Brent. So still holding well under $100 a barrel. Less than four minutes to go until the opening bell. We begin the trading day with CrossMark's Victoria Fernandez. This is Bloomberg Open Interest.
All right. Just moments until the start of trading on the New York Stock Exchange and the Nasdaq. This is Bloomberg Open Interest. I'm Matt Miller. We can see futures down a bit on the S&P, two-tenths of 1%. But we closed at almost 7620 on the S&P in the cash trade yesterday. Obviously another new record for the S&P. The Nasdaq futures actually gaining a little bit as we continue to feel the reverberations of Jensen Huang at that Taipei conference, Computex. At the New York Stock Exchange, you see Applied Aerospace and Defense ringing the opening bell. So cool that Lin Martin goes up there on the balcony with them to do that every day. So they have an IPO today down at the Nasdaq market site. You've got Scripps. There's the spelling bee winner. This kid spelled, I think, 32 words in 90 seconds in the lightning round. That's insane. That's less than three seconds per word. I would ask him, why does Scripps have two P's? Like, how do you pronounce that differently with one P or two P's? Unfortunately for them, the stock is down 84% in the past five years.
In terms of the stocks that we're watching today, Macy's is the big retail earnings news. The shares are gaining more than 4% because they boosted their forecast for the year. They see growth in their luxury business. That is, of course, Bloomingdale's right across the street from us here at 731 Lex. So Macy's is up today. Palo Alto Networks had been up big after raising its guidance. It was gaining 13% before a turnaround. And now a drop of 5%, I guess didn't meet expectations or buy the rumor, sell the news. And Marvell Technology right now up 9% in the cash trade, surging again. This after Nvidia CEO Jensen Huang said back on Monday that this company could be a trillion company.
Joining me now is CrossMark Global Investments chief market strategist Victoria Fernandez. And Victoria, as we watch Marvell continue to gain from this, I mean, Jensen Huang has sent so many companies soaring in the last week at the Computex conference in Taipei. How much do you see this, which was what, once a narrow rally, like broadening out across the market?
Yeah. Good morning, Matt. It is interesting we had such an AI-focused rally going on in the markets, and we are just now starting to see some of it move around. I mean, you're starting to see some transportations do better. You're starting to see aerospace and defense. And two of the areas that I'm really interested in watching is you're starting to see a little bit of a relative turnaround in healthcare and then discretionary. And as you and I have talked before, that discretionary versus staples ratio that has been bottom of the barrel for quite a long period of time. Discretionary was just not performing well off those oversold conditions. And you needed that. You just have the consumer continued to be strong. We needed that for the economy. And so now we're just now starting to see that. So hopefully this broadening continues and we get to see more of the non-AI part of the economy catch up.
Now before we see that, I want to just point out Alphabet is boosting its equity capital raise. It was already astounding at $80 billion, kind of one-upping SpaceX. And now they're going to raise $84.75 billion. How much cash is out there, Victoria? I mean, even if everyone's a believer, like, how much money is there to buy these assets?
Yeah. And remember too, they did their debt offering earlier in the year. Right. So it's equity and debt that we're seeing coming. I was actually reading a Morgan Stanley article yesterday that said there is about $250 trillion worth of global capital that can be allocated to the AI trades, to the new IPOs that are coming. And so the concern that a lot of people have is where is the money going to come from in order to really take all these new shares in. It looks like it's out there and it's waiting for the opportunity. We continue to see these companies come to market, debt and equity side, and there is plenty of opportunity and plenty of people wanting to have these names, appetite for these names. And I just don't see it starting to go down any time soon.
No, I mean, there's all the money in the world to buy debt, to push spreads down to, I guess the only place where maybe people are pulling it out is private markets, private assets. We saw that in private credit during the SaaS apocalypse. We're apparently starting to see it in private equity as well. What are you hearing?
Yeah, you know, there was so much concern around private equity, and you were just having some good conversations around that as well. And not that we thought that the private equity would flow through to the broader credit space. But I do think people were like, you know, look, maybe we didn't completely understand when we went into some of these that we weren't going to be able to get our money out completely. I mean, that's just kind of the nature of private equity. So they are pulling those when there's opportunity. Now, we do know that's limited, right. But there was a news story today where a Swiss private equity company is limiting the amount that people can pull out. But I think that is a space people are doing that. And also, Matt, people could be trimming some of these names that have done so well, some of these hyperscaler names and starting to have money on the side, or putting it to work in companies that are going to be using this AI to the best of their ability, instead of just providing the AI. So it could be coming from a few different spots.
Have you found companies' investment opportunities, Victoria, outside of the AI space that are using AI to really boost the bottom line? You know, where I think we're going to see it, and we may not have it yet, but I think where it's coming is really in the healthcare space. And if you really look at like biotech, I think we're going to have in the future some wonderful gains here in this space with using AI and what that can do for the medical field and biotech. So that would be an area that I actually would look at and maybe put some money to work. You look at names like AbbVie or Amgen. Those are two of the largest names in that sector that we have in our portfolio. So I think there's some opportunity there.
All right, Victoria, great to get some time with you. Really appreciate you joining us. CrossMark Global Investments Chief Market Strategist Victoria Fernandez.
Let's get a check on what's going on in the stock market. Just a few minutes into the session, we're looking at still losses on the S&P, although they're incredibly slight. Right. We only see 16 points down and the breadth is pretty well split, 220 to the upside, 280 to the downside here on the winning side of the ledger. We have Meta Platforms and Intel going back and forth for the number one points addition. We're going to talk to an Intel partner in just a moment. Apple and AMD rising. Google, even after saying they're going to raise their equity capital raise to almost $85 billion from a planned $80 or an announced $80 that we saw a couple of days ago. On the downside is Nvidia. So this is what drags the index. It's only off 1.7%. But you can see they take ten points away from the index. Microsoft is off, IBM, Oracle, and Broadcom as well, although Broadcom has done so well, adding I think $280 billion in market cap over the last four sessions alone. Palo Alto Networks also doing poorly after it jumped so high in the pre-market. In terms of the industry group breakdown, we have more winners than losers. Utilities, energy, and consumer staples, though, are leading. And this is a really defensive indicator when these companies are on the rise. Although why be defensive after hitting record high after record high, six consecutive closes at a new high, nine consecutive weeks at a new high. And we see on the downside financials, IT, and consumer discretionary taking a little bit of a hit there. Coming up, I mentioned the Intel partner. And we're going to talk with SambaNova CEO, discusses his firm's $3.5 billion deal to power a world-first cloud for enterprise AI agents. We're talking inference with Rodrigo Liang. Next. This is Bloomberg Open Interest.
This is Open Interest. You're looking live at the principal room. Coming up next hour, billionaire Ray Dalio of Bridgewater and Michael Arougheti of Ares join Danny Berger for an exclusive interview.
Time now for our top call. Some of the analysts' action in focus this morning. First up is Oppenheimer downgrading AT&T, arguing the satellite internet is becoming a big competitive threat. The firm says services like Starlink are now priced similarly to traditional broadband and could get even cheaper as new satellites boost capacity. Next up, Morgan Stanley is upgrading Yum! Brands, arguing the market is not fully recognizing the company's growth potential. The firm named the Taco Bell and KFC owner a top pick in the fast-food sector and sees more demand for affordable meal options ahead, no matter how healthy they are. And finally, Bernstein is downgrading the packaged food giant General Mills to a sell. The firm says it's getting squeezed by higher commodity costs and weaker consumer spending, and the company doesn't have much room to raise prices without risking demand.
Now today, Vista Equity Partners and Cambium Capital launched what they are labeling the world's first inference cloud for enterprise AI agents. It's a $3.5 billion deal powered by processors from Samsung, SambaNova, Intel, and Nvidia. And here to discuss is the CEO of SambaNova, Rodrigo Liang. Rodrigo, great to have you on the program. Congratulations on the deal. Tell us about this world-first cloud.
And we're super excited about this. You know, this is a first commercially available disaggregated inference cloud that's going to allow you to actually run GPUs, the SambaNova chips, and Intel CPUs all together, really getting the most efficiency, lowest latency, highest performance inference in the world.
So, the token costs have been high in the headlines lately. We've heard of companies, you know, accidentally spending half a billion using AI. Your technology, as I understand it, Rodrigo, drastically reduces those costs. So what can you tell us about that?
Well, just look at the demand. And it's insatiable. Many, many companies are now seeing the value and the power of AI. And so they're transforming their companies by using more and more. I put it as the cost of tokens continue to rise because, you know, the infrastructure is so expensive. People are looking for alternatives. So somebody would come in with a much, much lower cost infrastructure, much higher performance would drive that. Ten kilowatts is an order of magnitude lower power than the traditional GPUs. And so it's allowing service providers to provide much, much lower cost, much more efficient tokens, which then drop the cost for enterprises as they transform their businesses.
How does your cloud actually work with an AI agent from a company? I was talking yesterday with MongoDB CEO Dev Ittycheria, and he was telling us that he sort of operates as, I guess, a traffic cop on the data layer in between the app and the cloud.
Well, this is one of those things, you know, we power the compute for cloud providers like the one that Vista Cambium just announced with EC2. And the beauty of what they're doing is they're creating this orchestration layer that allows you to use concurrently the GPUs and CPUs. And the reality is, look, the GPUs are incredibly powerful, the SambaNova chips are very, very fast, and the CPUs orchestrate. And so if you're able to just aggregate all of these three, you get the speed, the performance, economics that no single chip can touch. And so this is where we were super excited by our partners that are able to actually come and disaggregate the knowledge to get the best out of each one of those chips and then deliver the best performance at the lowest cost.
So demand for your services then I imagine, will outstrip supply, even if you produce as much as you can. And you build it as fast as you can. Vista Partners, will their portfolio companies get early access or first access to your cloud?
Absolutely. So this is one of those where, you know, we're seeing this to be very committed to the transformation of all of these companies, 92-plus companies that are going through their transformation, driving AI into their products. And so we're seeing that synergy between the services that these companies already provide, transforming to AI, and the efficiency and the speed that our tokens are able to produce. And matching those together in this VC-to-cloud service is going to be incredibly powerful in the market.
I mean, do you expect to see more of those kind of deals, Rodrigo, where, you know, huge asset managers or huge private equity companies, for example, need to secure their own cloud services for the businesses in their portfolios?
Yeah. Look, I think what you're seeing is the reality of AI computing is one that, one, you got to get access to compute, access to the chips, and access to power. And so if you have those, you can drive much, much better economics into your business. And so you're going to see people figure out ways to very creatively provide these types of infrastructure that then allow businesses to really, really scale what AI needs.
By the way, we just had news overnight, the president rebuilding his tariff wall. I believe Taiwan will fall into the 10% category of trading partners with the U.S. I don't think that's a huge surprise, but how much does this increase the urgency for you to produce chips elsewhere as well as in Taiwan?
Well, look, I mean, Taiwan to TSMC is still an incredibly efficient factory. And so most of the chips in the world are being built by TSMC and they're looking to actually deploy those factories in other places. But it takes time to build these factories in other locations. And so in the end, you're still seeing that most companies are still having some amount of chips built in Taiwan. And so you can actually, in the short term, having to figure out how to continue to actually manufacture here and try to see if we can actually get savings in other places when, you know, as the costs of components go up.
Yeah. I mean, Taiwan produces a lion's share of chips for everybody, but they're, as you say, moving production, for example, to Arizona. And you work so closely with Intel also looking to build fabs here. How long is it going to be until we can really build a meaningful portion of global chips used in the U.S.?
Well, I think, you know, this is probably for some of our partners that understand the fabs business a lot better. But look, there's a lot of focus by folks like Intel and other makers to bring capacity online and bring capacity into the United States. And so you're going to see that emphasis continue for the years to come.
I don't think many people understand the business better than you do, Rodrigo, but your humility is appreciated. SambaNova CEO Rodrigo Liang there talking about his big $3.5 billion deal. Coming up, oil gains as the U.S. and Iran exchange another round of strikes in a ceasefire. That's next. This is Bloomberg Open Interest.
This is Bloomberg Open Interest. I'm Matt Miller. Let's get a quick check on what's going on in the stock market for you. S&P 500 now down half a percent but still at 7571, which you may not have expected, you know, nine weeks ago. We continue to rocket to new highs. And today it looks like we're taking a bit of a breather here as Nvidia falls. The Nasdaq 100 is down four-tenths of 1% as well. We do have yields and oil rising. That could be part of the problem. Take a look at, here's the U.S. dollar coming up. Here's Brent crude moving higher. Normally I have yields. Let's put yields back here. The dollar is always there. Nvidia right now down 2.5% to $1735. For those chip stocks, Marvell Technology though continues to drive higher after Jensen Huang said this could be a trillion company. I think it trades for less than a quarter of that still after the gains we've seen this week. Macy's up, but now turning lower. As seems to be the trend in this market, big gains with an earnings release and then you sell the news. GameStop is gaining right now 8%. So watch that meme stock which doesn't look like it's going to take over. eBay, KKR, and Ares are both down today as concerns about the withdrawals that we've seen in private credit spread to private equity.
Now, President Trump says he swore at Israeli Prime Minister Benjamin Netanyahu during a call this week as he pushes to de-escalate fighting in Lebanon. The Israelis seem very insistent on escalating. The president also told the Pod Force One podcast that Iran has agreed it will not pursue a nuclear weapon, something Iran has been saying for decades. Joining us now is Bloomberg White House reporter Skylar Woodhouse. Skylar, what is the president going to get beyond a commitment that Iran has been making to every administration since I've been voting?
Yeah. Good morning, Matt. Look, he's told ABC News that he would like to see written concessions. I mean, he's also desperate for a deal. He expressed his frustration with Israel's Prime Minister, Benjamin Netanyahu. So right now it's sort of a waiting game to see when the president, you know, might accept a deal. Last week, he met with his national security team where we expected him to walk out with the next step or with a potential deal. And we did not see that. And look, this ceasefire that started in April is nearing two months. So, look, this is something the president wants to see wrapped up, especially as oil prices are continuing to surge. The November midterm elections here in the U.S. are quickly approaching. And so he's looking to sort of get this under wraps, but there's still a lot of questions remaining to when we could see that deal and how much the president might be willing to buy.
Skylar, I saw that he said on the Pod Force One podcast, we could have the Strait of Hormuz open by Labor Day, which isn't until September, and we're still at the beginning of June. Is there a concern that this ceasefire, in which we continue to fire at one another, will not hold?
Yeah, I think this has been a pretty wobbly ceasefire that we have seen. Obviously, we have still continued to see fighting. And on that bit on Labor Day, one thing that I think was particularly interesting on the president's comments on that podcast was a while back when the war sort of really kicked off, I believe it was the Treasury Secretary who had mentioned, you know, to say that we could see oil prices, gas prices come down by end of summer. So it does make you wonder if that is the timeline that they are really working on there. But yeah. No, look, the president is, you know, who knows what we can see on Truth Social, but that timeline is pretty interesting.
We do now know that he's going to do away with his $8 billion weaponization fund and that he wants Todd Blanche to remain as Attorney General.
Yes. That is kind of a particularly interesting thing. It's really no surprise, considering that since Bondi stepped aside and Blanche has been serving as the deputy. The fact that the president has not rushed to reappoint or renominate an Attorney General, I think, is pretty telling and does show that the president does have, you know, a good amount of confidence in the acting Attorney General right now. So, yeah, I think it's, you know, we'll see how long he lasts. But because we have not seen that official nomination, I can imagine that we'll see Blanche around for a little bit longer.
All right, Skylar, thanks so much for joining us. Bloomberg's Skylar Woodhouse reporting live from the White House. Coming up in the next hour, the CEOs of Ares and the ATP.
We are 30 minutes into the trading day. Welcome to Bloomberg Open Interest. I'm Matt Miller. Danny Berger is on assignment. She's going to join us later this hour with Ray Dalio of Bridgewater and Michael Arougheti of Ares for exclusive interviews. We're looking at a little bit of a retreat after another record high for the S&P 500 yesterday. We closed at, I think, 7619 and now we're down to 7575. So a drop of 35 points as Nvidia falls. We have breaking economic data crossing the terminal right now: ISM services, factory orders, durable goods all coming across the terminal. In terms of the ISM services index, it's a little bit better than the previous number at 54.5 and better than the expectation, which was 53.8. Prices paid, which is very important as we watch this inflation, higher than it was previously.
At 71.3, but lower than the expectation, which was 72.3. Factory orders 4.8%, and that's better, much better than the previous number, which has been revised up to only 1.8%, and better than the estimate, which was 4.6%. Durable goods coming in at eight even, that's better than the 7.9 we had in the prior and in the survey. So the data looks a little bit stronger than we had anticipated. Joining us now is Ellen Zentner. She is chief economic strategist and the global head of thematic and macro investing at Morgan Stanley Wealth Management, and of course, a dyed-in-the-wool economist. Great to have you here on set with me, Ellen.
