Netflix Drops After Forecast; Reed Hastings Exits | Bloomberg Tech 4/17/2026

Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Lovelow in San Francisco. This is Bloomberg Tech coming up. Netflix gives a lackluster forecast for the second quarter while chairman and co-founder Reed Hastings steps down after 29 years at the company. Plus the US government plans to make a version of Anthropic's Mythos model available to major federal agencies to tackle cyber risks despite the ongoing legal feud with the Pentagon. And Sequoia Capital raises 7 billion for its latest expansion fund targeting AI giants like OpenAI and Anthropic. We have details later in the hour. Such a great scoop Ed that you've got. Meanwhile let's look at what the markets are doing. Extraordinary moves and once again it's because we get an extraordinary barrage of news when it comes to the Middle East in conflict. The Strait of Hormuz promised to be open for commercial vessels at least. Oil absolutely tumbles down some 12 percent as hopes that suddenly we'll get supply chain eases coming. We're off by 12 percent now. At one point it was a record move for Brent. I'm looking at therefore still a record high for the Nasdaq 100 up 1.3 percent. This is another almost 30 percent just trillions added over the course of the last few trading days. I want to look at what's happening in terms of the last 13 days. This is the longest streak that we've seen in years. We're currently up some 16 percent at the moment. And it is notable the amount of gains that we see in the Nasdaq. How long they have been for. And even today despite one key drag on the market that you're looking at 13 days for the first time since 2013. The technology story is in the markets. Microsoft is up two and a half percent this Friday. But on the week it's heading for its best week since 2007. There's no one single story or catalyst out there but there's just momentum generally. Intel similarly. We've been talking about Intel being an outperformer even in spite of the war in Iran and how that's impacted chip supply chains. It's a stock trading at its highest level since 2000 where there is a story is in Netflix and Netflix's earnings. Essentially the outlook for the current period the second quarter not that good. And the stock is currently down eight and a half percent. Its worst day as it stands since October at one point in the session we were even deeper declines. And then there's the overhang of the Warner Brother Warner Brothers discovery deal that didn't happen. And then Reed Hastings the co-founder and now chairman who's been with this company for 29 years is stepping down. Let's summarize Bloomberg's Lucas Shaw who leads the screen time team is with us. Let's start with that overhang I guess. One of the reasons that the first quarter results look good is that they got to pay a breakup fee from Paramount. So factor that in. But I think that that is the story. There's just this overhang of what life looked like after walking away from the Warner Brothers discovery deal. Well walking away from the deal has in the short term up until earnings been really good for the stock. Right. The stock was was up quite a bit over the last few weeks. Investors did not like the Warner Brothers deal. They were worried about how much Netflix was paying. They were worried about what it would mean for the company. But it's it also fed sort of I think expectations that the forecast for this year would be revised in a positive way. And instead even though Netflix had a better first quarter than they expected in terms of subscriber growth and revenue they maintained the estimates and they warned that actually profit and margin would be down a little bit in the second quarter because of increased spending on programming. So maybe the market got ahead of itself. Where did they get impacted by Reed Hastings. How much is that a concern that this looming large figure co-founder is going to be stepping in looking more at philanthropy. Yeah hard to quantify of course because it's not like the investors are saying well I sold for this reason and I sold for that reason. But look it has to be a factor. On the one hand Reed Hastings has been telegraphing his departure for a long time in 2020. He names Ted Sarandos as co-CEO in 2023. He steps down as CEO and becomes executive chairman. Then he becomes just chairman. He's been signaling that he's going to withdraw from this business because he feels like he's done his job. At the same time this is the guy who led the company for most of its existence did a tremendous job. And so his departure is going to worry people. Just to point out that Reed Hastings is also a board member of Bloomberg Inc. and Bloomberg LP the parent company of Bloomberg Media the parent company of this network. Lucas there's a lot of choice right now. I watch Netflix. I'm watching The Night Agent. I think it's very good. You might watch HBO Max. You might be Disney Plus or Hulu. Did we learn anything about Netflix's content slate strategy. You know they've been pushing into live pushing into games. It's not really clear to me like what happens next on that front. They're staying the course for the time being at least. They're sort of reiterating we're confident in what we're doing. We're. Yes they are. They're moving into some new areas video podcasting live programming and gaming were the three that they signaled both in their letter to shareholders and in the call. I don't think those have immediate or dramatic impacts on the business. Podcasting is not registering in a big way yet. Live is probably the most significant but they are being very selective about what live programming that they do and video gaming they would acknowledge has has been a miss so far but they feel like they're starting to develop a more comprehensive strategy. For the most part you look at the 20 billion dollars 19 billion dollars they're going to spend this year and it's on the same kind of scripted programming they've done for a long time now. Lucas Shaw as always brilliant to have you leader of screen time. We appreciate it. Let's get more on Netflix with Alicia Reese. When Bush security senior vice president of equity research you've actually got an outperform rating on the stock. Hundred eighteen dollars. Twelve month price target actually raised a little bit from 115. So the confidence. Alicia talk to us about where the confidence comes from. Yeah I think the ads strategy is what is being underappreciated here domestically. I think they had to put a lot into content in the second quarter to offset or you know just give the user reason to for resilience on the on the subscriber subscriber. The premium tiers but those who are not convinced could easily go to the ad tier and we've seen with our survey work over the years a lot of resilience around that since they introduced the ad tier. I think there's a lot of reason for people to stay when they give when they post all of that content. And you know to Lucas's point you know podcasting hasn't been a huge mark so far. But you know Netflix did point out that a lot of their users are coming on during the day when they wouldn't normally come on. And so that is incremental engagement. I think it's useful to have as much incremental engagement as they possibly can as they raise price. I do think it will be incremental here in with the price increases domestically perhaps not in Europe. There is some legal pushback right now on the price increases in a few countries and could potentially be in in the continent. I think you know the ad tier is really you know that the piece that is underappreciated here. There's so much opportunity for them to expand. And as they increase price some people and quite a few people tend to get pushed over to the ad tier. And with Netflix's low ad load and higher CPMs and potentially growing CPMs they can benefit pretty handsomely in the back half of the year. Alicia can you go through geographically for us a little bit because perhaps we're underwhelmed in terms of first quarter and pushing forward. First quarter U.S. Canada was actually a slightly slower growth than anticipated. But Asia doing well Europe doing well Latin America doing well. Is there still the growth areas. Yeah I think it's really important to note that you know because of the geographic diversity their results are you know pretty steady overall. The World Baseball Classic was a huge hit in Japan but it didn't seem like there was a lot of churn soon after. There was a lot of content that people in the region found really favorable and so they kept on the service. And Netflix noted their ad tier being you know having a little bit more heft in the region because of that increased subscriber growth. So that's something that we had not factored in. The average revenue per member is quite low in APAC and I think advertising in Japan and elsewhere in the region could really boost results. UCAN wasn't as strong as we had expected it to be in the first quarter but you know there was a range and it was really within the range. Our survey work you know just suggested that it was pretty standard par for the course. Nothing you know hugely a miss or a beat. But you know you do have some some decent trends in Europe you know absent the price increases as well. So I think you know overall regionally they're they're quite healthy and they'll continue to be. But there is you know nothing domestically that helped them hit it out of the park this quarter. There's a line in the Bloomberg story Alicia. Wall Street is looking for signs Netflix can keep subscribers engaged. And Netflix has not disclosed subscribers since the first quarter of 2025. It focuses on engagement, time spent, and so you've gone over a number of interesting telltale signs of how you assess the health of the company. Going forward what is the metric that proves definitively that Netflix is taking time and eyeballs in a world where you have a lot of choice and it's not just about streaming platforms in that battle. Well it doesn't matter whether they're on the premium tier or the ad tier so long as you know Netflix is extracting increasing revenue off of these users and engagement is clearly an important sign. But so you're looking at a combination of revenue whether they're getting you know the highest subscription price or whether they're on the ad tier and engaging significantly with the content and providing a lot more value to advertisers and therefore revenue to Netflix. And if they're able to do that at a reasonable cost of content the profitability will continue to climb and pre-cash flow will continue to climb and that's what we've been seeing. And so for us that's a huge positive. In the second quarter surely there's going to be a lot of content amortization a lot more content on the service but in the back half that's going to even out and they'll be able to hit those four year targets and probably exceed them. Netflix asked Wall Street judge us on traditional financial metrics. The stock's down 9 percent on track for its biggest drop since October but at one point down 12 percent biggest drop since 2022. Wall Street's judging them on the financial metrics. Alicia Risa Webber. Thank you very much. Now coming up in the program. Anthropic's mythos model was among the top concerns for global leaders at the IMF spring meeting. We get the latest on the cyber concerns buzzing around D.C. That's next. This is Bloomberg Tech. Anthropic CEO Dario Amodei is set to meet with White House Chief of Staff Susie Wiles today. That's according to reports. The meeting comes as the company's powerful AI model mythos continues to raise concerns with public and private leaders over its cyber security capabilities. And let's not forget Anthropic is still feuding with the Pentagon over how the military uses its A.I. tools. Let's get the latest with Bloomberg's Mike Shepard who's in Washington. I think we start with the reported meeting. But right now there is constant headlines about Anthropic's relationship with the federal government. And this is a little bit of a twist in the whole saga. You know since the beginning of the year we've seen this increasing feud between Anthropic the developer of Claude and now mythos over what degree of safeguards should be included in its product. And it culminated in that Pentagon declaration of the company and its systems as a supply chain risk and prompting a company lawsuit to get that designation overturned. Really an extraordinary turn of events. And yet now the technology has forced another. And this is the prospect that its newest product mythos could be so powerful and so good at identifying cyber vulnerabilities that it free it can't be released widely beyond a handful of technology firms and Wall Street banks that really have that kind of trust and also would need to be able to vet their own systems. And add in a way this really kind of brings us closer to the remote possibility that has been talked about by policymakers and and others for years that there could be a devastating cyber attack that takes out critical infrastructure or disrupts the financial system. Mike what have those in Washington. One of those close the administration made of this sort of contradictory relationship going on at the moment and the fact that they're trying to freeze them out from the supply chain headache risk in one sense. I mean extraordinary step taken. And on the flip side outside of the Pentagon they seem to be working with the Treasury Department. And we understand we'll eventually be working with other federal agencies. Well this really is the question of the moment. And it seems to be that they are looking past the conflict that they're having between the company and the Pentagon for the moment simply because they need to. The urgency of it requires that the Treasury Department not only engage and test the system on its on its own networks to make sure that there are no vulnerabilities. Remember the Treasury handles all manner of payments to U.S. citizens, Social Security, you name it. And then also performs critical market functions that could be disrupted if hackers were able to penetrate those networks. So they really have an agenda and so do many other agencies. So for the White House to line up access which it currently does not have to meet those for all these agencies is something seen as important. And it is putting in the backseat this whole question of whether the Pentagon should be insisting that Anthropic drop its demands for safeguards on its products and military use. Bloomberg's Mike Sheppard in D.C. with the reporting. Thank you. Can I just point out that over the last seven days a number of Anthropic executives have gone on stage or done interviews and they've basically explained that they want to have it both ways. They're saying yeah we we are standing with these principles against the Pentagon because we believe in it. But we know that the government needs to have access to and understand the most powerful model. That's basically the line. They're trying to be pragmatic and at the end of the day they are now based on our reporting taking action on that and saying to government how about it. And isn't it interesting at the same time we've got the U.K. and Europe desperate to get their hands on this technology as well and calling for steps to be taken. We learn of course in that interview with Tom McKenzie and the Anthropic U.K. lead or North Europe lead that U.K. will be getting it soon. Look you've got to learn more. There's plenty to discuss. Let's talk about how we've got a Bloomberg live Q&A coming up a little bit later today on Anthropic's mythos coming up. We're not going to be speaking to the Apex CEO Roger Wells. The company makes its public market debut. This is Bloomberg Tech. Madison Air made a strong debut on the public markets pulling off the largest U.S. industrial IPO since 1999. I spoke with CEO Jill Wyant about the company's strategy and how its data center business took shape. Listen to this. We've been at this for a while. You know the data center business was born out of our customer handling business which has done this for a combined 350 years. So we did not start doing this last week or last quarter. We've had a triple source supply chain. We've had 99 to 100 percent delivery rates for the hyperscalers and the co-locators we've been serving for years. And we are there to care for and optimize and ensure those assets perform at their best. We are differentiated. We are winning. And I think the best part of that story and it's all within a very balanced set of end markets. We are not a data center pure play. We give investors great exposure to the obvious opportunity there while at the same time growing nicely in other advanced high performance environments in the macro economy where air impacts customer outcomes away from the stock market. You know a focus of the Bloomberg Tech audience is the role of debt in all of these projects. Let's call it the reindustrialization of America. I think. Correct me if I'm wrong. You know coming out of this IPO the debt loads. I think it looks like about three billion dollars for you. What's the strategy. Do you see with time paying that down that coming down quickly or you're sanguine on the load and how you work it. Well about a hundred percent a hundred percent of the IPO proceeds we will use to retire debt. So now I don't know the exact calculation. I've been talking to a lot of folks today about green shoe execution but really we should come out of that IPO about three and a half times trailing on a leverage basis. And then we continue to do what we do which is grow our business and generate cash flow and expand our EBITDA which should allow us to exit 2026 below three times levered on a trailing basis. Again we run that play into next year and we should be south of 2.5 times levered as I say before New Year's Eve well before New Year's Eve in 2027. And really then it just comes back to the same play we've always been running. Great sales higher margins are EBITDA margins enterprise wide at 26 and a half percent or 800 to 1000 basis points better than the most of the competition we see out there. Our team is very focused and robust around converting that to free cash flow. We have an asset light model where we whereby we can make our growth investments while remaining at a low single digit capex. And we have an owner's mindset across the company. So good disciplined use of cash. So we feel good about that you know getting that balance sheet to the point where investors consistently told us they wanted to be. And that just opens up more optionality and flexibility for us going forward. Madison Air CEO Jill Wyant sticking with IPOs shares a military drone maker AVEX are set to begin trading today. The company has raised three hundred twenty million dollars. The shares pricing at twenty dollars each near the top of its projected range. Let's speak now with Roger Wells who's AVEX CEO and a big day for the business. What's interesting is what you use the money for. Therefore what will three hundred twenty million dollars by. Yeah. So our primary use of proceeds is going to be to buy down debt and create networking capital that we can really use to scale the business and accelerate growth. Just so you know Roger Bloomberg's reporting that the shares are indicated to open somewhere twenty three to twenty five dollars apiece. You priced it 20. It was 12 times over subscribed. So I don't know how that makes you makes you feel. But the basics of it are you're a drone company and you're a company that in line with the rest of industry is looking at the battlefield. You might move deeper into warfare. Explain the strategy. Yeah. So first off we couldn't be more excited with where we landed. A lot of investor excitement and interest in the products technologies and solutions that AVEX is moving into the market. We are a company that builds autonomous multi-mission multi-domain systems that are battlefield proven. By the time we get to the end of fiscal year 26 we will have delivered over 9000 systems to Ukraine and really proven the capabilities that that we bring. We will continue to focus in on bringing kinetic solutions that are designed to meet the needs of our customers. Long range precision strike right your munitions and launched effects more broadly. When you say that these are being used what. How do we see the scale ramp up and how dependent do you remain on government contracts from the United States. Yeah look I think the the activities we've seen in Ukraine and more recently in Iran just validate the fact that autonomous unmanned systems are going to be a part of modern warfare now and long into the future. We feel like we're well positioned with the significant backlog over eight billion dollars as it stands today and really also validated by the fact that the fiscal year 27 budget request came in over 50 billion dollars for exactly the same types of systems that we bring to the market and to our customers. So we see a lot of growth in this area of the market and a broad adoption of this types of technology. Have you done the math on that Roger. So when the full year 27 defense budget gets gets done how much of that you could capture. Yeah I think we're well positioned and well aligned with evolving requirements. Obviously we're working very closely with our customers to ensure that we are able to bring scaled systems that are affordable and on a timeline that's operationally relevant. So we're constantly working with them to make sure that we're meeting their demand. Roger there's been a lot of exuberance shall I say hype around defense tech names and a lot of them make drones. And I'm interested as to how you continue to build a USP narrative here. What makes you different than the other drone companies. Yeah look I think we really focus in on on a differentiated technology stack that allows our systems to be highly competitive on the modern battlefield. We're able to execute in highly contested environments where GPS is denied. Communications are jammed. Electronic warfare is being pervasively deployed by technical sophisticated adversaries and that technology differentiation is really how we distinguish ourselves and how we we continue to bring top talent to the AVEX team. AVEX indicated to open 23 to 25 dollars priced at 20 dollars in an IPO that Bloomberg reports was more than 12 times oversubscribed. Roger Wells is AVEX CEO. Thank you very much. Coming up on the program. Shares of Netflix dropped pretty sharply as well after posting disappointing second quarter earnings forecast. There's also a big departure. Someone with a long history of that company will have it next. It's halftime. This is Bloomberg Tech. Welcome back to Bloomberg Tech. We are checking in on these markets because it's an extraordinary day from geopolitics. It looks as though the Strait of Hormuz is open according to Iran. Of course this is we move towards closer end to conflict. The world hopes. But we're down by 9.6 percent. If you're looking at oil we've jumped ahead a little bit. So let's go back to the Nasdaq 100 record high. Yeah. Down 10 percent on Brent tech is unstoppable in spite of the war in Iran. So many headlines. So Iran's foreign minister confirms the Strait of Hormuz is open. By the way the Strait of Hormuz is a body of water in the Gulf and lots of ships carrying oil pass through it. Oil was more than oil. More than oil. Yeah right. But that's why you see that that big drop in Brent. You know that the oil I guess will start flowing a little bit more. And then you know broadly speaking you know tech is is is the focus for a lot of investors right now. And within that you know that bucket of the Nasdaq 100 for the first time a 13 day streak since 2013. I think. Yeah. 2013 to go back that long. The sentiment risk on sentiment to remain despite all the geopolitical headlines. But let's go to the A.I. headlines that continue to drive this market and look for some. It's positive. Others it's negative. Figment down off by 6.4 percent as we get. Well reality check that still a I might be disrupting the world of software. This time Claude design is what's coming out. I've got pictures relentless with the amount of announcements. Yeah. So look at that chart. The squiggly line. But the drop just after 11 Eastern is because the headline hit. Anthropic confirming that Claude design is being launched and released. It had been reported in the press earlier in the week which also had hit Figma. But that's a pretty sharp reaction of A.I. displacing a platform that does design create policy visual work like designs prototype slides one pages and more on Adobe as well for example. Yeah we. Story is not going to go away. Let's get back to Netflix and Netflix is under pressure and the stock down almost 10 percent on track for its biggest drop since October. I believe at one point on track for its biggest drop since 2022. The reactions to the numbers and a big departure. Geetha Ranganathan of Bloomberg Intelligent says in her react research Netflix maintaining its four year outlook despite avoiding M&A costs may concern investors but reflects a cautious approach. Geetha joins us now. You know a lot of your colleagues and peers in the markets on the street pointed out that they kind of wanted to see Netflix raise the four year guidance. You know was there an expectation of that. Like why were we going into to the print thinking maybe they'll tell us things are better than they are. Yeah there was definitely a lot of elevated expectations going into the print. And so you know that they just hiked prices in the U.S. and I think that definitely fed into that optimism. There was also the thing of you know the M&A integration costs basically going away after they drop the Warner Brit bid. And so you know I think investors just naturally assumed that they would take up their operating margin which they did not do. So you know this was just your classic case of when results were definitely good. But that's just not good enough given that the street was expecting a whole lot more. He said therefore what holds back margin growth. Revenue is still looking relatively good but perhaps a little more tepid than the street had anticipated. Is consumer sentiment the one being hit. Is it more they still have to deploy cash within their content because look they're not getting the Warner Brothers discovery content anymore. Yeah no that's a great point Caroline. And it's exactly that. So it is elevated content spending this year. So historically what we've seen for Netflix is content amortization in about the 6 to 7 percent growth range. This year it is actually jumping pretty significantly. So it's going to be up 10 percent. They've guided to cash content costs of roughly 20 billion dollars. So that's you know a pretty significant step up from prior years. And that's what is really kind of working its way into that kind of the tepid operating margin guidance. We're going to see the biggest step up happen in the second quarter. And this is really just Netflix kind of as you just pointed out Caroline. This is just them diversifying their content portfolio kind of making all of these new investments into live content into you know some of these sports games if you will. Video podcasts all of that. And that is really costing them. But it's you know it's them just playing both offense and defense. I'm going to have him. So good to have you on. Thank you from Bloomberg Intelligence. And what we've got. Yeah many more news stories in the world of tech and it's time for talking tech. First up Chinese regulators have fined leading delivery platforms in the country including those from Alibaba Pinduoduo and Meituan for failing to screen unqualified merchants. Authorities imposed five hundred twenty eight million dollars in fines and seizures. The count the largest since China's 2015 food safety law update. Plus TV shopping network QVC has filed for bankruptcy as part of a plan of the struggling multimedia retailer to cut more than five billion dollars of debt. In a statement the company said they have more than a billion dollars in cash at the end of 2025 to fund ongoing operations. An open AI is rolling out an early version of a new AI model designed to accelerate drug discovery. The chat to be team maker says it's GPT Rosalind model targets life sciences research would initially be offered as a limited preview to select business customers. Current promise of health care is big when it comes to AI. Meanwhile it's coming up. It's a big set of investment towards AI potentially Sequoia Capital raising seven billion dollars for its latest expansion fund under this new leadership. We're on our necks. It's really bad tech. Bloomberg reporting that Sequoia Capital one of the largest most prominent venture capital firms has raised seven billion dollars for its latest expansion fund. It will target AI giants like open AI and anthropic. Natasha Mascarena has broke the story and joins us now. So like Sequoia raises funds relatively often I would say. But what we're hearing is like this is a big race. Seven billion. It's a very clear focus. Later stage mature companies. What else do we need to know. Yeah absolutely. I mean listen this is the first fundraise we've seen since there's been a leadership change at Sequoia. So this is something that we've been tracking very closely. What is it going to look like under a new leadership with Pat Grady and Alfred Lynn at the top of the firm. They came in at the end of last year. Right now it looks like a lot more investing. This is about double the size of the last expansion fund that Sequoia raised in 2022 and comes in addition to two point five billion raised for its seed through growth investing last year. So just a lot more capital. And we're sort of seeing that writ large aren't we. Kind of Perkins thrive. We know that others are in the market potentially raising you. I like iconic capital potentially general catalyst as well. All of them having to raise bigger and bigger funds because they need to write bigger and bigger checks to the bigger and bigger startups. Absolutely. I think right now there's a dynamic in venture capital where if you're a platform fund you can't just be able to play in one stage. And so with this new capital with Sequoia it's for their latest stage investment. And it remarks back to some of their most successful investments with which closed last month in a 32 billion sale to Alphabet was something that Sequoia back at the earliest stages but continue to double down on. We've we've said that about thrive. We're seeing that now about iconic a firm that I profiled today backing in traffic again and again. And so it's the new normal for funds to be having to add billions to their balance sheet. OK so Natasha let's let's show our audience who's leading this firm right. The co-stewards they're called not co-CEOs not co-managing partners co-stewards. There they are on the left of your screen. I read. Yeah. And they clearly have sartorial direction and synergy as well. But Alfred Lin on the left. Pat Grady on the right. Just give the back story of when they came in. The changes Sequoia made and set the scene for this new era at what is a very important and big venture firm. Yeah absolutely. So last year Roloff both handed the reins over to Alfred Lin and Pat Grady. Now Alfred Lin was known as someone that was helping lead Sequoia's early stage practice. Pat Grady is someone that was known as leading Sequoia's later stage practice. Now we're seeing them both really be hand in hand and co-lead the firm together. And there's a few more changes. So we've reported on some shake ups on the early stage side of the house. We've also seen some people come back to Sequoia's fold. So most prominently we saw Doug Leoni the former senior steward so former top leader of the firm come back into an active investing world. And we've also seen them beef out their growth stage investing ranks. So a lot of changes. And that's why really the new and the new Capitol Hall is something we were so desperate to get to the bottom of because we have just been wondering if we're going to see Sequoia refocus or we can see them expand. And for now you definitely can tell that what Alfred and Pat's top priority will be will be expansion. And to the bottom of it you got within Natasha Mascarena is always great reporting on the venture space. We appreciate it. Let's stick with that venture space because what we just posted actually for VC record shattering two hundred sixty seven billion dollars in the quarter. But the data shows that the landscape is almost entirely consumed by the arms race. We don't want to call it that in this scenario. It's a race while the rest of the ecosystem is effectively frozen because of geopolitical uncertainties. Joining us now is one of the architects of this report. Kyle Stanford director of venture capital research over at Pitchbook. Kyle it's extraordinary how much money is being raised but how much money is being spent on just a few companies. Yeah it really is. Right. And to your point of the data looking really great and it does. But it really depends on where you're at. Ninety one percent of the capital went to deals of one hundred million or larger. So about one hundred and eighty five. You had 73 percent of that go to five companies all AI. And if you include Databricks in there you have investors that want exposure and LPs that want exposure to AI. And so what's getting left behind is the non AI companies whether it be your traditional enterprise SAS that was hot in 2021 or you know different business models that are just not harnessing or not AI native like everyone wants. Everyone wants. So what happens. Is it a tale of totally two cities. Are there an awful lot of people out there who are receiving no funds who are still languishing in down rounds or not even to raise funds at all. Are there these zombie companies out there. Definitely. I mean there's 25 percent of the unicorns. You know about 900 unicorns now in the U.S. 25 percent of those haven't raised since 2022 in a market that's really fast and really hot like we're seeing right now. If you were a strong company and were leveraged for raising another round you would do that. And so those companies are still trying to find a way to you know maybe they are going to take a lower exit or you'll find some way to go through us back in and reorganize themselves. But there's a lot of those companies that were strong and hot in the next big company in 2021 and 22 and have not raised sense. And those are the companies that are really struggling in this market. We are. We're just reflecting call that the data we're showing the data you guys published is from the first quarter right. And activity has been heavy more recently. You heard the reporting from from Natasha and I last night. Right. Our understanding from sources is Sequoia is doing seven billion dollars in an expansion to fund. But to go off to that late stage you know the A.I. companies. What do you infer from that. You know the necessity to have capital at those levels. I guess because otherwise you're not buying in to the names that we're talking about. Yeah there's a few things that tells me right. One companies are continue are going to continue to stay private longer. Right. So those VCs that have access and exposure to companies that are then 15 years old and raising another private round are going to want to get into those companies again and continue to keep their stakes high. It also tells me that LPs want that exposure. They know these companies are not going to go public in the timely fashion that we might have seen five years ago or a decade ago. Right. So they want to make sure that they have exposure to the anthropics and the space X's and the Databricks of the world. Well maybe not. Also Kyle in the future. Those companies they're going to probably go public this year. Right. Yeah. Yeah. So we're saying everything. I think that impacts a lot. Right. I think one we're looking at the those companies as the kind of market indicators if the IPO market window is going to be fully open this year. We have seen obviously space X confidentially file. We have seen discord filed in January but hasn't got any movement. There's not really a backlog or a pipeline of VC backed IPOs because everyone's waiting for these big companies to go public to see what the public investors want to support. You see how Figma has traded today after Anthropic announced their design studio. That's the worry of a lot of these VC backed companies that they're going to go public and they're going to not find the support for their high valuations and then have to contend with Anthropic and Open AI launching something that's very competitive to their space. I'll stand for director of venture capital research at Pitchfork back on Bloomberg Tech. Thank you very much. We just talked about it. Private markets are bracing for IPO soon to be public markets ahead of what's expected to be the biggest IPO ever. Space X has moved up a scheduled vesting date for shares awarded to employees. According to sources it may be accelerated to as soon as next week. Let's get the details with Bloomberg deals. Ryan Gould. I think the point here is that an accelerated vesting kind of makes those employees feel a little bit better about the mechanics of an IPO for them what they might be able to to sell and of course lock up periods etc. I think it gives them the comfort I suppose like that they're part of the journey. And I think you know given what's going on with Elon generally I think his his view is that the employees the shareholders are all in unison. This is very much part of their success. So I think you know having giving this sort of reassurance and confidence to space X employees that they're going to be you know made whole if you will in terms of what they're able to buy or sell I think is you know massively important just for unity and morale around what is clearly a massive mega milestone not just for space expert but for the world. I mean not to put it lightly. This is going to be the most extraordinary IPO most in terms of scale in terms of what the company itself has achieved. But will there be this moment where we're starting to worry about how much the current employees can can lock in the money. What does it mean about the time frame. How quickly are we going to therefore be IPO. I mean it's crazy to think that you know you're looking at a day now where the NASDAQ is you know is up 1.6 1.7. Everything is falling into place. But if you also put you know this employee investing schedule in the same light that you put the 30 percent retail allocation in. I mean it's all kind of. I mean I don't think people fully understand the gravity of like this deal in particular. Right. I mean 30 percent in a retail location an IPO as large as large as this. They're looking to raise 75 billion dollars. I mean that's a significant chunk. So there's a there's a there's a timeline here. So what we're reporting is that SpaceX told employees that the vesting date would take place in April rather than May. But what we're working toward is June to set out the timeline and the mechanics of how we think this IPO is going to work. Right. So this next week as soon as next week we could see this vesting it moved up of public filing. So they've already confidentially filed the public filing could come. We hear as soon as maybe the third week of May which would then put them on track for that 15 day minimum cooling off period. The SEC mandates which are then them for put them in line for the June listing that could come instead of the second week of June. So that's like a matter of weeks. So you know by this time in a couple of weeks we could be looking at this thinking like the whole global capital market looks entirely different. Like not to mention the trimming and some of the stocks that's already going on to make way for this. And what's extraordinary is how much money has been made in the private markets and how much might therefore be made or not in the public markets. Bloomberg's Ryan Gould crosses IPO. Thank you. Coming up Apple's longtime marketing executive retires marking a change of the guard for a series of key product lines. This is Bloomberg Tech. Iran has agreed to suspend its nuclear program indefinitely according to President Trump. In a phone conversation with our own Bloomberg reporter he said that Iran will not receive any frozen funds from the United States. This is breaking news from our own Kate Sullivan over a Bloomberg. We'll keep you abreast of the latest. But he says that the deal between to end the conflict Iran U.S. and Israel. Most of the main points are finalized. It'll go pretty quickly according to the president of the United States. S&P hit a record Nasdaq 100 at a record Brent crude up by 10 percent. Yeah the stocks were at records and session highs anyway but pushed even a little bit higher on those headlines. Another big story we're tracking Apple's longtime marketing executive Stan Ng is retiring after 31 years with the company. He'd been in charge of a series of key product lines for the iPhone maker like the Apple Watch AirPods health and smart home initiatives. Bloomberg senior tech editor Dana Warman's here with us on set in another name leaving the world of Apple. One maybe people weren't familiar with but important nonetheless. Yes and it appears to be a friendly departure. But as you said it's of a peace. There have been there's been a big changing of the guard across both the Steve Jobs era and even to some extent the Tim Cook era. And this is not to say that Tim Cook is retiring anytime soon. But Bloomberg has reported really extensively that the company is really deeply in into its succession planning and is preparing a successor. And this feels like just another drumbeat in a path that is going to culminate in Tim Cook himself leaving at some point. Get not necessarily soon but at some point. Not soon. Stan is saying what did he achieve. I mean he's so closely known with the watch but also the iPod the O.G. of it all. Yes absolutely. Goes back way that way back. And even in his LinkedIn post announcing his departure he said that one of the last things he did at Apple on the Apple campus was do a workout in the gym using his original iPod classic that he said was still working on a pretty good battery. But one thing that Mark Gurman did note in his report is that at Apple at least marketing executives aren't just in charge of the advertising of these products but they have a hand in steering the product development itself. So that was interesting to me. And that is that's not to say that there won't be future air pods future Apple watches. And I'm sure that there are products in the pipeline for years ahead. But that just speaks to the influence that marketing executives at that level have at the company. Well said. And a woman was great to have you on on all things Apple. We thank you. And there's another story we've got to get to over at Intel. They're actually hiring Samsung executive Sean Han is about to join Intel next month to become general manager of the company's foundry services in a bid to help win over customers for the foundry business. And of course it comes as a company is trying to break into the outsourced chip manufacturing business currently dominated by TSMC and with Samsung coming in as a destined second. It's important with the reporting you've done on the tariff. Yeah. So like so Intel announced that it's joining must have a fab. Right. And generally this the stock story is amazing. Intel is back at its highest level since 2000. And it's up for a third straight week. And it's just like has momentum. But that is the unproven part. Customers using its chip manufacturing technology. And of course next week we'll find out because they have earnings. You know how much progress they've made towards that. Two thousand two thousand and twenty six. What a ride it has been to be with Intel. And the fact that basically you're back at where we were in 2020 that January high before of course the world came to a standstill is where Intel was out. But what a pummeling the stock got in previous years. And then just last year extraordinary up 80 percent. This year we're already up 90. Yeah look it's not just about capacity either. You know the volume of chips available. It's about what they've always said is technology leadership and having the latest processes that can produce the best chips at the highest yield. The economics are brutal but they just got to come out and say oh by the way this is our customer. I'm not going to name one for them. But that's the story that we're looking for. Need the proof points. Meanwhile that does it for this edition of Blue Tech. And you're sticking here in New York. I'll do a little New York weekend and we'll be back next week here on set. Check out the pod. You know exactly where to find it. I heart Spotify and Apple and on Bloomberg. This is Bloomberg Tech.