Bloomberg Tech
2026-10-20 · Hosted by Caroline Hyde, Ed Ludlow · Bloomberg / iHeartMedia
Executive Summary
Bloomberg Tech led with Nvidia-backed Nscale, which is targeting a roughly $30 billion valuation in its planned IPO while some investors argue it's worth closer to $16-19 billion. The pushback follows CoreWeave falling more than 20% since filing publicly and a Bloomberg report that Microsoft walked away from one of Nscale's UK data center deals over the weekend — all while the broader AI trade staged a rebound, with the Nasdaq 100 up 1.7% after last week's worst weekly drop since April 2025.
Key Stories & Changes
1. Nscale's IPO Valuation Under Investor Pressure
Nscale targeting roughly $30 billion valuation; some investors say closer to $16-19 billion
CoreWeave down more than 20% since filing publicly; Nebius also cited as a comparable under pressure
Nscale filed publicly on September 18; as of October 19 still working through SEC comments, well past the normal ~15-day path to roadshow
Microsoft pulled out of anchoring one of Nscale's UK data center projects over the weekend, citing power constraints; Microsoft and Anthropic are Nscale's two largest customers
Reporter Bailey Lipschultz noted Bloomberg's prior reporting that Nscale is being challenged in building out its sites
2. Anthropic's Public Benefit Fund and Musk's Counter-Pledge
Anthropic to put 5% of shares into a new wholly owned LLC (not a nonprofit) dedicated to addressing AI's labor-market impact
Board can add another 2 percentage points for every 50% increase in valuation; subject to shareholder approval
Senator Bernie Sanders had proposed a government-administered fund of up to 50% of IPO equity; that proposal has since subsided
Elon Musk responded on X suggesting Anthropic give shares directly to the public instead, and pledged to give one SpaceX share to every kid in America next year
Bloomberg's Mike Shepherd estimated ~72 million children at ~$146/share implies $10-11 billion, a "rounding error" against Musk's ~$900 billion net worth
3. Former OpenAI Engineer's Recording Device Case
Former OpenAI employee, fired the same day he was arrested, charged with planting a secret recording device in an executive conference room
DOJ argues he is a flight risk, citing a booked one-way flight to Saudi Arabia (his country of origin)
Government filings indicate he had frequent WhatsApp contact with a Saudi royal family member who tried to recruit him for a Kingdom-backed AI project
The room in question was also used for meetings with government officials, raising national-security concerns about leaks of closely held AI model information
4. Market Rebound in AI Trade
Nasdaq 100 up 1.7%, on track for its biggest jump in a month, after last week's biggest weekly drop since April 2025 (five straight days of declines)
Philadelphia Semiconductor Index up 3.5%; CoreWeave up almost 3% after Goldman Sachs upgrade to buy
Hyperscaler earnings loom: SpaceX reports Tuesday night, Meta Wednesday, Microsoft/Google/Amazon the following week
Tech is expected to generate 48% of S&P earnings-per-share growth this quarter, raising stakes for the sector to deliver
5. Individual Stock Movers
Amazon up 5% (biggest jump since end of July) after Morgan Stanley named it a top pick, raising price target to $350 from $335; analyst Brian Nowak cites AWS growth/profit runway as underappreciated, AWS margins near 40%, stock trading at ~20x earnings
Intel upgraded at JPMorgan, crediting CEO Lip-Bu Tan's execution; biggest gain since September 21
CoreWeave upgraded to buy at Goldman Sachs, calling last week's sell-off overdone
AMZN: Amazon — +5% — Morgan Stanley top pick on underappreciated AWS growth and margins
INTC: Intel — Up (biggest gain since Sept 21) — JPMorgan upgrade citing management execution
CRWV: CoreWeave — +~3% — Goldman Sachs upgrade to buy after prior week's sell-off
6. Tenstorrent's New $6.2 Billion Valuation
AI chip startup Tenstorrent raised $1.5 billion, valuing the Nvidia challenger at $6.2 billion, more than double its valuation two years ago
New VC firm Trace led the round; Sandisk and Cadence are strategic investors
Founded by former AMD engineers roughly 10 years ago; gained momentum after chip-design veteran Jim Keller joined as CEO
Keller says Tenstorrent is undercutting Nvidia on price and targeting smaller customers overlooked by larger rivals
7. Capital Expenditure Outlook from Argent Capital
Portfolio manager Jed Ellerbrock of Argent Capital: Amazon to spend roughly $220 billion in CapEx this year, projected to rise to $350 billion next year (AWS + Retail combined), continuing higher into 2028
Anthropic's 45% sequential revenue growth and Nvidia's projected 70% growth next year characterized as decelerating but still "impressive" relative to prior quarters
Ellerbrock cited rising equity-check requirements (now above 10% of project value) and higher interest rates as key CoreWeave/Neo Cloud cost pressures
8. Private Markets and the AI IPO Wave
Hamilton Lane (oversees $1 trillion+ in private market assets, ~$128 billion in venture/growth equity) executive co-chairman Eric Hirsch discussed primaries, secondaries, and continuation funds as access mechanisms
Hirsch: companies are staying private far longer than in the late 1990s; IPO is "not the default" outside mega-cap frontier labs
Public company count has been shrinking for decades; new IPOs increasingly concentrated in $1-2 trillion-plus valuations
9. Data Centers as a Midterm Election Flashpoint
More than 300 localities have imposed construction moratoriums on data centers
A September poll found 61% of voters oppose data center construction; at least 35 related ballot measures pending
Loudoun County, VA ("data center alley") has 233 facilities built or under construction, generating 17,000 jobs and a projected $1.3 billion in tax revenue, but may pause new reviews for up to 12 months
Washington Post analysis: the issue has been injected into nearly 40% of races nationwide; Dallas Fed finds data centers have pushed wholesale electricity costs 3-5% higher nationwide
10. Apple's Home View Robotic-Arm Upgrade
Apple developing a higher-end Home View device with a robotic arm that can swivel the screen toward whoever's speaking
Initial version launches November 13, roughly a 24-month delay from original late-2024 target; pricing for the robotic-arm version expected north of $800 (vs. $299 for the base model)
Delay attributed to Siri AI/software readiness, not hardware; base pricing benefited from being produced before the recent memory shortage
Trends Identified
1. AI Infrastructure Credit Stress Spreading to IPO Valuations
Nscale's valuation haircut mirrors the broader repricing seen in CoreWeave and Nebius, suggesting investors are applying a steeper discount to "neo cloud" infrastructure players amid concerns about leverage, build-out execution, and hyperscaler contract risk (illustrated by Microsoft's UK withdrawal).
2. AI Giants Moving to Address Social Backlash Ahead of IPOs
Anthropic's public benefit fund, following similar sentiment from figures like Elon Musk, reflects a broader industry push to get ahead of public anxiety about AI-driven job displacement before blockbuster share offerings — a trend likely to recur as OpenAI also approaches its own IPO.
3. Capital Expenditure Still Climbing Despite Growth Deceleration
Even as growth rates "decelerate" (Anthropic's 45% sequential growth, Nvidia's projected 70% next-year growth), absolute CapEx figures (Amazon's projected jump from $220 billion to $350 billion) point to continued infrastructure investment, creating a push-pull between slowing growth rates and still-rising dollar spend (CapEx: capital expenditures, money spent on long-term infrastructure like data centers).
4. Private Markets Increasingly the Default for AI-Adjacent Companies
With public company counts shrinking for decades and new IPOs concentrated among trillion-dollar-plus "giants," the bulk of AI-thematic business formation and value creation is expected to remain in private markets indefinitely, reinforcing the importance of primary, secondary, and continuation-fund access points for investors.
5. Data Center Buildout Becoming a Bipartisan Political Liability
Local opposition to data centers — crossing partisan lines — is emerging as a genuine midterm election issue, with over 300 construction moratoriums and nearly 40% of national races touching the topic, even as the federal government frames the buildout as a competitive necessity against China. ---
Sentiment Analysis
Overall Market Sentiment: Cautiously Rebounding
Markets bounced sharply after last week's sell-off, but reporting throughout the episode (Nscale's valuation cut, Microsoft's contract withdrawal, OpenAI security concerns) suggests underlying anxiety about AI infrastructure financing persists beneath the rebound.
Risk Factors Highlighted
Nscale valuation gap: Investors pricing the company nearly 50% below its own IPO target signals broader skepticism toward neo cloud valuations.
Hyperscaler contract cancellation risk: Microsoft's exit from Nscale's UK deal shows key tenants can walk away, pressuring smaller infrastructure players.
SEC review delays: Nscale's prolonged comment process a month after filing raises questions about undisclosed financial issues.
AI model security: The OpenAI recording-device case highlights risk of leaked closely held model IP reaching foreign actors.
Data center political backlash: Over 300 local moratoriums and ballot measures threaten continued infrastructure buildout.
Electricity cost pressure: Data centers linked to 3-5% higher nationwide wholesale electricity costs, a consumer-facing risk.
Growth deceleration optics: Anthropic's and Nvidia's slower (but still high) growth rates are fueling market anxiety despite still-strong absolute performance.
Equity dilution uncertainty: Unclear whether Anthropic's public benefit fund requires newly issued shares, which could affect IPO shareholder dilution.
Device development delays: Apple's Home View device reflects a multi-year delay pattern tied to AI software readiness, a risk for consumer AI hardware timelines broadly.
This episode was covered in today's [The Market Signal — 2026-10-20](https://marketsignal.beehiiv.com/p/the-market-signal-2026-10-20), a cross-source synthesis of multiple podcast reports.