America's No. 1 financial conglomerate

Chapter 604: Donning the Resurrection Armor

"Prudential Group, Arthur F. Ryan, they are preparing for an IPO. If you're interested, you can participate."

It's a giant right from the start, the largest insurance company in the United States, with assets exceeding $2100 billion.

"MetLife, Robert Benmosher, only took office in July, previously he was the CE of Chase Manhattan Bank."

Ernst raised a toast with the other party and chatted for a few moments.

No wonder people say finance is a circle, and the Rockefeller family is an even larger circle.

MetLife and Chase Manhattan Bank were both core assets of the Rockefeller Group. Robert Benmosher's job change was essentially a strategic reshuffle of the core management team within the group.

"Hartford Financial Services Group, Ramani Al."

Ernst's attitude towards this person was much more perfunctory than towards the previous two; he simply gave a brief greeting.

There was no way to hide it; the strong curry smell emanating from the other person couldn't be masked even with perfume.

This is different from the body odor that is common among Westerners, who can mask their body odor with perfume and frequent washing.

But the smell on him was more like foul body odor mixed with perfume. To put it simply, Ernst immediately pictured pouring a huge amount of perfume into a stinking, eye-watering outhouse.

"Fidelity Investments, Edward C. Ned Johnson III."

His name is extremely long, much like the amount of wealth he manages.

He is the son of Fidelity's founder and has led Fidelity to maintain its leading position in the mutual fund industry for two decades, managing assets of over $5900 billion.

BlackRock is no match for it now.

Vanguard, the second-largest public fund in the U.S., manages about $2500 billion less in assets.

This is one of the true behemoths of Wall Street today. Even Wall Street giants like Goldman Sachs and Citigroup have to affectionately call it "brother."

Because they are the biggest clients, they entrust hundreds of billions of dollars in assets to major Wall Street institutions for investment every year, and the flow of their funds directly affects the revenue performance of many investment banks.

"I heard that AI Technology is planning to launch its Series B funding round?" Edward offered a toast, his tone clearly showing interest.

Ernst was taken aback, not because he was surprised that the other party knew about AIT's Series B financing.

Since they agreed to cooperate with Citibank, this news would spread sooner or later.

To his surprise, the other party was actually interested in an unlisted company. "Don't tell me Fidelity wants to invest." Not only Ernst, but even Buffett was surprised and asked first.

"Why not?" Edward C. Ned Jansen III answered frankly, without the slightest hint of concealment.

Ernst frowned. "But what about regulatory aspects?"

The U.S. Investment Company Act of 1940 imposes strict restrictions on the investment targets of public funds. Startups, or companies that are not publicly listed, have unstable revenue, and have a short lifespan, are subject to very strict regulatory scrutiny, although there are no explicit provisions prohibiting investment.

Because these companies have extremely poor liquidity and extremely high valuation risks, they do not meet the underlying requirements of the US public funds that must do their utmost to ensure the safety and liquidity of retail investors' funds.

Therefore, public funds invest in stocks or equity funds, bonds or bond funds, and money market funds of large companies, such as short-term treasury bonds, large negotiable certificates of deposit, and commercial paper.

It's not that startups don't get public funding, but it's extremely rare.

Even if they do invest, it's considered bridge investment, meaning those companies about to go public come in, make a quick buck, and leave.

The main problem is that it's too troublesome. You have to report to the relevant departments every few days and face inspections from time to time.

"So what?" Edward seemed completely unconcerned about these troubles. "That's your Ernst company, a consumer electronics giant with a clearly visible and promising future."

"Now that you mention it, I've also become interested in AI Technology," Buffett interjected with a smile, glancing at Ernst.

Ernst really wanted to ask, are you serious? Everyone knows that Buffett's investment logic is based on mature companies.

Although he didn't ask aloud, Buffett understood from his expression: "This is Ernst's company; who could refuse it?"

Ernst really didn't expect his name to be so well-known now.

"If AI Technology gets a Series C funding round, I'll definitely call you," Ernst said to Buffett.

Edward's eyes lit up at those words, and Buffett replied seriously, "It's a deal."

What does it mean to have a Series C funding round?

Everyone here is discerning and can hear the subtext in Ernst's words.

For unlisted startups, the more funding rounds they typically receive, the better.

The funds raised through these financing rounds do not need to consider short-term profit returns; they are essentially used to fuel the company's development.

Even startups that have already achieved profitability will choose to continue raising funds if they have completed fewer funding rounds.

Its core purpose is to accumulate sufficient funds before listing, so that the company can have enough room for error if the market environment changes after listing.

Unless, of course, the company is flush with cash, with more money than it can spend. In such cases, shareholders typically won't choose to dilute their equity again in order to maximize their profits.

AiTech's profitability is an open secret in the industry and there is no need to question it.

A professional organization has analyzed its core product IP and concluded that the profit margin of this product is at least 60%, and possibly even higher.

Such a profit margin is unparalleled in the manufacturing industry.

It's important to know that the average profit margin in traditional manufacturing is mostly between 10% and 20%, and even in high-end manufacturing, a profit margin of over 30% is rare.

Everyone is envious of AiTech's profit margin.

It can make money, but it can also spend money.

The newly established global R&D center, the construction of the headquarters building, and the acquisition and integration of several small technology companies all require huge financial investments.

Especially in terms of brand promotion, AGI's investment in GG can be described as insane.

Some media outlets have jokingly said that "when Axon's new products are launched, even hippos on the African savanna can see Axon's GG (Goblin).

While this statement is somewhat exaggerated, it does reflect the significant amount of investment iTech has made in promoting GG.

Ernst also has his own frustrations regarding this. Although the IP has achieved great market success, iTech is, after all, a relatively new startup.

To quickly establish brand awareness in a short period of time, it is necessary to adopt this kind of overwhelming publicity strategy.

We can't really rely on word-of-mouth, can we? We need to use a lot of Google AdSense and leverage the psychological suggestion effect of repeated exposure to quickly build AGI's brand influence in consumers' minds and catch up with industry giants like Sony.

It is precisely because Atech spends money like water and has not yet gone public or disclosed its financial statements that outsiders have always remained at the level of speculation about its true financial situation.

Ernst's comment, "If there's a Series C funding round," immediately gave Edward C. Ned Johnson III and Warren Buffett a clue.

AiTech's cash flow is at least in the billions of dollars.

The reason is simple: research and development innovation is an extremely capital-intensive project, especially for companies like iTech that are always committed to launching industry-first products. Without sufficient cash flow to support it, it is impossible to maintain high-intensity R&D investment, let alone guarantee the company's operational tolerance.

"So, we can find a time to talk?" Edward C. Ned Jansen III's smile grew even brighter, his tone filled with obvious anticipation.

He was the one who brought up the financing of AI Technology first, but Ernst did indeed decline Buffett's offer.

In other words, he has a way in.

"5%, that's the most equity I can offer, unless you can convince Citigroup to give up some of its shares," Ernst said calmly, then added a heads-up, "Moreover, the valuation of iTech in this Series B funding round may far exceed your expectations."

"Tell me," Edward C. Ned Johnson III asked in a low voice. Buffett leaned forward instinctively, his eyes filled with curiosity. "Eight hundred billion dollars," Ernst said firmly, without the slightest hesitation.

"How much?" Edward C. Ned Johnson III and Warren Buffett exclaimed almost simultaneously, their voices so loud that many people in the banquet hall turned to look, wondering what topic had caused these two bigwigs in the financial world to lose their composure like this.

Monica Bellucci, standing next to Ernst, reacted even more dramatically, her mouth opening perfectly, creating a strange symmetry with a certain part of his body.

However, no one cared about the beautiful female star at this moment, even though she was stunningly beautiful tonight, even though she was Ernst's dance partner.

In the face of capital, even beauty can only become a backdrop.

On the other side, Edward C. Ned Johnson III and Buffett gradually calmed down. Edward even downed his glass of champagne in one gulp, as if using alcohol to suppress the turmoil in his heart.

He had considered that ITech's valuation would be very high, after all, Ernst had previously taken advantage of Wall Street to fleece people, which was the highest in the United States.

When we talk about Wall Street now, the three words are Ernst's company and financing.

Some might say, "Are those scoundrels on Wall Street going to give Ernst money again?"

But he never expected that the valuation would be so outrageously high.

"Can I know how much equity Citigroup acquired in this round of financing?" He didn't dwell on whether the valuation was reasonable, nor did he ask Citigroup whether they accepted the price.

Since Ernst just said that Fidelity wanted a larger stake and needed to negotiate with Citigroup, it means that the deal with Citigroup has basically been reached. "20%," Ernst didn't hide anything, and after hesitating, added, "At least."

What secrets does AiTech hold that are unknown to the outside world?

The idea instantly took shape in their minds.

But what exactly is the secret that allowed iTech's valuation to increase by more than $50 billion?

If Ivy Technology goes public and truly surpasses a market capitalization of $800 billion, the two of them will at most be surprised.

But this is valuation, it's financing, so the price will naturally shrink because investors need to take on greater risks.

iTech's Series A funding round was valued at $150 billion, which exceeded the expectations of Wall Street institutions at the time.

Currently, Wall Street generally values ​​iTech at between $220 billion and $260 billion.

Even if it's $30 billion, where did this $50 billion increase come from?

"Okay." Edward thought for a moment and then agreed immediately, demonstrating his decisiveness and boldness as a Wall Street tycoon.

His idea was simple: if Citibank dared to invest and didn't mind having too many shares, it meant that Citibank had grasped the problem.

Since Citibank feels it's excellent value for money, what is he afraid of? There's no reason for him to back down.

"However, I have one condition."

Ernst raised his glass in a gesture of approval. "Please go ahead."

"If iTech launches its next round of financing in the future, Fidelity Investments hopes to have priority investment rights."

"Yes," Ernst agreed almost without hesitation.

It is highly unlikely that AiTech will launch another Series C financing round. At the latest, the company will complete its IPO by early 2000.

Even if unexpected circumstances arise requiring further financing, he wouldn't mind Fidelity Investments getting involved.

Ernst agreed to Fidelity's participation in the financing because he valued the special nature and network of public funds.

The reason I agreed was because I valued the public fund's nature and the connections it had.

This is similar to the social security fund; public funds are generally not allowed to lose money.

And the fact that Ai Technology will later become a military-industrial complex is simply a perfect combination.

If you make money, everyone's happy. If you lose money...

How can we lose money?

Since it's a military industry, the country's money is AiTech's money.

In order for iTech to make money and for their own investments to avoid losses, these public funds will inevitably exert pressure on the government through various channels to provide iTech with funds.

At least they must do this before they withdraw.

This is like giving AI a resurrection suit, granting it a chance to use an immunity token.