WEBVTT - Amazon Spends Big, DraftKings Sees Major Super Bowl Bets 0:00:00.840 --> 0:00:05.080 From the heart of where innovation, money and power collide 0:00:05.400 --> 0:00:10.680 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.840 --> 0:00:25.000 Caroline Hyde and Ed Ludlow. 0:00:26.200 --> 0:00:28.880 Like from New York, I'm Caroline Hyde and I'm Jackie 0:00:28.920 --> 0:00:32.239 Devalas in San Francisco, this is Bloomberg Technology coming up. 0:00:32.360 --> 0:00:35.600 Amazon plans to spend at least one hundred billion dollars 0:00:35.680 --> 0:00:38.760 this year to keep up with AI demand. We break 0:00:38.800 --> 0:00:42.080 down the earnings, plus US Treasury Secretary Scott Besson says 0:00:42.080 --> 0:00:45.599 Elon Musk's Doge effort isn't altering treasury systems. 0:00:45.840 --> 0:00:47.240 More on our exclusive. 0:00:46.800 --> 0:00:50.440 Interview and with the Super Bowl this Sunday, we dig 0:00:50.520 --> 0:00:53.440 into the sports spending industry with DraftKings CEO Jason Robbins. 0:00:53.479 --> 0:00:56.240 But first we dig in to these markets. But the 0:00:56.320 --> 0:00:59.360 number one name that is dragging down the NASAC, it's 0:00:59.400 --> 0:01:01.800 Amazon by three point six percent. The worst day of 0:01:01.800 --> 0:01:04.800 the stocks is December the eighteenth. This is all about 0:01:04.920 --> 0:01:07.520 the earnings that we get the fact that they managed 0:01:07.520 --> 0:01:09.440 to be in line for their fiscal fourth quarter ten 0:01:09.480 --> 0:01:12.880 percent growth in revenue. We see earnings overall showing sixty 0:01:12.920 --> 0:01:15.600 percent more than growth in operating profit. But it's the 0:01:15.720 --> 0:01:18.399 forward looking guidance that once again has us a little 0:01:18.440 --> 0:01:21.000 bit anxious. And it's all about AWS. Let's get to it, 0:01:21.080 --> 0:01:25.480 Bloomberg Intelligence analyst Phunam Goyle. And first off, with AWS, 0:01:25.720 --> 0:01:28.559 they're committing to yet more spend one hundred billion dollars. 0:01:28.560 --> 0:01:30.640 That's going to be the run rate that's necessary to 0:01:30.720 --> 0:01:33.360 capture the extent of demand for cloud right now. 0:01:34.080 --> 0:01:35.520 Yeah, you said it, absolutely right. 0:01:35.560 --> 0:01:37.759 So we're not still surprised by that because we heard 0:01:37.760 --> 0:01:40.600 that from Microsoft and Google earlier too. But one hundred 0:01:40.640 --> 0:01:43.360 and five billion dollars in twenty twenty five and likely 0:01:43.400 --> 0:01:46.640 thereafter means they're spending more on AI. But that's a 0:01:46.640 --> 0:01:48.680 good thing, right We want to see them spend more 0:01:48.760 --> 0:01:52.280 because there is going to be higher demand for AWS 0:01:52.320 --> 0:01:55.720 services and Amazon needs to make sure that they're investing 0:01:55.840 --> 0:01:56.840 and not behind the curve. 0:01:57.880 --> 0:02:01.120 What did the company say about it's eco commerce business? 0:02:01.160 --> 0:02:04.360 We forget this now and all the talk about artificial intelligence. 0:02:04.360 --> 0:02:05.960 How is it fending off competition there? 0:02:06.600 --> 0:02:06.800 Yeah? 0:02:06.840 --> 0:02:09.000 E commerce actually had a very nice quarter on the 0:02:09.080 --> 0:02:12.120 heels of a very strong holiday season. They did well, 0:02:12.160 --> 0:02:14.880 surprisingly in their physical store business, which is also a 0:02:14.919 --> 0:02:17.120 small piece of the business. But the fact that it 0:02:17.160 --> 0:02:20.800 grew nearly high single digits was surprising and promising on 0:02:20.840 --> 0:02:24.960 the efforts there for the online side. Very good growth there, 0:02:25.120 --> 0:02:28.120 and we are looking to see what happens in twenty 0:02:28.160 --> 0:02:30.160 twenty five with the added terrace. 0:02:31.200 --> 0:02:34.880 Let's just talk about whether or not commerce can be 0:02:35.040 --> 0:02:38.560 supporting ultimately the amount of capital expenditure that's going on here, Poonam. 0:02:38.919 --> 0:02:40.600 It feels as though this is a company that is 0:02:40.680 --> 0:02:43.880 cash rich. Most analysts have upgraded their price targets on 0:02:43.960 --> 0:02:46.080 the company today even though we see those weaknesses in 0:02:46.080 --> 0:02:46.480 the SHES. 0:02:46.520 --> 0:02:47.600 People are willing to wait. 0:02:47.480 --> 0:02:50.200 Right, Yeah, people are definitely willing to wait. I mean 0:02:50.200 --> 0:02:52.120 there's a lot of profitability that will come out of 0:02:52.200 --> 0:02:55.240 Amazon over the coming years from the AWS business, but 0:02:55.480 --> 0:02:58.480 also from advertising, which is a key driver here to 0:02:58.520 --> 0:03:02.800 profitability with even higher margins than AWS, and retail is 0:03:02.840 --> 0:03:06.120 the driving force behind that higher advertising momentum. 0:03:06.919 --> 0:03:10.200 That's Bloomberg Intelligence analyst Punem Gooil, thanks so much. 0:03:10.639 --> 0:03:11.200 Let's go to. 0:03:11.360 --> 0:03:14.160 China, where tech stocks have helped power a bull run 0:03:14.200 --> 0:03:17.280 for their market show me among shares surging to a 0:03:17.320 --> 0:03:20.079 fresh record on the back of new product launches. Let's 0:03:20.080 --> 0:03:23.200 bring in Bloomberg's Peter Elstrom for more. Peter, what does 0:03:23.240 --> 0:03:26.080 show Me unveil that got investors so excited? 0:03:27.800 --> 0:03:29.240 Yeah, Hi, Jackie. Yeah. 0:03:29.240 --> 0:03:31.880 Shaumi is best known for its smartphones, of course, and 0:03:31.919 --> 0:03:35.360 they've competed with Apple and Huawei in the market quite effectively. 0:03:35.600 --> 0:03:38.400 But they also have this whole ecosystem of other devices 0:03:38.400 --> 0:03:41.040 that they're able to tap into that includes cars. Now 0:03:41.080 --> 0:03:43.200 they want ahead with a car venture while Apple pulled 0:03:43.240 --> 0:03:46.000 away from that. They also have a lot of wearable devices. 0:03:46.040 --> 0:03:48.800 So there are a couple of bullish sentiments there. One, 0:03:48.840 --> 0:03:51.200 there's this overall sentiment that the China market is quite 0:03:51.200 --> 0:03:53.640 strong right now. On top of that, Shaumi seems to 0:03:53.680 --> 0:03:56.360 be growing quite a bit, and the Chinese government is 0:03:56.400 --> 0:03:59.560 offering subsidies in a number of different areas, including wearables. 0:04:00.040 --> 0:04:01.560 Could benefit show Me in the long run. 0:04:01.640 --> 0:04:03.800 So they have this whole ecosystem that is probably going 0:04:03.840 --> 0:04:06.680 to be able to benefit from some of these growth opportunities. 0:04:06.760 --> 0:04:09.880 Looking at Shaomi, auto's another auto that's been on a 0:04:09.920 --> 0:04:12.440 tap byd We're all looking at autonomous. We're looking at 0:04:12.480 --> 0:04:15.720 a key competitive threat here for Tesla that saw Chinese 0:04:15.760 --> 0:04:17.600 sales fall like they have done around the world. 0:04:18.800 --> 0:04:21.920 Right bid of course, surpassed Tesla in terms of the 0:04:22.000 --> 0:04:25.640 number of electric vehicles sold. They've been a breakout success 0:04:25.640 --> 0:04:28.080 from China really, and they've had a success beyond the 0:04:28.080 --> 0:04:30.080 country in a number of different areas. So they didn't 0:04:30.080 --> 0:04:33.440 even announce anything that gave the shares this big bump. 0:04:33.720 --> 0:04:36.320 There's a report that they're going to have an announcement 0:04:36.440 --> 0:04:38.920 next week, and the anticipation is they're going to talk 0:04:38.920 --> 0:04:41.839 about their autonomous driving capabilities. They think they're going to 0:04:41.880 --> 0:04:44.840 take a step forward there, and that really benefited the shares. 0:04:44.880 --> 0:04:48.880 On top of this overall bullish sentiment in China, there's another. 0:04:48.640 --> 0:04:52.440 Boost here that's helping lift Chinese tech stocks Deep Seek, 0:04:52.520 --> 0:04:56.599 which is completely the opposite reaction that US tech markets had. 0:04:56.480 --> 0:04:59.320 Kind of explain that for US, Peter right. 0:04:59.440 --> 0:05:03.080 Deep Sea, of course, is this AI model that has 0:05:03.120 --> 0:05:06.200 come out over the past few months, but really a 0:05:06.240 --> 0:05:09.560 couple weeks ago captured the world's attention because it's an 0:05:09.600 --> 0:05:13.719 AI model that is competitive with open aiyes alternative offering. 0:05:13.880 --> 0:05:15.680 But they did it at just a fraction of the cost. 0:05:15.760 --> 0:05:18.279 It's unclear exactly whether the costs that they announced at 0:05:18.520 --> 0:05:21.120 exactly in line, but nevertheless it was certainly much much 0:05:21.200 --> 0:05:24.440 cheaper than what the companies in Silicon Valley are doing. 0:05:24.640 --> 0:05:27.960 So Deep Seak itself is of course not publicly traded, 0:05:28.200 --> 0:05:31.760 but that's given the sense of optimism for the rest 0:05:31.760 --> 0:05:34.160 of the Chinese market, and you've seen an uplift and 0:05:34.200 --> 0:05:35.400 a number of different stocks. 0:05:35.600 --> 0:05:37.320 In particular, Ali Baba. 0:05:37.040 --> 0:05:39.960 Best known for its e commerce business, announced an AI 0:05:40.000 --> 0:05:42.159 model that's supposed to be quite good. They said theirs 0:05:42.279 --> 0:05:43.880 is actually better than Deep Seeks. 0:05:43.960 --> 0:05:44.800 It's not clear. 0:05:44.600 --> 0:05:47.440 Whether that's the case, but their stock has been rising 0:05:47.520 --> 0:05:48.039 quite a bit. 0:05:48.240 --> 0:05:48.400 Now. 0:05:48.520 --> 0:05:50.920 This comes against the backdrop that Ali Baba got beat 0:05:51.000 --> 0:05:53.400 up for years by the Chinese government, So they're still 0:05:53.600 --> 0:05:56.320 far far off their highs from twenty twenty to twenty 0:05:56.360 --> 0:05:59.320 twenty one, but they're recovering a fair bit here. 0:06:00.240 --> 0:06:03.240 The sentiment, of course come whipsaw, and a lot of 0:06:03.240 --> 0:06:05.279 that's to do with just the economy over in China. 0:06:05.320 --> 0:06:08.400 There's tariffs and concerns about US China relationship going forward. 0:06:08.400 --> 0:06:11.160 But for now, does this sort of bullish sentiment feel resilient? 0:06:11.320 --> 0:06:13.400 Is it all just pegged on the latest day I development? 0:06:13.400 --> 0:06:17.880 Peter, It's it's so hard to tell, really, especially in China, 0:06:17.920 --> 0:06:19.600 because there's a lot of things that you can't see 0:06:19.600 --> 0:06:21.960 that are going on beyond the numbers, beyond. 0:06:21.680 --> 0:06:23.039 The specifics that we see. 0:06:23.520 --> 0:06:25.960 There certainly are analysts who believe that this is going 0:06:26.000 --> 0:06:28.159 to be sustainable from here. One analyst put out a 0:06:28.160 --> 0:06:31.000 report called China is going to eat China will eat 0:06:31.040 --> 0:06:33.159 the world, you know, very bullish sentiment for some of 0:06:33.160 --> 0:06:36.080 these China stocks, including Alli, Baba and Tencent, which had 0:06:36.120 --> 0:06:38.640 been leaders in the past. But again, the Chinese government 0:06:38.680 --> 0:06:40.480 had really beat up those companies in the past, so 0:06:40.520 --> 0:06:42.039 they're just getting back some of that ground. 0:06:42.360 --> 0:06:46.120 Peter, let's talk about trade tensions, because I'm ad all 0:06:46.120 --> 0:06:49.560 this optimism. What does all of this mean in the 0:06:49.640 --> 0:06:52.160 long term or even really in the short term as 0:06:52.160 --> 0:06:55.520 some of these tensions escalate with President Trump and Beijing. 0:06:56.920 --> 0:06:59.560 Right, Jackie, you're hitting on another one of the very 0:06:59.640 --> 0:07:02.799 key actors and the unpredictability of the whole sentiment. 0:07:02.880 --> 0:07:03.120 Here. 0:07:03.279 --> 0:07:05.360 You have a number of Chinese companies that will get 0:07:05.400 --> 0:07:08.640 caught in the crossfire between the US government and the 0:07:08.720 --> 0:07:11.840 Chinese government if in fact they escalate from here. We've 0:07:11.880 --> 0:07:15.200 already seen the US put these ten percent tariffs on 0:07:16.240 --> 0:07:19.840 Chinese goods. Also, they eliminated this rule the deminimous rule 0:07:19.880 --> 0:07:24.360 that really helped PDD Holdings, the parent company of Timu, 0:07:24.440 --> 0:07:26.560 that the e commerce player that has been on such 0:07:26.560 --> 0:07:29.280 a terror and also Shean. Those companies are certainly going 0:07:29.320 --> 0:07:31.360 to get hit by some of these changes. It's a 0:07:31.400 --> 0:07:33.840 matter of whether they're going to continue with those. The 0:07:33.880 --> 0:07:36.200 Trump administration, of course, has gone back and forth on 0:07:36.240 --> 0:07:38.960 some of these tariffs. We saw them announce them for 0:07:39.120 --> 0:07:41.360 Mexico and Canada and then back off of them. So far, 0:07:41.400 --> 0:07:43.920 the Chinese tariffs are in places probably aren't going to 0:07:44.000 --> 0:07:47.200 go away, but you can imagine the Trump administration negotiating 0:07:47.240 --> 0:07:49.800 a bit here. So unpredictability is really going to be 0:07:49.840 --> 0:07:50.360 the key. 0:07:50.480 --> 0:07:50.840 Doesn't it. 0:07:51.000 --> 0:07:54.200 Just bloking back its Peter Elstrom, thanks so much. Coming up, 0:07:54.240 --> 0:07:56.280 we're going to hear from the US Treasury Sectory Scott 0:07:56.280 --> 0:08:00.280 Besson on Elon Musk's doge efforts that exclusive eminem it. 0:08:00.360 --> 0:08:03.920 But first we're watching shares of pinterest too. Earnings abound 0:08:04.120 --> 0:08:06.280 Pindress surging almost eighteen percent. 0:08:06.440 --> 0:08:07.920 Revenue for the current period expected to. 0:08:07.920 --> 0:08:09.520 Be about eight hundred and thirtyeven to eight hundred and 0:08:09.520 --> 0:08:12.560 fifty two million dollars that exceeded estimates. They also really 0:08:12.560 --> 0:08:15.760 managed to push across expectations in the holiday quarter for 0:08:15.840 --> 0:08:18.080 revenue and profitability. 0:08:17.960 --> 0:08:20.120 From New York San Francisco. This is bloom Meg Technology. 0:08:33.880 --> 0:08:37.280 US Treasury Secretary Scott Beresen says a lot of misinformation 0:08:37.400 --> 0:08:40.400 is floating around DOGE and that he personally vetted the 0:08:40.400 --> 0:08:43.960 Treasury employees on Elon Musk's Government Efficiency Team with read 0:08:44.120 --> 0:08:46.959 only access to federal payment data. He sat down with 0:08:47.000 --> 0:08:50.120 Bloomberg Silehemosen yesterday for an exclusive interview. 0:08:50.160 --> 0:08:50.720 Just take a listen. 0:08:52.200 --> 0:08:56.360 These are Treasury employees. It are two Treasury employees, one 0:08:56.360 --> 0:09:00.200 of whom I personally interviewed in his final round. Is 0:09:00.240 --> 0:09:04.800 no tinkering with the system. They are on read only, 0:09:05.320 --> 0:09:08.720 they are looking. They can make no changes. It is 0:09:08.760 --> 0:09:13.280 an operational program to suggest improvement. So we make one 0:09:13.320 --> 0:09:17.000 point three billion payments a year. And this is two 0:09:17.080 --> 0:09:22.199 employees who are working with a group of long standing employees. 0:09:23.760 --> 0:09:26.600 The letter that the Treasure Department sent earlier this week 0:09:26.640 --> 0:09:31.680 talked about how the team currently does not have access 0:09:31.760 --> 0:09:34.280 to change the system. Have they at any point this 0:09:34.400 --> 0:09:36.520 year had the ability to make changes. 0:09:36.800 --> 0:09:39.600 Absolutely not. This is no different than you would have 0:09:40.040 --> 0:09:42.360 the at a private company. And by the way, the 0:09:42.440 --> 0:09:45.520 ability to change the system sits over at the Federal Reserve, 0:09:46.160 --> 0:09:49.680 so it doesn't even lie in this building. So they 0:09:49.760 --> 0:09:53.680 could make suggestions on how to change the system, but 0:09:54.040 --> 0:09:55.560 we don't even run the system. 0:09:56.120 --> 0:09:59.480 And if they ask for if they request the ability 0:09:59.480 --> 0:10:01.080 to change the system, would you grant that. 0:10:01.720 --> 0:10:05.360 No, again, they have no ability to change the system. 0:10:05.520 --> 0:10:09.240 I have no ability to grant that change. That they 0:10:09.440 --> 0:10:12.240 can make suggestions, then it would go to the Federal 0:10:12.280 --> 0:10:17.000 Reserve and just like any large erp system, there would 0:10:17.040 --> 0:10:19.240 be tests. There would be this, there would be that, 0:10:19.600 --> 0:10:23.040 and then the FED will determine whether these changes are. 0:10:23.000 --> 0:10:23.679 Robust or not. 0:10:24.800 --> 0:10:27.760 As the Secretary of Treasure, you also oversee the IRS. 0:10:28.000 --> 0:10:30.680 Do you know what kind of access the team has 0:10:30.800 --> 0:10:33.960 to IRS data or individual taxpayer data? 0:10:34.280 --> 0:10:36.520 Well, I'm glad you asked that too, because look that 0:10:36.679 --> 0:10:40.439 THERS the privacy issue is one of the biggest issues, 0:10:40.760 --> 0:10:45.240 and over the past four years we've seen a lot 0:10:45.240 --> 0:10:49.560 of leaks out of there. The IRS systems are quite poor. 0:10:50.040 --> 0:10:53.680 When I started in college in nineteen eighty, I learned 0:10:53.720 --> 0:10:57.000 the program in COBAL. I think there are twelve different 0:10:57.040 --> 0:11:00.640 systems at the IRS that still run on cobD. But 0:11:01.120 --> 0:11:04.760 as of now, there is no engagement at the RS. 0:11:05.280 --> 0:11:07.760 And if they request that access, would you sign off 0:11:07.760 --> 0:11:08.360 on that request? 0:11:09.240 --> 0:11:11.920 They haven't, so we'll take that when it comes to it. 0:11:12.559 --> 0:11:15.000 I think there is a lot to do there, but 0:11:15.880 --> 0:11:21.120 the president was elected with a big agenda and to 0:11:21.160 --> 0:11:26.640 the extent that getting the IRS in better shape is 0:11:26.720 --> 0:11:30.200 part of that. Sure, because look, with the IRS, what 0:11:30.240 --> 0:11:34.640 am I concerned about? I am concerned about collections. I'm 0:11:34.679 --> 0:11:39.880 concerned about privacy, and I am concerned that the system 0:11:39.920 --> 0:11:40.960 is robust. 0:11:42.160 --> 0:11:46.560 That was US Treasury Secretary Scott Bessened along with Bloomberg 0:11:46.600 --> 0:11:50.280 Sillia Mosen. Let's bring in Bloomberg's Mike Shepherd. Now, Mike, 0:11:50.360 --> 0:11:53.520 before we get into Doge, I want to address a 0:11:53.559 --> 0:11:57.000 story that just crossed the wire from Reuter's Trump plans 0:11:57.000 --> 0:12:02.120 to issue reciprocal tariffs as early as he told Republicans 0:12:02.600 --> 0:12:05.280 yesterday of his plans. Can you kind of break down 0:12:05.360 --> 0:12:06.560 what we know so far? 0:12:07.840 --> 0:12:10.760 Well, we're still trying to confirm this report, Jackie, but 0:12:10.800 --> 0:12:13.400 it is significant in the sense that one of the 0:12:13.400 --> 0:12:17.400 biggest concerns that investors have had and companies have had 0:12:17.559 --> 0:12:21.600 about the incoming administration will be what happens on trade 0:12:21.920 --> 0:12:26.040 and on tariff's just owing to the widespread potential economic impact. 0:12:26.480 --> 0:12:30.840 The Reuters report does not specify which countries would be targeted. 0:12:31.160 --> 0:12:35.040 It's unclear how detailed Trump got in the conversation with 0:12:35.160 --> 0:12:37.960 Republican lawmakers, but we are going to hear from the 0:12:37.960 --> 0:12:40.880 President later today. He is holding a news conference with 0:12:40.920 --> 0:12:43.880 the visiting Prime Minister of Japan at the White House 0:12:43.920 --> 0:12:46.640 in the one o'clock hour, and this is certain to 0:12:46.720 --> 0:12:49.520 be one of the top questions at the agenda, and 0:12:49.600 --> 0:12:52.920 he may even use the moment to make the announcement 0:12:53.000 --> 0:12:53.800 himself right there. 0:12:54.160 --> 0:12:57.600 And look, taris feed into inflation anxiety, that feeds into 0:12:57.800 --> 0:13:00.360 the lower consumer confidence data we got today as well, 0:13:00.400 --> 0:13:03.200 so there is a wider economic impact here. I wonder 0:13:03.360 --> 0:13:06.880 if with Japanese leadership we hear more about AI as well. 0:13:06.920 --> 0:13:09.120 And we know that Mark Zuckerberg, riding high on his 0:13:09.160 --> 0:13:11.160 share price at the moment, has gone to the White 0:13:11.200 --> 0:13:14.360 House to discuss AI leadership too well. 0:13:14.400 --> 0:13:16.800 Caro AI has been one of the early themes of 0:13:16.840 --> 0:13:19.760 the Trump administration, and the President, in his very first 0:13:19.800 --> 0:13:23.960 day in office, rescinded the Biden executive order that sought 0:13:24.000 --> 0:13:26.520 to put more guardrails in the industry, and he since 0:13:26.880 --> 0:13:32.000 signed his own order looking to launch further development of 0:13:32.040 --> 0:13:34.560 the industry here. And then of course we saw the 0:13:34.600 --> 0:13:38.960 announcement with SoftBank's Masseo she Soon Open Ai, Sam Altman 0:13:39.240 --> 0:13:43.360 and Oracles Larry Ellison in the Oval Office at the 0:13:43.400 --> 0:13:48.200 White House to talk about potential investment here in the 0:13:48.320 --> 0:13:52.520 US of up to five hundred billion dollars. And we'll 0:13:52.559 --> 0:13:54.960 be looking to see if Masseo she Saan even shows 0:13:55.040 --> 0:13:57.280 up again at the White House today. He has been 0:13:57.559 --> 0:14:01.040 a frequent companion to Trump late leap at mar A 0:14:01.080 --> 0:14:03.520 Lago and more recently at the White House to talk 0:14:03.640 --> 0:14:09.360 further about this what the Japanese investment firms plans are 0:14:09.400 --> 0:14:12.400 here in the US, but also what Japan's plans are 0:14:13.000 --> 0:14:16.040 for developing AI there as well. 0:14:16.200 --> 0:14:20.000 Mike, there's another companion that Trump has, and that's Elon 0:14:20.160 --> 0:14:23.760 Musk and his group. DOGE has been storming across Washington 0:14:23.840 --> 0:14:28.080 looking for savings. But in that video you saw Besson 0:14:28.320 --> 0:14:32.840 trying to allay concerns that he did not have access 0:14:32.880 --> 0:14:36.760 to non read only information. But what did he say 0:14:36.880 --> 0:14:40.120 about having access in the first place. Does he agree 0:14:40.120 --> 0:14:41.840 with what DOJE is doing in Washington? 0:14:43.160 --> 0:14:46.240 Well, he endorsed it, and he indicated that he was 0:14:46.320 --> 0:14:49.840 completely aligned with Elon Musk when he came to this 0:14:49.960 --> 0:14:53.000 effort to find savings to reduce the size of the 0:14:53.040 --> 0:14:56.960 federal government and to also make the systems more efficient. 0:14:57.080 --> 0:15:00.800 And of course, during the conversation with our colleague Sileia Mosen, 0:15:01.080 --> 0:15:03.920 we heard the Treasury Secretary point to the IRS and 0:15:04.000 --> 0:15:08.360 its antiquated systems, you know, those networks and that hardware 0:15:08.680 --> 0:15:14.240 is decades old, and it has been repeatedly cited by 0:15:14.240 --> 0:15:19.160 the Government Accountability Office as something that federal agencies and 0:15:19.480 --> 0:15:22.480 administrations need to address. That Congress needs to fund the 0:15:22.520 --> 0:15:25.960 agency more to replace the systems, to find money to 0:15:26.040 --> 0:15:29.280 do that. And yet decades later, here we are. And 0:15:29.840 --> 0:15:32.320 one of the reasons it is difficult to simply march 0:15:32.360 --> 0:15:34.880 in and do this is that these older systems can 0:15:34.960 --> 0:15:37.680 be sensitive and that you know, you heard the Treasury 0:15:37.720 --> 0:15:41.720 Secretary talk about tickering. Even small changes carry the risk 0:15:41.840 --> 0:15:44.560 of perhaps a disruption of some sort, and that is 0:15:44.600 --> 0:15:47.320 probably the last thing this administration wants to see. 0:15:47.680 --> 0:15:58.080 Mike Sheppard breaking all down. Thank you time now for 0:15:58.120 --> 0:15:58.600 talking tech. 0:15:58.600 --> 0:16:01.480 First up, Apple's latest budget iPhone is set to be 0:16:01.520 --> 0:16:04.000 unveiled as soon as next week the long awaited lower 0:16:04.000 --> 0:16:06.760 cost iPhone SE. It's expected to feature a new design 0:16:06.760 --> 0:16:09.480 and Apple Intelligence. The updated SE is part of Apple's 0:16:09.480 --> 0:16:12.040 efforts to boost its iPhone business, which saw one percent 0:16:12.080 --> 0:16:15.520 decline in sales during the holiday quarter. Plus open Ai 0:16:15.600 --> 0:16:18.840 is close to selecting additional data center campuses in Texas. 0:16:19.040 --> 0:16:21.280 The sites are part of Stargate, the joint venture aiming 0:16:21.280 --> 0:16:24.240 to invest five hundred billion dollars in USAI infrastructure over 0:16:24.280 --> 0:16:27.200 the next four years, and speaking in Berlin earlier, open 0:16:27.240 --> 0:16:30.720 Ai CEO Sam Altman said he'd also quote love to 0:16:30.760 --> 0:16:33.440 help build a similar project in Europe, but added the 0:16:33.440 --> 0:16:37.640 continent's regulations would determine how quickly the technology advances. And 0:16:37.720 --> 0:16:40.920 cryptocurrency firm Gemini is said to be considering an IPO 0:16:41.000 --> 0:16:43.080 as soon as this year. According to the sources, the 0:16:43.120 --> 0:16:46.440 VINKLVAS backed firm is in talks with potential advisors, but 0:16:46.720 --> 0:16:48.320 no final decision has been made yet. 0:16:48.400 --> 0:16:53.440 Jackie and we stay on crypto, Elise Colleen Stellmark, managing partner, 0:16:53.520 --> 0:16:57.560 joins us now Alice. Can this Gemini IPO spread a 0:16:57.600 --> 0:17:00.840 wider wave of IPOs across the crypto space, or is 0:17:00.880 --> 0:17:02.040 Gemini just an outlier. 0:17:02.960 --> 0:17:04.159 Well, I hope so. 0:17:04.160 --> 0:17:07.840 So the companies in the field have been maturing and 0:17:08.000 --> 0:17:10.560 hopefully at the same time as ipo market is opening. 0:17:11.320 --> 0:17:13.520 You, of course, are someone who has been in the 0:17:13.680 --> 0:17:15.960 bitcoin space for years. 0:17:16.280 --> 0:17:18.080 Not to age anyone here, but at least a decade. 0:17:18.119 --> 0:17:20.440 You've been playing in this field time and time again. 0:17:20.480 --> 0:17:23.800 We're seeing a broader adoption here, but it will talk 0:17:23.840 --> 0:17:27.000 from a white house perspective, is reality being struck from adoption. 0:17:26.680 --> 0:17:28.080 And an institutional level. 0:17:28.280 --> 0:17:31.160 We are seeing incredible adoption and in twenty twenty five 0:17:31.240 --> 0:17:34.480 there's great tail winds to that. At the end of January, 0:17:34.560 --> 0:17:38.360 for example, Tether announced that it would launch on Bitcoin 0:17:38.440 --> 0:17:42.560 and on Bitcoin's payment network Lightning, which means that it's 0:17:42.800 --> 0:17:46.280 that trillions of dollars in activity and over four hundred 0:17:46.320 --> 0:17:49.800 million Tether users could now be hosted on Bitcoin and 0:17:50.080 --> 0:17:54.120 Lightning network. Those users are, in turn and Tether will 0:17:54.119 --> 0:17:58.960 get the value of Lightning's instant settlement and cheaper transaction capabilities. 0:17:59.520 --> 0:17:59.920 So fine. 0:18:00.720 --> 0:18:03.880 You know, with speed, with ease, maybe comes this border adoption, 0:18:04.000 --> 0:18:07.240 but stable coin regulation is not necessary for us really 0:18:07.280 --> 0:18:09.480 for us to see the wave of us. 0:18:09.880 --> 0:18:11.119 Doing payments through crypto. 0:18:11.200 --> 0:18:15.440 Finally, regulatory clarity will is certainly overdue and will be helpful. 0:18:15.480 --> 0:18:19.679 It's helpful both in terms of the startup ecosystem, and 0:18:19.760 --> 0:18:23.000 because the startup ecosystem is relevant to bitcoin's adoption, it's 0:18:23.000 --> 0:18:25.680 helpful to bitcoin itself as well. 0:18:25.880 --> 0:18:28.720 Let's stick on this topic of regulation, as boring as 0:18:28.720 --> 0:18:32.000 it may be sometimes, but crypto at this point in 0:18:32.040 --> 0:18:35.120 its life cycle is still somewhat vulnerable to the whims 0:18:35.160 --> 0:18:38.640 of Washington. We've seen that really wax and wane. What 0:18:38.680 --> 0:18:41.520 can the administration do in the short term to really 0:18:41.640 --> 0:18:43.320 cement crypto's momentum. 0:18:44.520 --> 0:18:47.800 Sure, so, as I said, regulatory clarity will be helpful. 0:18:47.880 --> 0:18:51.960 That bitcoin and startups don't exist in a silo. What 0:18:52.080 --> 0:18:56.760 happens in the economy is also incredibly important, and both 0:18:56.800 --> 0:18:59.119 the startups and to bitcoin, and we've seen that in 0:18:59.200 --> 0:19:03.600 bitcoin's recent volatility. Now, what we're hoping is that as 0:19:03.680 --> 0:19:08.320 regulatory clarity is available, that startups can continue along the 0:19:08.359 --> 0:19:12.680 path that they have pursued, but more efficiently because their 0:19:12.680 --> 0:19:15.919 capital doesn't need to be spent in creating sort of 0:19:16.119 --> 0:19:20.640 redundancies and alternative paths that hedge against. 0:19:21.760 --> 0:19:22.640 Future regulation. 0:19:23.720 --> 0:19:28.240 There's some common ground between crypto and artificial intelligence. When 0:19:28.240 --> 0:19:31.240 it comes to data centers, this has been a huge 0:19:31.359 --> 0:19:35.960 topic and earnings for Microsoft and Amazon trying to build 0:19:36.000 --> 0:19:39.199 out the capacity to run their models, and not so 0:19:39.240 --> 0:19:42.879 dissimilar from Bitcoin, it takes a lot of energy consumption 0:19:43.160 --> 0:19:45.600 and there's concerns that the power grid might not be 0:19:45.640 --> 0:19:48.400 able to handle this demand. Are you worried at all 0:19:48.520 --> 0:19:54.040 that perhaps these infrastructure constraints might impact Bitcoin's future growth. 0:19:54.600 --> 0:19:57.640 That's a great question. So there is an important convergence 0:19:57.720 --> 0:20:02.359 between bitcoin technologies and what's happening in generative AI and 0:20:02.400 --> 0:20:06.880 the proliferation of llms and apps built on top. 0:20:07.359 --> 0:20:08.240 Now, from an. 0:20:08.240 --> 0:20:13.720 Energy perspective, of course, Bitcoin has been very productive in 0:20:13.840 --> 0:20:20.720 providing anchor tenancy and mining off of renewable energy sources. 0:20:21.119 --> 0:20:24.320 Bitcoin can do that because it can scale up or 0:20:24.400 --> 0:20:28.000 down its mining demands based on the price of energy 0:20:28.040 --> 0:20:32.400 at the time, which makes it responsive to demand cycles. 0:20:32.840 --> 0:20:37.359 The Bitcoin mining can be applied to AI's energy needs 0:20:37.359 --> 0:20:39.600 as well in the way that I just explained. But 0:20:39.640 --> 0:20:43.240 bitcoin technologies can do more than that because of Bitcoin 0:20:44.000 --> 0:20:48.840 Bitcoin's payment network lightning networks ability to scale payments. As 0:20:48.960 --> 0:20:53.240 generative AI matures, it will it will need to access 0:20:53.320 --> 0:20:58.520 micro payments at scale on a reliable network, and Lightning, 0:20:58.680 --> 0:21:02.040 architected as a payment channel network, can uniquely do that 0:21:02.119 --> 0:21:03.080 in the cryptosphere. 0:21:03.160 --> 0:21:04.240 We've only got a minute left. 0:21:04.320 --> 0:21:06.840 Lightning Labs is a course in your portfolio. Interestingly, so 0:21:06.920 --> 0:21:09.480 social Energy is as well, and that's about renewable energy 0:21:09.480 --> 0:21:12.280 feeding bitcoin minus. Where else is about to sort of 0:21:12.280 --> 0:21:15.600 take off when it comes to portfolios, how what are 0:21:15.600 --> 0:21:16.080 the startups? 0:21:16.080 --> 0:21:16.760 Are you looking at? 0:21:17.160 --> 0:21:20.280 Yes, So what's really taking off in twenty twenty five 0:21:20.800 --> 0:21:24.840 is companies that are advancing the financialization of bitcoin itself. 0:21:25.160 --> 0:21:28.280 So those are companies like, for example, a portfolio company 0:21:28.320 --> 0:21:33.080