Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast, with Caroline Hide in New York
Speaker 1: and Edlavelow in San Francisco.
Speaker 2: This is Bloomberg Tech coming up In Video's CEO says
Speaker 2: he anticipates getting the first batch of US licenses to
Speaker 2: explore H twenty AI chips to China very soon. Plus
Speaker 2: more from Cryptoweek on the Hill after Trump says the
Speaker 2: House will pass the Genius Acts, Stablecorn bill today and
Speaker 2: Elon Musk's XAI is in discussions to lease data center
Speaker 2: capacity in Saudi Arabia. We bring you the Bloomberg exclusive.
Speaker 2: Good morning. Let's get right to markets, and we are
Speaker 2: very focused right now on the chip sector ASML. These
Speaker 2: are the Dutch shares trading in Amsterdam of the world's
Speaker 2: leading chip equipment maker or chip making equipment maker. The
Speaker 2: story's really clear the vision they've given us for twenty
Speaker 2: twenty six. They are not holding to that in terms
Speaker 2: of growth or a year of growth. But what really
Speaker 2: spooped the markets was a comment from the CFO about
Speaker 2: how right now chip makers and customers are very worried
Speaker 2: about tariffs will go deeper later in the hour, then
Speaker 2: you have in video. So actually in video was kind
Speaker 2: of not doing much this morning. We know that Jensen
Speaker 2: one is in China talking up the success of being
Speaker 2: able to sell in a limited way some AI chips
Speaker 2: back into that market over the course of three days.
Speaker 2: We had a big game yesterday pushing the market cap
Speaker 2: well beyond four trillion dollars, with giving some of that
Speaker 2: back this morning. The anxiety in this Wednesday session is
Speaker 2: slightly linked to let's say, digits from ASML. Anyway, Jensen
Speaker 2: Onong's been talking up a storm. Listen to this. Some
Speaker 2: of the things that we wrote off.
Speaker 1: Might be harder to recover, but most of the things
Speaker 1: that he quit on reserve.
Speaker 2: Will not be.
Speaker 3: Scrapped permanently was not scrapped permanently. So we'll compare what
Speaker 3: customers would like to buy now versus the inventory that we.
Speaker 2: Have, and then we can figure that out.
Speaker 3: It's probably not one hundred percent, but it's not sero
Speaker 3: percent either.
Speaker 2: Let's get more on Nvidio and the relaxation of some
Speaker 2: of those chip cuts. Bluebos. Mike Shepherd joins us out
Speaker 2: of DC and Jensmong's had paid a number of times.
Speaker 2: Actually in the last twelve to twenty four hours in
Speaker 2: Beijing in China. And let's say he's basking a little
Speaker 2: bit in what is a big win for him and
Speaker 2: a big win for the company.
Speaker 4: Well, that's fair to say, because this really was a
Speaker 4: big turn about by the Trump administration in basically lifting
Speaker 4: these export curbs on the AGE twenty that it had
Speaker 4: imposed just back in April, and much to in Nvidia's chagrin,
Speaker 4: it prompted the company to take a four point five
Speaker 4: billion dollars right down on the previous quarter, and it
Speaker 4: had been looking at losses of perhaps as much as
Speaker 4: eight billion dollars in sales for the current quarters. So
Speaker 4: this is a potentially big gain. And Jensen Wong is
Speaker 4: saying that he is expecting those licenses very soon ed
Speaker 4: although he didn't give an exact timeline, and there's still
Speaker 4: some unanswered questions about that too, the scope of it.
Speaker 4: We don't know exactly what this backlog of orders that
Speaker 4: Jensen is saying are still on the books that they
Speaker 4: can fulfill very quickly once they get the licenses. And
Speaker 4: it's also not clear whether the permission that the US
Speaker 4: government now is signaling that it will start giving extends
Speaker 4: beyond the inventory that Jensen was talking about that have
Speaker 4: been held up by the restrictions that were imposed. Likewise,
Speaker 4: we don't know if this will be a rubber stamp
Speaker 4: process by the US. In other words, will it be
Speaker 4: quick as Jensen is suggesting, or will there be some
Speaker 4: bureaucratic tangles here. So there are some questions about how
Speaker 4: far this goes and whether this might extend to future
Speaker 4: chips that Nvidia may try to sell.
Speaker 2: There bureaucratic tangles. There's also the political entanglement as well.
Speaker 2: There's been a lot of headlines i think in the
Speaker 2: last twenty four hours, with Jensen Wong in the center
Speaker 2: of them because he is in China, and there's a
Speaker 2: timing question because he met with the President of the
Speaker 2: United States last week. Do we use Nvidia as any
Speaker 2: kind of sign that the relationship between the two countries,
Speaker 2: the United States and China is evolving or changing in
Speaker 2: real time as well?
Speaker 4: You know, it really does fit into the broader picture
Speaker 4: of how US China relations are really evolving fairly quickly,
Speaker 4: you know, since Liberation Day when Donald Trump imposed you know,
Speaker 4: these eyewatering terrists in the world's second largest economy really
Speaker 4: prompting a reckoning between Washington and Beijing, enforcing negotiators from
Speaker 4: both sides to sit down and really hash it out
Speaker 4: over trade. They didn't get too far into the weeds,
Speaker 4: but they did address some of the key issues, and they.
Speaker 2: Included export controls.
Speaker 4: The US has been concerned that China have been holding
Speaker 4: back on sales of rarers elements to American customers, and likewise,
Speaker 4: Beijing have been complaining about export controls like the ones
Speaker 4: that we are talking about applying to the H twenty chip,
Speaker 4: but also to chip design software and other elements. So
Speaker 4: we got a sense that there has been a little
Speaker 4: bit of a quid pro quo, something that Treasury Secretary
Speaker 4: Scott Bessen acknowledged during his interview with our colleague Gamery
Speaker 4: who are Durned, yesterday morning, and something that we are
Speaker 4: seeing fitting into this broader pattern of perhaps a little
Speaker 4: bit more rap Prochemont Secretary of State Marco Rubio has
Speaker 4: been meeting with his Chinese counterparts to try to set
Speaker 4: the stage for a summit between President Donald Trump and
Speaker 4: his counterpart, Chinese President Shijimping sometime before the end of
Speaker 4: the year, and likewise, Trump has also been signaling a
Speaker 4: softer tone. He's saying that he will fight China in
Speaker 4: a friendly fashion. And likewise, according to reporting from our
Speaker 4: colleagues Jenny Leonard and Mackenzie Hawkins inside the room, inside
Speaker 4: those meetings at the White House, Trump is one of
Speaker 4: the least hawkish voices when it comes to China.
Speaker 2: Shepherd in Washington, d C. Thank you very much. Let's
Speaker 2: stick with the semiconductor space broadly. This is shares of ASML, right,
Speaker 2: the world's most important leading edge maker of lithography machines
Speaker 2: EUV lithography. They used to manufacture chips, and what has
Speaker 2: happened this morning is the company has walked back its
Speaker 2: forecast for next year twenty twenty six. Let's get out
Speaker 2: to London and Bloomberg's Henry Wren. That is a part
Speaker 2: of the story, right, So in that European session the
Speaker 2: stocks off loads but down more than ten percent, Henry.
Speaker 2: The other part was the CFO saying, our customers are
Speaker 2: really worried about tarifs. Right now, give us the summary, yes, sir, yes, indeed.
Speaker 5: So usually every quarter when it's about trades trays about
Speaker 5: its orders intake number. This quarter the order intake number
Speaker 5: is satisfactory.
Speaker 2: It beat estimates. However, one light in.
Speaker 5: This press release created court Trailer's attention, and that's CEO
Speaker 5: saying that although the company is still preparing for growth
Speaker 5: for twenty twenty six, the company really couldn't confirm that
Speaker 5: at this stage because that contrasted with the company's messaging
Speaker 5: about three months ago saying that based on its client
Speaker 5: conversations at that time, twenty twenty six was still expected
Speaker 5: to be a year of growth.
Speaker 2: So this really.
Speaker 5: Set dampens the sentiment. As you mentioned, we see celldowns
Speaker 5: in some other chip equipment companies today as well, including
Speaker 5: Applied Materials.
Speaker 2: KOA in the US.
Speaker 5: As well as ASMI B Semiconductor as well in the Netherlands.
Speaker 2: What about the course of gone, I mean, is there
Speaker 2: any sense of how the health of the business is
Speaker 2: right now?
Speaker 5: Yes, so let's talk about Let's focus on the EUV first,
Speaker 5: because that's the most important growth factor for the company,
Speaker 5: and according to the order intake that we've been seeing
Speaker 5: in the past quarter, it does seem that TSMC has
Speaker 5: been putting into more orders, which is ASML's most important customer. However,
Speaker 5: for many other customers, the uncertainty.
Speaker 2: Level is on the rise. We talked about.
Speaker 5: You know, the Trumpet administration is backtracking many of its
Speaker 5: eye watering tariffs. However, based on the conversations ISML has
Speaker 5: forsed many of its clients, it does seem that the
Speaker 5: uncertainty level is on the rise rather than on the decline.
Speaker 2: Ismel explained that it's because of two reasons.
Speaker 5: On the direct side, you still have this Section two
Speaker 5: three two investigation going on on the US, which means
Speaker 5: the terriffs imposed to chips and chip making equipment is
Speaker 5: still unknown. And on the other hand, you have this
Speaker 5: terriff's impact on the economy, which many chip makers are
Speaker 5: more concerned about. So on the direct and indirect side,
Speaker 5: the company is getting more cautious, Its customers are getting
Speaker 5: more cautious. So that's probably why you see the company
Speaker 5: walking back its guidance a bit today.
Speaker 2: Blue makes Henry ran out of London. Thank you very much.
Speaker 2: Let's get to the chip in AI sectors in greater
Speaker 2: depth with an investor. Jay Hatfield, CEO CIO of Infrastructure
Speaker 2: Capital Advisors. It's hard to know whether to start on
Speaker 2: trade and policy, or the politics of the day between
Speaker 2: America in China, or the idiosyncratic that Henry was going through.
Speaker 2: But right now tariff seems to connect all of those things.
Speaker 2: What are you seeing across the technology sector in how
Speaker 2: investors are responding to tariffs but also how the companies
Speaker 2: themselves are communicating the impact.
Speaker 6: Thanks Ed, It's great to be back on.
Speaker 7: Well.
Speaker 6: The way we look at tariffs is they're actually very
Speaker 6: positive for the US and very negative for the rest
Speaker 6: of the world, and you're seeing that today with ASML.
Speaker 6: But US companies are mostly except maybe Apple, mostly unaffected
Speaker 6: by the tariffs, a lot of met local manufacturing, So
Speaker 6: you continue to see tech stocks lead the market. But
Speaker 6: what I think most people are missing is the revenue
Speaker 6: benefit to the US. So we're forecasting three hundred billion
Speaker 6: of revenue from tariffs, which is really the run rate
Speaker 6: right now, and we're also forecasting that the budget deficit
Speaker 6: declines next year at a one point four only that's
Speaker 6: only four and a half percent of GDP, so nobody
Speaker 6: else is really looking at those numbers. It is good
Speaker 6: for the US to collect revenue, pay down or have
Speaker 6: less of a deficit, which ultimately will be invested and
Speaker 6: help the economy.
Speaker 2: Jay I think the top story over the course of
Speaker 2: several days has been in Nvidia, the world's most valuable company,
Speaker 2: now being more free in a limited way to sell
Speaker 2: chips back into China. It's a headline and it's a
Speaker 2: single company. But what does that signal to you on
Speaker 2: the policy side about how America will continue to trade
Speaker 2: with China?
Speaker 6: Well, I think what you're seeing is that the Trump administration,
Speaker 6: notwithstanding the tariffs which can be negative for a lot
Speaker 6: of companies and trade restrictions which hurt Nvidia three or
Speaker 6: four months ago, is that they are pro business and
Speaker 6: if you lobby the administration, they are open to changing policy.
Speaker 6: So ultimately that's going to support the stock market. It's
Speaker 6: going to be published for tech companies. So they're just
Speaker 6: way more practical than the prior administration and way more
Speaker 6: pro business.
Speaker 2: You track a series of economic indicators, right, what is
Speaker 2: yourjection on the net effect of this administration's policy? Do
Speaker 2: you see growth near, medium term, long term or what
Speaker 2: do you think we're being set up for going forward?
Speaker 2: On the fiscal side.
Speaker 6: Well, it's fairly complicated because tariffs are negative for the
Speaker 6: economy in the very short run because you just take
Speaker 6: it's really like the sales tax, so you take buying
Speaker 6: power away from consumers. But the real issue is the
Speaker 6: FED is misanalyzing tariffs. They're not treating them as one time.
Speaker 6: They're sticking with their archaic expectations theory of inflation that
Speaker 6: tariffs might cause expectations and spiral out of control, which
Speaker 6: we think is no longer no.
Speaker 2: Longer tru Let me ask you this, that's your view
Speaker 2: on this current FED administration? Right, I have to acknowledge
Speaker 2: that in the markets right now there is movement across
Speaker 2: assets on the reports and speculation about what the administration
Speaker 2: may or may not do visa v FED chairman Powe, Right,
Speaker 2: I think we see that in the markets. What do
Speaker 2: you make of that potential change? And I'd note for
Speaker 2: our audience, right, this is Bloomberg Tech. We talk about
Speaker 2: tech companies that are valued on their future earnings, so
Speaker 2: rates impact that equation, right, take it from there.
Speaker 6: Well, we actually have a differentiated view that if in
Speaker 6: fact the FED chair gets replaced, of course, the stock
Speaker 6: market probably would react negatibility. That would just be a
Speaker 6: buying opportunity for a couple of reasons. First of all,
Speaker 6: the power FED has been tremendously behind the curve. They
Speaker 6: use a flawed CPI, so they're always about two years
Speaker 6: behind the curve. But also a new FED chair is
Speaker 6: not going to have super loose monetary powers, so just
Speaker 6: have a normal monetary policy, and they have to deal
Speaker 6: with the existing board, which has the core board has
Speaker 6: four Democrats on it, so they're not going to be
Speaker 6: all powerful. They're not going to lower rates too quickly.
Speaker 6: And it's important to note that rates are altered tight now,
Speaker 6: so we really really need to cut.
Speaker 2: That was in the context of media reports on the
Speaker 2: president's consideration of whether or not he can or will
Speaker 2: fire chaed FED chair Japower. Bloomberg's not verified that reporting,
Speaker 2: but as we discuss Jay, we see it in the market.
Speaker 2: Jay Hatfield of Infrastructure Capital Advisor's great to have you
Speaker 2: back on the show. Thank you. Now. Coming up, Mark
Speaker 2: Zuckerberg is set to face off against Meta shareholders in
Speaker 2: a trial over the company's handling have used the data.
Speaker 2: We're going to get the details next. This is Bloomberg
Speaker 2: Tech today is in court in Delaware over allegations from
Speaker 2: shareholders related to the fallout from the Cambridge Analytica data
Speaker 2: mining scandal. I want to go to Boomberg's Riley Griffin,
Speaker 2: who's here in sf. Okay, so the trials underway, what
Speaker 2: is the context and the basis of the trial, who's involved?
Speaker 2: What do we need to know?
Speaker 8: And this is a case that is not just about privacy,
Speaker 8: but it is about power. Mark Zuckerberg is expected to
Speaker 8: testify alongside former COO Cheryl Sandberg and board members about
Speaker 8: the Cambridge Analytica scandal, which has had quite a long
Speaker 8: shadow over Meta. But in this case, Meta is not
Speaker 8: a defendant. Actually just the executives and the board members are,
Speaker 8: and the shareholders in this case are looking to hold
Speaker 8: them financially accountable for the fallout of that scandal.
Speaker 2: Okay, history is important here. Earlier in my career, Cambridge
Speaker 2: Analytica scandal was a big story. What are the basics
Speaker 2: of it that our audience, who may or may not know,
Speaker 2: need to know.
Speaker 8: Yes, years ago, this was a case where Cambridge Analytica
Speaker 8: firm had harvested data of millions of face Book users inappropriately.
Speaker 8: This firm had ties to political operations the Trump campaign,
Speaker 8: and ultimately Facebook had to pay a multi billion dollar
Speaker 8: settlement to the FTC for that data breach.
Speaker 2: Okay, what are the shareholders actually accusing the specific executive
Speaker 2: of ben if it's not the company that's a defendant,
Speaker 2: and it's those key names. What is it the shareholders won?
Speaker 8: Yeah, negligence, a lack of oversight over over the company's
Speaker 8: actions during that time. Now, remember Mark Zuckerberg has total
Speaker 8: control over the company via his voting power. He has
Speaker 8: the majority control over votes and essentially can set company direction.
Speaker 8: And shareholders here are saying that these executives didn't do
Speaker 8: their appropriate duty, didn't follow FTC orders, and allowed this
Speaker 8: breach to happen knowing that there were certain.
Speaker 2: Risks at hand. I feel like there's a lot of
Speaker 2: litigation going on with Meta. It's hard to distinguish and
Speaker 2: work how all these different paths. This one's happening in Delaware.
Speaker 2: Why is it happening now? Again, Like I reflect that
Speaker 2: the Cambridge Analyticus scandal was more than a decade ago
Speaker 2: something like that.
Speaker 8: Yeah, so it's great that you bring up Delaware because
Speaker 8: what makes this an unprecedented case is it's the first
Speaker 8: time we're seeing a CEO and board members actually go
Speaker 8: to court. Usually these kinds of things are settled or
Speaker 8: negotiated behind closed doors, and we're actually seeing this trial
Speaker 8: take place in Delaware, and it really has ramifications for
Speaker 8: all companies out there, whether or not Mark Zuckerberg and
Speaker 8: other executives are having to pay billions in dollars for
Speaker 8: this scandal. Now, one thing we need to remember is
Speaker 8: this is a really hard case to win these care
Speaker 8: mark claims. The battle is uphill, and it could set
Speaker 8: the direction for whether Meta ultimately reincorporates outside of Delaware
Speaker 8: in the future.
Speaker 2: So, Riley Griffin of Bloomberg News and Bloomberg Tag, you're
Speaker 2: kind of like six months into this beat of covering Meta,
Speaker 2: and so much has happened in the first half of
Speaker 2: the year. What I would like to get from you
Speaker 2: is is Mark Zuckerberg himself, like he actually does appear
Speaker 2: and gives testimony in the context of litigation or if
Speaker 2: it is a political hearing something like that, he often
Speaker 2: will stand up and speak right yes.
Speaker 8: And that's an evolution of his career. What we've learned
Speaker 8: from our reporting and my reporting over the last six
Speaker 8: months has been that Mark Zuckerberg really wants to take
Speaker 8: legal fights to court. Now this is no longer a
Speaker 8: time where he wants to just settle, but he wants
Speaker 8: to set the precedent that Meta can win these cases
Speaker 8: and in this case, he can.
Speaker 2: You wrote an extensive and deep piece in BusinessWeek about
Speaker 2: the kind of magnification. Yeah, of Mark Zuckerberg. I really
Speaker 2: encourage the audience to go out and read it. But
Speaker 2: you mentioned that the evolution of his career, there's also
Speaker 2: been an evolution of him personally politically. Could you summarize
Speaker 2: what you learned through that?
Speaker 8: Oh, apologies, this is something for kids.
Speaker 2: That is his vibe.
Speaker 8: He has said this publicly, he said it privately. He
Speaker 8: has done apologizing for scandals of the past and ready
Speaker 8: to move on and really dominate the space and that
Speaker 8: demands winning, whether it's on the legal front or politically speaking.
Speaker 2: So the big news this week in Meta's world has
Speaker 2: been this commitment for massive, massive scale data center. You know,
Speaker 2: I break the story this morning, We're going to do
Speaker 2: it later and to show that XAI is looking at
Speaker 2: Saudi Arabia because you need the capital, the space, the energy.
Speaker 2: But what Meta is doing, you know that the image
Speaker 2: that they give is it could cover Manhattan. The scale
Speaker 2: of what they want to do. Summarize it as best
Speaker 2: you can, and what our read on it was, Yeah.
Speaker 8: So hundreds of billions of dollars. That's how much Meta
Speaker 8: is expecting to spend on this AI race to beat
Speaker 8: out the competition over time, overtime, overtime. We know that
Speaker 8: this year, as of the last quarter results, they're expecting
Speaker 8: to spend you know, as much as seventy two billion
Speaker 8: in capital expenditures, a lot on data centers as you mentioned,
Speaker 8: and we're seeing two hundred million dollars pay packages for
Speaker 8: AI talent they're poaching from Open AI. I mean, this
Speaker 8: is a really relentless race, and Meta is putting all
Speaker 8: the capital it has on hand to win it.
Speaker 2: Bloomer's Riley Griffin, thank you very much. Some headlines that
Speaker 2: there crossing the Bloomberg terminal. President Trump is likely to
Speaker 2: fire FED chair Powell, according to White House officials and
Speaker 2: Bloomberg's reporting that could happen soon. Bloomberg also reporting that
Speaker 2: Trump spoke to lawmakers on Tuesday about whether or not
Speaker 2: two hours Powell. I'd note some of the market reaction.
Speaker 2: We're showing the Bloomberg US Dollar Spot Index, the Dollar
Speaker 2: Spot Index raising gains after that report, also seeing treasuries
Speaker 2: pair gains after earlier reports. Will continue to bring you
Speaker 2: what we know throughout the day. All right, coming up,
Speaker 2: we're going to discuss the fate of the Genius Act
Speaker 2: stable Cooin bill, as with Kavieta Gutter from the Delta
Speaker 2: Blockchain Fund. This is Bloomberg Tech crypto stocks rising along
Speaker 2: with Bitcoin after President Trump said the House of Representatives
Speaker 2: will pass the Genius Act stable Coin bill today. This
Speaker 2: after a procedural vote failed. Yes, they want to get
Speaker 2: out Scavie to go to general partner at the Delta
Speaker 2: Blockchain Fund. There is some political wrangling going on, but
Speaker 2: it looks like the Genius Act stable Cooin bill moves forward.
Speaker 2: Why is it important it does so? Hi Ed?
Speaker 9: I mean Genius Act is basically putting a basic structure
Speaker 9: of what stable points should have already been a long
Speaker 9: time back. If the stable cooin bills or the Genius
Speaker 9: Act actually provides any companies who are doing stable coins
Speaker 9: the rules and regulations around how to really release them,
Speaker 9: how much pillateral do you want, what sort of underlining,
Speaker 9: transparency and accountability associated with it should be there? And
Speaker 9: I think those are the things which companies like Circle
Speaker 9: were always watching. But putting a standard structure would help
Speaker 9: a lot of fintech companies, like whether it's Square block
Speaker 9: or a bunch of other portfolio bunch of other financial
Speaker 9: companies to actually release it in a right way.
Speaker 2: We've been asking ourselves when this bill passes, what happens next.
Speaker 2: And the hope from your industry, as I understand it,
Speaker 2: is that there's just going to be much wider use
Speaker 2: of dollar denominated digital tokens. Dollarization, as David Sachs would
Speaker 2: call it and has done here on this program. Is
Speaker 2: that what you're hoping for. Yeah, I'm hoping for three
Speaker 2: different results.
Speaker 9: First, we have to understand that more stable coin, especially
Speaker 9: in US denominated, is going to have adoption.
Speaker 2: You are actually creating.
Speaker 9: A soft power around US dollar beyond the trillion dollar deficit.
Speaker 2: Which we already had or a debt.
Speaker 9: You're actually making a more US pegged economy in the world,
Speaker 9: which is really big for US dollars and the United
Speaker 9: States comments, and I think that's why President Trump is
Speaker 9: really pushing for it. Secondly, it does legitimate everything around
Speaker 9: crypto with respect to USD denominated currency. It will give
Speaker 9: a big high for the prices in bitcoin, ethereum and
Speaker 9: all the other stuff which we are looking at denominated
Speaker 9: in USD. So that's a very big one, and most
Speaker 9: important is for a normal regular customer, very viptu customer,
Speaker 9: as we say, would actually start understanding crypto adoption using
Speaker 9: stable coin and would be a very comfortable segme into crypto.
Speaker 9: So I do feel like, not only for the industry,
Speaker 9: but as a country, it's a very big bit.
Speaker 2: Okay, So House vote on the Genius Acts stable Coin
Speaker 2: bill today. We'll track it. We'll bring you the latest
Speaker 2: when we get it. Kavida Goetze from the Delta Blockchain Fund,
Speaker 2: thank you very much. Now coming up, fueling the growing
Speaker 2: AI race, we look towards the future of energy is
Speaker 2: data center demand ces no signs of slowing down. Data
Speaker 2: center is everywhere at the moment, so much more to discuss.
Speaker 2: This is Bloomberg Tech. Welcome back to Bloomberg Tech. Let's
Speaker 2: get back to the story from earlier in the hour,
Speaker 2: Bloomberg reporting citing a White House official, that President Trump
Speaker 2: is likely to fire Federal Reserve Chairman J Powell very soon.
Speaker 2: The market reaction was in the US dollar, but we
Speaker 2: also saw G ten peers climb on those headlines. Bloomberg
Speaker 2: also confirming earlier reporting that yesterday the President met with
Speaker 2: Guope lawmakers to discuss whether or not he ought to
Speaker 2: oust bedchair Japowe. That's what we'll keep tracking. Markets are
Speaker 2: moving in real time. Also thinking a lot about the
Speaker 2: semiconductor space because of ASML's earnings. Right that is a
Speaker 2: big story right now. They scrapped their year of growth
Speaker 2: forecast for twenty twenty six. But the big headline that's
Speaker 2: spooped investors is that the CFO is saying customers are
Speaker 2: very worried about tariffs. These are shares that were trading
Speaker 2: in Amsterdam. The market in Europe now closed, but that
Speaker 2: is a big drop, almost eleven percent. Those are the
Speaker 2: public markets. Let's go from public markets to private markets,
Speaker 2: a story I broke with colleagues yesterday. SpaceX is planning
Speaker 2: an insider share sale that would value the company at
Speaker 2: about four hundred billion dollars. That's according to our sources.
Speaker 2: The per share price is two hundred and twelve dollars,
Speaker 2: and that's up substantially from the one hundred and eighty
Speaker 2: five dollars set in the prior transaction that was December.
Speaker 2: This deal marks a rapidly climbing value for Musk's rocket
Speaker 2: and satellite maker, which is now the most valuable private
Speaker 2: startup in the world. Sticking with mister Musk. Elon Musk's
Speaker 2: Ai startup XAI is in discussions to least data center
Speaker 2: capacity in Saudi Arabia. That's according to sources, it's all
Speaker 2: part of an effort to expand infrastructure in regions offering
Speaker 2: cheap energy but also political goodwill. I want to get
Speaker 2: out to our AI editor Seth Figerman, who joins us
Speaker 2: on the story. Seth, this is something we reported with
Speaker 2: colleagues in Europe and in the Middle East this morning.
Speaker 2: My understanding is from sources there's one key name, which
Speaker 2: is Humane. That's who XAI is talking to. What do
Speaker 2: we need to know here?
Speaker 10: You know, I think this is one of the rare
Speaker 10: providers in the region that could probably get XAI you know,
Speaker 10: several gigawads of capacity in the coming years I can
Speaker 10: speak to. I think the scope of Elon's ambition. You know,
Speaker 10: it was only a year or so ago that people
Speaker 10: are still scratching their heads about what you want to
Speaker 10: do with XAI and where really sat in the ecosystem.
Speaker 10: Now we're looking at a company that is tonally valued
Speaker 10: at around two hundred billion dollars, you know, and expanding
Speaker 10: infrastructure at a scale that's starting to rival open ai
Speaker 10: and Meta, though perhaps not quite at the same level yet.
Speaker 10: Of course, what we're waiting to hear is now, what's
Speaker 10: the product, what's the revenue stream?
Speaker 2: All of that that makes it a big business, right,
Speaker 2: So in Memphis, Tennessee, you have Colossus hyper scale data
Speaker 2: center footprint. The rest of the reporting is that you know,
Speaker 2: they might also be looking at the UAE. There's a
Speaker 2: relationship with g forty two and elon Mask. They might
Speaker 2: be looking at Africa. The main thing is you just
Speaker 2: mentioned it the products. Where is xai at You know,
Speaker 2: groc four was this big moment on social media, But
Speaker 2: what do we know about the model when it's capabilities?
Speaker 10: Yeah, I mean this still feels like a company that's
Speaker 10: making more headlines for the controversies than for the capabilities
Speaker 10: of its products. That's it does seem to be higging
Speaker 10: benchmarks that are comparable to some of the leaving providers
Speaker 10: out there, including OPENINGI. But what we have not seen
Speaker 10: really from Xaiya is a play a real central role
Speaker 10: in the business and developer ecosystem. This is not a
Speaker 10: company that's partner and done deals with a bunch of
Speaker 10: fortune five hundred brands it's not necessarily a central tool
Speaker 10: for developers and software engineers. They are starting to implement
Speaker 10: higher price tiered products that might start to jem up revenue.
Speaker 10: But I don't know that we've really seen approve the
Speaker 10: business case yet, but we going as where it goes
Speaker 10: in the next six months.
Speaker 2: Bloomberg Seth Fighaman, thank you very much for joining us.
Speaker 2: Let's get more on the race for AI data centers.
Speaker 2: Katherin Huff University of Illinois, a Barna Champaign Associate professor,
Speaker 2: somebody that has also held multiple roles in the Department
Speaker 2: of Energy across the US government. That report just there.
Speaker 2: I broke it with colleagues this morning in the Middle East.
Speaker 2: But what's interesting about it was my understanding is XAI
Speaker 2: musk rationale is to look to regions where energy is cheapest,
Speaker 2: which puts a reflection on the Stata player in this
Speaker 2: country as well. Would you just give us your reaction
Speaker 2: to that reporting. Yeah, I think it makes a lot
Speaker 2: of sense.
Speaker 7: Right as power demand goes way up, you're going to
Speaker 7: need to see some balance between the cost of running
Speaker 7: these data centers with the cost of powering them, which
Speaker 7: is going to be a huge component you know, a
Speaker 7: lot of AI data center companies are looking towards new
Speaker 7: energy and building new energy for the grid, like nuclear energy.
Speaker 7: I'm a nuclear engineering professor, so that's where my expertise lies,
Speaker 7: and I immediately think of countries that might build new
Speaker 7: nuclear as options for that.
Speaker 2: The focus this week has been in Pennsylvania and Pittsburgh,
Speaker 2: and there was a commitment from one company, call Weave,
Speaker 2: to invest in that state in data center capacity. I
Speaker 2: just want to play you a SoundBite from call Wee'
Speaker 2: CEO on the big picture of where he sees the need.
Speaker 3: The broader issue really that has echoed around this conference
Speaker 3: and it has been an extraordinary conference has really been
Speaker 3: about the need to be able to build and scale
Speaker 3: the energy infrastructure of the country, to be able to
Speaker 3: build and scale the computing infrastructure for artificial intelligence so
Speaker 3: that America can maintain its position as a.
Speaker 2: Leader in the space.
Speaker 3: And in many ways, the physical infrastructure for artificial intelligence,
Speaker 3: the compute, the clusters, that is going to define our
Speaker 3: ability to lead within this space.
Speaker 2: The need to scale energy infrastructure, Katie, how great is
Speaker 2: that need?
Speaker 7: Yeah, the pace of builds needed to ramp up the
Speaker 7: amount of power that we're talking about here is in
Speaker 7: the gigawats, right, and this is the kind of challenge
Speaker 7: that we were facing already with regard to replacing fossil
Speaker 7: fuel sources in the United States. Is in the many
Speaker 7: tens or hundreds of gigawatts by twenty fifty. Add on
Speaker 7: to that the need to build more power for data centers,
Speaker 7: and you get a situation where you know, hundreds of
Speaker 7: new nuclear reactors need to be deployed or you know,
Speaker 7: other hopefully clean energy technologies.
Speaker 2: Does the regulatory environment support that?
Speaker 7: Yeah, you know, the Nuclear Regulatory Commission has a number
Speaker 7: of activities focused on accelerating licensing. Now, I am a
Speaker 7: bit concerned about the way that the Trump administration has
Speaker 7: worked in the last few months to reduce its independence
Speaker 7: as a regulator. I'm increasingly concerned about recent actions being
Speaker 7: taken by the administration. A really strong, independent, well funded,
Speaker 7: fully staffed regulator enables ensuring standards that are going to
Speaker 7: be met and that the public is being kept safe,
Speaker 7: and they can speed up their process for sure. But
Speaker 7: my understanding is they're working on it.
Speaker 2: Katie. We've had many of the nuclear operators or would
Speaker 2: be nuclear operators come on this program particularly those that
Speaker 2: have relationships with technology companies. But when I look at
Speaker 2: their timelines, we're talking end of the decade at least
Speaker 2: to come online. But they argue nuclear is the only option.
Speaker 2: Solar wind, other sources of renewed energy just won't cut it.
Speaker 2: Summarize your position on whether they're right or wrong.
Speaker 7: Yeah, absolutely, You know, I think nuclear energy is extremely
Speaker 7: well suited to supporting AI and data centers and a
Speaker 7: number of other sort of critical infrastructure needs that we're
Speaker 7: going to have near near term. You know, largely because
Speaker 7: of its reliability. It's on twenty four to seven. It's scalable, right,
Speaker 7: it has a very small land footprint, and you know,
Speaker 7: tech companies that have made clean energy commitments and climate
Speaker 7: commitments globally, these are global companies. They also value that
Speaker 7: nuclear energy is emissions free, and so it's extremely well suited.
Speaker 7: But those constructions have to be starting now in order
Speaker 7: to make it to the twenty thirty two, twenty thirty
Speaker 7: five timelines that we're talking about sort of gigawatts worth
Speaker 7: of expansion. You know, I know that a number of
Speaker 7: AI companies said yesterday that if there were those gigawatts
Speaker 7: ready to buy today, they would be buying them. Nuclear
Speaker 7: isn't there yet, but a number of nuclear builds are
Speaker 7: on the way.
Speaker 2: Katie, half of the University of Illinois. It's great to
Speaker 2: have you here on Bloomberg Tech. Thank you very much.
Speaker 2: And when it comes to powering AI data centers, the
Speaker 2: US facing a bottleneck, Katie just explained a bit of
Speaker 2: it there at Bloomberg Green in Seattle yesterday. Long term,
Speaker 2: long time, well known silicon and Valley investor in Okosla
Speaker 2: discuss the types of energy he thinks can fuel our
Speaker 2: future AI ambitions.
Speaker 11: The change in demand is what has caused the problem.
Speaker 11: Now nimbiism like grid again is going to be a problem.
Speaker 12: But data centers don't need the grid. You can put
Speaker 12: the data center over the power sources. So I do
Speaker 12: think grid helps.
Speaker 11: But the demand problem is created by the projected increase
Speaker 11: in demand from AI data centers.
Speaker 2: Which can be who did near barer sources. Coming up,
Speaker 2: nineteen Labs launches its first commercial drone flight, successfully delivering
Speaker 2: medicine in Guyana. We're going to speak with nineteen Lab
Speaker 2: CEO Ramfish. That's next. This is Bloomberg Tech. This is
Speaker 2: Bloomberg Tech. You're looking at the live shot of the
Speaker 2: principal room. Check out the Bloomberg Tech podcast. You can
Speaker 2: find it on the terminal as well as online on Apple,
Speaker 2: Spotify and on iHeart. This is Bloomberg Tech. Nineteen Labs
Speaker 2: is taking telehealth to the skies. The company has launched
Speaker 2: its Gale four s drone powered by Starlink and Nvidia
Speaker 2: AI to autonomously deliver medicine and digital health toolkits from
Speaker 2: more I want to bring in nineteen Lab. CEO Raumfish
Speaker 2: is with us here in San Francisco. So the first
Speaker 2: kind of case study or successful should call it admission
Speaker 2: is in Guyana. What did you achieve and why that nation?
Speaker 2: In particular.
Speaker 13: We've been working in Ghana for the last few years
Speaker 13: and the president and the government of other is very
Speaker 13: egoty use technology to improve the country and use the
Speaker 13: new found money from GAZZ to actually have a positive impact.
Speaker 13: So we've been building a public private partnership with them
Speaker 13: for the last few years, bringing advanced technology, starting with
Speaker 13: telemedicine and now launching the dun delivery of medication and
Speaker 13: bringing back from those whole indigenous communities blood samples or
Speaker 13: other goods to the regional hospitals.
Speaker 2: So we talked a little bit about the technology. You know,
Speaker 2: I cover in video very closely and for a long time,
Speaker 2: Jensen Wong's been telling me about real world AI and
Speaker 2: physical AI. You use video is a partner, but how
Speaker 2: does that work?
Speaker 13: There are two technologies that are transforming what we can
Speaker 13: do in those remote places. Traditionally you haven't been able
Speaker 13: to go there physically. Drown is changing this, and you
Speaker 13: haven't been able to communicate. Duran's is changing this. The
Speaker 13: Nvidia piece comes on top of it allows us to
Speaker 13: automate and monitor and perform during operation in a much safer,
Speaker 13: more autonomous way, and that directly ties into the costs.
Speaker 13: And when you are dealing with the next one billion
Speaker 13: people in the world population, one of the major consideration
Speaker 13: is innovating at the cost point. That's why Nvidia is
Speaker 13: transformative here as well on.
Speaker 2: The data side. Or you have physical silicon inside of we.
Speaker 13: Have physical silicon inside because of the AI is moving
Speaker 13: to the edge, so we actually have both the starling
Speaker 13: on the drawn and the Nvidia on the drawn to
Speaker 13: the real time processing of what's happening on the drawn,
Speaker 13: so it can fly autonomously in a safe way.
Speaker 2: Astonishing you know, Starlink is available in so many formats
Speaker 2: and mediums, you know, industrial scale on aeroplanes in the home.
Speaker 2: How did you negotiate with them to get a receiver
Speaker 2: locally onto the drone.
Speaker 13: The Starlink Mini is kind of the smallest model of
Speaker 13: the starlinks drown't you know we're not talking about the dgis. Well,
Speaker 13: we are looking on something that's better be called unmanned
Speaker 13: aircraft and these are just growing every year now, like
Speaker 13: we can carry twenty five pounds this year, by next
Speaker 13: week they're looking at one hundred and fifty pounds and
Speaker 13: men's aircraft. So yeah, you put the Starlink on it.
Speaker 13: In the moment you put Starling, you completely transform how
Speaker 13: you can fly because the pilot can fit view the weather,
Speaker 13: view the physical location monitor throughout.
Speaker 2: The flight in very low latency.
Speaker 13: Almost no latency, sits with a joystick. You know, in
Speaker 13: the past of technology has only been available for expensive
Speaker 13: military usage. We believe in drans for good and this
Speaker 13: telling has been able to enable us to transform this
Speaker 13: put the Stellink on the downs and offer those services.
Speaker 2: In my study in research of you, I know you
Speaker 2: to be more kind of involved in the smartphone market
Speaker 2: historically working at Apple other OEMs. How did you get
Speaker 2: into drones?
Speaker 13: Oh, I've always been into aviation since I was a kid.
Speaker 13: And if you think about the dawn nowadays, done is
Speaker 13: no longer that much of a aero challenge or aerospace challenge.
Speaker 13: A don is much more of a computer with sensor
Speaker 13: and models and software and communications that you need to
Speaker 13: come together. Well, that's what I did at Apple, That's
Speaker 13: what I did in some song leading digital health, and
Speaker 13: that's where I started when I build the first staf
Speaker 13: phone in the world at the Browser in ninety five.
Speaker 13: It's building the how do well and the software together
Speaker 13: or to create amazing.
Speaker 2: Products just very quick.
Speaker 7: You know.
Speaker 2: Zip Line is a company that we've covered on this
Speaker 2: program deeply. It's very analogous in many years what you're doing.
Speaker 2: They've been able to scale in different markets. Do you
Speaker 2: see them as the main competitor. Do you try to
Speaker 2: emulate them?
Speaker 13: I think they are absolutely a fantastic company and they
Speaker 13: are doing amazing things. We try to take a slightly
Speaker 13: different approaches in them. They are much more vertically integrated
Speaker 13: and everything needs to be technology powered. We believe in
Speaker 13: achieving balance between what I called ai and agi. There
Speaker 13: is a space to use humans in the operation of grants,
Speaker 13: especially in rule and indigenous places, and being able to balance.
Speaker 13: You know, you can have local people charge the drans unpeck.
Speaker 13: The drans have it land in the communities. It also
Speaker 13: means that you empower and educate local people.
Speaker 2: So rum Fish ninety lab CEO, thank you very much.
Speaker 2: We got to get out to Washington, DC and Bloomber's
Speaker 2: Kale lines and speak more about headlines that President Trump
Speaker 2: very likely to pow to fire a FED chair pal. Kaylee,
Speaker 2: update me, what's the latest.
Speaker 14: Yeah, Bloomberg is reporting this, according to a White House
Speaker 14: official familiar with the matter, though they do caution ed
Speaker 14: that no final decision has yet been made. But yes,
Speaker 14: it does seem that the President may be getting closer
Speaker 14: to the point where he makes the call to at
Speaker 14: least try to fire at the FED Chair Jerome Powell.
Speaker 14: And he spoke about this, we understand with Republican lawmakers
Speaker 14: who were gathered at the White House Tuesday evening here
Speaker 14: in Washington. The New York Times in fact actually reporting
Speaker 14: that he waived in front of them a draft letter
Speaker 14: of his firing of Chairman Pal. So there certainly is
Speaker 14: an escalation in what has been an ongoing feud, if
Speaker 14: you will, at least one sided feud between the Trump
Speaker 14: White House and the FED chairs. The President has continually
Speaker 14: pushed the chair to lower rates substantially. The question is
Speaker 14: going to be whether or not a he does this,
Speaker 14: but also if he has the legal grounds to do
Speaker 14: so when we actually look at the Federal Reserve Act.
Speaker 2: Of course, a FED.
Speaker 14: Governor can only be removed for cause. It's unclear exactly
Speaker 14: in terms of reading the LAG what it actually means
Speaker 14: to try to fire a FED chairman, though of course,
Speaker 14: as FED chair he is a FED governor as well,
Speaker 14: and there's a question of to what extent this would
Speaker 14: be applicable to both of the titles that he holds.
Speaker 14: It also is a question of what exactly that cause
Speaker 14: would be, because simply not lowering interest rates isn't necessarily
Speaker 14: a justified cause, which is why we may have seen
Speaker 14: the administration put in continued focus on specifically the cost
Speaker 14: of the renovation to the FED buildings here in Washington,
Speaker 14: suggesting that Powell may have lied to Congress about that.
Speaker 2: So this is a.
Speaker 14: Story we're continuing to watch, and we may get more
Speaker 14: from President Trump on that in just a moment as
Speaker 14: he sits down with the Crown Prince and Prime Minister
Speaker 14: of Bahrain in the Oval Office d.
Speaker 2: We're also looking at the dollar right The biggest reactions
Speaker 2: to these headlines was in the dollar spot index, of course,
Speaker 2: with the G ten currencies moving higher. We're now going
Speaker 2: to hear from President Trump in the White House alongside
Speaker 2: his counterpart from Bahrain
Speaker 6: The Prime Minister