WEBVTT - Musk’s xAI In Talks to Lease Saudi Data Center Capacity 0:00:00.280 --> 0:00:13.880 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.920 --> 0:00:17.680 from coast to coast, with Caroline Hide in New York 0:00:18.000 --> 0:00:22.799 and Edlavelow in San Francisco. 0:00:23.200 --> 0:00:26.560 This is Bloomberg Tech coming up In Video's CEO says 0:00:26.560 --> 0:00:30.520 he anticipates getting the first batch of US licenses to 0:00:30.640 --> 0:00:35.120 explore H twenty AI chips to China very soon. Plus 0:00:35.159 --> 0:00:37.600 more from Cryptoweek on the Hill after Trump says the 0:00:37.640 --> 0:00:41.760 House will pass the Genius Acts, Stablecorn bill today and 0:00:41.840 --> 0:00:45.800 Elon Musk's XAI is in discussions to lease data center 0:00:45.840 --> 0:00:50.159 capacity in Saudi Arabia. We bring you the Bloomberg exclusive. 0:00:50.920 --> 0:00:53.920 Good morning. Let's get right to markets, and we are 0:00:54.080 --> 0:00:56.959 very focused right now on the chip sector ASML. These 0:00:56.960 --> 0:01:00.360 are the Dutch shares trading in Amsterdam of the world's 0:01:00.440 --> 0:01:04.720 leading chip equipment maker or chip making equipment maker. The 0:01:04.760 --> 0:01:08.120 story's really clear the vision they've given us for twenty 0:01:08.200 --> 0:01:10.600 twenty six. They are not holding to that in terms 0:01:10.600 --> 0:01:12.800 of growth or a year of growth. But what really 0:01:12.840 --> 0:01:16.160 spooped the markets was a comment from the CFO about 0:01:16.200 --> 0:01:19.840 how right now chip makers and customers are very worried 0:01:19.920 --> 0:01:22.679 about tariffs will go deeper later in the hour, then 0:01:22.720 --> 0:01:24.680 you have in video. So actually in video was kind 0:01:24.680 --> 0:01:26.600 of not doing much this morning. We know that Jensen 0:01:26.600 --> 0:01:29.720 one is in China talking up the success of being 0:01:29.760 --> 0:01:32.520 able to sell in a limited way some AI chips 0:01:32.560 --> 0:01:35.440 back into that market over the course of three days. 0:01:35.440 --> 0:01:37.759 We had a big game yesterday pushing the market cap 0:01:37.920 --> 0:01:40.440 well beyond four trillion dollars, with giving some of that 0:01:40.480 --> 0:01:44.200 back this morning. The anxiety in this Wednesday session is 0:01:44.280 --> 0:01:49.639 slightly linked to let's say, digits from ASML. Anyway, Jensen 0:01:49.720 --> 0:01:52.720 Onong's been talking up a storm. Listen to this. Some 0:01:52.800 --> 0:01:54.280 of the things that we wrote off. 0:01:55.880 --> 0:01:59.680 Might be harder to recover, but most of the things 0:01:59.720 --> 0:02:01.840 that he quit on reserve. 0:02:03.120 --> 0:02:03.640 Will not be. 0:02:03.680 --> 0:02:08.880 Scrapped permanently was not scrapped permanently. So we'll compare what 0:02:09.000 --> 0:02:12.200 customers would like to buy now versus the inventory that we. 0:02:12.240 --> 0:02:13.919 Have, and then we can figure that out. 0:02:14.120 --> 0:02:16.320 It's probably not one hundred percent, but it's not sero 0:02:16.360 --> 0:02:16.920 percent either. 0:02:18.880 --> 0:02:21.480 Let's get more on Nvidio and the relaxation of some 0:02:21.520 --> 0:02:23.720 of those chip cuts. Bluebos. Mike Shepherd joins us out 0:02:23.760 --> 0:02:26.520 of DC and Jensmong's had paid a number of times. 0:02:26.520 --> 0:02:28.880 Actually in the last twelve to twenty four hours in 0:02:28.960 --> 0:02:32.120 Beijing in China. And let's say he's basking a little 0:02:32.120 --> 0:02:34.400 bit in what is a big win for him and 0:02:34.440 --> 0:02:35.520 a big win for the company. 0:02:36.680 --> 0:02:39.240 Well, that's fair to say, because this really was a 0:02:39.240 --> 0:02:44.160 big turn about by the Trump administration in basically lifting 0:02:44.200 --> 0:02:47.639 these export curbs on the AGE twenty that it had 0:02:47.680 --> 0:02:51.560 imposed just back in April, and much to in Nvidia's chagrin, 0:02:51.880 --> 0:02:54.280 it prompted the company to take a four point five 0:02:54.320 --> 0:02:57.240 billion dollars right down on the previous quarter, and it 0:02:57.240 --> 0:03:00.200 had been looking at losses of perhaps as much as 0:03:00.960 --> 0:03:03.840 eight billion dollars in sales for the current quarters. So 0:03:03.880 --> 0:03:06.400 this is a potentially big gain. And Jensen Wong is 0:03:06.400 --> 0:03:09.800 saying that he is expecting those licenses very soon ed 0:03:09.840 --> 0:03:12.560 although he didn't give an exact timeline, and there's still 0:03:12.600 --> 0:03:15.920 some unanswered questions about that too, the scope of it. 0:03:16.120 --> 0:03:18.840 We don't know exactly what this backlog of orders that 0:03:18.960 --> 0:03:21.960 Jensen is saying are still on the books that they 0:03:21.960 --> 0:03:24.880 can fulfill very quickly once they get the licenses. And 0:03:24.919 --> 0:03:27.480 it's also not clear whether the permission that the US 0:03:27.560 --> 0:03:30.640 government now is signaling that it will start giving extends 0:03:30.680 --> 0:03:33.720 beyond the inventory that Jensen was talking about that have 0:03:33.760 --> 0:03:37.600 been held up by the restrictions that were imposed. Likewise, 0:03:37.640 --> 0:03:39.960 we don't know if this will be a rubber stamp 0:03:40.000 --> 0:03:42.400 process by the US. In other words, will it be 0:03:42.480 --> 0:03:45.360 quick as Jensen is suggesting, or will there be some 0:03:45.440 --> 0:03:48.920 bureaucratic tangles here. So there are some questions about how 0:03:48.960 --> 0:03:51.800 far this goes and whether this might extend to future 0:03:51.880 --> 0:03:53.760 chips that Nvidia may try to sell. 0:03:53.800 --> 0:03:59.640 There bureaucratic tangles. There's also the political entanglement as well. 0:04:00.200 --> 0:04:01.560 There's been a lot of headlines i think in the 0:04:01.600 --> 0:04:03.920 last twenty four hours, with Jensen Wong in the center 0:04:03.960 --> 0:04:06.640 of them because he is in China, and there's a 0:04:06.680 --> 0:04:08.760 timing question because he met with the President of the 0:04:08.840 --> 0:04:12.920 United States last week. Do we use Nvidia as any 0:04:13.000 --> 0:04:16.680 kind of sign that the relationship between the two countries, 0:04:16.720 --> 0:04:20.560 the United States and China is evolving or changing in 0:04:20.600 --> 0:04:22.640 real time as well? 0:04:22.880 --> 0:04:25.160 You know, it really does fit into the broader picture 0:04:25.200 --> 0:04:30.160 of how US China relations are really evolving fairly quickly, 0:04:31.320 --> 0:04:34.640 you know, since Liberation Day when Donald Trump imposed you know, 0:04:34.680 --> 0:04:38.960 these eyewatering terrists in the world's second largest economy really 0:04:39.000 --> 0:04:43.719 prompting a reckoning between Washington and Beijing, enforcing negotiators from 0:04:43.760 --> 0:04:46.479 both sides to sit down and really hash it out 0:04:46.560 --> 0:04:49.279 over trade. They didn't get too far into the weeds, 0:04:49.480 --> 0:04:52.160 but they did address some of the key issues, and they. 0:04:52.040 --> 0:04:53.440 Included export controls. 0:04:53.600 --> 0:04:55.800 The US has been concerned that China have been holding 0:04:55.839 --> 0:05:00.640 back on sales of rarers elements to American customers, and likewise, 0:05:00.880 --> 0:05:04.279 Beijing have been complaining about export controls like the ones 0:05:04.360 --> 0:05:08.320 that we are talking about applying to the H twenty chip, 0:05:08.520 --> 0:05:11.520 but also to chip design software and other elements. So 0:05:11.520 --> 0:05:13.520 we got a sense that there has been a little 0:05:13.520 --> 0:05:16.600 bit of a quid pro quo, something that Treasury Secretary 0:05:16.640 --> 0:05:20.000 Scott Bessen acknowledged during his interview with our colleague Gamery 0:05:20.040 --> 0:05:22.480 who are Durned, yesterday morning, and something that we are 0:05:22.520 --> 0:05:26.440 seeing fitting into this broader pattern of perhaps a little 0:05:26.440 --> 0:05:29.480 bit more rap Prochemont Secretary of State Marco Rubio has 0:05:29.520 --> 0:05:32.600 been meeting with his Chinese counterparts to try to set 0:05:32.640 --> 0:05:36.360 the stage for a summit between President Donald Trump and 0:05:36.440 --> 0:05:40.800 his counterpart, Chinese President Shijimping sometime before the end of 0:05:40.800 --> 0:05:43.600 the year, and likewise, Trump has also been signaling a 0:05:43.600 --> 0:05:46.160 softer tone. He's saying that he will fight China in 0:05:46.200 --> 0:05:49.920 a friendly fashion. And likewise, according to reporting from our 0:05:49.960 --> 0:05:53.440 colleagues Jenny Leonard and Mackenzie Hawkins inside the room, inside 0:05:53.440 --> 0:05:55.919 those meetings at the White House, Trump is one of 0:05:55.920 --> 0:05:58.480 the least hawkish voices when it comes to China. 0:06:00.160 --> 0:06:02.440 Shepherd in Washington, d C. Thank you very much. Let's 0:06:02.440 --> 0:06:06.840 stick with the semiconductor space broadly. This is shares of ASML, right, 0:06:06.920 --> 0:06:11.839 the world's most important leading edge maker of lithography machines 0:06:11.960 --> 0:06:15.200 EUV lithography. They used to manufacture chips, and what has 0:06:15.240 --> 0:06:17.599 happened this morning is the company has walked back its 0:06:17.640 --> 0:06:20.640 forecast for next year twenty twenty six. Let's get out 0:06:20.680 --> 0:06:23.320 to London and Bloomberg's Henry Wren. That is a part 0:06:23.360 --> 0:06:26.039 of the story, right, So in that European session the 0:06:26.080 --> 0:06:28.560 stocks off loads but down more than ten percent, Henry. 0:06:28.839 --> 0:06:32.160 The other part was the CFO saying, our customers are 0:06:32.160 --> 0:06:37.200 really worried about tarifs. Right now, give us the summary, yes, sir, yes, indeed. 0:06:37.279 --> 0:06:41.760 So usually every quarter when it's about trades trays about 0:06:41.839 --> 0:06:45.320 its orders intake number. This quarter the order intake number 0:06:45.440 --> 0:06:46.279 is satisfactory. 0:06:46.279 --> 0:06:48.599 It beat estimates. However, one light in. 0:06:48.640 --> 0:06:52.040 This press release created court Trailer's attention, and that's CEO 0:06:52.160 --> 0:06:55.480 saying that although the company is still preparing for growth 0:06:55.760 --> 0:06:59.120 for twenty twenty six, the company really couldn't confirm that 0:06:59.240 --> 0:07:02.520 at this stage because that contrasted with the company's messaging 0:07:02.560 --> 0:07:05.320 about three months ago saying that based on its client 0:07:05.360 --> 0:07:09.160 conversations at that time, twenty twenty six was still expected 0:07:09.240 --> 0:07:10.400 to be a year of growth. 0:07:11.240 --> 0:07:12.440 So this really. 0:07:12.480 --> 0:07:15.920 Set dampens the sentiment. As you mentioned, we see celldowns 0:07:16.000 --> 0:07:19.120 in some other chip equipment companies today as well, including 0:07:19.160 --> 0:07:20.560 Applied Materials. 0:07:20.120 --> 0:07:21.680 KOA in the US. 0:07:21.640 --> 0:07:25.840 As well as ASMI B Semiconductor as well in the Netherlands. 0:07:27.120 --> 0:07:29.000 What about the course of gone, I mean, is there 0:07:29.000 --> 0:07:31.120 any sense of how the health of the business is 0:07:31.200 --> 0:07:31.720 right now? 0:07:33.360 --> 0:07:37.040 Yes, so let's talk about Let's focus on the EUV first, 0:07:37.440 --> 0:07:41.120 because that's the most important growth factor for the company, 0:07:41.480 --> 0:07:44.520 and according to the order intake that we've been seeing 0:07:44.520 --> 0:07:47.000 in the past quarter, it does seem that TSMC has 0:07:47.040 --> 0:07:52.120 been putting into more orders, which is ASML's most important customer. However, 0:07:52.280 --> 0:07:55.760 for many other customers, the uncertainty. 0:07:55.200 --> 0:07:57.080 Level is on the rise. We talked about. 0:07:57.160 --> 0:08:00.760 You know, the Trumpet administration is backtracking many of its 0:08:00.800 --> 0:08:04.480 eye watering tariffs. However, based on the conversations ISML has 0:08:04.520 --> 0:08:06.880 forsed many of its clients, it does seem that the 0:08:07.000 --> 0:08:10.840 uncertainty level is on the rise rather than on the decline. 0:08:11.120 --> 0:08:13.200 Ismel explained that it's because of two reasons. 0:08:13.240 --> 0:08:15.880 On the direct side, you still have this Section two 0:08:15.920 --> 0:08:19.320 three two investigation going on on the US, which means 0:08:19.520 --> 0:08:23.200 the terriffs imposed to chips and chip making equipment is 0:08:23.240 --> 0:08:25.760 still unknown. And on the other hand, you have this 0:08:26.240 --> 0:08:29.560 terriff's impact on the economy, which many chip makers are 0:08:29.600 --> 0:08:33.000 more concerned about. So on the direct and indirect side, 0:08:33.080 --> 0:08:36.280 the company is getting more cautious, Its customers are getting 0:08:36.280 --> 0:08:39.439 more cautious. So that's probably why you see the company 0:08:39.480 --> 0:08:41.800 walking back its guidance a bit today. 0:08:42.559 --> 0:08:44.960 Blue makes Henry ran out of London. Thank you very much. 0:08:45.080 --> 0:08:47.800 Let's get to the chip in AI sectors in greater 0:08:47.920 --> 0:08:52.400 depth with an investor. Jay Hatfield, CEO CIO of Infrastructure 0:08:52.440 --> 0:08:56.120 Capital Advisors. It's hard to know whether to start on 0:08:56.400 --> 0:08:59.040 trade and policy, or the politics of the day between 0:08:59.080 --> 0:09:04.000 America in China, or the idiosyncratic that Henry was going through. 0:09:04.320 --> 0:09:07.920 But right now tariff seems to connect all of those things. 0:09:08.000 --> 0:09:10.920 What are you seeing across the technology sector in how 0:09:11.000 --> 0:09:14.080 investors are responding to tariffs but also how the companies 0:09:14.120 --> 0:09:16.400 themselves are communicating the impact. 0:09:17.400 --> 0:09:18.920 Thanks Ed, It's great to be back on. 0:09:19.440 --> 0:09:19.560 Well. 0:09:19.600 --> 0:09:22.800 The way we look at tariffs is they're actually very 0:09:22.840 --> 0:09:25.280 positive for the US and very negative for the rest 0:09:25.320 --> 0:09:27.720 of the world, and you're seeing that today with ASML. 0:09:28.520 --> 0:09:33.280 But US companies are mostly except maybe Apple, mostly unaffected 0:09:33.640 --> 0:09:37.160 by the tariffs, a lot of met local manufacturing, So 0:09:37.200 --> 0:09:41.040 you continue to see tech stocks lead the market. But 0:09:41.120 --> 0:09:44.720 what I think most people are missing is the revenue 0:09:45.240 --> 0:09:49.320 benefit to the US. So we're forecasting three hundred billion 0:09:49.400 --> 0:09:52.040 of revenue from tariffs, which is really the run rate 0:09:52.160 --> 0:09:56.560 right now, and we're also forecasting that the budget deficit 0:09:56.760 --> 0:10:01.560 declines next year at a one point four only that's 0:10:01.600 --> 0:10:04.560 only four and a half percent of GDP, so nobody 0:10:04.559 --> 0:10:06.880 else is really looking at those numbers. It is good 0:10:06.880 --> 0:10:10.440 for the US to collect revenue, pay down or have 0:10:10.600 --> 0:10:14.080 less of a deficit, which ultimately will be invested and 0:10:14.160 --> 0:10:15.040 help the economy. 0:10:15.880 --> 0:10:18.040 Jay I think the top story over the course of 0:10:18.120 --> 0:10:22.080 several days has been in Nvidia, the world's most valuable company, 0:10:22.520 --> 0:10:25.320 now being more free in a limited way to sell 0:10:25.400 --> 0:10:28.840 chips back into China. It's a headline and it's a 0:10:28.880 --> 0:10:31.880 single company. But what does that signal to you on 0:10:31.920 --> 0:10:35.880 the policy side about how America will continue to trade 0:10:35.880 --> 0:10:36.400 with China? 0:10:37.000 --> 0:10:40.400 Well, I think what you're seeing is that the Trump administration, 0:10:40.559 --> 0:10:43.520 notwithstanding the tariffs which can be negative for a lot 0:10:43.520 --> 0:10:47.559 of companies and trade restrictions which hurt Nvidia three or 0:10:47.600 --> 0:10:51.439 four months ago, is that they are pro business and 0:10:51.720 --> 0:10:56.239 if you lobby the administration, they are open to changing policy. 0:10:56.679 --> 0:10:59.560 So ultimately that's going to support the stock market. It's 0:10:59.640 --> 0:11:02.440 going to be published for tech companies. So they're just 0:11:02.520 --> 0:11:06.360 way more practical than the prior administration and way more 0:11:06.400 --> 0:11:07.079 pro business. 0:11:08.200 --> 0:11:14.120 You track a series of economic indicators, right, what is 0:11:14.160 --> 0:11:18.520 yourjection on the net effect of this administration's policy? Do 0:11:18.559 --> 0:11:22.120 you see growth near, medium term, long term or what 0:11:22.160 --> 0:11:24.640 do you think we're being set up for going forward? 0:11:24.679 --> 0:11:26.679 On the fiscal side. 0:11:26.280 --> 0:11:31.280 Well, it's fairly complicated because tariffs are negative for the 0:11:31.280 --> 0:11:33.480 economy in the very short run because you just take 0:11:34.320 --> 0:11:36.560 it's really like the sales tax, so you take buying 0:11:36.640 --> 0:11:41.360 power away from consumers. But the real issue is the 0:11:41.440 --> 0:11:45.800 FED is misanalyzing tariffs. They're not treating them as one time. 0:11:46.480 --> 0:11:51.600 They're sticking with their archaic expectations theory of inflation that 0:11:51.679 --> 0:11:56.360 tariffs might cause expectations and spiral out of control, which 0:11:56.360 --> 0:11:59.000 we think is no longer no. 0:11:59.080 --> 0:12:02.000 Longer tru Let me ask you this, that's your view 0:12:02.040 --> 0:12:04.800 on this current FED administration? Right, I have to acknowledge 0:12:04.800 --> 0:12:08.160 that in the markets right now there is movement across 0:12:08.200 --> 0:12:12.240 assets on the reports and speculation about what the administration 0:12:12.360 --> 0:12:15.920 may or may not do visa v FED chairman Powe, Right, 0:12:15.960 --> 0:12:19.000 I think we see that in the markets. What do 0:12:19.080 --> 0:12:23.120 you make of that potential change? And I'd note for 0:12:23.120 --> 0:12:25.760 our audience, right, this is Bloomberg Tech. We talk about 0:12:25.760 --> 0:12:28.719 tech companies that are valued on their future earnings, so 0:12:29.040 --> 0:12:32.200 rates impact that equation, right, take it from there. 0:12:33.200 --> 0:12:37.079 Well, we actually have a differentiated view that if in 0:12:37.080 --> 0:12:39.400 fact the FED chair gets replaced, of course, the stock 0:12:39.400 --> 0:12:41.760 market probably would react negatibility. That would just be a 0:12:41.760 --> 0:12:44.680 buying opportunity for a couple of reasons. First of all, 0:12:45.240 --> 0:12:49.520 the power FED has been tremendously behind the curve. They 0:12:49.640 --> 0:12:52.959 use a flawed CPI, so they're always about two years 0:12:53.000 --> 0:12:56.840 behind the curve. But also a new FED chair is 0:12:56.880 --> 0:13:00.440 not going to have super loose monetary powers, so just 0:13:00.480 --> 0:13:02.679 have a normal monetary policy, and they have to deal 0:13:02.760 --> 0:13:07.160 with the existing board, which has the core board has 0:13:07.200 --> 0:13:09.959 four Democrats on it, so they're not going to be 0:13:10.000 --> 0:13:12.960 all powerful. They're not going to lower rates too quickly. 0:13:13.120 --> 0:13:15.800 And it's important to note that rates are altered tight now, 0:13:16.280 --> 0:13:18.400 so we really really need to cut. 0:13:18.840 --> 0:13:21.280 That was in the context of media reports on the 0:13:21.320 --> 0:13:24.240 president's consideration of whether or not he can or will 0:13:24.320 --> 0:13:28.320 fire chaed FED chair Japower. Bloomberg's not verified that reporting, 0:13:28.360 --> 0:13:30.120 but as we discuss Jay, we see it in the market. 0:13:30.440 --> 0:13:33.240 Jay Hatfield of Infrastructure Capital Advisor's great to have you 0:13:33.280 --> 0:13:35.320 back on the show. Thank you. Now. Coming up, Mark 0:13:35.400 --> 0:13:39.600 Zuckerberg is set to face off against Meta shareholders in 0:13:39.640 --> 0:13:42.960 a trial over the company's handling have used the data. 0:13:42.960 --> 0:13:45.680 We're going to get the details next. This is Bloomberg 0:13:45.679 --> 0:14:03.080 Tech today is in court in Delaware over allegations from 0:14:03.120 --> 0:14:06.920 shareholders related to the fallout from the Cambridge Analytica data 0:14:06.960 --> 0:14:09.560 mining scandal. I want to go to Boomberg's Riley Griffin, 0:14:09.559 --> 0:14:12.560 who's here in sf. Okay, so the trials underway, what 0:14:12.720 --> 0:14:16.720 is the context and the basis of the trial, who's involved? 0:14:16.800 --> 0:14:17.480 What do we need to know? 0:14:17.960 --> 0:14:20.520 And this is a case that is not just about privacy, 0:14:20.600 --> 0:14:23.920 but it is about power. Mark Zuckerberg is expected to 0:14:23.920 --> 0:14:29.400 testify alongside former COO Cheryl Sandberg and board members about 0:14:29.440 --> 0:14:32.480 the Cambridge Analytica scandal, which has had quite a long 0:14:32.520 --> 0:14:35.400 shadow over Meta. But in this case, Meta is not 0:14:35.440 --> 0:14:39.040 a defendant. Actually just the executives and the board members are, 0:14:39.160 --> 0:14:42.120 and the shareholders in this case are looking to hold 0:14:42.160 --> 0:14:45.400 them financially accountable for the fallout of that scandal. 0:14:45.600 --> 0:14:48.880 Okay, history is important here. Earlier in my career, Cambridge 0:14:48.880 --> 0:14:51.840 Analytica scandal was a big story. What are the basics 0:14:51.880 --> 0:14:53.640 of it that our audience, who may or may not know, 0:14:53.760 --> 0:14:54.120 need to know. 0:14:54.440 --> 0:14:57.280 Yes, years ago, this was a case where Cambridge Analytica 0:14:57.360 --> 0:15:02.320 firm had harvested data of millions of face Book users inappropriately. 0:15:02.520 --> 0:15:06.840 This firm had ties to political operations the Trump campaign, 0:15:07.760 --> 0:15:11.680 and ultimately Facebook had to pay a multi billion dollar 0:15:11.680 --> 0:15:14.520 settlement to the FTC for that data breach. 0:15:15.160 --> 0:15:18.600 Okay, what are the shareholders actually accusing the specific executive 0:15:18.680 --> 0:15:20.760 of ben if it's not the company that's a defendant, 0:15:20.840 --> 0:15:23.960 and it's those key names. What is it the shareholders won? 0:15:24.400 --> 0:15:28.600 Yeah, negligence, a lack of oversight over over the company's 0:15:28.640 --> 0:15:32.760 actions during that time. Now, remember Mark Zuckerberg has total 0:15:32.800 --> 0:15:35.920 control over the company via his voting power. He has 0:15:35.960 --> 0:15:40.120 the majority control over votes and essentially can set company direction. 0:15:40.240 --> 0:15:44.240 And shareholders here are saying that these executives didn't do 0:15:44.360 --> 0:15:48.080 their appropriate duty, didn't follow FTC orders, and allowed this 0:15:48.160 --> 0:15:51.200 breach to happen knowing that there were certain. 0:15:51.000 --> 0:15:54.600 Risks at hand. I feel like there's a lot of 0:15:54.640 --> 0:15:58.080 litigation going on with Meta. It's hard to distinguish and 0:15:59.200 --> 0:16:02.840 work how all these different paths. This one's happening in Delaware. 0:16:04.400 --> 0:16:07.200 Why is it happening now? Again, Like I reflect that 0:16:07.280 --> 0:16:10.680 the Cambridge Analyticus scandal was more than a decade ago 0:16:10.840 --> 0:16:11.480 something like that. 0:16:11.920 --> 0:16:14.800 Yeah, so it's great that you bring up Delaware because 0:16:14.800 --> 0:16:17.440 what makes this an unprecedented case is it's the first 0:16:17.440 --> 0:16:20.280 time we're seeing a CEO and board members actually go 0:16:20.400 --> 0:16:24.160 to court. Usually these kinds of things are settled or 0:16:24.280 --> 0:16:27.120 negotiated behind closed doors, and we're actually seeing this trial 0:16:27.360 --> 0:16:30.880 take place in Delaware, and it really has ramifications for 0:16:31.000 --> 0:16:35.120 all companies out there, whether or not Mark Zuckerberg and 0:16:35.280 --> 0:16:38.880 other executives are having to pay billions in dollars for 0:16:38.920 --> 0:16:42.360 this scandal. Now, one thing we need to remember is 0:16:42.440 --> 0:16:44.440 this is a really hard case to win these care 0:16:44.520 --> 0:16:48.280 mark claims. The battle is uphill, and it could set 0:16:48.320 --> 0:16:52.280 the direction for whether Meta ultimately reincorporates outside of Delaware 0:16:52.280 --> 0:16:52.800 in the future. 0:16:53.000 --> 0:16:56.480 So, Riley Griffin of Bloomberg News and Bloomberg Tag, you're 0:16:56.560 --> 0:16:59.800 kind of like six months into this beat of covering Meta, 0:16:59.800 --> 0:17:01.400 and so much has happened in the first half of 0:17:01.400 --> 0:17:03.600 the year. What I would like to get from you 0:17:03.680 --> 0:17:06.360 is is Mark Zuckerberg himself, like he actually does appear 0:17:06.720 --> 0:17:09.760 and gives testimony in the context of litigation or if 0:17:09.760 --> 0:17:12.440 it is a political hearing something like that, he often 0:17:12.440 --> 0:17:14.600 will stand up and speak right yes. 0:17:14.440 --> 0:17:16.720 And that's an evolution of his career. What we've learned 0:17:16.720 --> 0:17:18.720 from our reporting and my reporting over the last six 0:17:18.800 --> 0:17:22.600 months has been that Mark Zuckerberg really wants to take 0:17:22.680 --> 0:17:25.840 legal fights to court. Now this is no longer a 0:17:25.840 --> 0:17:27.840 time where he wants to just settle, but he wants 0:17:27.880 --> 0:17:30.720 to set the precedent that Meta can win these cases 0:17:31.000 --> 0:17:32.080 and in this case, he can. 0:17:32.960 --> 0:17:37.240 You wrote an extensive and deep piece in BusinessWeek about 0:17:37.480 --> 0:17:40.880 the kind of magnification. Yeah, of Mark Zuckerberg. I really 0:17:41.160 --> 0:17:43.239 encourage the audience to go out and read it. But 0:17:43.359 --> 0:17:45.800 you mentioned that the evolution of his career, there's also 0:17:45.880 --> 0:17:50.560 been an evolution of him personally politically. Could you summarize 0:17:50.560 --> 0:17:51.879 what you learned through that? 0:17:51.920 --> 0:17:54.960 Oh, apologies, this is something for kids. 0:17:55.680 --> 0:17:56.600 That is his vibe. 0:17:56.640 --> 0:17:59.280 He has said this publicly, he said it privately. He 0:17:59.320 --> 0:18:03.040 has done apologizing for scandals of the past and ready 0:18:03.080 --> 0:18:05.440 to move on and really dominate the space and that 0:18:05.480 --> 0:18:08.920 demands winning, whether it's on the legal front or politically speaking. 0:18:09.040 --> 0:18:11.800 So the big news this week in Meta's world has 0:18:11.800 --> 0:18:16.520 been this commitment for massive, massive scale data center. You know, 0:18:16.720 --> 0:18:18.080 I break the story this morning, We're going to do 0:18:18.080 --> 0:18:19.879 it later and to show that XAI is looking at 0:18:19.880 --> 0:18:23.320 Saudi Arabia because you need the capital, the space, the energy. 0:18:23.840 --> 0:18:26.760 But what Meta is doing, you know that the image 0:18:26.760 --> 0:18:29.240 that they give is it could cover Manhattan. The scale 0:18:29.240 --> 0:18:31.240 of what they want to do. Summarize it as best 0:18:31.280 --> 0:18:34.120 you can, and what our read on it was, Yeah. 0:18:33.960 --> 0:18:36.520 So hundreds of billions of dollars. That's how much Meta 0:18:36.560 --> 0:18:38.880 is expecting to spend on this AI race to beat 0:18:38.880 --> 0:18:41.879 out the competition over time, overtime, overtime. We know that 0:18:41.960 --> 0:18:46.360 this year, as of the last quarter results, they're expecting 0:18:46.440 --> 0:18:48.879 to spend you know, as much as seventy two billion 0:18:48.920 --> 0:18:52.000 in capital expenditures, a lot on data centers as you mentioned, 0:18:52.560 --> 0:18:56.040 and we're seeing two hundred million dollars pay packages for 0:18:56.560 --> 0:18:59.040 AI talent they're poaching from Open AI. I mean, this 0:18:59.119 --> 0:19:02.639 is a really relentless race, and Meta is putting all 0:19:02.680 --> 0:19:04.199 the capital it has on hand to win it. 0:19:04.280 --> 0:19:07.520 Bloomer's Riley Griffin, thank you very much. Some headlines that 0:19:07.520 --> 0:19:11.919 there crossing the Bloomberg terminal. President Trump is likely to 0:19:12.040 --> 0:19:16.040 fire FED chair Powell, according to White House officials and 0:19:16.040 --> 0:19:19.639 Bloomberg's reporting that could happen soon. Bloomberg also reporting that 0:19:19.640 --> 0:19:23.199 Trump spoke to lawmakers on Tuesday about whether or not 0:19:23.359 --> 0:19:26.520 two hours Powell. I'd note some of the market reaction. 0:19:26.680 --> 0:19:29.960 We're showing the Bloomberg US Dollar Spot Index, the Dollar 0:19:30.000 --> 0:19:33.119 Spot Index raising gains after that report, also seeing treasuries 0:19:33.359 --> 0:19:36.359 pair gains after earlier reports. Will continue to bring you 0:19:36.600 --> 0:19:39.000 what we know throughout the day. All right, coming up, 0:19:39.040 --> 0:19:41.480 we're going to discuss the fate of the Genius Act 0:19:41.600 --> 0:19:44.439 stable Cooin bill, as with Kavieta Gutter from the Delta 0:19:44.440 --> 0:19:55.560 Blockchain Fund. This is Bloomberg Tech crypto stocks rising along 0:19:55.560 --> 0:19:59.000 with Bitcoin after President Trump said the House of Representatives 0:19:59.160 --> 0:20:02.879 will pass the Genius Act stable Coin bill today. This 0:20:03.000 --> 0:20:05.199 after a procedural vote failed. Yes, they want to get 0:20:05.200 --> 0:20:07.880 out Scavie to go to general partner at the Delta 0:20:08.240 --> 0:20:11.800 Blockchain Fund. There is some political wrangling going on, but 0:20:11.840 --> 0:20:14.919 it looks like the Genius Act stable Cooin bill moves forward. 0:20:14.960 --> 0:20:17.359 Why is it important it does so? Hi Ed? 0:20:17.560 --> 0:20:20.840 I mean Genius Act is basically putting a basic structure 0:20:20.880 --> 0:20:23.640 of what stable points should have already been a long 0:20:23.680 --> 0:20:27.080 time back. If the stable cooin bills or the Genius 0:20:27.119 --> 0:20:30.439 Act actually provides any companies who are doing stable coins 0:20:30.840 --> 0:20:34.280 the rules and regulations around how to really release them, 0:20:34.359 --> 0:20:37.160 how much pillateral do you want, what sort of underlining, 0:20:37.840 --> 0:20:41.439 transparency and accountability associated with it should be there? And 0:20:41.520 --> 0:20:44.080 I think those are the things which companies like Circle 0:20:44.119 --> 0:20:47.560 were always watching. But putting a standard structure would help 0:20:47.600 --> 0:20:51.000 a lot of fintech companies, like whether it's Square block 0:20:51.240 --> 0:20:54.160 or a bunch of other portfolio bunch of other financial 0:20:54.200 --> 0:20:56.680 companies to actually release it in a right way. 0:20:56.920 --> 0:21:01.040 We've been asking ourselves when this bill passes, what happens next. 0:21:01.080 --> 0:21:04.320 And the hope from your industry, as I understand it, 0:21:04.359 --> 0:21:06.800 is that there's just going to be much wider use 0:21:07.240 --> 0:21:11.720 of dollar denominated digital tokens. Dollarization, as David Sachs would 0:21:11.720 --> 0:21:14.080 call it and has done here on this program. Is 0:21:14.080 --> 0:21:16.960 that what you're hoping for. Yeah, I'm hoping for three 0:21:17.040 --> 0:21:17.920 different results. 0:21:18.000 --> 0:21:21.760 First, we have to understand that more stable coin, especially 0:21:21.800 --> 0:21:24.480 in US denominated, is going to have adoption. 0:21:24.600 --> 0:21:26.720 You are actually creating. 0:21:26.240 --> 0:21:30.800 A soft power around US dollar beyond the trillion dollar deficit. 0:21:30.440 --> 0:21:32.080 Which we already had or a debt. 0:21:32.280 --> 0:21:35.760 You're actually making a more US pegged economy in the world, 0:21:35.840 --> 0:21:38.600 which is really big for US dollars and the United 0:21:38.600 --> 0:21:41.399 States comments, and I think that's why President Trump is 0:21:41.400 --> 0:21:46.560 really pushing for it. Secondly, it does legitimate everything around 0:21:46.920 --> 0:21:50.960 crypto with respect to USD denominated currency. It will give 0:21:51.000 --> 0:21:54.399 a big high for the prices in bitcoin, ethereum and 0:21:54.440 --> 0:21:57.480 all the other stuff which we are looking at denominated 0:21:57.520 --> 0:22:00.440