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Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of

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Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.

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Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlowe.

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Speaker 2: Good morning, everybody. I'm Tim Steneveeg and.

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Speaker 3: I'm Katie Greifeld, both in New York. This is Bloomberg Technology.

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Speaker 2: Coming on at Tesla's annual eb sales dropped for the

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Speaker 2: first time in over a decade.

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Speaker 3: And speaking of Tesla, the company also in focus following

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Speaker 3: a cybertruck explosion outside the Trump Las Vegas Hotel yesterday.

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Speaker 3: We'll have the latest.

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Speaker 2: Man TikTok is feeling the heat as its potential ban

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Speaker 2: draws near. We'll discuss a little later this hour. First, though,

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Speaker 2: a check on markets on this first trading day of

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Speaker 2: twenty twenty five KT. I don't know about you, but

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Speaker 2: I'm still writing twenty twenty four on all my checks.

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Speaker 3: That's terrible. I think we can still safely say happy New.

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Speaker 2: Year, though, thanks Happy New Year.

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Speaker 3: I think a lot of investors are happy we turned

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Speaker 3: the page.

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Speaker 2: I think they are too. Although the Nasdaq had great

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Speaker 2: years back to back in twenty twenty four and twenty

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Speaker 2: twenty three, up today the Nasdaq one hundred by three

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Speaker 2: tenths of one percent. We do have about seventy percent

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Speaker 2: of the stocks in the Nasdaq one hundred higher today

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Speaker 2: five of the seven mag seven higher, with only Tesla

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Speaker 2: and Apple lower weighing on today's trade. KT. I know

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Speaker 2: you're gonna have more on Tesla in just a minute.

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Speaker 2: I mentioned back to back years of gains twenty twenty

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Speaker 2: four and Nasdaq one hundred is up nearly twenty five

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Speaker 2: percent twenty twenty three, up by more than fifty percent.

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Speaker 2: Speaking of back to back years of gains, Bitcoin higher

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Speaker 2: today for a third day in a row, one point

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Speaker 2: seven percent to the upside, up by about sixteen hundred dollars.

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Speaker 2: It did fall about three percent in December, up more

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Speaker 2: than one hundred twenty percent, and twenty twenty four k

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Speaker 2: of more than one hundred and fifty percent in twenty

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Speaker 2: twenty three.

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Speaker 3: That's the thing you mentioned, some of those stats, those

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Speaker 3: yearly stats, especially for the NASAQ one hundred. That's even

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Speaker 3: with the big benchmarks puking in the final week of

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Speaker 3: the year. So clearly a bit of relief today, even

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Speaker 3: with Tesla doing its darnedness to try to drag this

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Speaker 3: index down. Let's take a look at shares right now.

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Speaker 3: You can see down about five point six percent. Of course,

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Speaker 3: we got their fourth quarter deliveries this morning, coming in

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Speaker 3: at four hundred and ninety five thousand vehicles that missed

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Speaker 3: analyst projections. They had been penciling in about five hundred

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Speaker 3: and twelve thousand vehicles delivered, and you can see that

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Speaker 3: disappointment in the shares right now. Tesla also had a

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Speaker 3: fantastic year in twenty twenty four, but it came with

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Speaker 3: a ton of volatility ends a lot of political cross

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Speaker 3: currents as well.

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Speaker 2: Yeah, that's certainly something we'll be talking about in just

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Speaker 2: a few minutes. But how about this last few months

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Speaker 2: of twenty twenty four for Tesla? I know, probably remarkable.

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Speaker 3: Well remarkable too because Elon Musk some have them calling

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Speaker 3: him the co president President elect Donald Trump doesn't of that,

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Speaker 3: and President elected Donald Trump absolutely dominating all of the

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Speaker 3: year ahead outlooks. Let's talk a little bit more about that,

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Speaker 3: because Wall Street has its eyes laser focused on Trump's

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Speaker 3: return to the White House and trying to gauge what

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Speaker 3: to expect this year from his anticipated pro business policies,

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Speaker 3: but also his tough talk on global trade and general unpredictability.

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Speaker 3: You can call it that. Bloomberg News has collated over

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Speaker 3: seven hundred key calls from more than fifty leading financial institutions,

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Speaker 3: and Bloomberg's needs to say. COVID is here to break

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Speaker 3: it all down. It's the subject of today's big Take, Denitza.

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Speaker 3: It's great to have you with us since I made

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Speaker 3: this point, of course on open interest, so I'll make

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Speaker 3: it again. It's really hard to talk about twenty twenty

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Speaker 3: five without talking about Donald Trump.

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Speaker 4: Yeah, it's clearly the biggest word this year. Everything is

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Speaker 4: Donald Trump, Tariff's American exceptionalism. These are the worst we

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Speaker 4: sow through all those outlooks, which were compiled by Sam Palter.

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Speaker 4: Of course, and last year, the year before, we were

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Speaker 4: talking about hardline. We're talking so much about monetary policy.

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Speaker 4: We're talking about the economy, which is still an important

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Speaker 4: factor here, but definitely Donald Trump has taken center stage.

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Speaker 4: What we have seen is a lot of people are

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Speaker 4: betting on American companies and are not pretty warming up

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Speaker 4: towards international companies despite the fact that they obviously are

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Speaker 4: a lot cheaper, but US assets are taking central stage.

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Speaker 4: JP Morgan says, US exceptionalism is getting reinforced. We're talking

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Speaker 4: about AI. We have a big call from bn Y

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Speaker 4: saying that AIS role in the world will surpass that

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Speaker 4: of other technologies that propel earlier periods of such growth.

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Speaker 4: So we're seeing a lot of AI optimism. That comes

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Speaker 4: also with conscious calls of broading of the rally of

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Speaker 4: people saying that more and more companies use AI, hence

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Speaker 4: they will join that.

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Speaker 2: AI for Keral, It's a great piece. Check it out

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Speaker 2: by Bloomberg Sam Potter, Janisa Sikoba also working on that

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Speaker 2: along with many other folks of the Bloomberg News team.

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Speaker 2: You can check it out now at Bloomberg dot com

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Speaker 2: slash Big Take. Well, let's now bring in Keith Buchanan,

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Speaker 2: senior portfolio manager at Globalt Investments and has about three

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Speaker 2: billion dollars in assets under management. For more Keith, you

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Speaker 2: heard me mention the back to back years of gains

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Speaker 2: on the Nasdaq one hundred remarkable couple of years. Do

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Speaker 2: you think there's still room to run for megacap tech?

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Speaker 5: Hi, and thanks again for having me.

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Speaker 6: We actually have been moving into more balanced stants over

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Speaker 6: the last couple of months, and we're really focused on

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Speaker 6: the growth versus value collision course, if you will, that's

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Speaker 6: set up for twenty twenty five among other actually you know,

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Speaker 6: carryous collision courses across our American economy and also for markets.

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Speaker 6: So we've moved into a more balance stamps because we

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Speaker 6: look at growth as this dominant really over the marketplace

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Speaker 6: for WILLI says a pronuncial crisis minus a few years,

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Speaker 6: most recently in twenty twenty.

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Speaker 5: Two, and at last phase.

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Speaker 6: Of course, I've been moved by AI spending the story,

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Speaker 6: but you questioning at what cost does that come at?

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Speaker 7: It?

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Speaker 6: Are we looking at valuation that grows into infinity and

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Speaker 6: what point does that price end the scenario that we're

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Speaker 6: now also the growth that's over to come over the

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Speaker 6: next couple of years. Also at what cost does this

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Speaker 6: AI spending and this productivity come.

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Speaker 5: Of course that's a boon to earnings, but does it

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Speaker 5: come in.

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Speaker 6: Wage gains and workers That could cause a little more

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Speaker 6: consternation among the consumer and consumer spending. So we're balancing

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Speaker 6: all of those right now, and it led us to

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Speaker 6: a more balanced approach. Is how we look at the

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Speaker 6: US markets and not preferring growth over value any longer.

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Speaker 5: We actually have been in that stands for several years frior.

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Speaker 3: Well when it comes to big tech and when it

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Speaker 3: comes to the Magnificent seven. I think a lot of

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Speaker 3: people would agree with you on these stretched valuations. But

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Speaker 3: the pushback I keep hearing to that point is that

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Speaker 3: you have the earnings growth to back it up. That

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Speaker 3: basically the fund of mentals are justifying these eyewatering valuations.

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Speaker 3: And if you expect to see some of the momentum

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Speaker 3: behind big tech fade, are you saying that you'd expect

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Speaker 3: earnings to disappoint a bit in twenty twenty five.

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Speaker 6: Not necessarily, And that's why we haven't gone underweight and growth.

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Speaker 5: We actually just in a neutral stance, if you will.

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Speaker 6: We don't see the case for that disappointment to come

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Speaker 6: in twenty twenty five, even twenty twenty six. As we

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Speaker 6: grow into like you mentioned, are grown into multiples that

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Speaker 6: seem lofty, you know a year and a half ago,

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Speaker 6: don't seem as lofty anymore today. But that maturation of

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Speaker 6: this growth phase and investment has to come at some

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Speaker 6: point where the market price is in fully the bowlt

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Speaker 6: suspending this flooding this marketplace.

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Speaker 5: Agree again, we don't feel like.

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Speaker 6: These stocks are broken or any the part of the

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Speaker 6: story is is amiss at all. But we think that

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Speaker 6: growth actually could come more and sync with the value

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Speaker 6: as far as the performance over the next couple of

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Speaker 6: years as the market digests those valuations and time.

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Speaker 3: Well, let's talk a little bit more about value, because

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Speaker 3: of course value has broken a lot of hearts over

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Speaker 3: the past couple of years, and many expect that to continue.

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Speaker 3: So you have the valuation piece looking good when it

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Speaker 3: comes to a lot of these value names, a lot

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Speaker 3: of these value indexes. But are you expecting to see

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Speaker 3: actually that earnings growth broadened out, especially if we are

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Speaker 3: in a higher for longer sort of environment where the

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Speaker 3: FED can't cut as much as maybe some have been open.

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Speaker 5: Okay, almost has to. And we've looked at this closely.

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Speaker 6: From a bottom of standpoint, the market expects earnings per

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Speaker 6: share growth of thirteen percent of the twenty twenty five

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Speaker 6: that's not as concentrated in the max seven as it

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Speaker 6: was in twenty twenty two and twenty twenty three, and

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Speaker 6: especially in twenty twenty four as well, So that broadening

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Speaker 6: has to occur and evaluations just don't show that that

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Speaker 6: broadening is expected. If you look at names like financials

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Speaker 6: that start to appreciate some of that, and those stocks

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Speaker 6: have performed over the past twelve months. We look at

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Speaker 6: other spaces like that offer the opportunity for the valuations

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Speaker 6: to grow into a broadening of earnings that the marketing

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Speaker 6: spect from a bottom up standpoint, but from a top

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Speaker 6: down standpoint and also from an index standpoint, it really

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Speaker 6: hasn't really materialized in a lot of those value names

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Speaker 6: and those industries that traditionally are are categorized as value

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Speaker 6: orient and so we're really excited about just a balance

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Speaker 6: that that Arnie's growth could lead to performance and value sectors,

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Speaker 6: and we feel like growth doesn't necessarily have to bleed

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Speaker 6: out in order for that to happen.

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Speaker 8: Keith.

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Speaker 2: Over the last couple of years, really since the public

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Speaker 2: introduction of chat GPT, we've seen a lot of the

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Speaker 2: AI gains go to just a handful of companies, including

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Speaker 2: the megacaps, you know, hyperscalers and whatnot. I'm wondering when

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Speaker 2: we're starting to see those AI gains go to other

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Speaker 2: types of companies, like when is AI going to allow

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Speaker 2: Procter and gamble to sell more tied and toilet paper

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Speaker 2: with fewer people.

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Speaker 6: We're starting to see actually some implementation of AI that

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Speaker 6: could benefit sectors and names and industries outside of the

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Speaker 6: Max seven already.

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Speaker 5: You see that in healthcare started talking about how some.

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Speaker 6: Development of drugs has accelerated and they feel like they

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Speaker 6: can be more efficient in how they allocate resources because

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Speaker 6: of artificial intelligence. They've implement it within those platforms. So

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Speaker 6: again that's the spending comes first, productivity games come next,

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Speaker 6: and we should see that materialize across the board.

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Speaker 5: Again, that's the case.

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Speaker 6: For the spending, of course will grow to those names

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Speaker 6: that put this technology and implement this within economy. But

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Speaker 6: as all industries start to implement some level of higher

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Speaker 6: productivity that benefits names across the board, and those with

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Speaker 6: lower evaluations and theory should have a quicker move when

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Speaker 6: those earnings start to accelerate it and it.

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Speaker 3: Will be fascinating to see when the investing timeline sort

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Speaker 3: of turns to more of those applications versus just the

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Speaker 3: hardware and the chip makers. But keys, we got to

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Speaker 3: leave it there. Great to kick off twenty twenty five

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Speaker 3: with you. That is Buchanan. He is senior portfolio manager

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Speaker 3: over at Global Investments. Now coming up, Tesla disappoints more

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Speaker 3: on the carmakers delivery miss Next, This is Bloomberg.

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Speaker 2: Tesla fourth quarter sales out today, the electric carmaker disappointing investors,

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Speaker 2: posting an annual vehicle sales drop for the first time

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Speaker 2: in more than a decade. Joining US now is Bloomberg's

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Speaker 2: Detroit bureau chief David at Welch. David one point seventy

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Speaker 2: nine million vehicles sold in twenty twenty four fourth quarter

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Speaker 2: deliveries for to ninety five thousand, five hundred and seventy

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Speaker 2: Tesla stock taking a hit as the result. To what

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Speaker 2: can we attribute this decline to? I think it's just

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Speaker 2: purely greater competition. Whether it's in China where Bid and

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Speaker 2: the domestic EV players are doing very well with competitive product,

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Speaker 2: helped buy a lot of Chinese government subsidies. It's tougher

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Speaker 2: sledding there, and there's more competition in the US. You've

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Speaker 2: got a lot of new EV's out there from Hyundai, Kia,

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Speaker 2: General Motors. They're all pushing pretty hard here. GM's got

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Speaker 2: a pretty cheap one with the Equinox sales throw under

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Speaker 2: thirty five thousand. That's going to put pressure on the market.

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Speaker 2: And also, you know EV sales generally still some growth there,

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Speaker 2: but slower growth, So you have slower growth for the

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Speaker 2: total total industry and more players fighting for that piece

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Speaker 2: of the pie, and Tesla's not immune to that either.

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Speaker 2: The other thing, look, Tesla's got this lineup of four

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Speaker 2: vehicles that can sell in pretty decent numbers, a niche

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Speaker 2: cyber truck, which has not set the world on fire

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Speaker 2: in terms of growth. Unless they get this cheaper model

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Speaker 2: to type of vehicle out there, they're probably not going

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Speaker 2: to see a lot of electric vehicle growth from them

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Speaker 2: in the US market, and they're going to have really

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Speaker 2: tough competition in Europe and China going forward, So it's

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Speaker 2: not a growth story on the EV side of their

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Speaker 2: business right now.

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Speaker 3: Maybe the hope is then that, of course Tesla, which

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Speaker 3: already is the market leader, would take share from some

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Speaker 3: of its competitors because Elon Musk on the latest earnings

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Speaker 3: call said that he sees twenty to thirty percent growth

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Speaker 3: this year, which seems optimistic. Are we hearing anywhere close

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Speaker 3: to those figures When you take a look at what

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Speaker 3: the cell side is actually.

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Speaker 9: Expecting the sale side's not expecting that. There isn't a

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Speaker 9: lot of credibility. We've seen a lot of skepticism over

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Speaker 9: the twenty to thirty percent growth. Now what we don't know.

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Speaker 9: Tesla's supposed to have this cheaper EV coming out this year.

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Speaker 9: They famously missed their their targets for production and sales

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Speaker 9: all the time. But if it does come out it

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Speaker 9: is cheaper, that's where they would presumably get some growth.

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Speaker 9: It's going to be really hard to steal that much

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Speaker 9: market share and less Tesla res or it's just some

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Speaker 9: really deep discounting. I mean, look, there's a wild card

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Speaker 9: here too, which is if Tesla's not reliant on government

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Speaker 9: subsidies the seventy five hundred tower tax break for evs

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Speaker 9: and the other companies are, maybe they can gain share

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Speaker 9: that way. But there's just not that much growth in

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Speaker 9: the EV market where I think they're going to see

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Speaker 9: twenty to thirty percent growth based off its US sales,

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Speaker 9: And again, the Chinese competition is just too tough for

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Speaker 9: them to get huge numbers there either.

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Speaker 2: David a little closer to home here in the US,

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Speaker 2: is there a political risk given Elon Musk's close alliance

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Speaker 2: with President elect Donald Trump, and that it could alienate

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Speaker 2: potential folks who would say, you know, in another world,

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Speaker 2: I would have gone for a Tesla, but these days,

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Speaker 2: no thanks.

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Speaker 9: Look, that phenomenon I think is real. I also think

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Speaker 9: it's kind of baked in already because Elon kind of

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Speaker 9: went to the right side of the political aisle some

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Speaker 9: time ago with the things he's been saying on X

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Speaker 9: and he's been working with Donald Trump for months now.

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Speaker 9: There may be more of that coming. People who were

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Speaker 9: predisposed of buying avs, many of them are interested in

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Speaker 9: climate change and they buy them for that reason. Others

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Speaker 9: are not. But look, I think Elon has probably alienated

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Speaker 9: a certain kind of consumer. How big of an impact

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Speaker 9: that's having to quantify, but I think that does have

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Speaker 9: an effect for sure.

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Speaker 3: Well let's talk about the flip side of that, David,

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Speaker 3: because Okay, maybe the left leaning customer base of Tesla

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Speaker 3: doesn't want to buy more Tesla's, but there's a lot

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Speaker 3: of expectations and you can see that in the stock

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Speaker 3: price that a Donald Trump administration, the second Donald Trump administration,

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Speaker 3: is going to be good news for Tesla. I mean,

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Speaker 3: what are some of the actual policies that are potentially

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Speaker 3: on the table here that would benefit Tesla.

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Speaker 9: The big one, I think is the Trump administration's priority

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Speaker 9: of setting up a federal framework for autonomous vehicles. What's

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Speaker 9: really pushing this stock, I think to a large degree,

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Speaker 9: is this idea that Tesla's not just an automaker in

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Speaker 9: the way that general motors are, dime where or BMW

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Speaker 9: or Toyota are. It's an AI company. It's a tech play, right,

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Speaker 9: and you can only do that if you do have robots,

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Speaker 9: you do have self driving cars. And without a federal

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Speaker 9: framework that enables somebody like Tesla to put a vehicle

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Speaker 9: on the road with no steering wheel and no braking,

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Speaker 9: accelerator pedals, totally robot driven, that's not going to happen.

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Speaker 9: Trump's the Trump administration will make it a priority. Elon

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Speaker 9: is camped out at Maro Lago trying to help write that,

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Speaker 9: I would assume. But anyway, he's going to have influence

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Speaker 9: that will help Tesla certainly, depending on how the rules

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Speaker 9: are done. And then with the other thing, Elon has said,

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Speaker 9: we don't need federal subsidies to sell our evs. It

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Speaker 9: would affect other companies more and he's probably right about that,

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Speaker 9: But how much getting rid of those would help Tesla

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Speaker 9: sell more evs that it remains to be seen. I

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Speaker 9: think it's tough on them to get rid of those

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Speaker 9: incentives as well, because one that's free money to consumers

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Speaker 9: that they don't get anymore, and to Tesla might have

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Speaker 9: to discount more. So, even if they do steal market share,

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Speaker 9: it might be less profitable share if they have to

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Speaker 9: have big discounts in order to sell those vehicles. So

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Speaker 9: the bottom line is any kind of tax policy on

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Speaker 9: evs could benefit Elon if he has an outsized voice

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Speaker 9: in crafting it to help his company. So, you know,

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Speaker 9: we don't know what that looks like, but that certainly

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Speaker 9: could happen.

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Speaker 7: Well.

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Speaker 3: Tesla sharre is currently down almost six percent. David Welts,

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Speaker 3: thank you for that. Let's turn to the other major

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Speaker 3: Tesla news that we're following this morning, and that is

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Speaker 3: Elon Musk saying that the explosion of a Tesla cybertruck

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Speaker 3: outside of the Trump Las Vegas hotel was probably an

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Speaker 3: act of terrorism. The driver was killed and seven people

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Speaker 3: suffered minor injuries. For more, let's break it down with

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Speaker 3: Wloomberg's Mike Sheppard joining us now. And this is a

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Speaker 3: developing situation, of course, Mike. But what do we know

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Speaker 3: so far?

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Speaker 7: Well, what we know is that this vehicle, like the

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Speaker 7: vehicle used in the New Orleans terror attack, was rented

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Speaker 7: via the Touro app. But the company itself maintains that

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Speaker 7: there is no connection whatsoever between them that they can see.

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Speaker 7: Neither the suspect in New Orleans nor the man who

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Speaker 7: rented the cyber truck that exploded in Las Vegas had

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Speaker 7: any kind of a criminal background that would have shown

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Speaker 7: up in the checks that the company run. What we

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Speaker 7: know about the man he has been identified in Las

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Speaker 7: Vegas is that he is identified as an Army reservist

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Speaker 7: his on leave from the service temporarily. He was from

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Speaker 7: Colorado Springs. And we don't know yet what exactly the

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Speaker 7: cause was of this explosion in Las Vegas. Elon Musk

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Speaker 7: has said on x he posted last night that he

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Speaker 7: thought it looked more like and the company had concluded,

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Speaker 7: but did not offer more evidence of an explosion related

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Speaker 7: to either what he said were fireworks or perhaps a

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Speaker 7: bomb in the bed or back of the truck, rather

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Speaker 7: than a malfunction by the batteries. We've seen in some

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Speaker 7: other Tesla vehicles.

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Speaker 2: Mike, As Katie said, this is a developing story. We

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Speaker 2: don't know much yet, but I'm curious what has come

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Speaker 2: out at this point. Do we know how, if any

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Speaker 2: the ignition actually happened, how whatever was in the back

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Speaker 2: of the truck ignited, And do we know if the

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Speaker 2: vehicle's battery earned or if fire officials were able to

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Speaker 2: put out the fire before that happened.

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Speaker 7: Those are really good and still very open questions, Tim

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Speaker 7: that we're waiting for authorities to shed more light on.

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Speaker 7: We have heard, of course from Elon mus the world's

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Speaker 7: richest man and one of the co founders of Tesla

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Speaker 7: and now the owner of x laying this out for

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Speaker 7: us on social media, but the detailed account from authorities,

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Speaker 7: including the Las Vegas Fire Department and FBI, which is

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Speaker 7: also investigating this incident, we still do not have a

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Speaker 7: full accounting of what had happened, including the kind of

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Speaker 7: forensic questions that you're asking now, So we'll be eager

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Speaker 7: to hear from law enforcement and safety authorities there as

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Speaker 7: we get more.

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Speaker 2: Answers, again, more questions than answers that we have right now, Mike,

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Speaker 2: But I'm curious about potential similarities between what happened in

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Speaker 2: New Orleans and what happened in Las Vegas. The tech

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Speaker 2: angle here with vehicles rented on the app turo, the

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Speaker 2: connection of both being members or former members of used

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Speaker 2: armed forces. What are similarities we have right now?

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Speaker 7: You know, those are similarities, but authorities would be quick

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Speaker 7: to caution that they are all coincidental. Many people use

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Speaker 7: this Touro app to rent vehicles. Conversing with a friend

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Speaker 7: this morning, they happened to note that, Hey, you know,

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Speaker 7: I have an acquaintance who rented a cyber truck in

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Speaker 7: Las Vegas about the same time. So it is not

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Speaker 7: an uncommon thing for people to be using something like this.

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Speaker 7: If it were Avis or Hertz, I don't know if

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Speaker 7: we'd be asking sort of the same kinds of questions.

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Speaker 7: And again, when it comes to prior military service, we

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Speaker 7: have seen this again and again that sometimes actors in

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Speaker 7: these mass casualty events, and we can think all the

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Speaker 7: way back to nineteen ninety five, the bomb that took

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Speaker 7: out the Edward R. Murrah building in Oklahoma City that

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Speaker 7: was perpetrated by two men who had previously served in

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Speaker 7: the US Army so again coincidence, but we don't know

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Speaker 7: whether there is any connection valid or viable whatsoever, or

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Speaker 7: even if what happened in Las Vegas was an accident

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Speaker 7: or a deliberate and malicious act.

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Speaker 3: All right, Mike, really appreciate your reporting here. That is

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Speaker 3: Bloomberg's Mike Sheppard. Of course, we'll bring you more details

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Speaker 3: as we have them, but let's switch skars here and

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Speaker 3: discuss the future of H one B VISUS under the

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Speaker 3: new administration and the impact on the America's tech industry.

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Speaker 3: Of course, this was a firestorm over social media over

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Speaker 3: the holiday.

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Speaker 2: Well, coming up much more on Bloomberg Technology. This is Bloomberg.

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Speaker 7: Well.

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Speaker 3: Twenty twenty four was deemed the year of Artificial intelligence.

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Speaker 3: But why you're waiting to see if Wall Street will

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Speaker 3: grow impatient with the AI movement Bloomberg Opinions Davely wrote

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Speaker 3: about it in his latest column. He joins, us, now

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Speaker 3: tie this into what you call the brain rot economy,

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Speaker 3: all this enthusiasm that we're seeing over AI and what's

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Speaker 3: actually happening on a lot.

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Speaker 5: Of these apps.

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Speaker 10: Yeah, well, I mean we're seeing investors being extremely excited

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Speaker 10: that AI is going to come good this year earn

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Speaker 10: them lots of money. The revenue is going to start

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Speaker 10: pouring in and that's going to offset the worries about

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Speaker 10: capital expenditure going through the roof for just about all

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Speaker 10: major tech companies in twenty twenty four. Where that links

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Speaker 10: is the brain rot side of things, is that one

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Speaker 10: of the early uses of AI has been to fill

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Speaker 10: things like Facebook with just nonsense, really like pictures that

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Speaker 10: don't make any sense or text has been generated it

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Speaker 10: isn't really fun to read. And I think and in

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Speaker 10: my column there I wrote that there's going to be

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Speaker 10: this sort of awakening I hope from people saying, well,

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Speaker 10: why am I looking at this? And as soon as

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Speaker 10: people stop looking at this, that could spell trouble for

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Speaker 10: companies like Meta that rely on that.

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Speaker 2: Well, maybe they move away from that. Go to TikTok.

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Speaker 2: Your prediction about TikTok this year at least here in

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Speaker 2: the US will it be banned?

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Speaker 10: Well, the question is, you know what the Supreme Court's

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Speaker 10: going to do. They're going to hear arguments on January tenth,

439
00:23:11,400 --> 00:23:14,080
Speaker 10: and many legal observers say it's unlikely that the Supreme

440
00:23:14,119 --> 00:23:16,480
Speaker 10: Court is going to overturn the lower courts ruling which

441
00:23:16,560 --> 00:23:21,040
Speaker 10: was that the ban was constitutional. The next wildcard is

442
00:23:21,040 --> 00:23:22,439
Speaker 10: going to be what's Donald Trump going to do?

443
00:23:22,520 --> 00:23:22,639
Speaker 7: Now?

444
00:23:22,680 --> 00:23:25,800
Speaker 10: He's already asked for the band to be paused. He's

445
00:23:25,800 --> 00:23:27,560
Speaker 10: asked the Supreme Court for that. Whether or not they

446
00:23:27,680 --> 00:23:30,520
Speaker 10: grant him that, it's not it's not clear yet. But

447
00:23:30,600 --> 00:23:32,880
Speaker 10: I think it's going to take some overturning for this

448
00:23:33,720 --> 00:23:36,920
Speaker 10: for this ban on TikTok to stop. So I think

449
00:23:37,000 --> 00:23:39,359
Speaker 10: if you're on TikTok, you should be getting ready to

450
00:23:39,760 --> 00:23:41,640
Speaker 10: perhaps sort of move somewhere else.

451
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Speaker 3: Well, Dave Lee from Bloomberg Opinion, That is the perfect

452
00:23:44,600 --> 00:23:47,600
Speaker 3: segue into our next guest. Let's keep this discussion going

453
00:23:47,640 --> 00:23:50,240
Speaker 3: now with Godam Hans. He is a law professor at

454
00:23:50,240 --> 00:23:54,040
Speaker 3: Cornell and founding director of the university's Civil Rights and

455
00:23:54,119 --> 00:23:57,600
Speaker 3: Civil Liberties Clinic. Great to have you with us, of course,

456
00:23:57,640 --> 00:24:01,600
Speaker 3: so the Supreme Court will hear TikTok's argument on January tenth.

457
00:24:01,760 --> 00:24:05,160
Speaker 3: Of course, the ban would kick in on January nineteenth.

458
00:24:05,200 --> 00:24:08,160
Speaker 3: If it goes through. That is a very very quick

459
00:24:08,200 --> 00:24:11,800
Speaker 3: possible turnaround. And then you add President Donald president elect

460
00:24:11,840 --> 00:24:14,960
Speaker 3: rather Donald Trump into the equation. How are you thinking

461
00:24:14,960 --> 00:24:17,240
Speaker 3: that things will shake out from where it stands right now.

462
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Speaker 5: Yes, so thank you for having me. I am.

463
00:24:22,040 --> 00:24:25,600
Speaker 8: Similarly skeptical that the Supreme Court will overturn the lower

464
00:24:25,640 --> 00:24:29,560
Speaker 8: court's ruling. I think the schedule of the argument means

465
00:24:29,560 --> 00:24:33,840
Speaker 8: that we may hear something quickly before the effective date

466
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Speaker 8: of the ban, but I am not optimistic that the

467
00:24:38,880 --> 00:24:41,160
Speaker 8: court will make a different finding.

468
00:24:42,040 --> 00:24:42,600
Speaker 5: Ultimately.

469
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Speaker 8: Whether or not President lect Trump is able to change

470
00:24:46,720 --> 00:24:51,399
Speaker 8: that through urging Congress to override or rescind the law,

471
00:24:51,880 --> 00:24:54,000
Speaker 8: or some other kind of executive action, I think we'll

472
00:24:54,040 --> 00:24:56,320
Speaker 8: have to wait and see. I also don't think the

473
00:24:56,359 --> 00:25:00,720
Speaker 8: Supreme Court itself will take up President elect Trump's call

474
00:25:00,840 --> 00:25:04,880
Speaker 8: for a stay, given the sort of lack of precedent

475
00:25:05,040 --> 00:25:06,760
Speaker 8: for that kind of move.

476
00:25:07,240 --> 00:25:10,359
Speaker 2: You have been supportive of TikTok from a legal perspective,

477
00:25:10,359 --> 00:25:11,600
Speaker 2: Why is that? What's the case?

478
00:25:13,040 --> 00:25:18,880
Speaker 8: I think that this law is targeted pretty explicitly at

479
00:25:18,880 --> 00:25:23,880
Speaker 8: the company the Commeress. People who talked about it at

480
00:25:23,880 --> 00:25:26,800
Speaker 8: the time of its anactment earlier in twenty twenty four

481
00:25:27,359 --> 00:25:30,280
Speaker 8: said that there were major national security concerns that they

482
00:25:30,320 --> 00:25:33,119
Speaker 8: had been briefed onne privately, but that evidence has not

483
00:25:33,160 --> 00:25:37,320
Speaker 8: been made public. And while I agree that national security.

484
00:25:37,040 --> 00:25:38,520
Speaker 5: Is an important governmental interest.

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Speaker 8: I also think that when it comes to banning a

486
00:25:41,560 --> 00:25:45,879
Speaker 8: social media platform where millions of people exchange content and ideas,

487
00:25:46,160 --> 00:25:49,679
Speaker 8: that evans should be public. I did filend sign on

488
00:25:49,720 --> 00:25:51,959
Speaker 8: to an amicus brief both in the DC Circuit and

489
00:25:52,000 --> 00:25:55,280
Speaker 8: in the Supreme Court. We and that amicus brief argued

490
00:25:55,480 --> 00:25:59,920
Speaker 8: that the law really creates some fundamental First Amendment problem

491
00:26:00,160 --> 00:26:03,000
Speaker 8: is that I don't think are supported by the Supreme

492
00:26:03,000 --> 00:26:05,440
Speaker 8: Court President here. But of course we'll have to see

493
00:26:05,440 --> 00:26:08,280
Speaker 8: what the Court itself says in the coming weeks.

494
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Speaker 2: Cornell Law Professor Godham Hans, thanks so much for joining us.

495
00:26:11,640 --> 00:26:15,080
Speaker 2: Do appreciate it now. Potential TikTok ben would also pave

496
00:26:15,119 --> 00:26:17,800
Speaker 2: the way for metas reels or YouTube shorts to fill

497
00:26:17,800 --> 00:26:21,080
Speaker 2: in entertainment void for one hundred and seventy million Americans,

498
00:26:21,520 --> 00:26:24,280
Speaker 2: entertainment and the online advertising that comes with it. Let's

499
00:26:24,320 --> 00:26:27,280
Speaker 2: bring in Rachel Tipograph, founder and the CEO of Mickmac.

500
00:26:27,320 --> 00:26:30,360
Speaker 2: It's an e commerce marketing platform for multi channel brands.

501
00:26:30,520 --> 00:26:32,240
Speaker 2: Good to have you with us, Rachel, you have some

502
00:26:32,280 --> 00:26:35,840
Speaker 2: incredible data on the micmac platform about where the advertising

503
00:26:35,880 --> 00:26:39,640
Speaker 2: money is leaving to go to TikTok Let's start there

504
00:26:39,680 --> 00:26:42,359
Speaker 2: for context. Yeah, who's losing money as a result of

505
00:26:42,359 --> 00:26:43,679
Speaker 2: TikTok's growing popularity.

506
00:26:43,800 --> 00:26:44,399
Speaker 3: Absolutely.

507
00:26:44,560 --> 00:26:47,000
Speaker 11: My company, Mick Mac works with over two thousand of

508
00:26:47,000 --> 00:26:49,240
Speaker 11: the biggest brands in the world, and what we've seen

509
00:26:49,320 --> 00:26:51,800
Speaker 11: this year is a two hundred percent year over year

510
00:26:51,840 --> 00:26:54,639
Speaker 11: growth in TikTok. At the same time, we've seen a

511
00:26:54,680 --> 00:26:59,159
Speaker 11: sixty five percent decline in Alphabet. Alphabet for US is

512
00:26:59,280 --> 00:27:03,320
Speaker 11: paid search, it's YouTube, it's DV three sixty everyone else

513
00:27:03,400 --> 00:27:06,200
Speaker 11: is menual compared to this, So if a TikTok ban

514
00:27:06,440 --> 00:27:09,360
Speaker 11: were to occur, you can believe that Alphabet is going

515
00:27:09,400 --> 00:27:12,679
Speaker 11: to see big regains in brand advertising traffic.

516
00:27:13,240 --> 00:27:16,000
Speaker 3: It's interesting. I mean, I'm speaking from personal experience when

517
00:27:16,040 --> 00:27:18,240
Speaker 3: I talk about TikTok shop. I actually used it for

518
00:27:18,320 --> 00:27:21,560
Speaker 3: holiday shopping, which I wasn't expecting to. Do you think

519
00:27:21,600 --> 00:27:25,720
Speaker 3: about TikTok potentially being banned. That would, theoretically, as to mention,

520
00:27:25,880 --> 00:27:29,720
Speaker 3: be a benefit for YouTube shorts for of course metas

521
00:27:30,000 --> 00:27:32,600
Speaker 3: reels as well. But when it comes to the actual

522
00:27:32,680 --> 00:27:36,000
Speaker 3: e commerce spit do they have the same infrastructure and

523
00:27:36,119 --> 00:27:38,439
Speaker 3: ease of use as you have on a TikTok shop.

524
00:27:38,760 --> 00:27:41,879
Speaker 11: It's interesting about TikTok TikTok has the power of television

525
00:27:42,119 --> 00:27:45,040
Speaker 11: with the backbone of direct response advertising, so you can

526
00:27:45,080 --> 00:27:48,560
Speaker 11: build brand and drive conversion all at once. That being said,

527
00:27:48,640 --> 00:27:51,040
Speaker 11: when it comes to bottom of the funnel, I want

528
00:27:51,040 --> 00:27:54,119
Speaker 11: to drive sales advertising. The two best places to do

529
00:27:54,160 --> 00:27:58,720
Speaker 11: it today still are alphabet meaning paid search, and meta.

530
00:27:59,480 --> 00:28:02,200
Speaker 11: And so if this were to happen, I still believe

531
00:28:02,200 --> 00:28:05,080
Speaker 11: you're gonna see a massive shift back to alphabet, a

532
00:28:05,080 --> 00:28:07,680
Speaker 11: little bit back to meta. But in terms of TikTok,

533
00:28:07,720 --> 00:28:10,480
Speaker 11: it has become the fourth biggest marketplace in the US.

534
00:28:10,920 --> 00:28:14,560
Speaker 11: So who's gonna gain from marketplace sales. It's gonna be Amazon,

535
00:28:14,680 --> 00:28:17,240
Speaker 11: it's gonna be Walmart, it's gonna be eBay, it's gonna

536
00:28:17,240 --> 00:28:20,159
Speaker 11: be Temu. So there's gonna be a lot of companies

537
00:28:20,200 --> 00:28:23,720
Speaker 11: to gain in this disruptive shift. If a TikTok band were.

538
00:28:23,600 --> 00:28:26,879
Speaker 2: To occur, Rachel, who do you think or what should

539
00:28:26,880 --> 00:28:29,600
Speaker 2: the companies that our clients of yours be doing to

540
00:28:29,640 --> 00:28:31,720
Speaker 2: prepare for a possible ban? How should they be changing

541
00:28:31,720 --> 00:28:32,760
Speaker 2: the way they're looking at things.

542
00:28:33,240 --> 00:28:35,600
Speaker 11: I believe first of all that a band is going

543
00:28:35,640 --> 00:28:37,680
Speaker 11: to be delayed. I think that this is a hot

544
00:28:37,800 --> 00:28:40,840
Speaker 11: opportunity for the Supreme Court and Trump. That's my hot

545
00:28:40,840 --> 00:28:44,720
Speaker 11: take as Rachel. But in terms of my customers, I'm

546
00:28:44,760 --> 00:28:46,760
Speaker 11: working with the biggest brands in the world. They're used

547
00:28:46,800 --> 00:28:50,040
Speaker 11: to this. When Elon Musk took ownership of Twitter now X,

548
00:28:50,320 --> 00:28:53,560
Speaker 11: we saw x traffic go to zero. What did they do?

549
00:28:53,640 --> 00:28:57,120
Speaker 11: They just reallocated spend overnight. It's not the big brands

550
00:28:57,160 --> 00:29:00,160
Speaker 11: to be worried about. It's the small medium businesses that

551
00:29:00,240 --> 00:29:03,920
Speaker 11: are heavily dependent on TikTok and the creators. Some people

552
00:29:04,040 --> 00:29:07,360
Speaker 11: rely one hundred percent on TikTok for their income. The

553
00:29:07,400 --> 00:29:10,320
Speaker 11: big brands will be resilient. The small businesses are the

554
00:29:10,360 --> 00:29:12,479
Speaker 11: ones who are going to experience tough times.

555
00:29:12,800 --> 00:29:14,880
Speaker 3: And Rachel, we only have about thirty seconds, but you

556
00:29:14,920 --> 00:29:17,440
Speaker 3: mentioned some of the beneficiaries here. Of course, the Amazon's,

557
00:29:17,480 --> 00:29:21,080
Speaker 3: the alphabets of the world. What about Ets? What about eBay?

558
00:29:21,200 --> 00:29:24,640
Speaker 3: Some of these marketplaces that have been kind of left behind.

559
00:29:24,840 --> 00:29:27,040
Speaker 11: Yeah, there's going to be a shift back to seeing

560
00:29:27,080 --> 00:29:30,560
Speaker 11: sales in places like eBay and ets and Tamu. But

561
00:29:30,720 --> 00:29:34,800
Speaker 11: Walmart and Amazon are huge players now in three P marketplaces.

562
00:29:35,240 --> 00:29:36,920
Speaker 11: All of these players will see gains.

563
00:29:37,560 --> 00:29:40,480
Speaker 3: All right, Rachel, really appreciate you taking the trip to

564
00:29:40,480 --> 00:29:42,360
Speaker 3: New York. Of course, that is Nick mac founder and

565
00:29:42,440 --> 00:29:46,080
Speaker 3: CEO Rachel Tipograph, And that does it for this edition

566
00:29:46,160 --> 00:29:49,120
Speaker 3: of Bloomberg Technology. I believe we'll both be back tomorrow.

567
00:29:49,200 --> 00:29:51,200
Speaker 2: Hez a treat. If they'll have us, we'll be back.

568
00:29:51,280 --> 00:29:53,600
Speaker 2: Don't forget to check out our podcast though. In the meantime,

569
00:29:53,760 --> 00:29:55,440
Speaker 2: you can find her on the terminal as well as

570
00:29:55,440 --> 00:29:58,880
Speaker 2: online at Apple, Spotify, and iHeart this is Bloomberg.

571
00:30:00,440 --> 00:30:10,400
Speaker 5: Then Quick, then rectal, Quick and

572
00:30:16,120 --> 00:30:16,400
Speaker 2: Quick