Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from San Francisco. This is Bloomberg Technology, coming up,
Speaker 2: not off the hook. President Trump says tech tariffs are
Speaker 2: coming for electronics, saying the reprieve was only temporary, plus
Speaker 2: a potential breakup Meta faces the FTC, which says the
Speaker 2: tech giant is a monopoly for owning Instagram and WhatsApp,
Speaker 2: and an all female crew defying gravity. We bring you
Speaker 2: the details of Blue Origins historical space mission. We also
Speaker 2: have some breaking news crossing the Bloomberg terminal, and it
Speaker 2: comes from the New York FED who have published and
Speaker 2: released their March survey of consumer expectations. The main headline
Speaker 2: one year US inflation expectations rising to three point six
Speaker 2: percent from three point one percent in the month of March.
Speaker 2: But there's also a feeling here that unemployment expectations are
Speaker 2: also moving higher, and that we could see unemployment move
Speaker 2: to a level jumping four point six percent according to
Speaker 2: that survey, to early pandemic levels. A lot to pack
Speaker 2: into this show. Let's get out to Bloomberg's Ryan Vastelica,
Speaker 2: who's across the technology sector for US. Okay, a lot
Speaker 2: of information over the weekend. Right now, those big, big
Speaker 2: tariff numbers don't apply to electronics, but tariffs are coming.
Speaker 2: What are you seeing in tech shares this morning? Hey,
Speaker 2: good morning.
Speaker 3: So right now we are seeing a pretty broad based
Speaker 3: rally companies like Apple, EhP, the hardware side of things,
Speaker 3: the chip side of things, either, I'll do them pretty
Speaker 3: well so far today, it seems like people are interpreting
Speaker 3: this as maybe at least a step in the right direction,
Speaker 3: perhaps a softer stance after some of the hardline numbers
Speaker 3: that really send stocks reeling, you know, previous couple of days.
Speaker 2: What's interesting, We're just showing shares of Apple up three
Speaker 2: point seven percent, not as high as they were and
Speaker 2: perhaps the pre market, but one of the names we
Speaker 2: focused on, wool Street, is still treading water. Right Ryan,
Speaker 2: I'm thinking about profit expectations and basically we're kind of stuck.
Speaker 2: No one is adjusting their forecasts for how these companies
Speaker 2: are going to be impacted going forward.
Speaker 3: What do you say, Yeah, absolutely so, this is a
Speaker 3: major major issue. Especially as people start to consider maybe
Speaker 3: whether these stocks look attractive following how much they've come down.
Speaker 3: So far, we haven't seen analysts really cut their estimates
Speaker 3: too dramatically on Apple, Nvidia or the other check names,
Speaker 3: or you know, the tech sector in general. That suggests
Speaker 3: that even though these stocks have come down quite a bit,
Speaker 3: their pes may not be as attractive as they seem
Speaker 3: if it turns out the E and the PE ratio
Speaker 3: is sort of artificially high as it stands right now.
Speaker 2: So this is something we're going to be watching, especially as.
Speaker 3: We get into earning season, any kind of commentary on
Speaker 3: what to expect them by the remainder of the year.
Speaker 3: You know, we haven't yet seen whether companies are going
Speaker 3: to be issuing forecasts at the rate they have in
Speaker 3: the past. Some companies have pulled their forecast is given
Speaker 3: the uncertain environment. So there's still a lot of questions
Speaker 3: out there about what we could expect. That puts the
Speaker 3: idea of what fair value is into question, and that's
Speaker 3: why we're seeing a lot of you know, people waiting
Speaker 3: to see what analysts are doing and what estimates look
Speaker 3: like after a month or so.
Speaker 2: There's a lot of people that want technology companies to
Speaker 2: see steep revisions in their guidance to feel comfortable. There
Speaker 2: are lots of people who say they don't care. Bloomers.
Speaker 2: Brian Vassenica busy couple of weeks for you and I
Speaker 2: coming up. Here's what President Trump had to say about
Speaker 2: tariff's yesterday. He was speaking on Air Force One.
Speaker 4: Well, that's going to be an anspert soon and we'll
Speaker 4: we'll be discussing it.
Speaker 2: But we'll also talk to companies.
Speaker 5: You know, you have to show a certain flexibility, so
Speaker 5: such products might lose flexibility some products for some products.
Speaker 2: Yeah, maybe we're j are now by IDC's Ryan Reef,
Speaker 2: Group vice President for the company's worldwide Device Tracker Suite,
Speaker 2: which of course includes phones, tablets, wearables, so much more so.
Speaker 2: The state of play is actually not clear. Right Friday night,
Speaker 2: we kind of believed it was a reprieve of consumer
Speaker 2: electronics in particular not being subject to the one hundred
Speaker 2: and twenty five percent level tariff. By Sunday you have
Speaker 2: the administration saying it is not a pause or a reprieve.
Speaker 2: It's just that we will have electronic specific tariffs to come.
Speaker 2: When you got to your desk, this morning. Where do
Speaker 2: you think that we stood.
Speaker 5: I think we said that personally in my opinion is
Speaker 5: I think this was part of the master plan. It's
Speaker 5: hard to actually know if that will actually be the
Speaker 5: or was the case, but I think, you know, I
Speaker 5: think generally the at least on the tech aspect of
Speaker 5: these tariffs that we've all seen and announced on April second,
Speaker 5: there was no way that the economy was going to
Speaker 5: sustain around these, really from the US side, but really
Speaker 5: both sides, I think if you really boil it down,
Speaker 5: so I think many were expecting this. That was just
Speaker 5: discussed on previous interviews that you guys have had today.
Speaker 5: But I think now it sort of comes back to
Speaker 5: actually the previous Ryan that from your team that you
Speaker 5: just had on made a good point, right. I think
Speaker 5: we're not seeing supply chains move that much. There's Ben Pullan.
Speaker 5: We expect there's going to be a lot more just
Speaker 5: to get done what you can just in case it's
Speaker 5: a Q two thing. But even from the the the
Speaker 5: imamless side of the street, you know, it seems like
Speaker 5: everyone's kind of holding ground because of the uncertainty across
Speaker 5: the board.
Speaker 2: You published some really interesting data from IDC this morning
Speaker 2: on the smartphone market in the first quarter, and this
Speaker 2: is the market share figures, right, And this is why
Speaker 2: we keep focusing on Apple in particular. You see that
Speaker 2: after you know, Samsung single biggest player after Samsung, but
Speaker 2: generally the market grew one point five percent in the
Speaker 2: first three months of this year. I'm seeing a lot
Speaker 2: of evidence that there was some front running because people
Speaker 2: knew towns were coming. How much did that factor into
Speaker 2: your research?
Speaker 5: There's definitely a play of it into the numbers being
Speaker 5: you know, I guess growth in the first quarter and
Speaker 5: so forth, but I don't know that it was as
Speaker 5: drastic as what we sort of saw some media headlines
Speaker 5: towards the end of March. What we're seeing is a
Speaker 5: lot of that activity works now it's coming to fruition,
Speaker 5: especially with the pause on tech. So there's really two
Speaker 5: ways to think about this. The supply side understands what
Speaker 5: they're up against day to day, hour to hour, right,
Speaker 5: you know, there's either a tariff on or off. If
Speaker 5: it's off, you make a decision of do you want
Speaker 5: to just speed up things to try to produce, build
Speaker 5: and ship. The consumer side is not that sort of
Speaker 5: straightforward because generally, I think what we the industry is
Speaker 5: looking at, we're certainly looking at, is does all of
Speaker 5: this uncertainty that's consistent like basically owning the news, does
Speaker 5: that just overall slow down economic demand? Not tech related,
Speaker 5: but just in general, we believe it does. I think
Speaker 5: that's also a factor that these OEMs Apple and who
Speaker 5: have to build in you don't want to up too
Speaker 5: much in and they haven't sit there that people aren't
Speaker 5: willing to buy because they're concerned.
Speaker 2: Ran you just said the supply side does know what's
Speaker 2: going on? You really think that, well, you know, let's
Speaker 2: take Apple as a case study. Right The reporting from
Speaker 2: Mark German is that the strategy right now in the
Speaker 2: case of the iPhone is prioritize iPhones built in India
Speaker 2: move them to the United States. I think in India
Speaker 2: they do about thirty million handsets a year. That's nothing
Speaker 2: in the scheme of things of the overall production. Given
Speaker 2: that most of those iPhones go to a big market
Speaker 2: in America, do you really think that they have a
Speaker 2: plan to adjust and that they understand what the administration
Speaker 2: is doing with electronics tariffs.
Speaker 5: I don't think that they are guesstimating the plan. I
Speaker 5: think that some companies, this is speculation, Just be very clear,
Speaker 5: would you know, either have some discussions that have been
Speaker 5: ongoing since you know, the election prior to that. That's
Speaker 5: just what you know, big companies do every election year.
Speaker 5: But I would think that they were very focused on
Speaker 5: terrorists because that's what this administration ran on. And I
Speaker 5: don't think that they know every detail, but I would
Speaker 5: assume that some of these big companies were either forewarned
Speaker 5: or you'll have some heads up, but maybe not. And
Speaker 5: I think that that the India piece keeps coming up
Speaker 5: with iPhone and I think is very interesting, no question
Speaker 5: in my mind. Prior to you know, April second and
Speaker 5: even this election, the plan was to ramp up more
Speaker 5: towards the end of a set, like you know, more
Speaker 5: assembly and manufacturing India. That's been pretty well disclosed. But
Speaker 5: whether or not this shifts things that quickly to be
Speaker 5: able to feed the US market, I'm a little bit
Speaker 5: more on the skeptical side of that, But I think
Speaker 5: that these these sort of pause or exemptions, whatever you
Speaker 5: want to call them, on China, that's going to be
Speaker 5: the focus. You're trying to build as much where it's
Speaker 5: most efficient in the product lines you.
Speaker 2: Ned Ryan Reeth for d C with some timely data,
Speaker 2: often more than a decade since perch seeing Instagram and WhatsApp.
Speaker 2: Meta is facing a landmark trial by the FTC alleging
Speaker 2: it made quote killer acquisitions that stifle competition for more
Speaker 2: blombergs Riley Griffin joins us on set. We're underway. What's
Speaker 2: the latest headlines out of DC.
Speaker 6: We have heard that introductory remarks have begun and the
Speaker 6: FTC is laying out a case in which it's alleging
Speaker 6: that Meta engage in a buy or bury strategy, squashing
Speaker 6: the competition and ultimately degrading the quality of the apps
Speaker 6: that Meta now aren't.
Speaker 2: We're going to point out on what you just said
Speaker 2: the headlines emerging. This is a behind closed doors proceedings.
Speaker 2: So the counter argument from Meta is pretty straightforward. Actually,
Speaker 2: let's bring it up a quote from the chief Legal
Speaker 2: Council at Meta that wrote over the weekend. But basically
Speaker 2: they're pointing out that how can you have a monopoly
Speaker 2: in a market where other players have very similar numbers
Speaker 2: to their own, citing TikTok and YouTube in particular, and
Speaker 2: arguing Meta has a less than thirty percent market share
Speaker 2: in those markets.
Speaker 6: It's an amazing argument, in part because the FDC has
Speaker 6: centered this around Snap and Meta is saying anybody with
Speaker 6: a kid at home knows that TikTok is a great
Speaker 6: competitor to Instagram. What I find so interesting about this
Speaker 6: ed is that one of Meta's reputational weaknesses over the
Speaker 6: years has been that it copies its competitors, and here
Speaker 6: in this case, Meta's legal team is actually using that
Speaker 6: to its advantage.
Speaker 2: It's going to go on and on, and we will
Speaker 2: cover it throughout the week. Riley Griffin, thank you very much.
Speaker 2: Let's get more on Meta's historic trial. William Kovacic, George
Speaker 2: Washington University Law School, Global Competition Professor of Law and Policy,
Speaker 2: joins us now And even before the proceedings got underway
Speaker 2: this morning. This morning, William, the chair of the FTC,
Speaker 2: gave the news to an interview to Fox Business and
Speaker 2: basically came out strongly, we see Meta as monopoly. What
Speaker 2: do you make of that? The timing of that comment
Speaker 2: and the timing of the interview.
Speaker 7: I think he's trying to underscore the commitment of the
Speaker 7: Commission to carry this case forward. There have been lots
Speaker 7: of questions raised about whether the interest of the White
Speaker 7: House and the case, the lobbying by Meta of the
Speaker 7: White House might lead to a settlement some action that
Speaker 7: would sell the case out. And I think what the
Speaker 7: Chair is trying to do in a variety of interviews,
Speaker 7: including this morning, is to say, in his words, we're
Speaker 7: keeping our foot to the gas. We're not going to
Speaker 7: back down.
Speaker 2: I should point out for an audience, you're a former
Speaker 2: member of the FTC and you chair the agency between
Speaker 2: March two thousand and eight March two thousand and nine.
Speaker 2: You and I, I feel like over the years have
Speaker 2: discussed the threat of an antitrust action against Meta and
Speaker 2: others many times, and so I ask, how does this one,
Speaker 2: this trial compare and does it have teeth? This does
Speaker 2: have teeth.
Speaker 7: There are formidable obstacles in the path of the FTC,
Speaker 7: prevailing obstacles that Judge Bozburg, who's trying the case, is
Speaker 7: mentioned before. But the requested relief is deadly serious. The
Speaker 7: divested sure of both Instagram and WhatsApp. The FTC has
Speaker 7: marshaled a good body of evidence, it seems that comes
Speaker 7: in many ways right out of the files of Meta
Speaker 7: itself the words of its senior leadership. So it's going
Speaker 7: to try the case in many ways by showing that
Speaker 7: Meta itself believed that it had market power and it
Speaker 7: believed that the acquisitions would suppress competition. Now Meta has
Speaker 7: some good responses to this, as Riley just mentioned, but
Speaker 7: this is a This is a deadly serious exercise.
Speaker 8: For the company.
Speaker 7: And if the judge finds liability and takes the remedial
Speaker 7: path that is available to the FTC and to the judge,
Speaker 7: we could see a major divestiture that would affect the
Speaker 7: company dramatically.
Speaker 2: A major divestiture. I mean, I I what are the
Speaker 2: chances of that the odds? How do you even model
Speaker 2: for that in a trial scenario.
Speaker 7: I suppose that if we were looking at a betting
Speaker 7: shop and we were trying to place odds, Meta would
Speaker 7: have an advantage. And the reason for the advantage is
Speaker 7: that it's going to be able to marshal arguments that
Speaker 7: we don't have market power in this market niche that
Speaker 7: the FDC has defined that the FTC can't toss aside TikTok,
Speaker 7: YouTube and x and other social network providers. Uh, and
Speaker 7: that's gonna that's going to be a hard hurdle to
Speaker 7: get over, So I give I give a I give
Speaker 7: a modest advantage to to to Meta in handling the case,
Speaker 7: But a lot of the FDC's evidence is going to
Speaker 7: come right out of its files. We're going to have
Speaker 7: senior executives on the stand giving us a really an
Speaker 7: unprecedented look at how the company operates, and that's what
Speaker 7: always makes trials risky and dangerous for defendants.
Speaker 2: We're just showing again Jennifer Neustad, Meta's chief legal officer's
Speaker 2: argument over the weekend, which is exactly as you explain.
Speaker 2: Look at the traffic and audience size of TikTok and
Speaker 2: YouTube and their argument metas argument that they have a
Speaker 2: less than thirty percent market share. Could we just go
Speaker 2: back to where we started, which was the FTC chair
Speaker 2: on Fox Business this morning. Ahead of the election of
Speaker 2: President Trump, a lot of people looked at jd Vance
Speaker 2: and his attitude towards big tech. It does seem in
Speaker 2: the early stages that President Trump listens to jd Vance
Speaker 2: about oversight of big tech in the antitrust context. What
Speaker 2: do you make of that?
Speaker 7: I think he is listening and perhaps there's a predisposition
Speaker 7: to listen and listen favorably, because notice the number of
Speaker 7: occasions on which the President has suggested that were it
Speaker 7: not for decisions made by Meta by Google in twenty twenty,
Speaker 7: that he would have gained reelection. So I don't think
Speaker 7: he's disposed in a general way to be fond of
Speaker 7: these companies. And I think he has accepted many of
Speaker 7: the arguments that the Vice president has offered to him,
Speaker 7: So he has there are a lot of reasons for
Speaker 7: which he might be very wary about taking a settlement
Speaker 7: that would be good for Meta here. I suspect he'll listen,
Speaker 7: but he's not ordinarily disposed to think that they are
Speaker 7: a particularly good actor.
Speaker 2: William Cove Church of the George Washington University Law School,
Speaker 2: and of course, former f TC chair himself, thank you.
Speaker 2: Cryptocurrency platform Cracking is expanding beyond digital currencies by now
Speaker 2: offering US equity and ETF trading. Joining US now Cracking
Speaker 2: co CEO Argent Setti along with my mate Bloombau Shnali
Speaker 2: Bassectionali take it away Rgin.
Speaker 8: Thanks for joining us. Of course, this is a big
Speaker 8: move by kracking to get into traditional stocks, and my
Speaker 8: question is how much is this a move to take
Speaker 8: on Robinhood Coinbase in a much larger way in terms
Speaker 8: of providing a one stop shop for clients.
Speaker 9: Yeah. So if you take a step back on the market,
Speaker 9: I think a lot of people think of crypto and
Speaker 9: traditional equities and traditional finance differently than we don't, which
Speaker 9: is our core customer base is professional traders and they
Speaker 9: exist all over the world very similarly in the way
Speaker 9: in which they think, eat and trade, and so Coinbase
Speaker 9: we think, and Robinhood in terms of prosumers and people
Speaker 9: getting onboard and into crypto. And then you have you know,
Speaker 9: other companies similar to Interactive Brokers that focus on professional
Speaker 9: trading and day trading. So for us, our goal has
Speaker 9: always been to be a leader in crypto assets, but
Speaker 9: also be a leader in the way in which our
Speaker 9: professional trading and customers and clients want to trade, may
Speaker 9: that be long term or short term, and so this
Speaker 9: is a this is a part of the path for
Speaker 9: us to continue to do that. In addition, we you know,
Speaker 9: we went to an agreement to acquire a company called
Speaker 9: Ninja Trader that focuses on professional trading for retail derivatives.
Speaker 9: So what you see us doing is just go across
Speaker 9: a wider range of asset classes, including equities and commodities.
Speaker 8: What does it mean for you financially Because of course,
Speaker 8: when you think about krack and, a lot of investors
Speaker 8: are awaiting highly anticipated one day IPO, what can you
Speaker 8: tell us about that path and how this helps.
Speaker 2: You get there?
Speaker 9: So, the most important thing for krack And is its clients,
Speaker 9: and what our clients care about is transparency, security and
Speaker 9: counterparty risk. And so as we continue to expand globally,
Speaker 9: not just here in the United States, but Europe, UK, Canada,
Speaker 9: Australia and now and to Asia, the thing that our
Speaker 9: clients care about most is that counterparty risk and regulatory clarity,
Speaker 9: and so what we're seeing is more regulatory clarity and
Speaker 9: eventually market stability in the crypto ecosystem and so on.
Speaker 9: Behalf of our clients will always want to be transparent
Speaker 9: with our financials, what we're doing, proof of reserves, etc.
Speaker 9: And if we do decide to go public, it'll be
Speaker 9: a journey along the way.
Speaker 2: Timing is everything. Oh, jenn, I found it so interesting
Speaker 2: to see your release because if you think about the
Speaker 2: business model right of Robinhood or a coinbase, they very
Speaker 2: much focus on volatility. Volatility drives volumes and transaction. How
Speaker 2: much is that a factor for you in this initiative.
Speaker 9: So it's look, if you're thinking about their clients, then
Speaker 9: you are thinking about all the milestones along the way.
Speaker 9: That is the most important. So, as I mentioned before,
Speaker 9: being transparent with our financials, being transparent with our reserves
Speaker 9: and their deposits, being transparent about what the products are,
Speaker 9: making sure that our exchange is fair right, there's no rebates,
Speaker 9: there's no discounts to the way in which all of
Speaker 9: our customers and clients interact with our exchange. That's what's
Speaker 9: most important. Volatility in the market is volatility in the market.
Speaker 9: That's always going to be the case. I care more
Speaker 9: about the slope and the long term growth for what
Speaker 9: access to capital markets and debt markets give our customers
Speaker 9: more than anything else.
Speaker 2: Rogen elsewhere in your portfolio, Empire, you were an investor
Speaker 2: in Xai and post Xai and x you know, there's
Speaker 2: clearly a long term view to look at payments and
Speaker 2: look at other financial service offerings that could you see
Speaker 2: working with Linda and the team on something like that.
Speaker 9: Yeah, I think what's really important is where our clients
Speaker 9: and customers are so today you can think of us
Speaker 9: as trading, but you know there's also products for savings
Speaker 9: in yield depending on the type of customer. And then
Speaker 9: eventually you can think about payments, payments and remittances in
Speaker 9: order to facilitate you know, peer to peer commerce or
Speaker 9: business to peer commerce.
Speaker 2: So again, those will be journeys along the.
Speaker 9: Way, which is we've created the platform and the infrastructure
Speaker 9: to be able to provide this, and we're already partnering.
Speaker 2: With folks to do that today.
Speaker 9: So almost you know, ten percent of our transactions today
Speaker 9: are and through our experiences. It's through people connecting through
Speaker 9: our API argent.
Speaker 8: One question I have as a former private investor in
Speaker 8: so many ways, you're very familiar with the xaxai story,
Speaker 8: but what about the potential for tokenization to make assets
Speaker 8: like this more public? How quickly can you get there?
Speaker 9: Technologically we can get there tomorrow, It's more about regulatory clarity,
Speaker 9: What is the legal and client relationship. How do you
Speaker 9: think about which assets real world assets that we talk
Speaker 9: about bringing on into crypto and making it programmable. So
Speaker 9: what I'd say is that what we're doing now, given
Speaker 9: that the future of training is pretty much borderless. It's
Speaker 9: around the clock, it's twenty four to seven in crypto
Speaker 9: rails has allowed that is that this lays the ground
Speaker 9: with groundwork not just for myself but the other exchanges
Speaker 9: worldwide to be able to provide equities and digitize them
Speaker 9: to become more programmable. So tokenization of equities is a
Speaker 9: term you hear a lot about. I think when you
Speaker 9: think about global liquidity pools and global access to capital
Speaker 9: and then demand for these assets no matter where they
Speaker 9: might be in the US or Europe, I actually think
Speaker 9: this lays a great groundwork for companies to start thinking
Speaker 9: about how they should list who they should work with
Speaker 9: and where those global equidity pools come from.
Speaker 2: Cracking co CEO Argent SETI greats have you back on
Speaker 2: the program and bloom Begstell's thank you for bringing it
Speaker 2: up to us. Now coming up on the show, Electronics
Speaker 2: expecting a temporary reprieve from tariffs, but President Trump says
Speaker 2: there are more tariffs on the way. We'll have more
Speaker 2: of that. Next. Welcome back to Bloomberg Technology. Ed Ludlow
Speaker 2: Here in San Francisco Financial Markets, the story is technology
Speaker 2: focus indexes really hitting session lows. Look at the NASDAK
Speaker 2: one hundred or for example, the Philadelphia Semiconductor Index, a
Speaker 2: temporary pause or reprieve from those high level tariffs on China,
Speaker 2: making people think things might not be so bad for
Speaker 2: the electronics sectors. However, there is a pledge, particularly in
Speaker 2: the semis case, that a bucket of tariffs specific to
Speaker 2: semiconductors is coming. We also look at Apple as a
Speaker 2: case study. Right Apple has been so interesting to track
Speaker 2: over the last six days based on how it's training
Speaker 2: on these headlines. So it's the biggest points drivers to
Speaker 2: the upside on the NASDAK one hundred right now. But
Speaker 2: if they're is a specific bucket coming for electronics, there's
Speaker 2: still the questions about what it will do. The administration
Speaker 2: wants on shoring of manufacturing. Apple seems focused on shifting
Speaker 2: more to India. Let's get back to our top story.
Speaker 2: Companies like Apple and Nvidia appearing to score a major
Speaker 2: win only for the White House, so then rain on
Speaker 2: their parade. President Trump posting on true Socials saying quote,
Speaker 2: there was no tariff exception which was announced on Friday.
Speaker 2: These products are subject to the existing twenty percent fentanyl
Speaker 2: tariffs and they are just moving to a different tariff bucket.
Speaker 2: Bluemis KD Lions joins US from Washington, d C. I mean,
Speaker 2: for me, the main learning of all of the last
Speaker 2: few days is that actually the White House is starting
Speaker 2: to think about how it defines semiconductors and defines electronics,
Speaker 2: and something very specific is coming.
Speaker 10: Yeah, that's what the White House is saying. Well, the
Speaker 10: President pushback on the idea that there's exemptions as being
Speaker 10: fake news.
Speaker 5: Ed.
Speaker 10: I would note that the White House statement literally said
Speaker 10: clarification of exemption which comply to hundreds of billion dollars
Speaker 10: in consumer electronics that the US imports. But what the
Speaker 10: President and others, including the Commerce Secretary Howard Lutnik, are
Speaker 10: arguing is that this does not mean this is a
Speaker 10: free pass forever. This really is just about procedure. Yes,
Speaker 10: these goods for now will not be subject to the
Speaker 10: ten percent global baseline tariff or one hundred and twenty
Speaker 10: five percent reciprocal tariff rate on all Chinese imports, but
Speaker 10: they are still subject to that twenty percent fentanyl tariff
Speaker 10: rate on everything that comes out of China, and they
Speaker 10: will be subject to semiconductor teriffs that President Trump has
Speaker 10: long been promising that just will be done. He refers
Speaker 10: to in a different bucket under different authority, it would
Speaker 10: be sectioned two thirty two. Realistically, that they're looking at
Speaker 10: which factors in national security parts of the equation, and
Speaker 10: the President on True Social over the weekend suggested it's
Speaker 10: not just semi conductors, but the whole electronic supply chain
Speaker 10: that they are looking at through this investigation. And while
Speaker 10: he has been talking about this for some time, he
Speaker 10: did indicate that this is coming sooner rather than later,
Speaker 10: suggesting to reporters on Air Force one that he could
Speaker 10: have a rate of the semicond doctor tariff announced within
Speaker 10: the week and that the tariffs themselves will be applied
Speaker 10: in the not so distant future. One thing I would
Speaker 10: note here that does potentially provide a window of opportunity
Speaker 10: or ability to maneuver for companies, if you will, like Apple,
Speaker 10: is when the President was asked by a reporter yesterday
Speaker 10: if there would be exemptions for things like iPhones, he
Speaker 10: suggested that he can't be rigid with this, that there
Speaker 10: has to be some degree of flexibility. It's just not
Speaker 10: entirely clear how he's defining flexibility or where that so
Speaker 10: called flexibility, might apply it inverse.
Speaker 2: Katie Lines in Washington, d C. Thank you very much.
Speaker 2: Let's broaden the conversation to include financial markets with city
Speaker 2: Index senior around this. Fiona Cincota, Okay, you got into
Speaker 2: your office this morning, you're at your desk, You looked
Speaker 2: at the commentary from the president, and then you looked
Speaker 2: at the documents from Friday night for exemptions. Where do
Speaker 2: you think tariff policy stands for technology? Good morning?
Speaker 11: I would say about as clear as mud, to be honest.
Speaker 11: You know, this just really highlighting the fact that there
Speaker 11: doesn't seem to be really much clarity at all over
Speaker 11: what the Trump administration is doing. Where we're at what
Speaker 11: might come tomorrow, And this is just making it extremely
Speaker 11: difficult for our clients to trade. It's making extremely difficult
Speaker 11: for businesses to really have any level of planning still
Speaker 11: over you know, where they should be moving manufacturing to,
Speaker 11: from what rate, at what speed? When's this happening? I mean,
Speaker 11: it just feels like the further we moved through these
Speaker 11: tariff announcements, the more uncertainty there actually is over what's happening,
Speaker 11: whether they'll be walked back, whether they'll be paused and
Speaker 11: I think that's being reflected in the markets really quite
Speaker 11: quite dramatically. Obviously, we saw those big swings across last week,
Speaker 11: but even today, you know, we started off with the
Speaker 11: futures considerably higher for the US tech stocks than what
Speaker 11: they've opened at. Obviously we have seen some bound are
Speaker 11: strong rebound in Apple, but I think, you know, given
Speaker 11: the fact that that company has lost around a fig
Speaker 11: of its value over the past few weeks, and the
Speaker 11: rebound is still relatively smaller, and that again just highlights
Speaker 11: that uncertainty.
Speaker 2: You know. This morning, in Video posted a blog explaining
Speaker 2: that they're going to for the first time build their
Speaker 2: AI supercomputer basically a server rack unit one in America.
Speaker 2: And that's a plan that's happening largely in Texas over
Speaker 2: the next four years. When you see a headline like that,
Speaker 2: how much do you think it is a direct response
Speaker 2: to the policy actions of this administration so far? Oh?
Speaker 11: Completely, I mean, I think this is absolutely a direct response.
Speaker 11: I mean, this is what Trump's sort of aiming for.
Speaker 11: And it's really interesting as well, because I mean it
Speaker 11: is moving that manufacturing back to the US, which is
Speaker 11: what Trump has you know, pledged for across his campaign.
Speaker 11: And since taking and moving into the White House. What
Speaker 11: I think is interesting here is what this will mean
Speaker 11: for cost Obviously, I think it's you know, much more.
Speaker 11: There are greater costs manufacturing in the US and perhaps
Speaker 11: other parts of the world, or there were indeed before
Speaker 11: these tariffs were being applied. So I mean, this is
Speaker 11: what companies are doing in order to be able to
Speaker 11: keep those costs down as much as possible, but it
Speaker 11: will still result in an increasing costs. And I think,
Speaker 11: you know, when this stuff come to consumer electronics particularly,
Speaker 11: that's obviously when we're going to see that hitting the inflation,
Speaker 11: We're going to see costs going up. But even with
Speaker 11: these supercomputers, it's going to be affecting the costs involved.
Speaker 2: So as of right this moment, and if you're a
Speaker 2: technology investor, how do you play it? Do you stay
Speaker 2: away from a name like Apple or others where there
Speaker 2: is more of a direct read through for the pass
Speaker 2: on of those costs at the consumer level?
Speaker 11: Yeah, you know, I think you know, tech obviously has
Speaker 11: been very much under pressure since the Trump administration starts
Speaker 11: denouncing these tariffs, and that's obviously because of the fact
Speaker 11: that it's a growth stock.
Speaker 2: I think there is.
Speaker 11: Much more potential looking towards value rather than growth right now.
Speaker 11: So I think the tech sector is still quite a
Speaker 11: difficult sector to be focusing in on given the level
Speaker 11: of uncertainty. I think that still exists. Obviously there's uncertainty
Speaker 11: across the board, but I think still more defensive areas
Speaker 11: are going to be benefiting, such as healthcare industrials. Those
Speaker 11: are areas that I would potentially be looking at rather
Speaker 11: than the tech sector, which I think still could potentially
Speaker 11: come under fire quite significantly from the Trump administration.
Speaker 2: City indexing, your analysts be honest and god, thank you
Speaker 2: very much for your time on the show. Now, coming
Speaker 2: up on Bluebog Technology, the first all female flight to
Speaker 2: space has taken off board a Blue Origin rocket and
Speaker 2: come safely back down to Earth. We'll have the details
Speaker 2: of the launch and how it positions Jeff Bezos's rocket company.
Speaker 2: That's coming up next. Also, take a look at some markets. Okay,
Speaker 2: we know where it's session lows, particularly on tech specific
Speaker 2: indices like NASDAQ one hundred. Interesting is the NASDAK Golden
Speaker 2: Dragon China Index. That's a list essentially of the US
Speaker 2: listed ADRs of Chinese technology companies and there is some
Speaker 2: respite for those names as well that have swung with
Speaker 2: a similar volatility to the rest of the tech sector.
Speaker 2: We'll dig into why throughout the week. Stay with us,
Speaker 2: We'll be right back. This has Blienberg Technology Q one.
Speaker 12: Less Lou Shepherd has cleared the tower.
Speaker 2: That was Blue Origins new Shepherd rocket taking off earlier
Speaker 2: today with a star studded crew of six women, including
Speaker 2: Lauren Sanchez, Jeff Bezos's Fionce, Gail King, and Katie Perry Bloomberg.
Speaker 2: Sanna Pashankar is here to tell us more. And you know,
Speaker 2: it was a notable sort of celebrity themed flight. What
Speaker 2: happened and what's the big picture with this one? Sanna?
Speaker 13: Yeah, so it was an all female crew and that
Speaker 13: was the first one since nineteen sixty three when a
Speaker 13: female Soviet cosmonaut went to space herself. So it's really
Speaker 13: the first all female crew with more than one member.
Speaker 2: And yeah, so they went up to space.
Speaker 13: I think they felt a lot of camaraderie among you know,
Speaker 13: being all women and I think being all you know,
Speaker 13: becoming astronauts for the first time. And so I think
Speaker 13: it was you know, a really successful flight. Everything when
Speaker 13: as planned, Everything went smoothly, and many of them mentioned
Speaker 13: that it had really changed them coming back.
Speaker 2: Interesting. Alright, Bloomberg, Saner Pashankar, Great to have you here
Speaker 2: on Bloomberg Technology. Let's get more on why this flight
Speaker 2: matters for the space industry. As an A Zuokoro, Senior
Speaker 2: Fellow at the Harvard Belfa Center and former Assistant Director
Speaker 2: for Space Policy at the White House, back with us
Speaker 2: here on the show, I mean, there are a number
Speaker 2: of ways that we can take this conversation right. The
Speaker 2: way that I think about it is the data that
Speaker 2: prior to today's mission. I think I'm right in saying
Speaker 2: of all the people that have gone to space, only
Speaker 2: fifteen one five percent were female. So what is the
Speaker 2: significance from that standpoint?
Speaker 6: To you?
Speaker 2: As an a.
Speaker 4: This is greatly about American value creation and more innovation
Speaker 4: from the space sector through the launch business. I think
Speaker 4: that what we're seeing here is you're seeing glorigin menting
Speaker 4: itself as a safe and dependent, dependable option to go
Speaker 4: to space as a as a as an option for
Speaker 4: space tourism. The fact that in eleven minutes you can
Speaker 4: zoom past the Carmen line sixty two miles above sea
Speaker 4: level in a fully reusable suborbital rocket that's built for
Speaker 4: humans and come back safely. Is I think a big
Speaker 4: American feet that we need to that we need to
Speaker 4: highlight at the big question is what this means for
Speaker 4: investors in space. Does this mean investors will move further
Speaker 4: into the launch business and support additional flights. Does it
Speaker 4: mean that we will see another one of bees in
Speaker 4: another decade of being you know, making history again or
Speaker 4: will this continue to become a commonplace.
Speaker 2: I get asked a lot about the gap between Blue
Speaker 2: Origin and space X, but the other perspective active of
Speaker 2: the investors I speak to is that it's good to
Speaker 2: have two private sector names that are able to have
Speaker 2: a launch system that's reusable and that are launching with
Speaker 2: greater cadence. How important, though, is it that Blue Origin
Speaker 2: starts to make progress in its other domains outside a
Speaker 2: New Shepherd. I'm talking about New Glen and also its
Speaker 2: engine business.
Speaker 4: And you know there are also in the space station
Speaker 4: business as well. There's right busy companies. So I think
Speaker 4: that it's important that they are able to show successes
Speaker 4: because in the space business as safe successes or all
Speaker 4: that matters it's important to show these results in all
Speaker 4: your businesses, and right now they are doing that, and
Speaker 4: that builds well for the investment community that's watching what
Speaker 4: this does to grow the space asset class.
Speaker 2: Those that are skeptical look at this and say, this
Speaker 2: is a shop window for Jeff Bezos and Blue in
Speaker 2: the sense that it's an all celebrity, well mostly celebrity crew,
Speaker 2: and that to everyday people, this just isn't achievable. That
Speaker 2: you know, it's one hundred and fifty thousand dollars for
Speaker 2: the deposit. We don't know how much a ticket costs,
Speaker 2: because it depends on your relationship with Bezos. What's the
Speaker 2: counter argument, what's the argument on how this progresses and
Speaker 2: advances people's everyday opportunity to go to space. Yeah, the counter.
Speaker 4: Argument is threefold. Actually. The first is it helps the
Speaker 4: engineers with continuous repetition, which means that again they are
Speaker 4: doing this safely, and they are they become more used
Speaker 4: to doing it, so the engines and the systems perform
Speaker 4: better or it becomes more commonplace technically. The second is
Speaker 4: that when you think about the advent of air travel,
Speaker 4: you know it wasn't affordable to everyone and so with
Speaker 4: these repetitions, we hope that the intention is it helps
Speaker 4: to bring down the costs so that you have more
Speaker 4: people able to live space. And then thirdly, I think
Speaker 4: that what this does, and you alluded to this a
Speaker 4: bit with the two options, is it inspires others to
Speaker 4: start more rocket companies in America. It inspires others to
Speaker 4: see this as something that is, you know, something we
Speaker 4: do every day and not once in a decade.
Speaker 2: As an a lean on your experience in office, how
Speaker 2: do you think the White House and the pending NASSA
Speaker 2: administrator would view blues mission this morning?
Speaker 4: I believe that pending ASCID administrator also was on a
Speaker 4: similar flights. So one can't help but be excited that
Speaker 4: this is continuing, that there are more people given access
Speaker 4: to space. And I think that from the White House lens,
Speaker 4: when you see an American company continue to foster the
Speaker 4: innovation that we want to see are coming from American ingenuity,
Speaker 4: but that's a plus. And then thirdly, I think from
Speaker 4: the lens of NASA and even at the White House too,
Speaker 4: you want to see American prominent American leadership, and that's
Speaker 4: what you're seeing here.
Speaker 2: Jeff Bezos has a very similar big picture view of
Speaker 2: the future of space, like Elon Musk wants humankind to
Speaker 2: be multiplanetary species. I think Jeff Bezos talks about living
Speaker 2: and working in space. And you reference the future business
Speaker 2: model that Blue has of the future of international space stations,
Speaker 2: not the International Space Station, but with your experience, do
Speaker 2: you have line of sight to that future from a
Speaker 2: test a launched like such we had today.
Speaker 4: Absolutely. The International Space Station is set to retire in
Speaker 4: about six years, so by twenty thirty we expect that
Speaker 4: to start being retired. And there are a number of
Speaker 4: launch companies, a number of space companies, including a Origin,
Speaker 4: that are working to replace this station. And we're not
Speaker 4: going to see one station because the International Space Station
Speaker 4: is quite large and it's built over a decade, so
Speaker 4: you're going to see multiple options. You might have one
Speaker 4: for pharmaceuticals. You might have a space station for scientific research,
Speaker 4: and another for space tourism, a space hotel, if you will.
Speaker 4: So what you see is the Again, this repetition of
Speaker 4: flying gives a lot of It adds a lot of
Speaker 4: experience and expertise to the teams that are building what
Speaker 4: could be a future space station hotel.
Speaker 2: As an a. It was a acor from the Harvard
Speaker 2: Belfa Center. It's great to have you back on the program. Okay.
Speaker 2: A new story from this morning. Intel will sell a
Speaker 2: fifty one in its programmable chips unit al Terra, to
Speaker 2: silver Lake Management for eight point seventy five billion dollars.
Speaker 2: Is it spins off its non central businesses. The deals
Speaker 2: expected to close in the second half of twenty twenty five.
Speaker 2: Intel bort Alterra ten years ago for seventeen billion dollars.
Speaker 2: It's all part of new Intel CEO Lip Bhutan's strategy
Speaker 2: to divest from non core assets. Okay. Another chip name
Speaker 2: in Video is working to mass produce AI supercomputers that
Speaker 2: are built entirely in the US by late twenty twenty six.
Speaker 2: It's ramping up development of two manufacturing plants in Texas
Speaker 2: and says it will produce a half a trillion dollars
Speaker 2: worth of AI infrastructure in the United States over the
Speaker 2: next four years. Bluemost brody Ford joins me with some
Speaker 2: more details. I think it's really important to be honest
Speaker 2: with the audience about this story because it's it's been
Speaker 2: a multi week thing with in VideA. What do they
Speaker 2: mean by produce half a trillion dollars worth of AI infrastructure, Brody,
Speaker 2: And what we're talking about, I think is assembling this
Speaker 2: system that they called accelerated computing, not just the fabrication
Speaker 2: of key chips. That's a very important point.
Speaker 12: Yeah, I mean, electronics, more than any other good really
Speaker 12: come a bit from everywhere. Right, you buy a component
Speaker 12: from Vietnam, from China and in videos case, I'm not certain,
Speaker 12: but it's coming from all over the world, and likely
Speaker 12: what we're speaking about here is some of that kind
Speaker 12: of later stage manufacturing assembly. In Vidia isn't one hundred
Speaker 12: percent clear in this, but what we know is that
Speaker 12: in recent weeks, in recent months, there's been a lot
Speaker 12: of pressure for large companies, large tech companies to speak
Speaker 12: about how we are investing in the US. If tariffs come,
Speaker 12: supply chain disruptions come, we are ready. And so that's
Speaker 12: kind of what in Vidia's messaging today that they are
Speaker 12: ramping up their production in the US. They will have
Speaker 12: capacity here and they will make up to five hundred
Speaker 12: billion worth of goods here in the US just very quick.
Speaker 2: In Texas. Who the manufacturing partners, Yeah.
Speaker 12: They're pairing up with Fox khn Han how they're in Texas,
Speaker 12: and so I mean essentially they are. You know, it's
Speaker 12: kind of a who's who of the companies that are
Speaker 12: doing manufacturing for Arizona. It's going to be TSMC and
Speaker 12: their big Phoenix campus. Phoenix Campus we've heard a lot about.
Speaker 2: Right, Bloomberg's Brady Ford out of New York City really
Speaker 2: appreciate it. That does it for this edition of Bloomberg Technology.
Speaker 2: And what a start of the week it's been, particularly
Speaker 2: in the markets reaction. A lot of you are listening
Speaker 2: to us as a podcast, so you know exactly where
Speaker 2: you can find it on the Bloomberg terminal as well
Speaker 2: as online on Apple, Spotify, and on iHeart. A lot
Speaker 2: more to come throughout the week, particularly when it comes
Speaker 2: to technology stocks. From San Francisco. This is Bloomberg Technology