Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Caroline Hide.
Speaker 2: And Ed Ludlow live from New York.
Speaker 3: I'm Caroline Hyde and I'm Jackie Devalas in Washington. This
Speaker 3: is Bloomberg Technology coming up.
Speaker 4: The AI sell off continues, with the chip sector under
Speaker 4: pressure after earnings fail to turn the tide. This is
Speaker 4: Chinese AI competition fuels anxiety in the United States, but
Speaker 4: stock gains over in Asia. And President Trump is set
Speaker 4: to meet with some of the biggest US tech leaders
Speaker 4: next week to discuss the trade policy impact US manufacturing
Speaker 4: and much more. But first we've got to check in
Speaker 4: on these markets. They're still in sell off mode. We
Speaker 4: bounce off of our lows for the nawstep, we're still
Speaker 4: off by more than a percent point.
Speaker 2: Then that's that one.
Speaker 4: Hundred dragged lower from a points perspective by in video,
Speaker 4: by Broadcon, by Amazon, And notably, we're on track for
Speaker 4: a third week of declines, the longest losing streak since
Speaker 4: back in August. But I shine like what happened in
Speaker 4: Chinese tech. We're up more than five percent on the
Speaker 4: Hangsang Tech index. We go delve into why with the
Speaker 4: AI impact coming from Ali Barber from ten Cent, move
Speaker 4: on and look at the individual movers that are affecting
Speaker 4: the chip trade here in the United States. In Video
Speaker 4: off by two point four percent, we drag lower on
Speaker 4: a points perspective. Broadcom has its numbers after the bell
Speaker 4: AI still likely to drive growth twenty percent in excess
Speaker 4: of revenue.
Speaker 2: Gains, but we are worried more.
Speaker 4: About whether they can live up to the hype cycle
Speaker 4: that I've been so used to and shake off the
Speaker 4: rest sentiment that has consumed Marvell. Of by seventeen percent,
Speaker 4: they managed to post more than sixty percent revenue growth
Speaker 4: that investors don't care. Blomberg's Bailey Lipschualtz is here for
Speaker 4: why fundamentals ultimately, Bailey don't matter at this moment because
Speaker 4: we are selling what we used to love.
Speaker 5: We're selling what we used to love, and it's causing
Speaker 5: so much concern consternation. You have the tear risk or
Speaker 5: at least the headaches around that. As you mentioned, Marvel
Speaker 5: down more than seventeen percent at one point, the biggest
Speaker 5: intra day decline in about a decade. This is a
Speaker 5: big move for a big stock. All eyes will be
Speaker 5: on Broadcom as you mentioned later this evening, But the
Speaker 5: big question is what does that AI demand look like?
Speaker 5: Can China actually replicate what we're seeing for a much
Speaker 5: cheaper price, and how does that ultimately impact the markets,
Speaker 5: especially in a day or a week that we've been
Speaker 5: seeing with sawing moves on the major exchanges. Based on
Speaker 5: every headline around trade.
Speaker 3: Bailey, it's clear that hardware names here are getting really
Speaker 3: hit hard. What are we seeing on the software side?
Speaker 3: Are they insulated any more than we're seeing for the
Speaker 3: semiconductor stocks?
Speaker 5: Maybe a bit, Jackie, But the big question still is
Speaker 5: what do earnings look like? What does growth look like?
Speaker 5: If you're saying that maybe companies aren't going to have
Speaker 5: to spend as much or maybe they're going to find
Speaker 5: cheaper alternatives, that's obviously going to hit your hardware, your
Speaker 5: semiconductors makers. But the big question if you're a software
Speaker 5: company is how are you going to use cheaper costs
Speaker 5: potentially to improve your offerings and what does that actually mean?
Speaker 5: And the big question at the end of the day
Speaker 5: is what does the valuation actually look like and how
Speaker 5: are you being valued? What is a fair value how
Speaker 5: does that compare to the broader market, and in a
Speaker 5: market that really is driven by seven stocks, if not
Speaker 5: one stock, how does your company fit into that landscape?
Speaker 5: And how can investors appropriately value and allocate resources.
Speaker 3: That's Bloomberg's Biley Lipsheldznthemus for joining us. A series of
Speaker 3: new AI tools from China sparked frenzy trading in the
Speaker 3: nation's stock market, propelling an index of tech companies to
Speaker 3: a multi year high. Bloomberg's Isabell Lee joins us Now
Speaker 3: for more, Isabelle walk us through some of those new
Speaker 3: AI features and the companies in particular that are spurring
Speaker 3: this excitement.
Speaker 6: So we have a lot of news overnight in China,
Speaker 6: we saw ali Baba stock surgeon more than eight percent,
Speaker 6: although it's worth noting that the ADRs right now are
Speaker 6: parent back some of those games. Investors are probably digesting
Speaker 6: some of those news, taking their profits. So Alibab unveiled
Speaker 6: their new open AI source model. It's open source and
Speaker 6: it's marked lea better than the previous one using just
Speaker 6: a fraction of data from deep sks R one employees.
Speaker 6: Ten Cent also unveiled a new open source model, so
Speaker 6: did a company called Kaishaw Technology, and earlier this week
Speaker 6: Managed Ai launched water called General AI Agent. So all
Speaker 6: of this basically has boosted Chinese textures by five point
Speaker 6: four percent of its highest since twenty twenty one. And
Speaker 6: Alabama in particular I want to Highlight has been on
Speaker 6: a tear. It gained some one hundred and fifty three
Speaker 6: dollar billion dollars in market value since it's January low.
Speaker 6: So what does this tell us that the next deep
Speaker 6: seek to disrupt the global AI industry could definitely come
Speaker 6: from China.
Speaker 4: It's extraordinary that Asali Baba has surged, we've lost about
Speaker 4: forty percent of market capitalization for Marvell and the likes
Speaker 4: here in the United States is about when we're thinking
Speaker 4: about these models. They are showing that you can do
Speaker 4: more with less when it comes to data, when it
Speaker 4: also comes to compute power.
Speaker 2: But we didn't hear from Amazon, from.
Speaker 4: Microsoft, from the hyperscals that they were pulling back on
Speaker 4: investment in general to AI infrastructure.
Speaker 6: Absolutely, in the previous round of the earning season, you
Speaker 6: saw those big tech companies like Microsoft and Meta even
Speaker 6: doubling down on their AI cap expend They're still remaining
Speaker 6: committed there's still all in when it comes to developing AI,
Speaker 6: but these Chinese tech companies are showing us that it
Speaker 6: can just couse a fraction to make big waves and
Speaker 6: to develop Ali Baba. Investors are really warming up to this,
Speaker 6: as you can see with a performance overnight and just
Speaker 6: in general, the company has just really stabilized after years
Speaker 6: long of crackdown by the Chinese company. It's growing powerless
Speaker 6: and AI really shows that it has Bejing support and
Speaker 6: it's really helping galvanize a strong comeback.
Speaker 4: Isabell Lei on all things China, We thank you. Let's
Speaker 4: just take a check therefore. On sentiment across the board,
Speaker 4: Jordan Klein joins US managing director and TMT set to
Speaker 4: specialists at Mizuho.
Speaker 2: Your notes are a must read today.
Speaker 4: You call it survival mode, and ultimately AI related stocks
Speaker 4: are just getting hammered.
Speaker 2: Fundamentals don't matter.
Speaker 7: Yeah, that's right, Thanks for having me.
Speaker 8: We're in one of those nasty periods where they don't matter.
Speaker 8: They didn't really matter when the stocks were all going
Speaker 8: up and the momentum crowd was chasing these to new highs.
Speaker 8: Valuations didn't matter either, So it's a good reminder, although
Speaker 8: a painful one, that you know, what goes up can
Speaker 8: come down.
Speaker 7: I've covered tech a long time.
Speaker 8: And I think this is this does happen, especially when
Speaker 8: you have these new exciting growth narratives like AI reminds
Speaker 8: me a little bit of the dot com.
Speaker 7: I don't think this is anything like that, meaning it
Speaker 7: won't end that way.
Speaker 8: These companies are still reporting very good fundamentals and evaluations
Speaker 8: that are way lower than they were back, you know, twenty.
Speaker 7: Five years ago.
Speaker 8: But you know, it is crowded, it is a very
Speaker 8: popular trade and it's not working, so it doesn't really
Speaker 8: matter what the companies say. But eventually it will and
Speaker 8: I think that kind of comes back maybe later this
Speaker 8: year in the back.
Speaker 4: Half and here and now there's a lot of anxiety
Speaker 4: building about the competition in China. I spoke with Mike
Speaker 4: over at Iconic Capital yesterday, Mike Anders, who leads, of course,
Speaker 4: what is ultimately the family office of all tech billionaires,
Speaker 4: and this is what he had to say about d
Speaker 4: seeing just take a listen.
Speaker 9: I think there was both a surprise in how how
Speaker 9: quickly they were able to catch up, but I think
Speaker 9: there was also you know, a lot of I mean,
Speaker 9: the key takeaway was they can make this technology for
Speaker 9: cheaper than our models, and you know, this wake up
Speaker 9: call around efficiency versus you know, our route force spending.
Speaker 2: How much does that wake.
Speaker 4: Up call matter to some of these US based semiconductor
Speaker 4: names right now, Jordan.
Speaker 7: It's a very good question.
Speaker 8: I think it did you know a month ago or
Speaker 8: two months ago when we were at higher levels and
Speaker 8: these stocks and this was.
Speaker 7: Much more novel or a surprise.
Speaker 8: I think now as we get further along and we
Speaker 8: learn more about what China's doing and how they're training
Speaker 8: and creating models, you know, leveraging basically these US large
Speaker 8: language models at much you know, I guess faster pace
Speaker 8: and less expense. It is, you know, creating maybe the
Speaker 8: view that the growth and size down the road could
Speaker 8: be smaller for some of these hardware semi companies. But
Speaker 8: that being set on the flip side, it's creating I
Speaker 8: think more interest and excitement across internet and software because
Speaker 8: those are the kind of companies that could dramatically benefit
Speaker 8: from lower costs faster time to market. So it's kind
Speaker 8: of a double edged sword, but good for some, maybe
Speaker 8: not as good for others.
Speaker 7: And today I don't see these US.
Speaker 8: Big large cloud hyperscalers slowing or cutting back despite what's
Speaker 8: happening in China Jordan.
Speaker 3: That's exactly right, which makes me realize so many of
Speaker 3: these large companies that reported earnings last month mentioned that
Speaker 3: they were largely unconcerned with this deep seek fear that
Speaker 3: it would take away some of their demand. But all
Speaker 3: of a sudden, you're seeing more of a sensitivity. Is
Speaker 3: that going to persist every time China comes out with
Speaker 3: news about a new AI model? Well, what can kind
Speaker 3: of overcome some of that sensitivity that we're seeing.
Speaker 8: Yeah, I actually think the answer to that is it's
Speaker 8: not creating this shock factor with.
Speaker 7: You know, investors in terms of what it could mean.
Speaker 8: I think that you know, it's evolving, and that's kind
Speaker 8: of the dynamic of AI is that there's going to
Speaker 8: be news headlines and evolution that's going to be way
Speaker 8: faster than we've seen in other new areas of tech
Speaker 8: in the past, and investors are going to have to
Speaker 8: just deal with the volatility associated with that. But at
Speaker 8: the end of the day, you know, if you listen
Speaker 8: to what these companies are saying, and a lot of
Speaker 8: them have been speaking at Big Tech conferences this week.
Speaker 8: They're all kind of saying the same thing that, you know,
Speaker 8: we're full steam ahead.
Speaker 7: We see a lot of opportunity to monetize AI.
Speaker 8: It's very early days, and we can't air on the
Speaker 8: side of investing and developing and spending less.
Speaker 7: You know, we'd rather err on the side of spending more.
Speaker 10: So.
Speaker 7: I think that's the backdrop we're in.
Speaker 8: Unfortunately, it's just we're we're in a market dynamic that's
Speaker 8: basically punishing these companies no matter what they say. But
Speaker 8: eventually I think that changes and we get back to
Speaker 8: a more favorable backdrop.
Speaker 3: Let's also talk about how President Trump is starting to
Speaker 3: ramp up commentary and policies really around boosting domestic production
Speaker 3: and the companies that are perhaps benefiting from that, but
Speaker 3: also kind of seeing some pressure from other parts of
Speaker 3: the market. Do you think that his support for the industry,
Speaker 3: American companies and production could perhaps outset or outweigh some
Speaker 3: of this anxiety that we're seeing every time China comes
Speaker 3: out with a new advancement.
Speaker 8: Well, I think what we are seeing is that President
Speaker 8: Trump and his administration has taken a markedly different approach
Speaker 8: to AI than the Biden administration, and I think that's
Speaker 8: very good for these companies and the evolution in terms
Speaker 8: of this like arms race in AI, meaning he thinks
Speaker 8: this is critical technology. We have to be very supportive,
Speaker 8: and I think the restrictions are the controls against China
Speaker 8: or adversaries getting access to this is probably the biggest change,
Speaker 8: but I think that was going to happen no matter
Speaker 8: who was president in calling the shots. So my view,
Speaker 8: and I think investors view, is that he's going to
Speaker 8: continue to do whatever he can to support you know,
Speaker 8: America leading or sustaining a lead and winning in this
Speaker 8: AI race doesn't mean China and other countries can't catch up,
Speaker 8: but if anything, they're going to continue to spend more
Speaker 8: of their own money, both in Europe and China because
Speaker 8: they know now they can't rely on the United States.
Speaker 8: And in some areas that's going to help, like equipment
Speaker 8: companies that sell the tools and make these chips, because
Speaker 8: more companies and countries are going to need them.
Speaker 4: Jordan, I go back to your confidence for the second half.
Speaker 4: But in your note, you're saying this is a true
Speaker 4: crisis of confidence in the here and now. What gets
Speaker 4: us into that confidence in the second half.
Speaker 11: Yeah.
Speaker 8: I mean I wish I knew definitively what the catalyst
Speaker 8: or the event would be, and a lot of times
Speaker 8: you don't even know, but the stocks basically kind of
Speaker 8: tell you as they start to trade more positively on
Speaker 8: fundamentals that are constructive, and that's just a process. I
Speaker 8: personally think it's going to be more when we get
Speaker 8: middle of the year and in Vidia is seeing an
Speaker 8: accelerated ramp and their new Blackwell product that has multiple variants,
Speaker 8: you know, either underway or coming out later this year
Speaker 8: first quarter, you probably see that as their July earnings.
Speaker 8: But one of the things to remember is these stocks
Speaker 8: are very sensitive to earnings revisions. So when in Vidio
Speaker 8: was beating and raising by eight, nine, ten percent, the
Speaker 8: stock was legging up as more money came in. Lately,
Speaker 8: in the last several reports, they've beaten and raised, but
Speaker 8: it's been hoist and you're seeing that even with the
Speaker 8: mag seven, the beats and raises aren't as significant as
Speaker 8: they were. So if Nvidia kind of mid year, let's
Speaker 8: say in a quarter or two, aided by Blackwell, because
Speaker 8: the demands there they got to get the production, can
Speaker 8: start to beat and raise by larger amount. I think
Speaker 8: that causes again all these stocks to act better, but
Speaker 8: ultimately that has to happen until for these to kind
Speaker 8: of start to outperform again.
Speaker 3: Storting Kline from a zooh ho, thanks so much for
Speaker 3: joining us. We're also watching shares of Pinduoduo. They're down
Speaker 3: by about tenths three tenths of one percent. This is
Speaker 3: the parent company of Teamu. It's reporting a thirteen percent
Speaker 3: rise in sales for the December quarter. These are strong
Speaker 3: results attributed to Beijing's policy, though the shares are clearly
Speaker 3: reflecting some anxiety about how President Trump's tariffs on China
Speaker 3: could dent e commerce sales overall. Caroline, while said coming
Speaker 3: up well.
Speaker 2: Technique is a set to meet with President.
Speaker 4: Trump as his administration.
Speaker 12: Eyes a repeal of the Chips Act. This is blue
Speaker 12: my technology.
Speaker 3: President Trump is set to meet with top tech leaders
Speaker 3: next week to discuss trade policy and US manufacturing. According
Speaker 3: to sources, the CEOs of HP, Intel, IBM, and Qualcom
Speaker 3: have discussed meeting with the administration on Monday. For more,
Speaker 3: Bloomberg's Kaylee Lines joins us, Now, there's been a lot
Speaker 3: going on in Washington. What's the sentiment these tech CEOs
Speaker 3: are walking into and what could come out of these meetings.
Speaker 13: Well, clearly there are a number of things they likely
Speaker 13: want to discuss with the President. I would note we
Speaker 13: haven't gotten confirmation from the White House this is happening,
Speaker 13: and most of the companies aren't confirming either. HP, though,
Speaker 13: has said that their plan is to be there on
Speaker 13: Monday and that one of the things they want to
Speaker 13: discuss is trade policy. That is likely true for all
Speaker 13: of these companies, many of which have exposure to countries
Speaker 13: that are now facing higher tariffs. China, for example, is
Speaker 13: a big supplier share for company like Intel or HP
Speaker 13: for example, and that has twenty percent tariffs on it.
Speaker 13: Now there's a massive question that we have gotten news
Speaker 13: from Howard Lutnik today about Canada and tariffs and USMCA
Speaker 13: compliance perhaps having tariffs delayed for a month, but only
Speaker 13: a month till April second, when reciprocal tariffs could kick in.
Speaker 13: So that has implications for vast networks of supply chains
Speaker 13: for these companies. The other thing likely on the agenda
Speaker 13: as well, considering the remarks we got from the President
Speaker 13: in his ajoint addressed to a Joint Session of Congress,
Speaker 13: this week about repealing the Chips Act is whether or
Speaker 13: not that is actually a serious effort on the part
Speaker 13: of this administration. As a company like Intel as well
Speaker 13: as TSMC have made massive investment pledges in the United
Speaker 13: States due to that funding that was provided by Congress.
Speaker 13: I will just note though, that what reaction we got
Speaker 13: from Congress yesterday does indicate it's not likely a full
Speaker 13: repeal would happen. He would run into issues with the
Speaker 13: filibuster and the Senate is even sub Senate Republicans like
Speaker 13: the Finance Chair Mike Crapo, have suggested while they're open
Speaker 13: to reform of that legislation, they don't want to see
Speaker 13: it pulled back entirely.
Speaker 4: What's interesting is whose names aren't that You would have
Speaker 4: thought Nvidia is the key one in the line of
Speaker 4: fire when it comes to China.
Speaker 13: Well, that's true, especially when we consider another element of
Speaker 13: economic state craft, if you well, Caroline, which is export controls.
Speaker 13: That is another factor for these companies. It's not just
Speaker 13: about the cost of the things they may need to import,
Speaker 13: but what kind of products they make and technology they
Speaker 13: are actually able to export. That is another open question here.
Speaker 13: And while Jensen Wang may not be among those expected
Speaker 13: at the White House on Monday. He has already met
Speaker 13: with President Trump over the course of this administration, as
Speaker 13: have other tech executives who have similar vulnerabilities. Here you
Speaker 13: can think of Tim Cook for Apple and the like.
Speaker 13: So obviously they're all making the rounds as they try
Speaker 13: to get on the right side of this White House.
Speaker 3: That's Bloomberg's Kaylee Lines, thanks so much for joining us.
Speaker 4: So first, it's kind bill aimed at keeping kids and
Speaker 4: teens safe online, and.
Speaker 2: It's headed to the desk of Utah Governor Spencer Cox.
Speaker 2: The measure would require.
Speaker 4: App stores to verify users ages and require parental permission
Speaker 4: for those under eighteen. Nicole Lopez, global director of Youth
Speaker 4: Safety Policy for Meta.
Speaker 2: Joins US now.
Speaker 4: And what's interesting is ultimately for the responsibility shifts from
Speaker 4: the social media platforms such as Meta Meta over to
Speaker 4: Apple and to Google. Do you have sympathy though for
Speaker 4: Apple's argument here that they're going to have to take
Speaker 4: too much data to the amount that they really need. Ultimately,
Speaker 4: you don't need data restrictions on every app, only some
Speaker 4: of them.
Speaker 11: Look Apple's messaging last week and their solution is a
Speaker 11: positive first step, but it really doesn't go far enough
Speaker 11: in that first its protections are optional, they're not automatic,
Speaker 11: and second, the protections only apply with the team's approval,
Speaker 11: not the parents, and parents overwhelmingly tell us that they
Speaker 11: want to have the final say in terms of verifying
Speaker 11: their kids age and also having concent over any app
Speaker 11: that their team wants to download. And so, frankly, it
Speaker 11: isn't the right solution here. It just doesn't go far enough, Nicole.
Speaker 3: What else is Meta doing in the event that, like
Speaker 3: you said, this measure doesn't go far enough and people
Speaker 3: find loopholes around it. What can be found on Meta
Speaker 3: that can perhaps catch some of this?
Speaker 11: Yeah, Meta has invested millions and millions billions of dollars
Speaker 11: into just that. We want to create safe and age
Speaker 11: appropriate experiences and we're not abandoning, nor are other apps,
Speaker 11: any of the age assurance methods that we have in place,
Speaker 11: and so we're going to continue to invest in AI
Speaker 11: and age verification checkpoints because we do know the reality
Speaker 11: is that people will try to bypass the app store solution.
Speaker 11: So there will be those age liers, but there'll be
Speaker 11: fewer of them.
Speaker 4: And app store solution for Utah, but there's loads of
Speaker 4: other states in fact, also looking at these sorts of laws.
Speaker 4: How quickly might that unfold?
Speaker 2: Nicole?
Speaker 11: It's unclear how quickly it will unfold, But what I
Speaker 11: can say is this, we applaud Utah for taking this
Speaker 11: first step. There's sweeping legislation. It's been introduced by even
Speaker 11: over a quarter of the states, and it's across party lines.
Speaker 11: You have Alabama and Kentucky just last week introducing similar legislation.
Speaker 11: You have New Mexico, you have Alaska and other states
Speaker 11: that are also doing this. So this is really picking
Speaker 11: up momentum because again, this is what parents want, and
Speaker 11: so we're excited about it, and we also hope that
Speaker 11: Congress you know, follows suit.
Speaker 2: Yeah, take us there.
Speaker 4: Why not a federal rule here rather than the patchwork
Speaker 4: a state by state.
Speaker 11: Well, we think that the states are listening to parents,
Speaker 11: So we are excited about this. You know, if the
Speaker 11: federal government picks it up as well, we think it
Speaker 11: would be a great, great solution. So we're excited to
Speaker 11: see what develops. It's unclear at this point though, how
Speaker 11: quickly things move.
Speaker 3: Well, one thing that is clear is that CEO Mark
Speaker 3: Zuckerberg seems to have a good relationship with President Trump.
Speaker 3: Do you think that could perhaps perhaps swing perhaps some
Speaker 3: of the momentum for bringing federal legi in this space
Speaker 3: a step forward.
Speaker 11: That's above my pay grade. What I can say, though,
Speaker 11: is that this is what parents want. There's a recent
Speaker 11: Morning Console poll that found that close to eighty percent
Speaker 11: of parents want this one stop shop solution at the
Speaker 11: app store level. And I also want you to know
Speaker 11: I work two hats. I am first and foremost a parent.
Speaker 11: I'm a parent to tweens who are online quite a
Speaker 11: bit and on tech quite a bit. The other hat
Speaker 11: is the tech hat, you know, in terms of my
Speaker 11: job at Meta, this solution is common sense. It makes
Speaker 11: sense on both sides. And the point is parents are overwhelmed.
Speaker 11: Their teens are on an average of forty apps per week,
Speaker 11: and this app store legislation really makes it easier in
Speaker 11: parents than that. It's simple, it's manageable, it's effective, and
Speaker 11: it gives parents visibility into what their teens are doing online.
Speaker 11: So we think it makes sense.
Speaker 3: That's metas Nicole Lopez, thank you so much for joining us.
Speaker 2: Welcome back to rue Meg Technology. I'mkaren Hide in New.
Speaker 3: York and I'm Jackie Devalas in Washington, and we're both
Speaker 3: looking at the markets.
Speaker 4: Jackie, let's check in on the Semiconductor index in particular.
Speaker 4: At one point, every single member of this twenty member
Speaker 4: index was in the red.
Speaker 2: We now have just two in the green.
Speaker 4: But ultimately we're dragged off by two and a half percent,
Speaker 4: and we've got to dig into the individual move us
Speaker 4: that push us lower because we are filled with anxiety,
Speaker 4: whether or not it's about trade, whether or not it's
Speaker 4: about China building their own generative AI models that need
Speaker 4: less data, less compute, or indeed, whether it's ultimately fundamentals
Speaker 4: don't matter.
Speaker 2: At this moment. We've got video off by two point
Speaker 2: four percent.
Speaker 4: We're going to get more fundamentals from Broadcom later after
Speaker 4: the bel the earnings. But can they shake off the
Speaker 4: anxiety that we're still seeing the big hyperscale is pouring
Speaker 4: money into custom silicon. Can the AI trades still work
Speaker 4: for them?
Speaker 2: Remember they have shared two hundred billion.
Speaker 4: Dollars in market capitalization alone this year. I'm looking at
Speaker 4: Marvel off by seventeen percent. They actually beat expectations.
Speaker 2: In their quarter that it's just gone in the one
Speaker 2: that they look forward to, they.
Speaker 4: Say they're going to have revenue of more than sixty percent.
Speaker 2: Growth, not enough for the investor base.
Speaker 4: As they're still so worried about ultimately whether we've just
Speaker 4: seen too much hype in some of these names we
Speaker 4: sell our winners.
Speaker 3: Jackie, there's anger in Canada towards President Trump and his
Speaker 3: advisor Elon Musk. It's putting on pressure on Elon Musk's
Speaker 3: satellite business, Starlink. Bloomberg's Bruce Einhorn Joyce is joined this.
Speaker 7: Now for more.
Speaker 3: Bruce, help us understand the stakes here for Starlink. How
Speaker 3: much of the footprint do they have in Canada versus
Speaker 3: other customers.
Speaker 14: Starlink has a big market in Canada. Canada is their
Speaker 14: largest market outside of the United States. They have about
Speaker 14: half a million subscribers in Canada. In many ways, it's
Speaker 14: a perfect market for Starlink. Really big country, lots of
Speaker 14: remote areas where there's no fiber connection, no other terrestrial
Speaker 14: link for Internet for people to use, so a lot
Speaker 14: of people want to use Starlink satellites. A bunch of
Speaker 14: provincial governments have had or have been talking with SpaceX
Speaker 14: about deals to have Starlink available to provide access in
Speaker 14: remote and rural areas. Some of those are now at
Speaker 14: risk as Canadians are angry about the US, the tariffs
Speaker 14: and Elon Musk's roll in the Trump administration.
Speaker 2: But there is such dependence.
Speaker 4: You speak to individuals who, yes, feel deeply angered, but ultimately,
Speaker 4: if they're going to get any access to the Internet,
Speaker 4: they've got to stick with Starlin.
Speaker 2: Where's the where's the competitives?
Speaker 14: That is a big dilemma for some people. You might
Speaker 14: have some patriotic Canadians who want to you know, support
Speaker 14: their country and in you know, what seems to be
Speaker 14: a trade war with the US by shunning US products.
Speaker 14: But shunning Starlink is difficult for a lot of people
Speaker 14: because what are you going to turn to. Starlink is
Speaker 14: by far the market leading satellite internet service for low
Speaker 14: Earth orbit satellites, which is, you know, the preferred kind
Speaker 14: if you want to have really fast Internet connections. Uh,
Speaker 14: and there just aren't options available for people at the moment. Telesat,
Speaker 14: for instance, a big Canadian company, has plans to have
Speaker 14: a lower orbit network in place, but there's still several
Speaker 14: years off from having that ready. Amazon has plans for
Speaker 14: Project Kuyper, which is a Starlink alternative. Again they're not ready.
Speaker 14: There is European company one Web, which is based in London,
Speaker 14: owned by Utel Sat which is based in Paris, so
Speaker 14: they have satellite a satellite network available. They don't do
Speaker 14: retail the way that uh Starlink does. They don't go
Speaker 14: direct to consumers. So there just aren't a whole lot
Speaker 14: of options for Canadians who want to sever their links
Speaker 14: with Starling. That said, the one thing to keep in
Speaker 14: mind is there are governments that have said they're doing things.
Speaker 14: So the other day, after the tariffs took effect, Premier
Speaker 14: Doug Ford of Ontario, the country's largest province, said that
Speaker 14: they were tearing up their contract that they had just
Speaker 14: announced last year with Starlink to provide internet access to
Speaker 14: rural and remote areas of the province.
Speaker 2: See how consumers follow blue Megs. Buru s Einhorn. We
Speaker 2: thank you.
Speaker 4: Look more news breaking when it comes to the threat
Speaker 4: of tariffs, and it looks as though Mexico gets a
Speaker 4: reprieve for now on US MCA goods coming across truth
Speaker 4: social President Trump saying that they will he will pause
Speaker 4: tariffs on Mexico for US MCA goods until April the second. Now,
Speaker 4: remember this isn't just auto's. We're thinking about agricultural goods.
Speaker 4: They're included in this more manufactured goods, textiles. It depends
Speaker 4: on the specific region and origin more broadly than it
Speaker 4: does mean that there's a broader reprieve to these tariffs
Speaker 4: Mexican goods as it stands. Now, let's return to the
Speaker 4: impact that this is having on SpaceX and more broadly
Speaker 4: SpaceX competitor Utelsat there's been on an absolute tear as
Speaker 4: you can see in terms of it share price something nearly.
Speaker 2: Two hundred percent year to date.
Speaker 4: This as the European leaders are looking for Starlink alternative
Speaker 4: for Ukraine, that there are strained relations between Washington and
Speaker 4: Kieva course, and it's raising fears that Starlin service could
Speaker 4: be disrupted. Utelsat CEO Eva Benenk spoke with Bloomberg earlier.
Speaker 2: Just take a listen.
Speaker 15: Until now we have been together with Starling there. But
Speaker 15: it's clear that everybody's asking us today can you actually replace,
Speaker 15: especially the very large number of terminals that Starling has
Speaker 15: across Ukraine. And that's something we're looking very actively at.
Speaker 10: Yes.
Speaker 3: Interest in backing defense tech and AI startups is high
Speaker 3: among venture investors too. Shield Ai has just closed a
Speaker 3: two hundred and forty million dollar funding ground that valued
Speaker 3: the startup at five point three billion dollars. We should
Speaker 3: all so disclose that one of those investors is Bloomberg Beta,
Speaker 3: owned by Bloomberg LP, which also owns Bloomberg News. Brandon
Speaker 3: Sang is shields Ai co founder and president, joining me
Speaker 3: now to talk more about where you're going to put
Speaker 3: that two hundred and forty million dollars to use.
Speaker 16: Thank you so much. This round was really about supercharging
Speaker 16: one of our new products, called hive Mind Enterprise and
Speaker 16: Highmind Enterprise is an enterprise software suite that enables companies,
Speaker 16: governments OEMs to develop, tests, evaluate, and deploy autonomy across
Speaker 16: a number of different unmanned systems across a number of
Speaker 16: different domains at scale. It's really a page out of
Speaker 16: Amazon Web Services playbook that had a great internal product
Speaker 16: that then they then commercialized. We've done the exact same
Speaker 16: thing at shield Ai. We spent the past ten years
Speaker 16: building the world's best aipilot. Along the way, we built
Speaker 16: incredible development tools, infrastructure and pipelines. In about a year
Speaker 16: and a half ago, we made the decision, you know what,
Speaker 16: We're going to package this up. We're going to commercialize it.
Speaker 17: We're going to bring it to market so.
Speaker 16: We can enable our customers to deploy millions of AI pilots.
Speaker 4: There are a lot of strategic investors interested, Brandon. Look,
Speaker 4: you in this round have L three, Harris and Hanwa Aerospace.
Speaker 4: But we understand that you're going to be closing another
Speaker 4: round in a few weeks time from yet more strategics.
Speaker 4: Why do they want in and who's calling you?
Speaker 16: The demand is very high for autonomy worldwide, and I
Speaker 16: think what you're seeing is a lot of strategics recognize
Speaker 16: this demand from the customer base and they don't have
Speaker 16: the best solution in house to develop tests in deploy autonomy.
Speaker 16: And so that demand that you're seeing from the strategics
Speaker 16: is a recognition of demand from the broader marketplace along
Speaker 16: with the recognition that the autonomy is a hard thing
Speaker 16: to build. We make it faster, we make it in
Speaker 16: shield AI makes it faster, we make it easier. And
Speaker 16: we've been doing this for ten years. We've got real
Speaker 16: world results in customers' hands on the battlefield today.
Speaker 3: Well, let's talk about some of those defense customers. A
Speaker 3: lot of what's driving the optimism in this particular sector
Speaker 3: is the fact that you can both tap the commercial
Speaker 3: side and government contracts. What does that breakdown look like
Speaker 3: for you guys, Yeah.
Speaker 2: One hundred percent.
Speaker 16: Look, we still sell directly to the US government, US
Speaker 16: military and our allied governments. And I'd be remiss if
Speaker 16: I didn't mention our Vbat aircraft, which after we flew
Speaker 16: in Ukraine last year against Russian jammers, against jamming, GPS,
Speaker 16: jamming communications, no impact to our aircraft because of our
Speaker 16: AI pilot that we had flying the aircraft. We're seeing
Speaker 16: massive demand in the aircraft aspect of our business. Now,
Speaker 16: what Highmind Enterprise really allows us to do. It allows
Speaker 16: us to supercharge the industrial base. It allows us to
Speaker 16: tap into those commercial markets, and it is you know,
Speaker 16: somewhat you can make the analogy. It's a little bit
Speaker 16: of what like Pallanteer did ten years into their business,
Speaker 16: where they started to pursue the commercial markets, seeing a
Speaker 16: need from what they had built for the government. In
Speaker 16: the commercial sector, we see that exactly same need. A
Speaker 16: lot of commercial companies trying to figure out how to
Speaker 16: develop and deploy autonomy.
Speaker 3: There's been a lot of conflicts around the world, and
Speaker 3: now you're seeing European countries really start to communicate that
Speaker 3: they're going to bolster defense spending. Is that a good
Speaker 3: thing for you guys?
Speaker 16: Certainly we are seeing the same messaging and we're having
Speaker 16: those conversations every day with our European customers. They very
Speaker 16: much are acknowledging that their defense budgets are going up.
Speaker 16: They have to figure out what capabilities, what technology, what
Speaker 16: products they want. I think there's also a recognition they're
Speaker 16: turning to things that have worked when GPS or communications
Speaker 16: is being jammed. They don't want to do things the
Speaker 16: exact same way that they've been done for the thirty
Speaker 16: plus years. They're going to smaller, more affordable distributed systems
Speaker 16: that are powered by autonomy.
Speaker 4: Brandon Zem thanks for joining US president and co founder
Speaker 4: shield Ai on the fundraise now coming up female founders,
Speaker 4: so few of VC deal counts and a declining value
Speaker 4: in twenty twenty before.
Speaker 2: That's calling it her pitchbook.
Speaker 4: We're going to be speaking with Lorraina Yee of McKinsey
Speaker 4: Global Institute on the gender gap in tech.
Speaker 12: This is Room Made Technology.
Speaker 4: Pitchbook out with its latest report taking a look at
Speaker 4: female founders and investors in the USBC sector. Overall, the
Speaker 4: research firm found that both deal counts and value declined
Speaker 4: in twenty twenty four among.
Speaker 2: Female led USBC deals.
Speaker 4: Let's talk more about the gender gap in tech in
Speaker 4: finance the Lorraine McKinsey Global Institute Director and author of
Speaker 4: the book The Broken Rung And ultimately this is a
Speaker 4: book about opportunity, how they can succeed in spite.
Speaker 2: Of that broken rung.
Speaker 4: Loraina, But what you articulate is a gender technology gap.
Speaker 4: How does that feed into this narrative that women are
Speaker 4: raising less leading less technology businesses, they're able to get
Speaker 4: VC funding.
Speaker 18: Well, it's no surprise that we don't see women represent
Speaker 18: the technology gap, which actually starts with the education gap
Speaker 18: of women getting technical degrees all the way to the
Speaker 18: leadership and how they're represented in work.
Speaker 2: That's not a surprise.
Speaker 18: What we wanted to focus on is in spite of that,
Speaker 18: in spite of those breaks, you may see, how are
Speaker 18: some women succeeding and how do we make that transparent
Speaker 18: for everyone. So it's things like pick a company, not
Speaker 18: just a job, go into the power alley, those p
Speaker 18: and L roles in companies and make big, bold moves
Speaker 18: in your careers as and invest in your networks.
Speaker 3: Larina, you write that half of a person's lifetime earnings
Speaker 3: come from experience and then the other half comes from education.
Speaker 3: How does AI play into this differential. Is it poised
Speaker 3: to improve it or make it worse for women?
Speaker 18: Well, we are in between, so let's see how it goes.
Speaker 18: But what we have found is that in the United
Speaker 18: States women are not getting those technical degrees. We've been
Speaker 18: at about twenty two twenty six percent women computer scientists
Speaker 18: for decades. But the thing that we want to focus on,
Speaker 18: and you mentioned this experience capital, is fifty percent of
Speaker 18: your lifetime earnings comes from what you learn.
Speaker 2: On the job.
Speaker 18: So how you gain skills on the job matters so
Speaker 18: much so for women who didn't get it in school,
Speaker 18: they've got to be really strategic to gain ground in
Speaker 18: technology skills now in the job, and with AI, to
Speaker 18: that point it becomes ever more important. We know that
Speaker 18: AI is accelerating job transitions. We know that up to
Speaker 18: seventy percent of work that we do today could be
Speaker 18: automated over the next couple of decades with AI.
Speaker 2: So instead of fearing it. Women need to.
Speaker 18: Become the master of those skills, get ahead of it
Speaker 18: and manage against that.
Speaker 2: And so Doarina, what do they do?
Speaker 4: Do they self invest to ensure that they're ahead of
Speaker 4: the AI game? Do they push their employeers to be
Speaker 4: investing in them and reskilling.
Speaker 18: All of the above, And you need to bet in yourself.
Speaker 18: So in terms of what companies offer, it's really interesting. Actually,
Speaker 18: most employees, whether they're men or women, have come to
Speaker 18: the realization about seventy percent in the United States that
Speaker 18: AI will change at least thirty percent of their day
Speaker 18: to day activities over the next two years, and they
Speaker 18: are hungry for their leaders to invest more in them.
Speaker 18: So if you're one of those companies, you're in good stead.
Speaker 18: You should sign up for all of that and be
Speaker 18: an advanced pilot in rolling out AI. But let's say
Speaker 18: you're in a company that's not investing. You will have
Speaker 18: to invest outside with your time and make it a habit.
Speaker 18: I mean, the great thing about AI is it's so intuitive.
Speaker 18: As a user, it's really fun. I mean, it's an
Speaker 18: incredibly new technology and you're not behind because everyone over
Speaker 18: the last two years is trying to gain those skills.
Speaker 18: But I think the last thing is you have to
Speaker 18: bet on yourself. You are your very best bet, and
Speaker 18: you can do this. You can become a technologist because
Speaker 18: the other thing, it's not just about those hard technology
Speaker 18: skills to win in AI.
Speaker 2: We're going to need soft skills.
Speaker 18: We're going to need the ability to ask great questions,
Speaker 18: the ability to think about risks and ethics, the ability
Speaker 18: to think about reasoning and what do the results mean?
Speaker 2: And so these are skills that are great for women.
Speaker 3: Werena. There's a lot of budget cuts and STEM education
Speaker 3: programs are expected to be part of them. What does
Speaker 3: this mean for what the gender gap looks like going
Speaker 3: forward thirty seconds?
Speaker 18: I mean, if we're cutting these programs, this is going
Speaker 18: to hurt both men and women. So hopefully what we'll
Speaker 18: see is an increased investment in using AI to help
Speaker 18: with that education gap, and particularly this is incredibly important
Speaker 18: for women.
Speaker 3: That's Laurna McKinsey, Global Institute Director and senior partner. Thanks
Speaker 3: so much for joining us.
Speaker 4: Let's check back in on the chip stops because Marvel
Speaker 4: having a really ugly day. In fact, it's had a
Speaker 4: pretty ugly rundown from its highs back in January off
Speaker 4: by fifteen percent on the day, were off by more
Speaker 4: than forty percent from our highs. This is the company
Speaker 4: actually managed to meet expectations with its earnings, but it
Speaker 4: wasn't enough. Ultimately, a sixty percent growth in revenue guide
Speaker 4: not living up to the expectations of the market. And
Speaker 4: it's all about custom chips here, and we're wondering what
Speaker 4: that means broad Com too. Let's really just sign a
Speaker 4: line on where there is a bright spot for AI
Speaker 4: spending or not company with Broadcom earnings after the closing bell,
Speaker 4: let's dig in with Ian King, who joins us now
Speaker 4: and in Broadcom has a similar exposure custom chips ultimately,
Speaker 4: and we've had nothing but reassuring words from the hyperscalers.
Speaker 7: But is it going to be enough that you nailed it.
Speaker 19: I mean, everybody's saying, no problem, everything's fine. Demand is
Speaker 19: still great. It's just a case of can we supply it? Well,
Speaker 19: that's not enough if you are in video, if you
Speaker 19: are Marvel, what you showed everybody was Look, we have
Speaker 19: to have blowout numbers before people are reassured Marvel was
Speaker 19: good in video was good. Broadcom will likely be good
Speaker 19: again Later today but will that be enough?
Speaker 7: Probably not.
Speaker 4: Oh apologies, there I was living Jackie, take a moment.
Speaker 4: It is my fault entirely in. Let's move forward then
Speaker 4: and just think about what if they're not going to
Speaker 4: have blow our earnings. If we're thinking about also some
Speaker 4: of the implications on tariffs and many of these companies,
Speaker 4: big tech companies about to go to Trump next week,
Speaker 4: where are we going to get any sort of ease
Speaker 4: to our anxiety around the chip trade right now?
Speaker 19: Yeah, it's going to be difficult. As you say that,
Speaker 19: we've got the demand concerns, and on the flip side
Speaker 19: of that, what you just pointed to with tariffs is
Speaker 19: also indicating that the supply side is going to get
Speaker 19: squeezed their prices, that their costs are actually going to
Speaker 19: go up, because as you know, this is a globalized
Speaker 19: supply chain. Everything comes from somewhere else, Everything gets assembled
Speaker 19: somewhere else before it ships somewhere else. Efficiency was wide
Speaker 19: all came into being, and now that is being challenged
Speaker 19: by the policy of the current president of the US.
Speaker 4: Just feeding into broadcoms in markets. Then we had Jordan
Speaker 4: Klein from a Zuho on saying that basically the second
Speaker 4: half of the year is when we're going to get
Speaker 4: our confidence back when ultimately you see in videos chips
Speaker 4: being taken up blackwell really home run in terms of production.
Speaker 4: What are we likely to eventually see coming from Broadcom
Speaker 4: because we're also worried about exposure to Apple, right, yeah.
Speaker 19: I mean the idea here is that if in Video
Speaker 19: has a really good second half with this new product range,
Speaker 19: guess what, you're going to need more networking and that
Speaker 19: is good for Broadcom because Broadcom is also a major
Speaker 19: networking chip provider, so it's kind of a derivative trade there.
Speaker 19: But yes, Apple is a major coaster of Broadcom has
Speaker 19: been all along. They've been dancing backwards and forwards on
Speaker 19: whether Broadcom is the solution for the iPhone long term.
Speaker 19: As we know, Apple.
Speaker 2: Likes to do its own chips.
Speaker 19: That's gone backwards and forwards, and that concerned Lingers over Broadcam.
Speaker 19: Broadcom last time out said, hey, don't worry about it.
Speaker 19: We're well engaged with Apple. They need us, but we'll
Speaker 19: see I've.
Speaker 4: Already lost more than two hundred billion dollars in market
Speaker 4: cap over the course of this year.
Speaker 2: In King, thanks so much. It's gonna be a busy
Speaker 2: day for you.
Speaker 4: Meanwhile, another start that we're watching for after the bell
Speaker 4: HPE companies set to report their earnings and Brody Ford
Speaker 4: is here to break it down. And what sort of
Speaker 4: confidence are we going to hear from Antonio NR here
Speaker 4: Because he's trying to also vindicate a key deal that
Speaker 4: he wants to get done and that's been blown apart
Speaker 4: by the US government.
Speaker 20: I imagine their CEO is speaking more with their lawyers right
Speaker 20: now than he ever hoped to. Yeah, they agreed about
Speaker 20: a little over a year ago to purchase Juniper Network,
Speaker 20: saying that networking would be this kind of new core
Speaker 20: of their company. Regulators said, it looks like you're trying
Speaker 20: to snuff out some competition by buying it. Obviously HPE disagrees,
Speaker 20: and they're working on convincing regulators of that. But it's
Speaker 20: it's soaking up a lot of attention within the company
Speaker 20: I hear, and you know, so we'll be looking for
Speaker 20: any updates on that lawsuit tonight.
Speaker 10: As well as on the general AI server moment. I mean,
Speaker 10: right now, these companies like HPE, Dell, super Micro have
Speaker 10: kind of found this whole new business line of selling
Speaker 10: high powered compute for AI and HPE has been a
Speaker 10: bit of a laggard, but they've picked up some big deals.
Speaker 10: So we'll be looking for that backlog.
Speaker 4: Backlog that also needs to prove that the margin remains resilient.
Speaker 19: Right.
Speaker 4: You've written so much about the fact that this is
Speaker 4: ultimately not that profitable for server makers right now.
Speaker 3: Totally.
Speaker 17: Yeah, for server makers, it's all about, you know, what
Speaker 17: can you bundle in with the server, because when you
Speaker 17: sell a server, you're really kind of reselling Nvidia chip
Speaker 17: and you're not making a whole lot of money on it,
Speaker 17: so they try to sell additional goods along with it.
Speaker 17: And I mean, speaking of margins, they're already getting crunched
Speaker 17: on tariffs, right, I mean some of their peers, you know,
Speaker 17: their long lost relative HP said that, you know, tariffs
Speaker 17: would be crunching their margins, and I would expect to
Speaker 17: see similar commentary tonight from HPE.
Speaker 4: HP CEOs well CEO likely to go and speak that
Speaker 4: to Trump to next week. Brady Ford, good to have you,
Speaker 4: Thank you busy day ahead of those earnings after the bell.
Speaker 4: That does it for this edition of Bloomberg Technology. Do
Speaker 4: not forget to check out our podcast find Out on
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Speaker 4: This is Bloomberg technology.