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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: For now, we want to go from the markets and

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Speaker 2: shift over to Tesla. Tesla shares have been down there

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Speaker 2: more than seven percent right now here to tell us

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Speaker 2: about it more? Why is Craig for Trudell? He's Bloomberg

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Speaker 2: Global Auditors Editor Craig want to start out and talk

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Speaker 2: about this our investors. Are they just tired? I guess

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Speaker 2: this is assuming going according to what Elon Musk has

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Speaker 2: been saying. Are they just tired of his kind of

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Speaker 2: talking about this and putting himself out there and talking

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Speaker 2: about politics when he should be focused on the company.

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Speaker 3: I think they see all sorts of risks here. You know,

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Speaker 3: this is a matter of now, you know, just alienate,

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Speaker 3: alienating Democrats, but but also now going after Republicans and

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Speaker 3: and you know, really uh, sort of ticking off Donald Trump.

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Speaker 3: And we've seen that with Trump going from you know,

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Speaker 3: kind of biting his tongue when Musk was first attacking uh,

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Speaker 3: you know, the big beautiful Bill to really going after

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Speaker 3: Musk in a more sort of pitched way. And you know,

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Speaker 3: so so this is uh, you know, a risk for

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Speaker 3: him to to sort of make himself in an enemy

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Speaker 3: and of of both sides of the aisle in Washington,

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Speaker 3: Washington potentially, but also you know, just a great big

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Speaker 3: distraction after he's assured everybody, you know, on multiple occasions, look,

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Speaker 3: I'm going to you know, sort of get back to

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Speaker 3: business and and uh, you know, tend to to Tesla

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Speaker 3: more than I have been, you know, since last year.

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Speaker 4: So I have to ask this question, is there a

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Speaker 4: board here at this company that can reign Elon Musk?

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Speaker 3: Here? There is, You wouldn't necessarily know it from the

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Speaker 3: actions of the board, right, you know, to the extent

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Speaker 3: that we've heard from the board recently, it's been to say,

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Speaker 3: you know, Elon's are our guy.

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Speaker 5: You know.

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Speaker 3: They they batted down a report in the Wall Street

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Speaker 3: Journal just in the last few months about you know,

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Speaker 3: potential succession planning at the company. I think the sort

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Speaker 3: of read of that, a close read of that story,

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Speaker 3: it wasn't necessarily the case that what the journal was

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Speaker 3: saying was that they are you know, were actively looking

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Speaker 3: to replace Musk. It was potentially more of a matter

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Speaker 3: of of you know, sort of doing the job that

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Speaker 3: you would expect a board to do. I should sort of,

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Speaker 3: you know, give them a credit in that regard that

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Speaker 3: at least they're preparing for, you know, the potential of

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Speaker 3: of needing to to look for a next CEO. But

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Speaker 3: you know, Musk is very much in control of this

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Speaker 3: company and that was something that you know, the Delaware

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Speaker 3: Chancery Court judge who throughout his pay package, you know,

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Speaker 3: really emphasized in her ruling last year when she said,

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Speaker 3: you know, he's very much in control of this company

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Speaker 3: and its board, and you know on those grounds, uh,

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Speaker 3: you know, throughout his compensation package, which has created you know,

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Speaker 3: another mess and and you know, I think this you know,

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Speaker 3: political endeavors, you know, only only complicates the board's attempt

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Speaker 3: to try and get him him compensated in a in

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Speaker 3: a way that he's going to be happy with now quick.

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Speaker 2: Not too long ago, we heard Ilama saying, you know what,

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Speaker 2: I'm going to get back to it. I'm going to

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Speaker 2: focus on Tessel. This was after the last earnings and

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Speaker 2: now we're seeing the shift right, he's talking about this

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Speaker 2: America Party. I mean, is is this something that investors

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Speaker 2: should be concerned about? He's kind of going back on his.

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Speaker 3: Word there, Yeah, I mean, I think you know some

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Speaker 3: of the it's it's not the only way in which

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Speaker 3: he's he's sort of undermined himself. And and you know,

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Speaker 3: potentially you made an investors question the things that he's

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Speaker 3: been telling them because he also, you know, said to

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Speaker 3: Bloomberg back in May that our sales are turning around, right,

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Speaker 3: and that was not born out in the deliveries numbers

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Speaker 3: that the company reported last week. They had a thirteen

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Speaker 3: percent year over year decline in worldwide vehicle sales. That

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Speaker 3: was almost bang on what they posted for the first quarter.

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Speaker 3: So you know, for him to say, you know that

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Speaker 3: he thinks in terms of political spendings, he's done enough

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Speaker 3: that he's going to you know, do a lot less

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Speaker 3: of it in the future. You know, that was what

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Speaker 3: he said in May, and this is is pretty much

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Speaker 3: one hundred and eighty degrees different from from what he

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Speaker 3: was saying.

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Speaker 5: Then.

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Speaker 4: All right, Greig, thank you so much. I appreciate your reporting.

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Speaker 4: Craig Trudel Global Auto's editor for Bloomberg News.

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Speaker 6: He is in London.

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Speaker 4: I mean, it just feels like the brand has suffered damage,

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Speaker 4: the Tesla brand.

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Speaker 6: I guess the data will prove that out, and.

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Speaker 2: That's just kind of expected.

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Speaker 4: I know, I don't know, but but it seems like

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Speaker 4: if you do a third party, you're kind of upsetting everybody.

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Speaker 4: It's like both sides of the aisle. I don't know

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Speaker 4: how that's a good marketing strategy.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: All right, well, the House past President Trump's latest tax

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Speaker 2: and spending bill. But what does that mean for the

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Speaker 2: pharmaceutical industry? Well, we're about to learn more. I introduce

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Speaker 2: to you Sam Fazzelli. He's Bloomberg with Intelligence, Director of

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Speaker 2: Research for Global Industry Senior Pharmaceuticals. Sam, I want to

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Speaker 2: start there. I mean, what does this mean for pharma?

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Speaker 5: So the one big beautiful bill had in it a

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Speaker 5: couple of things, many things, obviously, I can't remember how

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Speaker 5: many pages it was supposed to be. But for the

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Speaker 5: farmer industry, I'm going to focus on two things right now.

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Speaker 5: Right one is a good thing. So there is an

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Speaker 5: orphan drug change and impacts the IRA and actually impacts

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Speaker 5: some really big drugs. Here. What's an ophan drug. When

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Speaker 5: you develop a drug for a patient population that less

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Speaker 5: than two hundred thousand in the US, you called an

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Speaker 5: orphan drug. You get a special exemption. It really helps

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Speaker 5: you in terms of your duration of time that it

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Speaker 5: can be on the market. It's a respective of your

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Speaker 5: patent expiry. It was all set up to help companies

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Speaker 5: develop drugs for these underserved markets. Two hundred thousand. Okay,

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Speaker 5: it's not small. It's not big, but it's not that small.

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Speaker 5: So it helped. One of the big drugs that had

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Speaker 5: this was Cutruder, which is the biggest selling drug at

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Speaker 5: the minute, and that's for cancer from merk. So when

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Speaker 5: IRA came along, it said, what we're going to do

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Speaker 5: is say your drug twenty fourteen approval for Truder under

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Speaker 5: orphan drug. Great, if you're an ophen drug, you don't

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Speaker 5: fall into IRA the renegotiation or price and all that.

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Speaker 5: But as soon as you get another indication then that

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Speaker 5: clock starts from the original date of approval. So if

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Speaker 5: you had a drug orphant drug in twenty fourteen and

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Speaker 5: you get some other indication in twenty twenty two, they

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Speaker 5: date back to count the clock counting to twenty fourteen.

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Speaker 5: That was terrible. It really means that nobody would want

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Speaker 5: to do multi indication tests, et cetera. So that's been changed.

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Speaker 5: Once an ophn drug is you can keep that drug date.

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Speaker 5: And so what does that mean for Ktruder from Merk

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Speaker 5: one extra year before price negotiations by Medicare, and that's

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Speaker 5: a twenty thirty billion dollar drug selling something like fifty

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Speaker 5: percent of his revenues in the US. That's a huge

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Speaker 5: win for the industry.

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Speaker 4: Sam, I'm looking at some of the bigger names, the

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Speaker 4: Mark down eighteen percent, and you know some of these

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Speaker 4: other names, the big farmer companies, Bristol Meyers down seventeen percent.

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Speaker 4: Is the markets? What's that reflect?

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Speaker 5: That?

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Speaker 6: Just uncertainty around trade, around teriffs.

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Speaker 5: All of it. So on the one hand, we've got

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Speaker 5: this positive. On the other hand, we have two big

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Speaker 5: things hanging over the farmer industry in general. One is

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Speaker 5: the tariffs, sectoral tariffs that are still being discussed. We

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Speaker 5: don't know yet. This is to try and incentivize companies

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Speaker 5: to bring their products to a manufacturing into the US

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Speaker 5: if they want to sell in the US market, et cetera.

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Speaker 5: If we did hear that perhaps in the trade deal

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Speaker 5: with the Switzerland they're giving a special dispensation for the

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Speaker 5: Swiss farmer companies rash and no artists and their shore

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Speaker 5: prices were up. But we don't know. We haven't seen

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Speaker 5: this trade deal yet. And then you've got the most

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Speaker 5: favored nation, which is the one that's particularly draconian, and

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Speaker 5: that is to say that whatever price do you want

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Speaker 5: to charge in the US, it's got to be closer

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Speaker 5: to the lower end of companies with a similar GDP

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Speaker 5: or something in the West. So that really is where

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Speaker 5: I think the biggest problem is we haven't heard anything,

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Speaker 5: but that's still under discussion and under consideration. Might be

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Speaker 5: another six to nine months before we hear anything.

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Speaker 4: Sam Another big I guess component of this administration policy

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Speaker 4: has been cutting funding or maybe threatening the cut funding

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Speaker 4: for research universities. And I have long experience with Duke University,

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Speaker 4: which is a huge medical center and research area. Here's

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Speaker 4: what's your industry saying about those potential cuts.

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Speaker 5: Yeah, the industry itself is relatively quiet, Paul, because what

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Speaker 5: they don't want to do is is, I don't know

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Speaker 5: whether the right phrases here, shake the target, tiger's cage

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Speaker 5: or whatever, you know, rattle the whole set here. But

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Speaker 5: in reality, there is a I think what I heard

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Speaker 5: the last number was a twelve percent increase in applications

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Speaker 5: to some of the top universities in Europe versus what

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Speaker 5: they were last year from the US. So that's folks

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Speaker 5: that would have gone to or wanted to go to Harvard,

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Speaker 5: they're now looking at Oxford, Cambridge, Siance, Pool, et cetera,

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Speaker 5: these very brilliant universities across Europe. So there's that issue.

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Speaker 5: But remember in the OBBB there's also another area where

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Speaker 5: there is a cup to mediciate spending. That's a million

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Speaker 5: Medicaid covered folks that lose it. That will also have

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Speaker 5: repercussions for pharma companies, healthcare in general. And of course

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Speaker 5: you go to a hospital you don't have insurance, they're

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Speaker 5: going to treat you. Who's going to pay for that?

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Speaker 5: It's going to go on your premium. There's a tax

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Speaker 5: on you, you know, let's see how this all pans out.

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Speaker 5: But not good there either.

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Speaker 2: All right, Sam, I want to talk about the Medicaid cuts.

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Speaker 2: I'm going to kind of put you on the spot there,

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Speaker 2: but it's going to affect insurers who focus on Medicaid.

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Speaker 2: They might lose customers. So what does this mean for like,

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Speaker 2: let's say Elevant's Health, United Health companies that do deal

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Speaker 2: with this.

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Speaker 5: Yeah, so they are clearly under pressure and there's a

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Speaker 5: risk for them. And one of the issues is exactly

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Speaker 5: what you just said. You know, this is completely upsetting

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Speaker 5: the card here for the insurance in general. The point is,

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Speaker 5: I'm not convinced that they will necessarily lose out. I mean,

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Speaker 5: we have dedicated expert analysts who cover the sector, et cetera.

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Speaker 5: But usually what's going to happen is that if they're

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Speaker 5: not making money elsewhere, they're going to try and raise

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Speaker 5: premium somewhere else, which is what I said to start with,

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Speaker 5: that there will be a way that they'll get through this.

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Speaker 5: But clearly uncertainty in the new time.

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Speaker 6: There's that word again, uncertainty.

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Speaker 4: We heard her so many times the day across so

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Speaker 4: many different industries. Sam Fazelli, thanks so much for your time.

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Speaker 4: Always appreciate checking in with you. Sam Fazzelli. He's a

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Speaker 4: director of Research for Global Industries, Senior Pharmaceuticals and Senior

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Speaker 4: Wine analyst for Bloomberg Intelligence.

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Speaker 6: Based over there in London.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Coarclay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 2: All right, we're going to shift gears now. I want

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Speaker 2: to take us to honorad Rona. He is Bloomberg Intelligence

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Speaker 2: Technology analyst corwe That is the big headline buying Core Scientific.

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Speaker 2: It's an all stock transaction, an rog. I want to

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Speaker 2: bring you in and talk about this for core Weve.

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Speaker 2: What is the benefit from this? What do they gain

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Speaker 2: from this?

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Speaker 7: Mean, think about it that they have capacity to process

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Speaker 7: ex summer of transactions or the backlock that they have

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Speaker 7: with this particular deal, they are expanding their infrastructure.

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Speaker 5: I mean it's a very simple deal.

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Speaker 7: As if you know, they're just buying more factories to

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Speaker 7: produce what they do. So is you know, it's it's

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Speaker 7: as simple as that.

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Speaker 6: All right, So this.

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Speaker 4: I'm not a tech person, so, but I know, tell

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Speaker 4: us what Core We've is, what do they do and

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Speaker 4: why are they shouting out nine billion dollars to get bigger?

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Speaker 6: I guess yeah.

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Speaker 7: So in the purest of pure forms, they are just

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Speaker 7: renting computing resources to anybody that wants to run an

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Speaker 7: AI infrastructure.

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Speaker 5: They are a very big Invidia shop.

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Speaker 7: They basically buy GPUs from Invidia, They create a network

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Speaker 7: or an infrastructure, and they give it to people to

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Speaker 7: go out and experiment or do whatever they need to

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Speaker 7: do on that infrastructure. It's no different than what AWS does,

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Speaker 7: but very heavy focus on GPUs rather than the CPO.

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Speaker 7: So that's really the big difference between a pure play

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Speaker 7: provider like Core Weve versus Amazon Web Services.

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Speaker 2: Now, if you can dig into some of the background,

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Speaker 2: what kind of challenges has has Core We've had in

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Speaker 2: the past. I mean, didn't they have a pretty dismal IPO.

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Speaker 5: Yeah.

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Speaker 7: I think that's really the most important thing is, you know,

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Speaker 7: they everybody thought when they're going to come out as

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Speaker 7: the first pure play you know AI infrastructure IPO, it's

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Speaker 7: going to be extremely popular, but it didn't happen. And

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Speaker 7: the reason for that is because they need a large

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Speaker 7: amount of upfront capital to build these data centers, and

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Speaker 7: then the workload comes in over the.

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Speaker 5: Next several years.

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Speaker 7: So there's a lot of questions about whether there's going

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Speaker 7: to be sustainability of this GPU demand going forward several

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Speaker 7: years out. So that's why you were right. The IPO

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Speaker 7: came at forty. In a few days, it was down

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Speaker 7: to thirty five. But now we're seeing you know, the

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Speaker 7: stock closer won sixty before this deal was announced, so

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Speaker 7: I you know, we have talked about it before that.

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Speaker 7: You know, why aren't they doing a secondary when it's

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Speaker 7: like one hundred and sixty blucks stocks of what they

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Speaker 7: did instead? It is they use their stock to go

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Speaker 7: out and buy another competitor I should say competitor, but

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Speaker 7: you know, another company in that space, so that it

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Speaker 7: expands their capacity, and you know, I think they're doing

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Speaker 7: the right thing by using stock at this point.

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Speaker 4: Are there more core weaves out there on a round

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Speaker 4: kind of more pure play AI stories, maybe the kind

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Speaker 4: of the sausage of AI if you will, the guts

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Speaker 4: that somebody could take public.

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Speaker 7: There are multiples of them there, but they are much

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Speaker 7: smaller size in korby they I would say there would

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Speaker 7: be hundreds of them at this point, because you know,

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Speaker 7: you go out, you buy the GPU, you go out

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Speaker 7: and start renting it out in the in you know,

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Speaker 7: in a long time ago, this high powered computing was

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Speaker 7: used for bitcoin mining, and then you know, when that's

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Speaker 7: not in favor, these guys are renting out their infrastructure

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Speaker 7: for other reasons. So there are other plays out there,

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Speaker 7: but almost all of them are much smaller than core

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Speaker 7: Viv from a you know, pure play point of view.

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Speaker 2: Now we digged into corewey, what about Core Scientific, what's

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Speaker 2: the attraction to them?

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Speaker 7: I mean, it's just they're expanding the number of you know,

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Speaker 7: the capacity that they have to process the transactions. In

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Speaker 7: a sense that Corvieve is a massive backlock right now

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Speaker 7: they have people wanting to use their services, and then

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Speaker 7: these guys have to go out and lease it from

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Speaker 7: you know, other companies like our Scientific In this case,

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Speaker 7: they said, you know, they have an agreement with them

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Speaker 7: to lease their facilities. They just said, you know, we'll

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Speaker 7: buy it out and expand their size. And I think

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Speaker 7: that's as simple as that.

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Speaker 4: And I think I have to point out Lisa core

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Speaker 4: Weave based in Livingston, New New Jersey.

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Speaker 6: Yes, so it just goes to my folks.

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Speaker 4: A little history lesson. Before there was Silicon Valley, there

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Speaker 4: was New Jersey. There was Central Jersey, the Institute for

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Speaker 4: Advanced Study, Princeton University, Menlo Park, New Jersey. Before there's

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Speaker 4: a Menlo Park, California, Menlo. Before there's a sand Hill

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Speaker 4: road in Silicon Valley, there's a sand Hill.

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Speaker 6: Road in Jersey. So it all, there's all these Jersey

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Speaker 6: guys went on New Jersey is back in New Jersey.

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Speaker 6: All right, an, thank you so much. We appreciate it.

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Speaker 4: On a rock ron Eastern technologyannels for Bloomberg Intelligence. He's

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Speaker 4: in at Chicago. You're trying to establish Chicago as a

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Speaker 4: technology hub.

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Speaker 6: Here.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: We want to move on now to the latest TikTok news.

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Speaker 2: We're going to bring a man deep saying Bloomberg Intelligence

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Speaker 2: senior tech industry analysts. Okay, so Mandy, President Trump getting

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Speaker 2: ready to begin talks with China. About a possible TikTok

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Speaker 2: deal to sell the app. Want to ask you, where

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Speaker 2: do we stand in this right now?

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Speaker 6: What is the latest?

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Speaker 8: I mean, from what we know, President Trump is pretty

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Speaker 8: confident that there is a buyer. In fact, there could

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Speaker 8: be private equity buyers at Consortium who may be interested

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Speaker 8: in buying TikTok us. And at this point, you know,

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Speaker 8: they want to make sure that it goes through in

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Speaker 8: terms of getting the approval from China. But in the

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Speaker 8: process they've launched a new app, TikTok Has, and that

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Speaker 8: sort of suggests they want to decouple the algorithm from

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Speaker 8: the core TikTok usage. So that was also a point

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Speaker 8: of contention in terms of getting the approval. So I

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Speaker 8: think the two go hand in hand, that one there

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Speaker 8: is a buyer available and the other the app is

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Speaker 8: getting a changeover in terms of decoupling the algorithm.

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Speaker 4: All right, So am I going to have effectively two

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Speaker 4: tiktoks out there? The TikTok app we all know and love,

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Speaker 4: and then something that they are doubling internally is M two.

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Speaker 4: So now there's gonna be two effective TikTok apps out

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Speaker 4: there for all these people.

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Speaker 8: Yes, and look with apps, there's always like a date

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Speaker 8: when the first app will obviously be phased out and

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Speaker 8: folks won't have access to it. I mean, remember what

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Speaker 8: happened during the band you know that wasn't even available.

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Speaker 8: So in this case, the plan is if and when

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Speaker 8: the deal gets announced and the new TikTok owner which

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Speaker 8: we don't know who will be ye, will get access

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Speaker 8: to the new app, and then the first one gets

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Speaker 8: paced down.

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Speaker 2: All right, So my kids want to know, asking, okay,

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Speaker 2: is there any chance of none of this going through,

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Speaker 2: like just TikTok disappearing from the US in general, they'd

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Speaker 2: be devastated, Mandy.

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Speaker 8: Look, it happened for two days, the app went dark,

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Speaker 8: and at that time Instagram got a very nice pop

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Speaker 8: in terms of engagement. So from that perspective, this will

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Speaker 8: be all positive news for a meta snapchat or you know,

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Speaker 8: even if dual lingo was mentioned as a beneficiary of

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Speaker 8: app and dark. Yeah, I know, it's all very intuitive,

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Speaker 8: but it did happen. In the data you could see

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Speaker 8: for those two days, duel Lingo did get a pop

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Speaker 8: in the engagement time.

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Speaker 6: All right.

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Speaker 4: I mean, you gotta spend your time somehow, go forbid

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Speaker 4: reading a book says the father. You know, Okay, so China.

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Speaker 4: If I'm China, what's my incentive to approve a sale

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Speaker 4: to say, a group maybe including some like an Oracle,

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Speaker 4: what's my incentive?

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Speaker 8: The incentive is it's the President of the United States

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Speaker 8: who is negotiating the deal, you know. And this is

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Speaker 8: part of a much bigger conversation when it comes to

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Speaker 8: China tariffs and everything that they are negotiating. So TikTok

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Speaker 8: deal to me, is part of that bigger negotiation now,

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Speaker 8: and President Trump is obviously keen to have a deal

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Speaker 8: for TikTok Us. He doesn't want the app to be banned,

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Speaker 8: and as part of that, he wants some concessions on

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Speaker 8: the tariff front. So to me, this is part of

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Speaker 8: a much bigger negotiation.

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Speaker 2: Now you mentioned Oracle, it's Oracle, the only name being

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Speaker 2: thrown around.

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Speaker 8: They are the trusted one when it comes to Washington.

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Speaker 8: They are among all the hyperscalers. I think they get

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Speaker 8: the trust of the President in terms of moving.

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Speaker 2: Ahead with what's the drug? Why Oracle?

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Speaker 8: Well, Oracle clearly hosts all the back end infrastructure for TikTok,

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Speaker 8: So this has been going on a while and they

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Speaker 8: have moved all the back end infrastructure to Oracles platform,

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Speaker 8: and they clearly have some sort of synergy when it

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Speaker 8: comes to hosting that making sure nothing gets saved in

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Speaker 8: Chinese data centers and none of the data gets transferred there.

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Speaker 8: So I think they're in the best position to do.

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Speaker 4: That thirty seconds. Any sense of timing when this could happen.

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Speaker 8: It sounded like President Trump is confident about this happening

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Speaker 8: over the course of the next ninety days, because remember

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Speaker 8: he extended the band by another ninety days, so to

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Speaker 8: do that, that would be my guest.

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Speaker 4: All right, Man Deep, thank you so much.

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Speaker 6: Appreciate that.

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Speaker 4: Man Deep, seeing senior tech industry anust, I can't imagine

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Speaker 4: he's on TikTok, but you never know Bloomberg Intelligence learnings

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Speaker 4: here in our Bloomberg Interactive Broker studio at Lisa.

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Speaker 6: Are you a TikToker?

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Speaker 2: I am not, but I will Actually I take that back,

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Speaker 2: I am because I have to follow my kids to

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Speaker 2: make sure to spy on them, you know, so I

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Speaker 2: have to join in.

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Speaker 4: All right, all right, I don't know, and it's it's

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Speaker 4: big for one hundred and seventy million US users.

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Speaker 6: I know, I know exactly. He's all over that stuff.

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Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

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