WEBVTT - Tesla Slides on Concern Musk’s New Party Will Worsen Slump 0:00:02.759 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.640 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple, Cocklay and Android Auto with the Bloomberg 0:00:17.960 --> 0:00:21.080 Business App. Listen on demand wherever you get your podcasts, 0:00:21.400 --> 0:00:23.120 or watch us live on YouTube. 0:00:23.760 --> 0:00:25.560 For now, we want to go from the markets and 0:00:25.600 --> 0:00:28.880 shift over to Tesla. Tesla shares have been down there 0:00:28.920 --> 0:00:31.600 more than seven percent right now here to tell us 0:00:31.600 --> 0:00:34.559 about it more? Why is Craig for Trudell? He's Bloomberg 0:00:34.560 --> 0:00:38.120 Global Auditors Editor Craig want to start out and talk 0:00:38.120 --> 0:00:40.960 about this our investors. Are they just tired? I guess 0:00:41.000 --> 0:00:43.559 this is assuming going according to what Elon Musk has 0:00:43.600 --> 0:00:46.920 been saying. Are they just tired of his kind of 0:00:46.960 --> 0:00:50.080 talking about this and putting himself out there and talking 0:00:50.080 --> 0:00:53.280 about politics when he should be focused on the company. 0:00:54.320 --> 0:00:57.200 I think they see all sorts of risks here. You know, 0:00:57.560 --> 0:01:00.880 this is a matter of now, you know, just alienate, 0:01:01.040 --> 0:01:06.480 alienating Democrats, but but also now going after Republicans and 0:01:06.480 --> 0:01:09.959 and you know, really uh, sort of ticking off Donald Trump. 0:01:10.000 --> 0:01:12.960 And we've seen that with Trump going from you know, 0:01:13.040 --> 0:01:16.560 kind of biting his tongue when Musk was first attacking uh, 0:01:16.640 --> 0:01:19.800 you know, the big beautiful Bill to really going after 0:01:19.920 --> 0:01:23.280 Musk in a more sort of pitched way. And you know, 0:01:23.360 --> 0:01:25.760 so so this is uh, you know, a risk for 0:01:25.880 --> 0:01:29.560 him to to sort of make himself in an enemy 0:01:29.600 --> 0:01:33.120 and of of both sides of the aisle in Washington, 0:01:33.480 --> 0:01:37.400 Washington potentially, but also you know, just a great big 0:01:37.440 --> 0:01:41.960 distraction after he's assured everybody, you know, on multiple occasions, look, 0:01:41.959 --> 0:01:44.240 I'm going to you know, sort of get back to 0:01:44.280 --> 0:01:47.640 business and and uh, you know, tend to to Tesla 0:01:47.720 --> 0:01:50.680 more than I have been, you know, since last year. 0:01:51.400 --> 0:01:54.400 So I have to ask this question, is there a 0:01:54.440 --> 0:01:57.840 board here at this company that can reign Elon Musk? 0:01:57.880 --> 0:02:02.320 Here? There is, You wouldn't necessarily know it from the 0:02:02.360 --> 0:02:05.720 actions of the board, right, you know, to the extent 0:02:05.760 --> 0:02:09.040 that we've heard from the board recently, it's been to say, 0:02:09.639 --> 0:02:11.680 you know, Elon's are our guy. 0:02:12.440 --> 0:02:12.640 You know. 0:02:12.680 --> 0:02:16.160 They they batted down a report in the Wall Street 0:02:16.200 --> 0:02:18.640 Journal just in the last few months about you know, 0:02:18.720 --> 0:02:23.240 potential succession planning at the company. I think the sort 0:02:23.280 --> 0:02:25.880 of read of that, a close read of that story, 0:02:26.160 --> 0:02:29.400 it wasn't necessarily the case that what the journal was 0:02:29.400 --> 0:02:31.800 saying was that they are you know, were actively looking 0:02:31.800 --> 0:02:34.960 to replace Musk. It was potentially more of a matter 0:02:35.040 --> 0:02:37.400 of of you know, sort of doing the job that 0:02:37.440 --> 0:02:39.600 you would expect a board to do. I should sort of, 0:02:39.880 --> 0:02:42.200 you know, give them a credit in that regard that 0:02:42.240 --> 0:02:46.880 at least they're preparing for, you know, the potential of 0:02:46.880 --> 0:02:49.400 of needing to to look for a next CEO. But 0:02:49.840 --> 0:02:52.680 you know, Musk is very much in control of this 0:02:52.760 --> 0:02:56.120 company and that was something that you know, the Delaware 0:02:56.520 --> 0:02:59.920 Chancery Court judge who throughout his pay package, you know, 0:03:00.080 --> 0:03:02.720 really emphasized in her ruling last year when she said, 0:03:03.040 --> 0:03:05.800 you know, he's very much in control of this company 0:03:05.800 --> 0:03:09.200 and its board, and you know on those grounds, uh, 0:03:09.360 --> 0:03:13.320 you know, throughout his compensation package, which has created you know, 0:03:13.360 --> 0:03:17.000 another mess and and you know, I think this you know, 0:03:17.120 --> 0:03:23.239 political endeavors, you know, only only complicates the board's attempt 0:03:23.280 --> 0:03:26.440 to try and get him him compensated in a in 0:03:26.480 --> 0:03:28.639 a way that he's going to be happy with now quick. 0:03:28.760 --> 0:03:30.800 Not too long ago, we heard Ilama saying, you know what, 0:03:30.919 --> 0:03:32.239 I'm going to get back to it. I'm going to 0:03:32.320 --> 0:03:35.080 focus on Tessel. This was after the last earnings and 0:03:35.200 --> 0:03:38.000 now we're seeing the shift right, he's talking about this 0:03:38.160 --> 0:03:41.920 America Party. I mean, is is this something that investors 0:03:41.960 --> 0:03:43.840 should be concerned about? He's kind of going back on his. 0:03:43.800 --> 0:03:47.480 Word there, Yeah, I mean, I think you know some 0:03:47.560 --> 0:03:49.839 of the it's it's not the only way in which 0:03:49.840 --> 0:03:53.280 he's he's sort of undermined himself. And and you know, 0:03:53.360 --> 0:03:58.400 potentially you made an investors question the things that he's 0:03:58.400 --> 0:04:01.600 been telling them because he also, you know, said to 0:04:01.640 --> 0:04:05.200 Bloomberg back in May that our sales are turning around, right, 0:04:05.360 --> 0:04:08.440 and that was not born out in the deliveries numbers 0:04:08.480 --> 0:04:10.960 that the company reported last week. They had a thirteen 0:04:10.960 --> 0:04:14.680 percent year over year decline in worldwide vehicle sales. That 0:04:14.760 --> 0:04:17.520 was almost bang on what they posted for the first quarter. 0:04:18.040 --> 0:04:20.680 So you know, for him to say, you know that 0:04:21.120 --> 0:04:24.240 he thinks in terms of political spendings, he's done enough 0:04:25.040 --> 0:04:26.880 that he's going to you know, do a lot less 0:04:26.920 --> 0:04:29.240 of it in the future. You know, that was what 0:04:29.279 --> 0:04:32.080 he said in May, and this is is pretty much 0:04:32.120 --> 0:04:35.080 one hundred and eighty degrees different from from what he 0:04:35.160 --> 0:04:35.480 was saying. 0:04:35.520 --> 0:04:35.680 Then. 0:04:36.080 --> 0:04:38.600 All right, Greig, thank you so much. I appreciate your reporting. 0:04:38.600 --> 0:04:41.760 Craig Trudel Global Auto's editor for Bloomberg News. 0:04:42.040 --> 0:04:43.239 He is in London. 0:04:43.360 --> 0:04:47.279 I mean, it just feels like the brand has suffered damage, 0:04:47.360 --> 0:04:48.480 the Tesla brand. 0:04:50.600 --> 0:04:52.240 I guess the data will prove that out, and. 0:04:52.200 --> 0:04:53.440 That's just kind of expected. 0:04:53.680 --> 0:04:56.479 I know, I don't know, but but it seems like 0:04:56.640 --> 0:04:59.640 if you do a third party, you're kind of upsetting everybody. 0:05:00.360 --> 0:05:01.880 It's like both sides of the aisle. I don't know 0:05:01.880 --> 0:05:04.359 how that's a good marketing strategy. 0:05:06.080 --> 0:05:09.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:09.839 --> 0:05:12.960 weekdays at ten am Eastern on Apple, Coarclay, and Android 0:05:12.960 --> 0:05:16.279 Auto with the Bloomberg Business App. Listen on demand wherever 0:05:16.320 --> 0:05:19.440 you get your podcasts, or watch us live on YouTube. 0:05:20.160 --> 0:05:24.120 All right, well, the House past President Trump's latest tax 0:05:24.160 --> 0:05:26.720 and spending bill. But what does that mean for the 0:05:26.760 --> 0:05:30.600 pharmaceutical industry? Well, we're about to learn more. I introduce 0:05:30.640 --> 0:05:33.320 to you Sam Fazzelli. He's Bloomberg with Intelligence, Director of 0:05:33.320 --> 0:05:36.840 Research for Global Industry Senior Pharmaceuticals. Sam, I want to 0:05:36.880 --> 0:05:41.000 start there. I mean, what does this mean for pharma? 0:05:41.480 --> 0:05:45.919 So the one big beautiful bill had in it a 0:05:46.000 --> 0:05:49.640 couple of things, many things, obviously, I can't remember how 0:05:49.640 --> 0:05:51.839 many pages it was supposed to be. But for the 0:05:51.839 --> 0:05:54.160 farmer industry, I'm going to focus on two things right now. 0:05:54.200 --> 0:05:56.840 Right one is a good thing. So there is an 0:05:56.960 --> 0:06:02.159 orphan drug change and impacts the IRA and actually impacts 0:06:02.160 --> 0:06:05.200 some really big drugs. Here. What's an ophan drug. When 0:06:05.200 --> 0:06:07.880 you develop a drug for a patient population that less 0:06:07.880 --> 0:06:10.680 than two hundred thousand in the US, you called an 0:06:10.720 --> 0:06:14.200 orphan drug. You get a special exemption. It really helps 0:06:14.240 --> 0:06:17.479 you in terms of your duration of time that it 0:06:17.520 --> 0:06:20.280 can be on the market. It's a respective of your 0:06:20.560 --> 0:06:24.120 patent expiry. It was all set up to help companies 0:06:24.600 --> 0:06:28.000 develop drugs for these underserved markets. Two hundred thousand. Okay, 0:06:28.000 --> 0:06:30.839 it's not small. It's not big, but it's not that small. 0:06:31.200 --> 0:06:34.080 So it helped. One of the big drugs that had 0:06:34.120 --> 0:06:37.280 this was Cutruder, which is the biggest selling drug at 0:06:37.279 --> 0:06:40.719 the minute, and that's for cancer from merk. So when 0:06:40.800 --> 0:06:43.640 IRA came along, it said, what we're going to do 0:06:44.320 --> 0:06:48.719 is say your drug twenty fourteen approval for Truder under 0:06:48.800 --> 0:06:52.240 orphan drug. Great, if you're an ophen drug, you don't 0:06:52.279 --> 0:06:55.160 fall into IRA the renegotiation or price and all that. 0:06:55.480 --> 0:06:57.560 But as soon as you get another indication then that 0:06:57.640 --> 0:07:01.440 clock starts from the original date of approval. So if 0:07:01.440 --> 0:07:03.800 you had a drug orphant drug in twenty fourteen and 0:07:03.839 --> 0:07:06.000 you get some other indication in twenty twenty two, they 0:07:06.120 --> 0:07:08.720 date back to count the clock counting to twenty fourteen. 0:07:09.000 --> 0:07:12.040 That was terrible. It really means that nobody would want 0:07:12.040 --> 0:07:18.000 to do multi indication tests, et cetera. So that's been changed. 0:07:18.400 --> 0:07:21.480 Once an ophn drug is you can keep that drug date. 0:07:21.840 --> 0:07:23.960 And so what does that mean for Ktruder from Merk 0:07:24.400 --> 0:07:28.559 one extra year before price negotiations by Medicare, and that's 0:07:28.680 --> 0:07:33.520 a twenty thirty billion dollar drug selling something like fifty 0:07:33.520 --> 0:07:35.960 percent of his revenues in the US. That's a huge 0:07:36.000 --> 0:07:37.000 win for the industry. 0:07:37.800 --> 0:07:39.520 Sam, I'm looking at some of the bigger names, the 0:07:39.560 --> 0:07:41.680 Mark down eighteen percent, and you know some of these 0:07:41.720 --> 0:07:45.640 other names, the big farmer companies, Bristol Meyers down seventeen percent. 0:07:45.720 --> 0:07:47.360 Is the markets? What's that reflect? 0:07:47.400 --> 0:07:47.480 That? 0:07:47.560 --> 0:07:50.160 Just uncertainty around trade, around teriffs. 0:07:51.560 --> 0:07:53.840 All of it. So on the one hand, we've got 0:07:53.880 --> 0:07:56.120 this positive. On the other hand, we have two big 0:07:56.160 --> 0:08:01.160 things hanging over the farmer industry in general. One is 0:08:01.200 --> 0:08:05.080 the tariffs, sectoral tariffs that are still being discussed. We 0:08:05.160 --> 0:08:08.360 don't know yet. This is to try and incentivize companies 0:08:08.640 --> 0:08:11.920 to bring their products to a manufacturing into the US 0:08:12.000 --> 0:08:14.040 if they want to sell in the US market, et cetera. 0:08:14.560 --> 0:08:17.360 If we did hear that perhaps in the trade deal 0:08:17.440 --> 0:08:21.160 with the Switzerland they're giving a special dispensation for the 0:08:21.160 --> 0:08:24.280 Swiss farmer companies rash and no artists and their shore 0:08:24.320 --> 0:08:26.840 prices were up. But we don't know. We haven't seen 0:08:26.840 --> 0:08:29.560 this trade deal yet. And then you've got the most 0:08:29.560 --> 0:08:33.520 favored nation, which is the one that's particularly draconian, and 0:08:33.600 --> 0:08:35.719 that is to say that whatever price do you want 0:08:35.760 --> 0:08:38.720 to charge in the US, it's got to be closer 0:08:38.720 --> 0:08:42.760 to the lower end of companies with a similar GDP 0:08:43.080 --> 0:08:47.080 or something in the West. So that really is where 0:08:47.160 --> 0:08:49.840 I think the biggest problem is we haven't heard anything, 0:08:50.120 --> 0:08:53.120 but that's still under discussion and under consideration. Might be 0:08:53.160 --> 0:08:55.520 another six to nine months before we hear anything. 0:08:55.880 --> 0:09:00.480 Sam Another big I guess component of this administration policy 0:09:00.520 --> 0:09:02.960 has been cutting funding or maybe threatening the cut funding 0:09:03.559 --> 0:09:07.320 for research universities. And I have long experience with Duke University, 0:09:07.320 --> 0:09:12.120 which is a huge medical center and research area. Here's 0:09:12.280 --> 0:09:14.800 what's your industry saying about those potential cuts. 0:09:16.000 --> 0:09:19.280 Yeah, the industry itself is relatively quiet, Paul, because what 0:09:19.320 --> 0:09:22.079 they don't want to do is is, I don't know 0:09:22.120 --> 0:09:24.720 whether the right phrases here, shake the target, tiger's cage 0:09:24.800 --> 0:09:28.760 or whatever, you know, rattle the whole set here. But 0:09:29.240 --> 0:09:32.240 in reality, there is a I think what I heard 0:09:32.240 --> 0:09:36.400 the last number was a twelve percent increase in applications 0:09:36.400 --> 0:09:39.720 to some of the top universities in Europe versus what 0:09:39.800 --> 0:09:43.960 they were last year from the US. So that's folks 0:09:43.960 --> 0:09:46.400 that would have gone to or wanted to go to Harvard, 0:09:46.559 --> 0:09:49.920 they're now looking at Oxford, Cambridge, Siance, Pool, et cetera, 0:09:50.080 --> 0:09:53.199 these very brilliant universities across Europe. So there's that issue. 0:09:53.280 --> 0:09:57.520 But remember in the OBBB there's also another area where 0:09:57.559 --> 0:10:00.600 there is a cup to mediciate spending. That's a million 0:10:00.679 --> 0:10:04.280 Medicaid covered folks that lose it. That will also have 0:10:04.400 --> 0:10:08.720 repercussions for pharma companies, healthcare in general. And of course 0:10:08.760 --> 0:10:11.480 you go to a hospital you don't have insurance, they're 0:10:11.480 --> 0:10:13.360 going to treat you. Who's going to pay for that? 0:10:13.480 --> 0:10:15.920 It's going to go on your premium. There's a tax 0:10:16.000 --> 0:10:19.280 on you, you know, let's see how this all pans out. 0:10:19.320 --> 0:10:20.920 But not good there either. 0:10:21.240 --> 0:10:23.960 All right, Sam, I want to talk about the Medicaid cuts. 0:10:24.080 --> 0:10:25.559 I'm going to kind of put you on the spot there, 0:10:25.600 --> 0:10:29.559 but it's going to affect insurers who focus on Medicaid. 0:10:29.559 --> 0:10:32.080 They might lose customers. So what does this mean for like, 0:10:32.160 --> 0:10:35.480 let's say Elevant's Health, United Health companies that do deal 0:10:35.520 --> 0:10:35.800 with this. 0:10:37.120 --> 0:10:39.880 Yeah, so they are clearly under pressure and there's a 0:10:39.960 --> 0:10:43.120 risk for them. And one of the issues is exactly 0:10:43.120 --> 0:10:47.440 what you just said. You know, this is completely upsetting 0:10:47.440 --> 0:10:50.880 the card here for the insurance in general. The point is, 0:10:51.600 --> 0:10:54.280 I'm not convinced that they will necessarily lose out. I mean, 0:10:55.200 --> 0:10:58.319 we have dedicated expert analysts who cover the sector, et cetera. 0:10:58.840 --> 0:11:01.440 But usually what's going to happen is that if they're 0:11:01.440 --> 0:11:03.640 not making money elsewhere, they're going to try and raise 0:11:03.640 --> 0:11:06.200 premium somewhere else, which is what I said to start with, 0:11:06.600 --> 0:11:10.000 that there will be a way that they'll get through this. 0:11:10.960 --> 0:11:13.000 But clearly uncertainty in the new time. 0:11:13.520 --> 0:11:14.800 There's that word again, uncertainty. 0:11:14.840 --> 0:11:17.040 We heard her so many times the day across so 0:11:17.040 --> 0:11:19.959 many different industries. Sam Fazelli, thanks so much for your time. 0:11:19.960 --> 0:11:22.439 Always appreciate checking in with you. Sam Fazzelli. He's a 0:11:22.440 --> 0:11:26.440 director of Research for Global Industries, Senior Pharmaceuticals and Senior 0:11:26.480 --> 0:11:28.520 Wine analyst for Bloomberg Intelligence. 0:11:28.559 --> 0:11:31.120 Based over there in London. 0:11:32.880 --> 0:11:36.600 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:11:36.679 --> 0:11:39.720 weekdays at ten am Eastern on Apple, Coarclay and Android 0:11:39.760 --> 0:11:43.079 Auto with the Bloomberg Business App. Listen on demand wherever 0:11:43.120 --> 0:11:46.280 you get your podcasts, or watch us live on YouTube. 0:11:46.640 --> 0:11:48.200 All right, we're going to shift gears now. I want 0:11:48.240 --> 0:11:50.640 to take us to honorad Rona. He is Bloomberg Intelligence 0:11:50.679 --> 0:11:56.000 Technology analyst corwe That is the big headline buying Core Scientific. 0:11:56.080 --> 0:11:59.160 It's an all stock transaction, an rog. I want to 0:11:59.200 --> 0:12:01.480 bring you in and talk about this for core Weve. 0:12:01.559 --> 0:12:03.520 What is the benefit from this? What do they gain 0:12:03.559 --> 0:12:03.840 from this? 0:12:05.280 --> 0:12:08.080 Mean, think about it that they have capacity to process 0:12:08.120 --> 0:12:10.880 ex summer of transactions or the backlock that they have 0:12:11.520 --> 0:12:14.400 with this particular deal, they are expanding their infrastructure. 0:12:14.440 --> 0:12:15.720 I mean it's a very simple deal. 0:12:15.800 --> 0:12:18.000 As if you know, they're just buying more factories to 0:12:18.080 --> 0:12:20.920 produce what they do. So is you know, it's it's 0:12:21.080 --> 0:12:21.880 as simple as that. 0:12:22.400 --> 0:12:23.000 All right, So this. 0:12:23.240 --> 0:12:27.800 I'm not a tech person, so, but I know, tell 0:12:27.880 --> 0:12:30.880 us what Core We've is, what do they do and 0:12:30.920 --> 0:12:33.520 why are they shouting out nine billion dollars to get bigger? 0:12:33.559 --> 0:12:35.199 I guess yeah. 0:12:35.280 --> 0:12:38.120 So in the purest of pure forms, they are just 0:12:38.280 --> 0:12:41.640 renting computing resources to anybody that wants to run an 0:12:41.640 --> 0:12:42.640 AI infrastructure. 0:12:42.880 --> 0:12:44.559 They are a very big Invidia shop. 0:12:44.640 --> 0:12:48.319 They basically buy GPUs from Invidia, They create a network 0:12:48.400 --> 0:12:50.640 or an infrastructure, and they give it to people to 0:12:50.679 --> 0:12:53.440 go out and experiment or do whatever they need to 0:12:53.440 --> 0:12:56.800 do on that infrastructure. It's no different than what AWS does, 0:12:57.160 --> 0:13:00.520 but very heavy focus on GPUs rather than the CPO. 0:13:00.640 --> 0:13:03.240 So that's really the big difference between a pure play 0:13:03.720 --> 0:13:06.600 provider like Core Weve versus Amazon Web Services. 0:13:06.880 --> 0:13:09.240 Now, if you can dig into some of the background, 0:13:09.240 --> 0:13:12.040 what kind of challenges has has Core We've had in 0:13:12.080 --> 0:13:14.360 the past. I mean, didn't they have a pretty dismal IPO. 0:13:15.400 --> 0:13:15.600 Yeah. 0:13:15.679 --> 0:13:18.200 I think that's really the most important thing is, you know, 0:13:18.280 --> 0:13:20.959 they everybody thought when they're going to come out as 0:13:20.960 --> 0:13:24.280 the first pure play you know AI infrastructure IPO, it's 0:13:24.320 --> 0:13:27.320 going to be extremely popular, but it didn't happen. And 0:13:27.320 --> 0:13:30.360 the reason for that is because they need a large 0:13:30.400 --> 0:13:33.839 amount of upfront capital to build these data centers, and 0:13:33.920 --> 0:13:35.560 then the workload comes in over the. 0:13:35.600 --> 0:13:36.480 Next several years. 0:13:36.600 --> 0:13:39.280 So there's a lot of questions about whether there's going 0:13:39.280 --> 0:13:42.959 to be sustainability of this GPU demand going forward several 0:13:43.040 --> 0:13:45.680 years out. So that's why you were right. The IPO 0:13:45.720 --> 0:13:47.840 came at forty. In a few days, it was down 0:13:47.880 --> 0:13:50.200 to thirty five. But now we're seeing you know, the 0:13:50.240 --> 0:13:53.280 stock closer won sixty before this deal was announced, so 0:13:53.559 --> 0:13:55.360 I you know, we have talked about it before that. 0:13:55.480 --> 0:13:57.640 You know, why aren't they doing a secondary when it's 0:13:57.679 --> 0:13:59.480 like one hundred and sixty blucks stocks of what they 0:13:59.520 --> 0:14:02.040 did instead? It is they use their stock to go 0:14:02.120 --> 0:14:04.840 out and buy another competitor I should say competitor, but 0:14:05.320 --> 0:14:07.960 you know, another company in that space, so that it 0:14:08.040 --> 0:14:10.840 expands their capacity, and you know, I think they're doing 0:14:10.880 --> 0:14:12.880 the right thing by using stock at this point. 0:14:13.080 --> 0:14:15.760 Are there more core weaves out there on a round 0:14:16.280 --> 0:14:20.720 kind of more pure play AI stories, maybe the kind 0:14:20.760 --> 0:14:23.880 of the sausage of AI if you will, the guts 0:14:24.680 --> 0:14:26.440 that somebody could take public. 0:14:27.480 --> 0:14:29.920 There are multiples of them there, but they are much 0:14:29.920 --> 0:14:32.920 smaller size in korby they I would say there would 0:14:32.920 --> 0:14:35.360 be hundreds of them at this point, because you know, 0:14:35.400 --> 0:14:37.560 you go out, you buy the GPU, you go out 0:14:37.600 --> 0:14:40.040 and start renting it out in the in you know, 0:14:40.080 --> 0:14:42.520 in a long time ago, this high powered computing was 0:14:42.720 --> 0:14:45.760 used for bitcoin mining, and then you know, when that's 0:14:45.800 --> 0:14:48.720 not in favor, these guys are renting out their infrastructure 0:14:48.720 --> 0:14:51.600 for other reasons. So there are other plays out there, 0:14:51.640 --> 0:14:54.560 but almost all of them are much smaller than core 0:14:54.640 --> 0:14:56.840 Viv from a you know, pure play point of view. 0:14:57.040 --> 0:15:00.560 Now we digged into corewey, what about Core Scientific, what's 0:15:00.600 --> 0:15:03.080 the attraction to them? 0:15:03.280 --> 0:15:05.400 I mean, it's just they're expanding the number of you know, 0:15:05.440 --> 0:15:08.640 the capacity that they have to process the transactions. In 0:15:08.680 --> 0:15:11.640 a sense that Corvieve is a massive backlock right now 0:15:11.680 --> 0:15:14.520 they have people wanting to use their services, and then 0:15:14.560 --> 0:15:16.440 these guys have to go out and lease it from 0:15:16.680 --> 0:15:19.600 you know, other companies like our Scientific In this case, 0:15:19.600 --> 0:15:21.560 they said, you know, they have an agreement with them 0:15:21.840 --> 0:15:25.080 to lease their facilities. They just said, you know, we'll 0:15:25.120 --> 0:15:27.440 buy it out and expand their size. And I think 0:15:27.480 --> 0:15:28.560 that's as simple as that. 0:15:28.960 --> 0:15:31.440 And I think I have to point out Lisa core 0:15:31.520 --> 0:15:34.200 Weave based in Livingston, New New Jersey. 0:15:34.280 --> 0:15:36.880 Yes, so it just goes to my folks. 0:15:36.840 --> 0:15:40.040 A little history lesson. Before there was Silicon Valley, there 0:15:40.080 --> 0:15:43.240 was New Jersey. There was Central Jersey, the Institute for 0:15:43.320 --> 0:15:48.240 Advanced Study, Princeton University, Menlo Park, New Jersey. Before there's 0:15:48.240 --> 0:15:50.680 a Menlo Park, California, Menlo. Before there's a sand Hill 0:15:50.800 --> 0:15:53.280 road in Silicon Valley, there's a sand Hill. 0:15:53.200 --> 0:15:56.160 Road in Jersey. So it all, there's all these Jersey 0:15:56.160 --> 0:15:58.960 guys went on New Jersey is back in New Jersey. 0:15:59.040 --> 0:16:00.880 All right, an, thank you so much. We appreciate it. 0:16:00.920 --> 0:16:04.280 On a rock ron Eastern technologyannels for Bloomberg Intelligence. He's 0:16:04.280 --> 0:16:07.360 in at Chicago. You're trying to establish Chicago as a 0:16:07.440 --> 0:16:08.600 technology hub. 0:16:08.640 --> 0:16:09.840 Here. 0:16:10.600 --> 0:16:14.280 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:16:14.400 --> 0:16:17.480 weekdays at ten am Eastern on Apple, Cocklay and Android 0:16:17.480 --> 0:16:20.800 Auto with the Bloomberg Business App. Listen on demand wherever 0:16:20.840 --> 0:16:24.000 you get your podcasts, or watch us live on YouTube. 0:16:24.600 --> 0:16:27.240 We want to move on now to the latest TikTok news. 0:16:27.280 --> 0:16:29.800 We're going to bring a man deep saying Bloomberg Intelligence 0:16:29.800 --> 0:16:32.960 senior tech industry analysts. Okay, so Mandy, President Trump getting 0:16:32.960 --> 0:16:35.080 ready to begin talks with China. About a possible TikTok 0:16:35.120 --> 0:16:37.840 deal to sell the app. Want to ask you, where 0:16:37.880 --> 0:16:39.040 do we stand in this right now? 0:16:39.080 --> 0:16:39.880 What is the latest? 0:16:40.480 --> 0:16:43.520 I mean, from what we know, President Trump is pretty 0:16:43.560 --> 0:16:46.720 confident that there is a buyer. In fact, there could 0:16:46.720 --> 0:16:51.360 be private equity buyers at Consortium who may be interested 0:16:51.440 --> 0:16:55.760 in buying TikTok us. And at this point, you know, 0:16:55.920 --> 0:16:58.080 they want to make sure that it goes through in 0:16:58.160 --> 0:17:01.280 terms of getting the approval from China. But in the 0:17:01.360 --> 0:17:06.000 process they've launched a new app, TikTok Has, and that 0:17:06.440 --> 0:17:09.840 sort of suggests they want to decouple the algorithm from 0:17:09.880 --> 0:17:13.960 the core TikTok usage. So that was also a point 0:17:14.000 --> 0:17:18.040 of contention in terms of getting the approval. So I 0:17:18.080 --> 0:17:20.960 think the two go hand in hand, that one there 0:17:21.000 --> 0:17:23.840 is a buyer available and the other the app is 0:17:23.920 --> 0:17:26.720 getting a changeover in terms of decoupling the algorithm. 0:17:26.720 --> 0:17:29.960 All right, So am I going to have effectively two 0:17:30.080 --> 0:17:33.600 tiktoks out there? The TikTok app we all know and love, 0:17:34.480 --> 0:17:37.320 and then something that they are doubling internally is M two. 0:17:38.680 --> 0:17:42.760 So now there's gonna be two effective TikTok apps out 0:17:42.760 --> 0:17:43.679 there for all these people. 0:17:44.160 --> 0:17:49.720 Yes, and look with apps, there's always like a date 0:17:49.800 --> 0:17:54.199 when the first app will obviously be phased out and 0:17:54.800 --> 0:17:57.280 folks won't have access to it. I mean, remember what 0:17:57.400 --> 0:18:01.240 happened during the band you know that wasn't even available. 0:18:01.320 --> 0:18:04.240 So in this case, the plan is if and when 0:18:04.280 --> 0:18:08.240 the deal gets announced and the new TikTok owner which 0:18:08.359 --> 0:18:11.200 we don't know who will be ye, will get access 0:18:11.200 --> 0:18:13.800 to the new app, and then the first one gets 0:18:13.800 --> 0:18:14.320 paced down. 0:18:14.960 --> 0:18:18.040 All right, So my kids want to know, asking, okay, 0:18:18.400 --> 0:18:21.440 is there any chance of none of this going through, 0:18:21.560 --> 0:18:25.080 like just TikTok disappearing from the US in general, they'd 0:18:25.080 --> 0:18:27.080 be devastated, Mandy. 0:18:27.400 --> 0:18:30.080 Look, it happened for two days, the app went dark, 0:18:30.280 --> 0:18:33.359 and at that time Instagram got a very nice pop 0:18:33.440 --> 0:18:38.080 in terms of engagement. So from that perspective, this will 0:18:38.119 --> 0:18:41.960 be all positive news for a meta snapchat or you know, 0:18:42.160 --> 0:18:45.639 even if dual lingo was mentioned as a beneficiary of 0:18:46.400 --> 0:18:49.080 app and dark. Yeah, I know, it's all very intuitive, 0:18:49.119 --> 0:18:51.800 but it did happen. In the data you could see 0:18:51.840 --> 0:18:54.560 for those two days, duel Lingo did get a pop 0:18:54.600 --> 0:18:56.160 in the engagement time. 0:18:56.280 --> 0:18:56.680 All right. 0:18:56.800 --> 0:18:58.880 I mean, you gotta spend your time somehow, go forbid 0:18:58.960 --> 0:19:04.439 reading a book says the father. You know, Okay, so China. 0:19:04.480 --> 0:19:07.240 If I'm China, what's my incentive to approve a sale 0:19:07.320 --> 0:19:11.560 to say, a group maybe including some like an Oracle, 0:19:11.600 --> 0:19:12.440 what's my incentive? 0:19:13.040 --> 0:19:16.159 The incentive is it's the President of the United States 0:19:16.240 --> 0:19:20.679 who is negotiating the deal, you know. And this is 0:19:20.760 --> 0:19:23.919 part of a much bigger conversation when it comes to 0:19:24.000 --> 0:19:29.560 China tariffs and everything that they are negotiating. So TikTok 0:19:29.640 --> 0:19:32.960 deal to me, is part of that bigger negotiation now, 0:19:33.240 --> 0:19:36.760 and President Trump is obviously keen to have a deal 0:19:36.840 --> 0:19:39.439 for TikTok Us. He doesn't want the app to be banned, 0:19:39.680 --> 0:19:42.920 and as part of that, he wants some concessions on 0:19:42.960 --> 0:19:45.000 the tariff front. So to me, this is part of 0:19:45.040 --> 0:19:46.280 a much bigger negotiation. 0:19:46.720 --> 0:19:49.280 Now you mentioned Oracle, it's Oracle, the only name being 0:19:49.280 --> 0:19:49.919 thrown around. 0:19:50.080 --> 0:19:52.880 They are the trusted one when it comes to Washington. 0:19:53.359 --> 0:19:56.720 They are among all the hyperscalers. I think they get 0:19:56.800 --> 0:19:59.760 the trust of the President in terms of moving. 0:19:59.520 --> 0:20:01.600 Ahead with what's the drug? Why Oracle? 0:20:01.960 --> 0:20:07.160 Well, Oracle clearly hosts all the back end infrastructure for TikTok, 0:20:07.600 --> 0:20:09.480 So this has been going on a while and they 0:20:09.520 --> 0:20:13.680 have moved all the back end infrastructure to Oracles platform, 0:20:14.080 --> 0:20:17.159 and they clearly have some sort of synergy when it 0:20:17.200 --> 0:20:20.720 comes to hosting that making sure nothing gets saved in 0:20:21.600 --> 0:20:25.080 Chinese data centers and none of the data gets transferred there. 0:20:25.160 --> 0:20:27.320 So I think they're in the best position to do. 0:20:27.280 --> 0:20:30.680 That thirty seconds. Any sense of timing when this could happen. 0:20:31.440 --> 0:20:35.240 It sounded like President Trump is confident about this happening 0:20:35.640 --> 0:20:38.040