Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From the Heart where Innovation, money and power Collie in
Speaker 2: Silicon Valley, Nbon.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 4: Live from New York.
Speaker 5: As the Blomberg Technology coming up, Micron planets after reporting earnings,
Speaker 5: and AI just couldn't make up for the smartphone and
Speaker 5: PC cheap weakness. Plus Elo Musk wielding his political power
Speaker 5: as the US now risks a government shutdown. We discuss
Speaker 5: as impact on the next stopgap bill, and Apple holds
Speaker 5: its plans for an iPhone hardware subscription service. This and
Speaker 5: much more on Apple News later this hour. But first
Speaker 5: weche can on one key stock. It is down more
Speaker 5: than seventeen percent and it is having its worst day
Speaker 5: since March twenty twenty. Micron really slumping on the back
Speaker 5: of its numbers, and we get straight to it the why,
Speaker 5: the how, as you see that it eradicates most of
Speaker 5: its gains year to date.
Speaker 4: We go to Blue meg Intelligence analyst Jake.
Speaker 5: Silverman first, whose report lays out that the outlook missed
Speaker 5: by twelve percent and week a smartphone PC in auto
Speaker 5: bit demand.
Speaker 4: This is it.
Speaker 5: We were all really excited about high bandwidth memory for
Speaker 5: AI applications, but really it comes back to you and
Speaker 5: me not buying more phones.
Speaker 6: Yeah.
Speaker 7: Well, look, there was definitely an inventory correction to some
Speaker 7: extent for fiscal two Q and this was starting to
Speaker 7: happen earlier this year. Actually we're starting to see this
Speaker 7: in June, July, August, and the reason primarily was to
Speaker 7: build the inventory ahead of price increases that did occur
Speaker 7: but now are starting to impact the company's demand.
Speaker 4: I see.
Speaker 5: So Sanja Marotra is really trying to set and spell
Speaker 5: out that the second half it's going to turn around.
Speaker 5: We're actually going to see maybe even a growth of
Speaker 5: the PC market of some five percent in twenty twenty five.
Speaker 7: But what spurs that, Well, there's typical seasonal demand, so
Speaker 7: we would hope to see seasonal growth in the second
Speaker 7: half regardless. But there's also the opportunity where there's content
Speaker 7: expansion within AIPCS AI smartphones, So there's an opportunity there.
Speaker 7: Whether or not that occurs, I think that still remains
Speaker 7: to be seen, but there's still optimism that there can
Speaker 7: be growth in the second half of the year versus
Speaker 7: the first half.
Speaker 4: So look, as we're try and get our head.
Speaker 5: Around the actual demand for AI in the consumer radiator department.
Speaker 5: In the data center, it is then, what four hundred
Speaker 5: percent growth in terms of their AI demand and sales.
Speaker 4: Why is that not bringing in enough revenue yet?
Speaker 6: Though?
Speaker 7: Well, so, they do have a number of products that
Speaker 7: are really impacting data center and demand. So high bandwidth
Speaker 7: memory is probably the most talked about, but it's actually
Speaker 7: still the most nascent for them. It's really not generating
Speaker 7: the bulk of the growth yet.
Speaker 6: So they still have other products.
Speaker 7: Like high capacity DRAM modules, stems, LPDDR five. They're really
Speaker 7: for servers, both AI and traditional compute. Traditional compute was
Speaker 7: actually a bit better than had been previously anticipated. But
Speaker 7: on the other hand, there's also data center SSDs, which
Speaker 7: seemed to be moderating near term, where they had been
Speaker 7: experiencing some pretty tremendous growth beforehand and had been benefiting
Speaker 7: a lot from share gains as well well.
Speaker 5: With meg Intelligence analyst Jake Silvan breaking down what is
Speaker 5: a pretty painful day in HQ in Voise, Idaho. But
Speaker 5: now let's go out to an investor in the scene.
Speaker 5: Kim forest Cio of Boca Capital Partners thirty five million
Speaker 5: dollars in assets under management, and Kim, you'll take on
Speaker 5: what is a absolute punishment on the stop today.
Speaker 8: Absolutely, Well, I've been doing this for her number of years,
Speaker 8: since nineteen ninety nine. And well I was a sales
Speaker 8: side analyst and a biside analyst than a PM then
Speaker 8: chief investment officer of my own firm. That being said,
Speaker 8: this is not my first day at this rodeo and
Speaker 8: Micron in particular, and all the memory kind of companies
Speaker 8: seem to have this boom bust cycle, and the boom
Speaker 8: and bust can be really close to each other, as
Speaker 8: evidenced by the price chart of Micron.
Speaker 6: So what's an investor to do? Well? Some people would
Speaker 6: like to be able.
Speaker 8: To trade this know when to go in low, you
Speaker 8: know when the high is God bless you on that.
Speaker 8: I think what you have to do is look at
Speaker 8: Micron and say it has terrific growth. There are very
Speaker 8: few players in this space. There's maybe six or seven
Speaker 8: companies that are competitors, and for the most part, sometimes
Speaker 8: bad things like this happen, but sometimes good things happen too.
Speaker 8: And to be able to trade around that around these
Speaker 8: events where there's a sudden shortfall in demand, but it
Speaker 8: will be made up. I think it's more of a
Speaker 8: buying opportunity than getting out now. The other thing is is,
Speaker 8: if you look at that chart, some people bought it
Speaker 8: at much higher prices this year, and it could be
Speaker 8: tax lost selling going on that's really driving the price
Speaker 8: down today.
Speaker 5: So there's a seasonality element to all of this. It's
Speaker 5: interesting if you go to analyst recommendations at the moment,
Speaker 5: a lot of people cut their price targets, but still
Speaker 5: you've got thirty seven buys on this stock, You've only
Speaker 5: got one cell, and the overall consensus for price target
Speaker 5: it's still at one hundred and thirty five. You've got
Speaker 5: room to run up from an eighty five dollars.
Speaker 4: But how does Sanjay Morotra.
Speaker 5: Get us there in terms of what he needs to
Speaker 5: signal now to the market.
Speaker 4: How much can he.
Speaker 5: Say, look, put aside China, put aside my exposure to
Speaker 5: the consumer, I'm all in on AI.
Speaker 8: Well, I think he made the case that he's all
Speaker 8: in on AI right, Like they have the products that
Speaker 8: AI wants and needs. AI for many reasons, has saved
Speaker 8: this market, right. I mean in video and meta certainly
Speaker 8: have driven it. But the real issue here is the
Speaker 8: AI people are buying stuff and building out their data centers,
Speaker 8: and I don't know that that's going to stop in
Speaker 8: any you know, definable time.
Speaker 5: And I did you sorry just so, But in that Kim,
Speaker 5: did you get that sort of easing of any anxiety,
Speaker 5: whether or not it was closely held or far away
Speaker 5: that we might be at some pivot point where the
Speaker 5: demand does start.
Speaker 4: To ease up.
Speaker 6: Sure?
Speaker 8: I mean, well, here's here's what investors really have to understand.
Speaker 8: Micron is a very small world in which all of
Speaker 8: its clients are either all on or all off, or
Speaker 8: so it seems.
Speaker 6: And if you remember when we were.
Speaker 8: Building out regular cloud database or cloud data centers, it's lumpy.
Speaker 6: And what I mean by that is you're either.
Speaker 8: Building out or you're not, and all of a sudden
Speaker 8: it can stop. And whenever several companies that have been
Speaker 8: building out data centers stopped, you know, the providers get clover.
Speaker 8: That's just the nature of this, and we don't know
Speaker 8: when it's going to stop. So investors have to be
Speaker 8: aware that we're not going to be spending in perpetuity to.
Speaker 9: Build out AI.
Speaker 6: There will be a day.
Speaker 8: When people take a pause and actually have to you know,
Speaker 8: reap the rewards of building this product and you know,
Speaker 8: having people pay for the.
Speaker 5: Service these mega clusters at a moment though that we
Speaker 5: seem to be seeing is not a signal of us
Speaker 5: pulling back anytime soon. But does macro policy, does a
Speaker 5: new administration in any way dampen the spirits or only
Speaker 5: accelerate them?
Speaker 8: Kim, It doesn't seem so, because the companies that are
Speaker 8: building these data centers out have enough money from what
Speaker 8: they're doing now. They don't need to be able to
Speaker 8: say in the future, I'll be able to you know,
Speaker 8: in some very definable timeline, I need to get my
Speaker 8: money back. So they are going to be building these
Speaker 8: things out because they have the cash flow. And I'm
Speaker 8: talking to about Microsoft, Google and Meta, their regular businesses
Speaker 8: are providing the capital to build out data centers.
Speaker 5: So you said this potentially could be a buying moment
Speaker 5: for Micron. What about the chip space more broadly, because
Speaker 5: everyone's been suddenly in on this focus on software trade.
Speaker 8: Right, Well, I think it's great, Like at some point
Speaker 8: software has to come back to winning.
Speaker 6: I used to be a software engineer and I.
Speaker 8: Would love to be able to like buy a good
Speaker 8: software company that I think will grow again in perpetuity.
Speaker 6: I like moneymaking machines.
Speaker 8: Microsoft has been that, although it had a lull in
Speaker 8: the you know, twenty ten to twenty fourteen range something
Speaker 8: like that. But yeah, software is great, but hardware is
Speaker 8: what is driving me crazy right now, because it seems
Speaker 8: there is no lack of demand and I think the
Speaker 8: software will follow.
Speaker 6: Now.
Speaker 8: A lot of people are Momentum investors, and I worry
Speaker 8: about Nvidia about that because Broadcom's kind of taken all
Speaker 8: or Era out of the room for Nvidia.
Speaker 5: Kim Forest just dampening our animal spirits when it comes
Speaker 5: to some of the key trades that have been in
Speaker 5: this here, Kim, we so appreciate it. Boca Capital Partners
Speaker 5: wishing you happily holidays, just cio there. Meanwhile, look, the
Speaker 5: Biden administration has cemented a deal to give sk Heinex,
Speaker 5: course another high bandwidth memory maker, close to four hundred
Speaker 5: and sixty million dollars in grants and five hundred million
Speaker 5: in loans. This is to support a facility in Indiana
Speaker 5: which will focus on packaging chips sent to the US
Speaker 5: from sk Heinex plants in South Korea.
Speaker 4: The deal is a key part of.
Speaker 5: US efforts to build a domestic semiconductor supply chain. Now
Speaker 5: coming up, Elon Musk's influence in Washington being felt already
Speaker 5: as he helps kill a stop gap funding bill. More
Speaker 5: on that next, this is blue Meg Technology. The last
Speaker 5: minute government funding bill has been scrapped by House Speaker
Speaker 5: Mike Johnson after urged lawmakers and President elect Trump to
Speaker 5: risk a government shutdown rather than accept for post stop
Speaker 5: gap bill.
Speaker 4: Room mergs Mike Shephard joins us for more.
Speaker 5: And if anyone had potentially been doubting or questioning the
Speaker 5: influence of being on Musk, that proved wrong.
Speaker 2: Here those doubts were erased. And in resounding forum yesterday
Speaker 2: it was almost like on cue. We saw Elon Musk
Speaker 2: use the power of his x ex social media platform
Speaker 2: to gin up opposition and amplify it very quickly and
Speaker 2: within ours. President elect Donald Trump and Vice President elect JD.
Speaker 2: Vance chimed in and said that day two oppose this
Speaker 2: spending deal, which have been negotiated for weeks, if not months,
Speaker 2: to try to revert a government shutdown that will come
Speaker 2: as soon as Saturday morning if lawmakers can't go back
Speaker 2: to the drawing board and put together something on the fly,
Speaker 2: which looks really unlikely right now.
Speaker 5: Republicans saying that that phone has been ringing off the
Speaker 5: hooks on the back of this call to arms.
Speaker 4: To call your lawmaker, hasn get it taken off.
Speaker 5: He's shown his political clout, but behind the scenes, he's
Speaker 5: also building a team, taking expertise from those he knows
Speaker 5: already and indeed attending every meeting that seems to be
Speaker 5: going on.
Speaker 4: In mar Laga.
Speaker 2: Well, you're right, Caroline, because what we've also seen is
Speaker 2: Musk using this bully pulpit of X to also give
Speaker 2: wing to this venture that Donald Trump appointed him and
Speaker 2: Vivek Ramaswami, one of Trump's campaign.
Speaker 9: Rivals, to lead.
Speaker 2: That's the Department of Government Efficiency. Now keep in mind
Speaker 2: it's not really a department. It wasn't an agency created
Speaker 2: by Congress. But its goal is to do kind of
Speaker 2: what they're asking for in their social media communications yesterday,
Speaker 2: and that is cut down the size of government, reduced spending,
Speaker 2: reduced the scope of government. And this entity, if you will,
Speaker 2: lack of a lack of a better run, we'll call
Speaker 2: it that. It is still taking shape, but we do
Speaker 2: know that they are hiring. Thanks for really great scoop
Speaker 2: by our colleagues yesterday, we already know that they have
Speaker 2: hired about ten people. And Elon Musk has into an
Speaker 2: executive from the boring company and a former Trump Chief
Speaker 2: technology officer in his administration the prior administration, to lead
Speaker 2: the hiring push. They've been talking to candidates. They're looking
Speaker 2: for software engineers, including folks with artificial intelligence expertise, and
Speaker 2: the idea is that they would apply that to the
Speaker 2: vast reams of government data, perhaps to try to figure
Speaker 2: out what are the efficiencies that could be gained.
Speaker 5: I want to where that talent comes from, because of
Speaker 5: course he's been busy hiring an XAI in that department too.
Speaker 5: Mike Shepard a joy to have him here in New York.
Speaker 5: Let's just talk a little bit about lev space more
Speaker 5: broadly as well, because Tesla is in early talks. We
Speaker 5: understand the city of Austin about rolling out a fleet
Speaker 5: of autonomous vehicles.
Speaker 4: As early as next year.
Speaker 5: In emails acquired by Bloomberg, Tesla employees have been communicating
Speaker 5: with the Texas city, so it's at least May to
Speaker 5: establish safety expectations for the vehicles. The emails go on
Speaker 5: further saying that Tesla has not yet finalized its decision
Speaker 5: for an Austin deployment. Let's stick on Tesla, Let's stick
Speaker 5: on EV landscape, Let's stick on all things in La
Speaker 5: Mosque as well, and how all of this is set
Speaker 5: to change under the twenty twenty five percent and Electrump administration,
Speaker 5: and maybe we see some of those EV incentives wound down,
Speaker 5: even a possibility of fast tracking autonomous driving too. We've
Speaker 5: got a perfect person, Steve Westley's with us Wesley Group
Speaker 5: managing partner, who used to be on the border of
Speaker 5: the EV giant as well as your key player in
Speaker 5: California politics, and therefore this is the perfect dimension to
Speaker 5: discuss this with you. How are you thinking the EV
Speaker 5: landscape changes come January twentieth, Well, look.
Speaker 10: Let's look at the big picture first.
Speaker 11: So people are saying EV growth is slowing down, nonsense.
Speaker 11: One out of five of all cars sold globally in
Speaker 11: twenty twenty four will be electric or hybrid. So we're
Speaker 11: living in an EV world and it's just moving faster.
Speaker 11: That's twenty five percent year over year growth, seventeen million
Speaker 11: evs sold, globally, US Canada a solid growth about twelve percent,
Speaker 11: China red hot at forty percent. The big stories is
Speaker 11: you talked about are kind of tesla versus byd.
Speaker 10: Who's going to be global leader?
Speaker 11: And then there's this other issue of US versus China
Speaker 11: and how are terrorists going to affect this? And what
Speaker 11: people have to remember US has already slapped terriffs on
Speaker 11: any Chinese car sold in the US.
Speaker 10: But that's firstly none.
Speaker 11: You've got to ask the question of what happens at
Speaker 11: the Chinese slap one hundred percent terriffs on US cars
Speaker 11: or automakers.
Speaker 9: Selling cars that happened.
Speaker 4: Do you think there's a high risk even for a tesla?
Speaker 10: Oh?
Speaker 11: Look, whatever, there are terrifts slapped on by one country
Speaker 11: or another, you've got to expect the other country to respond.
Speaker 11: The big question is is that cars that are already
Speaker 11: made in that country are just cars that come so
Speaker 11: from the US going to China.
Speaker 10: But the pastline's the same.
Speaker 11: There's a lot more US automakers selling cars into China
Speaker 11: than vice versus.
Speaker 10: So the US needs to be careful at in this one.
Speaker 5: And yet we have seen vibes or whether it be
Speaker 5: real political clout driving testa share price up into the right.
Speaker 4: Ever since the results of the election, has any.
Speaker 5: Of this China US tension been priced in, do you think,
Speaker 5: Steve Well?
Speaker 11: I think people don't have their arms around it quite yet.
Speaker 11: So you've got to look at the Tesla share price.
Speaker 11: Seventy six percent growth since January one of this year.
Speaker 11: That's astonishing. The big question is can Tesla keep it up?
Speaker 11: And I think it's going to be tough without getting
Speaker 11: some new products into the market. Tesla's auto growth this year,
Speaker 11: you know, after roaring sales growth in twenty twenty one
Speaker 11: and twenty twenty two of fifty one percent and seventy percent,
Speaker 11: this year it's darn year flat. So Tessa's got to
Speaker 11: get this new lower cost car into the market. There
Speaker 11: are new rumors that there's going to be a new
Speaker 11: sub thirty thousand dollars model Q coming sometime in twenty
Speaker 11: twenty five, but we've got to make sure that that's real,
Speaker 11: so investors have to look at it. I think twenty
Speaker 11: five is going to be a make or break year.
Speaker 11: It could see new heights if you can see a
Speaker 11: lower cost car coming out and full self driving improve
Speaker 11: but it can also sink if they don't get a
Speaker 11: new car to market sales stay flat.
Speaker 10: That's going to scare people.
Speaker 5: Now as an investor, though, Steve, as an investor, how hard.
Speaker 4: Has it been to read the tea leads?
Speaker 5: Because we're trying to understand as to whether they're just
Speaker 5: going to cut costs of current models on the market
Speaker 5: and get us to some sort of sense of affordability.
Speaker 4: Because Elon just signals.
Speaker 5: Time and time again he's more interested in the robotaxi
Speaker 5: side and the full sife driving side.
Speaker 10: It's incredibly hard.
Speaker 11: I mean, share price going up seventy five percent when
Speaker 11: sales are flat.
Speaker 10: I don't think anybody's ever seen anything like that before.
Speaker 11: What's going on kind of a bet on full self
Speaker 11: driving and probably a bigger bet on Musk's relationship with
Speaker 11: President Trump. What no one's talking about is very quietly,
Speaker 11: the energy vision looks like the saving grace for Tesla
Speaker 11: seventy five percent year over year growth.
Speaker 10: The other thing investors have to get their.
Speaker 11: Arms around is auto companies aren't just auto companies anymore.
Speaker 11: They're also or energy companies too, and it's a whole
Speaker 11: new world.
Speaker 10: You've got to pay attention.
Speaker 4: I got to pay attention to the politics involved in it.
Speaker 5: This week, of course we saw that again California is
Speaker 5: really going to be focusing in on in shoring, EV adoption,
Speaker 5: Steve where you sit. But also we've got a news
Speaker 5: story around the potential unionization let's call it subtly being
Speaker 5: done over with Rivian.
Speaker 4: We understand the UAWS reached a.
Speaker 5: Kind of secret deal with Rivian to make unionization easier
Speaker 5: as and when it becomes a profitable company.
Speaker 4: How much you think.
Speaker 5: That's a key area the labor side of things to
Speaker 5: the EV space.
Speaker 11: Well, look, the labor side's huge because labor costs are
Speaker 11: going up. This is one of the things that's plagued
Speaker 11: GM and Forward for years. And what's interesting is must
Speaker 11: it's great at pulling out all the stuff, making things
Speaker 11: go faster than any of the automaker, but he still
Speaker 11: has to deal with unions. And he may be the
Speaker 11: well dis guy in the world, but that's not going.
Speaker 10: To impact.
Speaker 11: How well with union battles German workers potential the outline
Speaker 11: strike soon precisely when he's trying to catch up for
Speaker 11: a Q four sales. So it's going to be interesting
Speaker 11: to see can Tessela's auto sales increase this year. You
Speaker 11: can I show your over year growth. Gosh, that's going
Speaker 11: to be a tough one to sell to shareholders.
Speaker 10: We'll see.
Speaker 5: And you are a long time shareholder and an influential
Speaker 5: one of that, Steve Wesley. We thank you of the
Speaker 5: Wesley Group time now for talking tech.
Speaker 4: First up.
Speaker 5: Apple has halted its project building out an iPhone hardware
Speaker 5: subscription service it's acording to sources, the idea was to
Speaker 5: make owning an iPhone like subscribing to an app, with
Speaker 5: consumers paying monthly fees to get a new phone each year.
Speaker 5: Apple has since disbanded and reassigned the team to other projects. Plus,
Speaker 5: the European Commission is pushing Apple to further open up
Speaker 5: its iPhone operating systems to rivals. Commission instructed the tech
Speaker 5: giant on Wednesday to rework iOS so that devices like
Speaker 5: smart watches, earbuds, headsets from rivals more compatible with the
Speaker 5: Apple ecosystem, and Apple is close to getting Indonesia to
Speaker 5: lift its ban on iPhone sixteen sales, this after the
Speaker 5: country's president gave his approval for a one billion dollar
Speaker 5: investment from the tech giant.
Speaker 4: Again, according to sources.
Speaker 5: Indonesia First Band remembers sales with the flagship device last month,
Speaker 5: saying Apple failed to comply with its domestic content requirements.
Speaker 4: Get stuck into all of these Apple related stories. I
Speaker 4: want to known Mark German with.
Speaker 5: Us, and Mark just talk to us a little bit
Speaker 5: more about what's happening with Indonesia because this is a
Speaker 5: big one eighty and they played hardball.
Speaker 4: In a one.
Speaker 6: Yeah, that's exactly right.
Speaker 1: So Apple and Indonesia have been going back and forth
Speaker 1: for weeks now since the launch of the iPhone sixteen. Right, Obviously,
Speaker 1: Apple wants to get the device in as many countries
Speaker 1: as possible. Indonesia is important to Apple because that's a
Speaker 1: potential growth market for them. Right, they are making a
Speaker 1: big bush across Southeast Asia and not being able to
Speaker 1: get it in one of the biggest countries there is
Speaker 1: a really big deal for them, and so they've been
Speaker 1: making different offers and what they finally landed on is
Speaker 1: investing one billion dollars into a facility there that would
Speaker 1: produce essentially twenty percent of air tags. AirTags, obviously, is
Speaker 1: that fun little device we're all gearing up to include
Speaker 1: in our luggage for the holidays. Right, It's not Apple's
Speaker 1: most popular product, but it's an important one, and it
Speaker 1: sounds like it was enough to get the job done.
Speaker 1: Apple is gearing up to release a new air tag
Speaker 1: in the middle of next year with much better range,
Speaker 1: better privacy, So that is going to be a cool
Speaker 1: thing for Indonesia to be able to produce that product
Speaker 1: potentially or further generations of that device.
Speaker 5: Let's stay global on the Apple front when you're looking
Speaker 5: at the EU news as well, because this compatibility argument
Speaker 5: has been going on for a while. Ultimately, whatever the
Speaker 5: EU forces does it become global in nature.
Speaker 1: The EU wants to crack open the iPhone completely. They
Speaker 1: want to essentially make it Android. They want to make
Speaker 1: it so users could be a bunch of cowboys and
Speaker 1: do whatever they want to the device.
Speaker 12: Right.
Speaker 1: Apple, on the other hand, wants this closed ecosystem with
Speaker 1: a privacy centric design and a clean user interface.
Speaker 6: They don't want.
Speaker 1: People to be able to open up their device to
Speaker 1: work with third party earbuds and watches and headsets as
Speaker 1: well as.
Speaker 6: It works with Apple products.
Speaker 1: And so the EU put out a list of several
Speaker 1: things it wants Apple to adopt and allow third parties
Speaker 1: to use at a deeper level, things like air drop
Speaker 1: file sharing, things like airplay video beaming from the device
Speaker 1: to other products, things like opening up underlying Wi Fi protocols.
Speaker 6: And Apple is.
Speaker 1: Pushing back on that by using Meta as an example
Speaker 1: and showcasing fifteen data categories that Meta wants access to
Speaker 1: and physitioning Meta as this anti privacy company and trying
Speaker 1: to show consumers and the European Commission, right the regulators
Speaker 1: in the EU, what could potentially happen to Apple device
Speaker 1: customers if these programs are opened up to the extent
Speaker 1: that they want them to be opened up.
Speaker 5: That Apple Meta rivalry really continues to play out when
Speaker 5: it comes to politics. Margam, thank you, welcome back to
Speaker 5: blow Meg Technology. I'm Caroline heid in New York. We
Speaker 5: also want to be going into the story that is TikTok.
Speaker 5: Today marks exactly one month until a possible ban in
Speaker 5: the United States, but now with the Supreme Court excepting
Speaker 5: to hear TikTok's challenge to that law, well, the social
Speaker 5: media app has a glimmer of hope. Alexander Levine joins
Speaker 5: us Now it's Today's Tech Daily. It is a big
Speaker 5: viewership on this story.
Speaker 4: And it's a big twist. It's a big twist.
Speaker 13: I think a lot of people are looking at this
Speaker 13: as a huge game changer in the eleventh hour, and
Speaker 13: I think we need a caution to just say that
Speaker 13: this could very well just be the Supreme Court doing
Speaker 13: what the Supreme Court has always set out to do.
Speaker 13: And we need to remember that this is the first time,
Speaker 13: if the band goes through, that a social media app
Speaker 13: will have ever been banned in this country. And so
Speaker 13: this could very well just be the Supreme Court, you know,
Speaker 13: recognizing how important these issues are and wanting to really
Speaker 13: set their record straight before a shutdown happens, and also
Speaker 13: before the administration changes hands, because a.
Speaker 5: Lot of people have said, well, the Supreme Court, large
Speaker 5: part of them, have been selected by previous president and
Speaker 5: now President elect Trump, and maybe that would bend towards
Speaker 5: whatever his views on.
Speaker 4: The social media app have been.
Speaker 5: Of course, he says there's a soft place in his heart,
Speaker 5: for a special place in his heart for the app.
Speaker 4: But these are lawmakers at the.
Speaker 5: End of the day, and people who going to be
Speaker 5: assessing on the merits of the law.
Speaker 13: Absolutely, you know, the justices are going to rule as
Speaker 13: they may. I think there's a lot of speculation given
Speaker 13: Trump and where Trump is seeming to come down on
Speaker 13: this now versus where he used to stand about how
Speaker 13: the justices may rule.
Speaker 4: But I think we really don't know.
Speaker 13: And the Supreme Court, we don't know what the Supreme
Speaker 13: Court is going to do. We don't know that this
Speaker 13: actually means that TikTok is going to be able to
Speaker 13: withstand being banned. But it is a really remarkable timeline
Speaker 13: when you look at the fact that we're one month
Speaker 13: from the band.
Speaker 4: That was supposed to take effect.
Speaker 13: The argument will be January tenth, and then the law
Speaker 13: is set to take effect in your nine days later.
Speaker 13: So if anything, it's just worth pointing out that the
Speaker 13: Supreme Court is moving exceptionally fast and unusually fast on
Speaker 13: this one issue.
Speaker 4: So people who assess the law now have the ball.
Speaker 5: But what I'm interested in is also we've got to
Speaker 5: remember it's not just a ban.
Speaker 4: They could divest.
Speaker 5: We kind of come off that narrative because TikTok wants
Speaker 5: us to think that this is.
Speaker 4: Either a ban or nothing. If we had anything.
Speaker 5: About potential suits about Withever, we would see its funnle.
Speaker 13: Absolutely, we know that this is sort of the next
Speaker 13: phase of the saga. So Bite Dance has said they
Speaker 13: will not sell their most prize asset in the US.
Speaker 13: Beijing has also said that Beijing's export rules basically say
Speaker 13: that Chinese companies cannot sell their algorithms like the one
Speaker 13: that is central to TikTok in the US, and that's
Speaker 13: made it so popular here. But American, potentially American bidders,
Speaker 13: people who have deep enough pockets, are already lining up.
Speaker 13: We have some reporting coming on that very soon later today,
Speaker 13: and I think it's important to realize that people are
Speaker 13: not going to take no for an answer here. When
Speaker 13: you've got over half of the American population at this point,
Speaker 13: more people than voting than voted in the last election
Speaker 13: using the platform, these bidders are really trying to line
Speaker 13: themselves up at the front of a competitive pack for
Speaker 13: who may be the person or the company to take
Speaker 13: over the US iteration of the platform. If by Dance
Speaker 13: feels a squeeze in this sort of eleventh hour with
Speaker 13: all of the legal you know, the legal path coming
Speaker 13: to an end, they want to be sort of the
Speaker 13: ones at the front of the pack.
Speaker 5: Well, look out for that next story publishing later today.
Speaker 5: Alexandre Levine All Things TikTok. Amazon meanwhile is delaying the
Speaker 5: return to office for thousands of employees due to lack
Speaker 5: of space. The company told some personnel working in at
Speaker 5: least seven cities, including Austin, Dallas, Phoenix, here in New
Speaker 5: York as well that the return dates will be pushed
Speaker 5: back until.
Speaker 4: March even April, according to sources.
Speaker 5: The company spokesperson said the vast majority of employees will
Speaker 5: have desks starting on January second.
Speaker 11: Now.
Speaker 5: This week, the Biden administration also announced the overhaul of
Speaker 5: H one B visa eligibility standards. It's a move that
Speaker 5: expands who can receive the work visas and gives more
Speaker 5: flexibility and clarity. The revision comes a mid concern that
Speaker 5: the upcoming Trump administration.
Speaker 4: May change course. We've got a perfect voice, Simeon to
Speaker 4: catch founding partner.
Speaker 5: Of One Way Ventures, a VC firm that backs immigrant
Speaker 5: founders in the United States and Canada, and the pre.
Speaker 4: Seed at the seed stage. So just this.
Speaker 5: News, this clarity on who can apply for H one
Speaker 5: B visas and ideally be fast tractive.
Speaker 4: Indeed, you've been allowed one in the past. Does this
Speaker 4: make a difference to your companies.
Speaker 14: Yeah, I mean, I think more H one B visas
Speaker 14: and simple final process is certainly going to.
Speaker 9: Make it easier for people to hire.
Speaker 14: The immigrants and occasionally for immigrants to start companies as well.
Speaker 5: Yeah, And what was interesting is in the news on
Speaker 5: the H one B visa overhaul some people are calling
Speaker 5: it is that entrepreneurs in particular are going to be
Speaker 5: a to apply if you've got a majority holding in
Speaker 5: a company.
Speaker 4: That you're building.
Speaker 5: How much have we seen entrepreneurs those building within North
Speaker 5: America dependent on these sorts of accesses to living in
Speaker 5: the United States.
Speaker 14: Well, yeah, I mean I think if there's more path
Speaker 14: to being able to start a company, it's going.
Speaker 9: To have more companies started.
Speaker 14: In particular, I think it's relevant to students that complete
Speaker 14: the education here and some of them may in fact
Speaker 14: be deterred from starting a company without simplified visa process.
Speaker 5: There was certainly clarity given for students so that they
Speaker 5: don't see a hole in their ability to be staying
Speaker 5: in the United States if they're going to be finding
Speaker 5: a job or building a business here. We're just looking
Speaker 5: at the founders that you do indeed back most of them.
Speaker 4: Being immigrant founders. Why focus on that demographic.
Speaker 14: Well, our fund, you know, we only invest in immigrants.
Speaker 14: We are immigrants. We know that collectively immigrants. If you
Speaker 14: take immigrants from any country to the US, they're not
Speaker 14: just like slightly better at building businesses. They are responsible
Speaker 14: for the majority of the value generated from new companies.
Speaker 9: Most of the unicorns that.
Speaker 14: Are billion dollar, multi billion dollar success stories are in
Speaker 14: fact started by immigrants, like fifty five percent of them,
Speaker 14: people who personally themselves made the journey and came here.
Speaker 5: Why why is that some sort of causal link or
Speaker 5: correlation link that people who have been driven and motivated
Speaker 5: to move and to come are going to be well
Speaker 5: more weighted to being successful.
Speaker 9: Well, there's a number of reasons.
Speaker 14: I think it's not a question of the countries they're
Speaker 14: from being full of people who are better at starting things.
Speaker 14: It's the people who make the journey, right. The experience
Speaker 14: of coming to a new country, like learning a new langue,
Speaker 14: which it's predictive of how much grit you have, how
Speaker 14: much perseverance you have. It's almost like, you know, your
Speaker 14: own immigration is like a startup because you're going into
Speaker 14: that unknown. You have to have some kind of vision,
Speaker 14: some kind of belief that you can do it, but
Speaker 14: before you have real evidence, and when you commit to
Speaker 14: doing that, you often.
Speaker 9: Don't really have a way back, right, Like.
Speaker 14: It's very hard to come back and admit that, like
Speaker 14: nobody really wanted you in America and it didn't work out,
Speaker 14: Like people around you don't necessarily believe that that's what
Speaker 14: you should do. You're sort of abandoning your existing network, right,
Speaker 14: And so the people who've done that and had to survive, right,
Speaker 14: had to learn the culture of the language, figure everything
Speaker 14: out from scratch, building your network. When they've done that once,
Speaker 14: they're more likely to be able to figure out how
Speaker 14: to disturb a big business, which you know, a big
Speaker 14: company has its own language right, its own culture in
Speaker 14: a way in any startup in order to has to
Speaker 14: be able to overcome it. So having done it once
Speaker 14: already on your own immigration, it's more likely that you
Speaker 14: will get there.
Speaker 9: And you're not going to give up along the way.
Speaker 14: You're not going to have as many alternative when things
Speaker 14: get hard.
Speaker 9: It's not so.
Speaker 14: Easy to get a cushy job right because you have
Speaker 14: the network.
Speaker 9: Right.
Speaker 5: What's interesting, though, is you think about the leaders of
Speaker 5: the Magnificent Seven, the CEOs, many of them immigrants.
Speaker 4: Elon Musk himself, who has got.
Speaker 5: The ear of the next elected president. Most of the
Speaker 5: time it feels like himself, an immigrant, didn't have to
Speaker 5: change languages, but certainly came here and built a number
Speaker 5: of incredibly successful companies. But what does the next administration
Speaker 5: look like to you? Do we see a pushback against
Speaker 5: immigration in some way?
Speaker 9: Well, you know, it's hard for me to tell.
Speaker 14: I personally believe that all the immigrants, even folks without
Speaker 14: an education, should be generally welcome, not illegally, right, they
Speaker 14: should be a pathilm to be illegal, of course, and
Speaker 14: I think it's just tremendous benefits the country to have
Speaker 14: these select few people who willing and able to make
Speaker 14: the journey. You know, we want to welcome them, But
Speaker 14: like I said, there's other reasons why they might do well,
Speaker 14: like having another culture, another language.
Speaker 9: It makes it more likely.
Speaker 14: That you'll figure out some new new culture, some new thing.
Speaker 9: And of course immigrants.
Speaker 14: Tend to be able to build technology offshore. Often there
Speaker 14: are places you can get engineers cheap, are far away,
Speaker 14: when normally a startup couldn't really do that in the beginning,
Speaker 14: because you want to be close to the customers. You
Speaker 14: want to be like a real team. You don't outsources.
Speaker 14: You want to have people on your core team from
Speaker 14: the beginning that build it. But when you are an immigrant,
Speaker 14: with those connections, it's very likely you'll be able to
Speaker 14: find people somewhere else where a salary is a lower
Speaker 14: and where that could actually feel like they're really part
Speaker 14: of your group. You can make that connection. And of course,
Speaker 14: but you're missing and we're all certainly missing a lot
Speaker 14: of things that it takes.
Speaker 9: To be successful.
Speaker 14: And so we as a fund are immigrants ourselves, but
Speaker 14: we came here as kids, right, so we're kind of
Speaker 14: like a bridge. We understand a little bit more about
Speaker 14: the culture of building a business in America, and we
Speaker 14: are able to see like these unusual qualities that make
Speaker 14: someone potentially able to build a really big business, right,
Speaker 14: that level of ambition and vision and thoughtfulness and perseverance,
Speaker 14: and so we kind of help them unlock We find
Speaker 14: the missing pieces.
Speaker 9: Sometimes it's a question.
Speaker 14: Of storytelling or or just building a network, right, and
Speaker 14: so that's what we specialize in. I just want to say,
Speaker 14: like people like Illan Musk or Sergey Brinn who build
Speaker 14: this big businesses It sounds sometimes to people like it's
Speaker 14: kind of an exception, but it's not.
Speaker 9: It's truly the majority of the big business. It's over half.
Speaker 9: I started by people like that.
Speaker 5: Samon to catch. We leave it on a great statistic.
Speaker 5: Founding partner of One Way Ventures, thank you. Coming up,
Speaker 5: we'll hear from Salesforce CEO, many of on tech policy,
Speaker 5: on Trump.
Speaker 4: Where the Time magazine is to sale. This is al
Speaker 4: big technology Perplexity.
Speaker 5: So an AI start up building a search product to
Speaker 5: compete with Google. It's just close to five hundred million
Speaker 5: dollars round of funding that triples the company's valuation to
Speaker 5: nine billion all. According to sources. The round was led
Speaker 5: by institutional venture partners and completed earlier this month. Perplexity
Speaker 5: declined to comment. Let's bring in the person who brought
Speaker 5: us the news blue bag. Surean gafari for more. And
Speaker 5: I might be numb because I look at one hundred
Speaker 5: and fifty seven million dollar valuation over an open AI.
Speaker 4: But put it in context, what does nine billion dollars mean?
Speaker 15: That's still a gigantic valuation.
Speaker 16: If you think about just in June, perplexity valuation was
Speaker 16: one third of this. It's tripled so, you know, I
Speaker 16: think that sorry, it's not one third of it, but
Speaker 16: it is tripled since June. So I think that, you know,
Speaker 16: we're seeing a very strong investor demand still to get
Speaker 16: in on the AI market. I don't think that, you know,
Speaker 16: some people are wondering, will they I bubble burst?
Speaker 15: Are we going to see investor demand cool off?
Speaker 16: I think startups like this growing this quickly show that
Speaker 16: the demand is still very, very high.
Speaker 5: Perplexity has been well used by consumers. They've got a
Speaker 5: fair share of legal issues to be contending with at
Speaker 5: the moment, and I'm interested as to how the growth
Speaker 5: actually is looking. Did you get any hints of where
Speaker 5: the fifteen million active uses has gone since March?
Speaker 6: Yeah.
Speaker 16: You know, they are saying that the number of searches
Speaker 16: that people do on Perplexity, and remember, their sort of
Speaker 16: competitive edge is that they're trying to be the best
Speaker 16: in giving people real time information and you know, good
Speaker 16: for kind of analysis and summaries, and they're saying that
Speaker 16: they're seeing.
Speaker 15: People query a lot more.
Speaker 16: They're seeing very strong growth in the past several months.
Speaker 16: They've also been rolling out some more kind of customized
Speaker 16: search options for people who want financial data or who
Speaker 16: want let's say sports data that's real time.
Speaker 15: So they are growing and I think that's why we're
Speaker 15: seeing this investor demand increase.
Speaker 5: And being levi'sjudial venture partners, we'll see how the growth continues.
Speaker 5: Sharing Gafari, thank you for the news. Meanwhile, let's talk
Speaker 5: Sales Force CEO Mark Benioff says the company's work in
Speaker 5: AI is the most exciting technology he's ever worked on,
Speaker 5: but that doesn't mean he's giving up his stake in
Speaker 5: Legacy Media recently spoke with me Megs Andrie Hordan about
Speaker 5: the future of Time magazine its recent decision to name
Speaker 5: President lect Donald Trump as Person of the Year.
Speaker 3: I think you know that when I bought Time Magazine,
Speaker 3: I said that I wouldn't endorse any political candidate, and
Speaker 3: I stopped all funding of all political candidates.
Speaker 6: But I think you also know that this week.
Speaker 3: Time Magazine did say that President Trump is our Person
Speaker 3: of the Year, and I couldn't be more excited about that.
Speaker 3: I mean, everything you've seen from the story, from the
Speaker 3: cover to the story itself, it's the biggest story we've
Speaker 3: ever done in the history of Time, and this is
Speaker 3: really speaks to a moment I believe in the political
Speaker 3: landscape where we really have to have a beginner's mind,
Speaker 3: that every possibility is ahead of us, and I think
Speaker 3: it's only in the expert's mind that we realize that
Speaker 3: we might have the constraints that we need to kind
Speaker 3: of put aside. So I'm excited for the future. I
Speaker 3: hope that agents in AI are a critical part of
Speaker 3: achieving the next level of efficiency and capability inside not
Speaker 3: only our government, but every government. And I believe very
Speaker 3: strongly that we need to use these kinds of technologies
Speaker 3: to achieve a balanced budget, which I think is a
Speaker 3: bypart is an issue that all of us can agree on.
Speaker 17: Yes, it is, and they are looking to jojify the government,
Speaker 17: bring experience industry people in that work with AI and crypto.
Speaker 17: Would you consider working alongside the administration if they ask
Speaker 17: you to maybe join something like a task force.
Speaker 3: Well, I don't really have the ability to answer that
Speaker 3: because nothing has been proposed to me except I'm highly
Speaker 3: conflicted as a media owner and it makes it incredibly
Speaker 3: difficult for me to operate administration. Administrations change, but at Salesforce,
Speaker 3: we believe strongly our values don't change, and we're mostly
Speaker 3: focused on operating our business. That said, when governments and
Speaker 3: presidents ask us to help them to make their countries
Speaker 3: more effective, more efficient, and more capable, especially in regards
Speaker 3: to artificial intelligence, we will always say yes.
Speaker 17: Well, there are reports out there. Now you've led me
Speaker 17: to this that maybe you're even looking at selling Time magazine.
Speaker 17: So say you did sell Time magazine, you can comment
Speaker 17: on whether or not those reports are true. Would you
Speaker 17: consider offering up all your expertise in efficiency to you know,
Speaker 17: the DOGE Task Force and to the incoming administration.
Speaker 3: Listen, I think that every American should do whatever they
Speaker 3: can to make America successful, and every American should do
Speaker 3: whatever they can to make the President of the United
Speaker 3: States successful. This is of course our country and our
Speaker 3: leadership team. So if called on I of course I
Speaker 3: would do whatever I can to support them.
Speaker 9: But the reality is there is.
Speaker 3: No deal on the table to sell Time, and it's
Speaker 3: extremely important that we do have fair and balanced journalism.
Speaker 3: And that's why I'm very proud to be an owner
Speaker 3: of Time Magazine.
Speaker 5: Sales will see and Mark Benioff there speaking of bluemgg's
Speaker 5: Amory Horden, Today's big take is heart hitting. It's about
Speaker 5: a lawsuit arguing that Snapchat has helped dealers sell children
Speaker 5: deadly counterfeit drugs, and that lawsuit could change the Internet
Speaker 5: as we know it. Bloomberg's Olivia Carvill is here with
Speaker 5: yet another groundbreaking story, and the context is always as painful.
Speaker 5: Since twenty twenty, drug overdoses this is what shocked me,
Speaker 5: driven by fentanel has become one of the leading causes
Speaker 5: of death among kids among teenagers.
Speaker 4: Killing more than sixteen hundred people.
Speaker 5: But all social media platforms in some way are implicated
Speaker 5: by this.
Speaker 4: But why has Snapchat singled out so much?
Speaker 12: That's right, I mean, drug sales can be found all
Speaker 12: social media platforms. I think what differentiates Snapchat here and
Speaker 12: why law enforcement, lawyers, even teenage users of the platform
Speaker 12: are kind of singling out Snapchat is the platform was
Speaker 12: really built on the idea of disappearing messages. It thrives
Speaker 12: on that evanescence, which means that if you send a
Speaker 12: message within twenty four hours, it has gone. And unfortunately,
Speaker 12: you know, while the company wasn't designed for this, what
Speaker 12: has happened is that teenagers like using the platform when
Speaker 12: they don't want their parents to know what they're doing
Speaker 12: and drug dealers like using the platform because evidence of
Speaker 12: their crimes is immediately deleted by default very quickly.
Speaker 5: In the story, the extent of use for drug sales
Speaker 5: becomes clear. We understand that Snapchat has removed two point
Speaker 5: two million pieces of drug related content, just as twenty
Speaker 5: twenty three they've locked more than seven hundred thousand dealer accounts.
Speaker 5: But we want to focus on Snapchat's response here because
Speaker 5: Jacqueline Buscher has responded to your piece and the Global
Speaker 5: had a platform safety saying that we're be committed to
Speaker 5: fight against the fundamental epidemic.
Speaker 4: How are they fighting against it?
Speaker 12: They're actually doing quite a lot, and the company points
Speaker 12: out that it wants to become the most hostile place
Speaker 12: on the Internet for drug dealers. They have fine tuned
Speaker 12: machine learning classifiers so AI technology to really detect any
Speaker 12: drug related content as soon as it's uploaded to the platform.
Speaker 12: That's resulted in them removing two point two million pieces
Speaker 12: of content and twenty twenty three alone that were flagged
Speaker 12: as being connected to drugs in some way. It also
Speaker 12: allows them to deactivate or lock the accounts of anyone
Speaker 12: for suspicious activity where it looks like they might be
Speaker 12: selling drugs through the platform. They also have strengthened their safeguards.
Speaker 12: I guess you could say their features or their recommendation
Speaker 12: engine that enables users to connect with one another. Often
Speaker 12: drug dealers have used this to try and build out
Speaker 12: their network to find more buyers. And the company really
Speaker 12: strengthens its safeguard when it comes to teen users with
Speaker 12: it recommendation engine, trying to limit the amount of strangers
Speaker 12: that it's connecting teenagers to combat the Fenoinnel crisis.
Speaker 5: Meanwhile, Michael Brewer, whose story you talk about so eloquently
Speaker 5: in this story, is still going to court and we
Speaker 5: understand that this could have broad reaching effects for section
Speaker 5: two thirty and we will continue to discuss it with
Speaker 5: you in the future. Once again, go and check out
Speaker 5: the big take. It's an amotive one with Olivia Carvill.
Speaker 4: We thank her. We're going to take it.
Speaker 5: Back to the markets now because there is a big
Speaker 5: sell off underway for one particular name and many of
Speaker 5: you are exposed to it.
Speaker 4: Mike run off by sixteen percent.
Speaker 5: Chip maker here in the United States, biggest maker of
Speaker 5: memory currently off by sixteen percent worse days since March
Speaker 5: twenty twenty as their forecast did not live up to expectations.
Speaker 5: It's about weakness in PC and in smartphone chips in particular,
Speaker 5: that does it for this edition of Bloomberg Technology.
Speaker 4: Don't forget to check out our podcast.
Speaker 5: You can find it on the terminal as well as Apple, Spotify,
Speaker 5: and iHeart this is a Bloomberg
Speaker 16: You think Co