WEBVTT - Nvidia Wins US Approval to Sell H200 Chips to China 0:00:02.520 --> 0:00:13.440 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:13.480 --> 0:00:17.320 from coast to coast with Caroline Hide in New York 0:00:17.600 --> 0:00:20.720 and Vla Lolow in San Francisco. 0:00:22.520 --> 0:00:24.160 This is Bloomberg Tech coming up. 0:00:24.200 --> 0:00:27.440 President Trump allows Nvidia to ship its eight two hundred 0:00:27.480 --> 0:00:30.760 AI chip to China in exchange for a twenty five 0:00:30.800 --> 0:00:32.000 percent surcharge. 0:00:32.080 --> 0:00:35.280 Plus. We'll drill more into the Warner Brothers, Discovery, SAGA 0:00:35.360 --> 0:00:38.400 and antitrust concerns rising from the proposed. 0:00:37.960 --> 0:00:42.440 Bids, and Microsoft is committing seventeen point five billion dollars 0:00:42.600 --> 0:00:46.120 over four years to help build India's cloud and AI infrastructure. 0:00:46.520 --> 0:00:49.239 We dig into the market's first and foremost so and 0:00:49.520 --> 0:00:52.160 ed not much of a movement. We're up ten percent 0:00:52.240 --> 0:00:55.200 on the NASAK one hundred jolts data. Basically jobs opening 0:00:55.480 --> 0:00:58.200 coming in better than had been anticipated, but scratched beneath 0:00:58.200 --> 0:01:00.560 the hood, and maybe less optimism there the market had 0:01:00.560 --> 0:01:02.760 hoped for. More Broadly, we're in wait and see mode 0:01:02.800 --> 0:01:05.160 for the FED tomorrow, but we're not in wait and 0:01:05.200 --> 0:01:07.320 see mode when it comes to some significant moves to 0:01:07.400 --> 0:01:08.319 one stop. 0:01:08.959 --> 0:01:10.000 Yep in vidio. 0:01:10.240 --> 0:01:12.680 This is how Invidia is traded over a twenty four 0:01:12.680 --> 0:01:17.040 hour period and two sessions, we're down marginally basically flat. 0:01:17.560 --> 0:01:20.880 In Tuesday's session, when news broke from the President that 0:01:21.040 --> 0:01:24.360 Nvidia would be authorized to ship H two hundred to 0:01:24.720 --> 0:01:29.160 China under certain circumstances with a twenty five percent surcharge, 0:01:29.520 --> 0:01:33.080 the stock spiked. But then when reports hit that China 0:01:33.120 --> 0:01:37.639 would move with its own restrictions on how and why 0:01:37.760 --> 0:01:41.360 and which companies could have access with that technology, the 0:01:41.440 --> 0:01:43.720 gains fizzled, and the same can be applied to both 0:01:43.760 --> 0:01:44.680 AMD and Intel. 0:01:44.760 --> 0:01:46.120 Let's stick with the Nvidia story. 0:01:46.240 --> 0:01:47.760 As you look at that two day chart of the 0:01:47.800 --> 0:01:50.520 stock and the big jump that led to a big fate. 0:01:50.600 --> 0:01:52.840 Let's bring in Blue Mosey and King, who leads our 0:01:52.840 --> 0:01:54.080 coverage of semiconductors. 0:01:54.440 --> 0:01:55.720 That's the news broadly. 0:01:56.120 --> 0:01:58.680 What else do we need to know about the calculus 0:01:58.680 --> 0:02:02.760 of America's decision to allow H two hundred in particular 0:02:02.800 --> 0:02:05.800 to go to China in certain circumstances, and whether or 0:02:05.840 --> 0:02:06.600 not China wants it? 0:02:06.760 --> 0:02:09.519 Yeah, I mean, that's exactly it. We've shown a willingness 0:02:09.560 --> 0:02:13.360 to sell. We've effectively said, hey, we were prepared to 0:02:13.360 --> 0:02:16.239 give you something better. The question now is whether China 0:02:16.360 --> 0:02:19.080 actually wants that and how Beijing will react. We have 0:02:19.160 --> 0:02:22.360 the President saying that he's cleared it with his counterpart 0:02:22.440 --> 0:02:25.160 in Beijing, but we haven't really seen a concrete response 0:02:25.200 --> 0:02:28.160 on how that will manifest itself in terms of orders 0:02:28.520 --> 0:02:29.200 or shipments. 0:02:29.600 --> 0:02:33.040 We know that the articulated total addressable market is fifty 0:02:33.040 --> 0:02:36.040 billion dollars for Jensen Wang, But what does the H 0:02:36.080 --> 0:02:38.720 two hundred bring that the H twenty doesn't. 0:02:38.880 --> 0:02:39.920 How much better is it? 0:02:40.680 --> 0:02:43.400 Yeah, I mean it's multiple times better. It's still a 0:02:43.440 --> 0:02:47.440 mainstream chip. It's still in widespread use in the world's 0:02:47.480 --> 0:02:50.320 data centers. It's not, of course in video's latest. It's 0:02:50.320 --> 0:02:53.799 nowhererea as good as the Blackwell generation, but it's still very, 0:02:53.880 --> 0:02:57.160 very good and according to analysiss a lot better, which 0:02:57.160 --> 0:02:59.760 is more important than anything else that the Chinese can 0:02:59.800 --> 0:03:00.640 make themselves. 0:03:01.120 --> 0:03:04.320 So that there is the what happens next. China has 0:03:04.440 --> 0:03:08.880 two domestic players maybe three, that have AI accelerators. They 0:03:08.880 --> 0:03:11.920 are not as performant as H two hundred, we think, 0:03:12.200 --> 0:03:14.720 But the main issue for China is also the supply 0:03:14.840 --> 0:03:16.480 constraint and manufacturing. 0:03:17.160 --> 0:03:18.600 Explain that part of the story. 0:03:18.760 --> 0:03:21.000 Yeah, I mean, as you know, China has been cut 0:03:21.040 --> 0:03:27.120 off from advanced semiconductor manufacturing, including TSMC. So the chips 0:03:27.120 --> 0:03:30.400 that it can make itself are constrained by the actual 0:03:30.440 --> 0:03:33.800 amount that it can make, but also the quality that 0:03:33.840 --> 0:03:36.960 it can make based upon the manufacturing capabilities of plants 0:03:37.000 --> 0:03:38.080 inside China. 0:03:38.280 --> 0:03:41.800 And quickly, just when I reference H twenty, the fifteen 0:03:41.840 --> 0:03:44.120 percent never went to the government because that was never 0:03:44.160 --> 0:03:47.120 signed off legally. Do we know whether the H two hundred, Yes, 0:03:47.160 --> 0:03:49.440 we've got a truth social but will it be signed 0:03:49.440 --> 0:03:51.360 off legally by the US at least? 0:03:51.600 --> 0:03:54.080 Yeah, I mean, as we put in our story yesterday, 0:03:54.120 --> 0:03:57.240 we had some reporting on that. And then exclusive for US, 0:03:57.800 --> 0:04:00.200 this is going to be a different arrangement because these 0:04:00.200 --> 0:04:02.680 ships are made in Taiwan. What's going to happen apparently 0:04:02.720 --> 0:04:05.200 is that they're going to be imported into the US, 0:04:05.240 --> 0:04:08.600 which would make them subject to an import tariff. So 0:04:08.640 --> 0:04:11.280 that's how we basically the US government gets paid and 0:04:11.320 --> 0:04:14.240 then they become re exported to China. 0:04:14.360 --> 0:04:17.120 The nuance always clear. Thank you in King. 0:04:17.520 --> 0:04:20.200 Now let's discuss the broader impact now on the tech markets. 0:04:20.720 --> 0:04:24.440 We bring in Ebeks Deshkaya's analyst at Swiss quote IBEC. 0:04:24.960 --> 0:04:29.479 What do you make of this potential for Invidio at least, 0:04:29.600 --> 0:04:32.440 and whether or not China will indeed import the market 0:04:32.440 --> 0:04:34.280 reaction from your perspective. 0:04:35.080 --> 0:04:38.680 Well, this is a win for Nvidia, but it has 0:04:38.760 --> 0:04:41.080 to be taken with a pinch of salt because we 0:04:41.120 --> 0:04:44.760 already hear that there are attentions among US politicians regarding 0:04:44.800 --> 0:04:47.760 what this means for the national security for US is 0:04:47.800 --> 0:04:51.840 a very sensitive segment of business. China is ensure to 0:04:52.120 --> 0:04:54.680 let its own companies buy these chips for the same 0:04:54.839 --> 0:04:58.240 national security issues and also because they're backing the domestic 0:04:58.320 --> 0:05:02.320 chip production. So for Nvidia, which assumes that is China 0:05:02.400 --> 0:05:04.839 sales are now zero, every chip that is going to 0:05:04.880 --> 0:05:08.200 be sold to China is a bonus. It is a tailwind. 0:05:08.320 --> 0:05:11.400 But for long term forecast with stale remain very much 0:05:11.440 --> 0:05:14.200 coaches regarding what this me is and how stable the 0:05:14.240 --> 0:05:15.160 stale is going to be. 0:05:16.839 --> 0:05:17.200 Upek. 0:05:17.360 --> 0:05:21.240 The base case assumption from Nvidia is right now in 0:05:21.279 --> 0:05:24.440 the fiscal year and maybe next fiscal year, zero revenues 0:05:24.440 --> 0:05:29.400 from China. That clearly this news has led everyone to recalculate. 0:05:29.920 --> 0:05:34.880 Would you assume some upside from Chinese AI data censorship 0:05:34.920 --> 0:05:35.960 revenue next year? 0:05:37.400 --> 0:05:42.039 Well, again, the geopolitical backshop is so uncertain that the 0:05:42.080 --> 0:05:45.760 best thing to do in terms of the safest a 0:05:45.839 --> 0:05:48.680 way to go with these assumptions is to keep that 0:05:48.960 --> 0:05:53.400 forecast at zero percent. But obviously investors are happy to 0:05:53.440 --> 0:05:56.760 hear that there is an opportunity in China for Nvidia, 0:05:57.080 --> 0:06:00.400 but again that opportunity is very much uncertain right now. 0:06:00.440 --> 0:06:02.920 We don't know if China is going to allow these 0:06:02.960 --> 0:06:05.400 chips to be sold. And again we don't even know 0:06:05.480 --> 0:06:09.159 if the Chinese companies will be willing to buy these chips, 0:06:09.200 --> 0:06:12.159 given that it is politically very sensitive, and if they 0:06:12.200 --> 0:06:16.560 could use domestic alternatives, even though they are less efficient, 0:06:16.839 --> 0:06:19.480 maybe it's going to be a better deal for them, 0:06:19.560 --> 0:06:23.400 especially from a political and geopolitical perspective. So in my opinion, 0:06:23.680 --> 0:06:26.719 investors will continue to assume that the Chinese sales is 0:06:26.800 --> 0:06:30.120 in the Nvidia's Chinese sales are going to be zero 0:06:30.720 --> 0:06:34.400 with a little bonus maybe if some of these chips 0:06:34.480 --> 0:06:35.400 actually get sold. 0:06:35.839 --> 0:06:38.360 If I bring us your global perspective, as you sit 0:06:38.400 --> 0:06:42.680 in Switzerland, this tussle between US and China to say 0:06:42.680 --> 0:06:44.640 who's got more dominance, But what do you hear from 0:06:44.680 --> 0:06:47.440 your perspective as to how far along China really is 0:06:47.760 --> 0:06:51.800 with its domestic chip manufacturing and use well. 0:06:51.800 --> 0:06:55.400 Obviously, US and the US technology is ahead of China. 0:06:55.680 --> 0:06:59.080 What China is good at doing is basically to find 0:06:59.160 --> 0:07:03.960 the chips to do manufacture from manufacturer chips in order 0:07:04.080 --> 0:07:07.839 to serve their own needs and serve the basic AI needs. 0:07:07.880 --> 0:07:13.840 So China is generally better in transforming their I investments 0:07:13.880 --> 0:07:19.240 into real revenue, whereas the US is prestige technology. Hope, 0:07:19.280 --> 0:07:21.840 that's really aiming for the best. But even from the 0:07:21.880 --> 0:07:24.880 European perspective, where we could be a little bit more neutral. 0:07:25.080 --> 0:07:27.840 While US is allies first of all, and US is 0:07:27.880 --> 0:07:32.040 well ahead from a technology perspective than China, then China 0:07:32.200 --> 0:07:35.240 is clearly coming and the fact that these chip restrictions 0:07:35.240 --> 0:07:38.880 have hit the Chinese technology sector means that they will 0:07:38.920 --> 0:07:42.200 be accelerating their efforts and do anything in their power 0:07:42.280 --> 0:07:44.160 to catch the US technology. 0:07:44.600 --> 0:07:47.120 It really has been a mounting concern from some of 0:07:47.120 --> 0:07:50.880 these tech leaders that perhaps were underestimating how sophisticated China is, 0:07:50.880 --> 0:07:55.920 is the market, underestimating how superior TPUs are, how other 0:07:56.040 --> 0:07:58.760 chips are being manufactured by big tech players for their 0:07:58.800 --> 0:07:59.560 own inference. 0:07:59.680 --> 0:08:02.240 How much we need to take that into the Nvidia story. 0:08:03.280 --> 0:08:07.600 Well, I think that what TPUs are interesting, but they 0:08:07.720 --> 0:08:11.480 are actually you know, serving in one particular area, and 0:08:11.560 --> 0:08:15.080 that's AI. Obviously, the fact that Google is now out 0:08:15.120 --> 0:08:20.360 there and commercializing the TPUs is a is a negative risk, 0:08:20.480 --> 0:08:23.160 is a negative factor for Nvidia. It is a risk 0:08:23.240 --> 0:08:26.080 in the sense that for those companies who are looking 0:08:26.240 --> 0:08:29.520 only for their AI applications, they would find it cheaper 0:08:29.840 --> 0:08:34.080 and as efficient as buying Mvdia's GPUs. But at the 0:08:34.160 --> 0:08:36.920 end of the day, mvd is not only selling chips, 0:08:36.960 --> 0:08:39.640 They're also selling the ecosystem that comes with it. So 0:08:40.040 --> 0:08:43.000 not every company is going to be comparatable going into 0:08:43.040 --> 0:08:46.240 the TPUs just because as cheaper and as efficient. I 0:08:46.240 --> 0:08:49.080 think that Nvidia still has the GPU market and the 0:08:49.120 --> 0:08:53.160 ecosystem well anchored, and Google, for example, with this TPUs 0:08:53.200 --> 0:08:54.120 doesn't really have it. 0:08:55.360 --> 0:08:56.120 You peck us good. 0:08:56.120 --> 0:08:58.520 This guy a Swiss great senior market analyst. Thank you 0:08:58.640 --> 0:09:01.240 very much for coming up. We'll come back on the 0:09:01.280 --> 0:09:05.320 talk of Hollywood, Warner Brothers, Discovery and the antitrust concerns. 0:09:05.360 --> 0:09:07.760 The proposed bids are definitely raising. 0:09:08.440 --> 0:09:09.000 That's next. 0:09:09.160 --> 0:09:10.160 This is Bloomberg Tech. 0:09:24.400 --> 0:09:27.000 Let's get to what everyone has been talking about in 0:09:27.160 --> 0:09:30.880 Entertainment the rival bids for Warner Brothers Discovery after Paramount 0:09:30.960 --> 0:09:34.880 came out with its own hostile takeover offer yesterday. Netflix 0:09:34.960 --> 0:09:38.120 co CEO Ted Serranos says he's not too worried. He 0:09:38.200 --> 0:09:40.760 spoke at the UBS Global Media and Communications Conference in 0:09:40.760 --> 0:09:41.559 New York yesterday. 0:09:41.600 --> 0:09:42.199 Just take a listen. 0:09:43.080 --> 0:09:47.400 Today's move was entirely expected. We have a deal done, 0:09:47.480 --> 0:09:50.440 and we are incredibly happy with the deal. We think 0:09:50.480 --> 0:09:52.719 it's great for our shareholders, think it's great for consumers. 0:09:52.960 --> 0:09:55.440 We think it's a great way to create and protect 0:09:55.559 --> 0:09:58.920 jobs in the entertainment industry. We're super confident we're going 0:09:59.000 --> 0:10:00.360 to get it across the line of finished. 0:10:00.480 --> 0:10:02.200 So we're excited. 0:10:02.960 --> 0:10:05.680 Let's bringing bloom bags. Luca Sure, author of the screen 0:10:05.679 --> 0:10:08.000 Time newsletter. Should he be as confident Lucas? 0:10:09.000 --> 0:10:11.240 First all, I love those old photos that you have 0:10:11.320 --> 0:10:13.880 of Ted back from I guess that's the release of Lillehimmer. 0:10:15.920 --> 0:10:18.120 Of course he's going to project confidence. 0:10:18.160 --> 0:10:21.199 He agreed to a deal, and what Paramount is proposing 0:10:21.320 --> 0:10:24.280 at the moment is not different from what it proposed 0:10:24.280 --> 0:10:26.960 when it lost this auction last week. Right, they're sticking 0:10:27.000 --> 0:10:30.000 with their thirty dollars a share and their insistence is 0:10:30.000 --> 0:10:32.600 that the board just didn't take the time to really 0:10:32.640 --> 0:10:35.240 consider it, and that if more shareholders hear their point 0:10:35.240 --> 0:10:37.280 of view, that they will be swayed. I think if 0:10:37.320 --> 0:10:40.680 Paramount stays on that current course, Ted has reason to 0:10:40.679 --> 0:10:43.720 be pretty confident because he already won with that. Risk 0:10:43.840 --> 0:10:46.840 for Ted and for Netflix would be if Paramount comes 0:10:46.880 --> 0:10:49.720 back and offers even more money, because then the board 0:10:49.720 --> 0:10:52.559 and the shareholders would likely think about opening back up. 0:10:54.280 --> 0:10:57.280 Lucas you've spoken at length and in some detail in 0:10:57.320 --> 0:10:59.880 the last year and two years with both Ted Surround 0:11:00.280 --> 0:11:04.480 and with David Ellison. The reporting overnight was really focused 0:11:04.559 --> 0:11:08.240 on the coalition that David Ellison has pulled together for 0:11:08.320 --> 0:11:11.880 the financing, and part of that includes people that have 0:11:12.000 --> 0:11:16.080 proximity to the administration, Jared Kushner and his private equity 0:11:16.120 --> 0:11:19.560 firm being the easiest example. Just reflect on what you 0:11:19.640 --> 0:11:22.920 know of both CEOs in the competition between them, but 0:11:23.040 --> 0:11:27.640 also David Ellison's ability here to manage that relationship with 0:11:27.679 --> 0:11:30.480 the White House if there is one. 0:11:29.920 --> 0:11:33.240 Right well, look, I think one of the reasons that 0:11:33.400 --> 0:11:38.480 Netflix prevailed in the initial auction was that you put 0:11:38.720 --> 0:11:42.439 Ted Surrandos in a room with the Warner Brothers, Discovery 0:11:42.480 --> 0:11:47.160 board and leadership, and he is charming and charismatic and 0:11:47.360 --> 0:11:49.680 it is generally very good in those situations. 0:11:49.720 --> 0:11:49.840 Right. 0:11:50.120 --> 0:11:52.480 It's one of the reasons that he is Netflix's primary 0:11:52.480 --> 0:11:55.920 person when it comes to wooing talent. David Ellison has 0:11:55.920 --> 0:11:58.400 a little bit less experience with that, right, he's younger. 0:11:58.679 --> 0:12:01.960 He is very amiable, but he doesn't have that He's 0:12:02.000 --> 0:12:03.760 not kind of like oozing the charm in the same 0:12:03.760 --> 0:12:06.240 way that Ted is. We've now entered a different phase 0:12:06.240 --> 0:12:07.760 of this to your point, where a lot of it 0:12:07.800 --> 0:12:11.000 is more about who you know and their proximity to 0:12:11.120 --> 0:12:15.920 people in positions of power. That's an area where Ted 0:12:15.960 --> 0:12:18.120 surround us is still very strong. But he comes from 0:12:18.160 --> 0:12:20.959 the generally from the democratic side of the political aisle, 0:12:21.440 --> 0:12:23.559 and so Netflix is having to kind of find the 0:12:23.559 --> 0:12:25.960 people who can help them get into the Trump administration. 0:12:26.240 --> 0:12:28.679 To your point, David Allison, in part because of his 0:12:29.280 --> 0:12:32.520 father Larry, and then also the various financiers he has, 0:12:32.520 --> 0:12:35.400 he has a lot of different ways to access the president. Now, 0:12:35.400 --> 0:12:38.000 of course all of this is moot, or should be 0:12:38.040 --> 0:12:40.920 moot if the board decides one way or the other. 0:12:41.559 --> 0:12:43.120 But you know, times are different. 0:12:43.160 --> 0:12:45.560 Now, I guess times are different. 0:12:46.040 --> 0:12:49.040 But let's just go back to cold hard cash here, 0:12:49.160 --> 0:12:52.559 because this really comes down to how much the investors 0:12:52.600 --> 0:12:54.680 are going to think the cable networks are worth. 0:12:54.760 --> 0:12:56.800 Right, That's a big part of it. 0:12:56.880 --> 0:13:02.000 Yeah, I mean the fundamental breakdown between what Paramount thinks 0:13:02.040 --> 0:13:04.120 of the state of play and what Warner Brothers Discovery 0:13:04.120 --> 0:13:06.440 thinks of the state of play is the value of 0:13:06.480 --> 0:13:09.320 the cable networks and the importance of cash. Paramounts bid 0:13:09.360 --> 0:13:12.560 is all cash. Netflix is bid is primarily cash, but 0:13:12.640 --> 0:13:15.560 not all cash. Paramount is valuing those cable networks at 0:13:15.559 --> 0:13:18.400 about a dollar a share. By that valuation, their bid 0:13:18.520 --> 0:13:21.760 is superior to Netflix. Warner Brothers Discovery is valuing it 0:13:21.760 --> 0:13:24.640 at three or four dollars a share, which and. 0:13:24.160 --> 0:13:26.880 By that metric, Netflix is superior. That's why I. 0:13:26.840 --> 0:13:30.280 Think it feels almost inevitable that Paramount if it really 0:13:30.280 --> 0:13:31.920 wants it will have to come over the top and 0:13:31.960 --> 0:13:34.480 just add let's say, three dollars to its bid. 0:13:35.040 --> 0:13:36.440 But we're not there yet. 0:13:37.160 --> 0:13:39.240 Bloom most Lucas, sure, thank you very much. 0:13:39.320 --> 0:13:43.360 President Trump first raised anti trust concerns over Netflix's market 0:13:43.400 --> 0:13:47.079 share if the deal goes through. Now, Senator Elizabeth Warren 0:13:47.320 --> 0:13:51.240 also weighing in on paramount spid, saying that merger would 0:13:51.240 --> 0:13:55.200 be quote a five alarm antitrust fire. Let's break it 0:13:55.240 --> 0:13:58.160 all down with Jennifer Huddleston, Senior tech Fellow at the 0:13:58.200 --> 0:14:03.840 Cato Institute whose work covers antitrust. A deal, a proposed 0:14:03.880 --> 0:14:08.640 deal of this scale and size and value is inevitably 0:14:09.000 --> 0:14:12.400 going to be looked at by regulators and reviewed, in 0:14:12.480 --> 0:14:15.400 part because we have a set of codified guidelines and 0:14:15.480 --> 0:14:19.120 rules from twenty twenty three that allow for that to 0:14:19.160 --> 0:14:22.760 be the case when regulators do look at it. Jennifer, 0:14:22.800 --> 0:14:26.000 what is the top consideration about this market that they'll 0:14:26.040 --> 0:14:26.480 be making. 0:14:27.760 --> 0:14:29.480 Thank you so much for having me, and you're right. 0:14:29.560 --> 0:14:31.120 One of the things we're going to see in this 0:14:31.200 --> 0:14:35.440 conversation is how do these twenty twenty three guidelines potentially 0:14:35.480 --> 0:14:38.120 play out in this case and what does that mean 0:14:38.200 --> 0:14:40.760 if such ends up in court, as well as what 0:14:40.760 --> 0:14:43.760 does that mean for any challenges. One of the interesting 0:14:43.800 --> 0:14:45.760 things is going to really be around this question of 0:14:45.800 --> 0:14:49.840 market definition. What is the market that these two platforms 0:14:49.880 --> 0:14:53.680 are potentially competing in and what does that mean for 0:14:53.840 --> 0:14:58.760 the actual average consumer? Is this online streaming subscription services. 0:14:58.880 --> 0:15:02.000 Is this some kind of bigger attention economy issue or 0:15:02.120 --> 0:15:05.080 is this something you know specific about the amount of 0:15:05.120 --> 0:15:09.000 time individuals spend on any type of entertainment. 0:15:09.640 --> 0:15:14.320 As it goes about Jennifer, will any of the regulators 0:15:14.360 --> 0:15:18.600 involves look at what the benefit is to the consumer 0:15:19.040 --> 0:15:21.840 in either merger or deal going through. 0:15:23.120 --> 0:15:26.320 I mean, we can certainly hope so. US antitrust law 0:15:26.360 --> 0:15:28.800 is supposed to be based in the consumer Welfare Standard, 0:15:28.800 --> 0:15:31.560 which means what regulators should really be looking at is 0:15:31.600 --> 0:15:35.600 will this mergerer acquisition harm consumers in some way? Will 0:15:35.640 --> 0:15:40.200 it negatively impact prices? Will it negatively impact the ability 0:15:40.280 --> 0:15:44.440 to have to have a certain quality or certain other 0:15:44.480 --> 0:15:48.240 elements that really should be based on sound economic factors. 0:15:48.520 --> 0:15:52.200 This shouldn't be about a subjective idea of how many 0:15:52.240 --> 0:15:54.920 players should be in the streaming market. It should really 0:15:54.960 --> 0:15:58.280 be focused on this question of our consumers going to 0:15:58.320 --> 0:16:00.760 be harmed. Our consumer is going to be worse off 0:16:01.040 --> 0:16:04.880 if they have this combined company as opposed to two 0:16:04.880 --> 0:16:05.800 separate companies. 0:16:06.160 --> 0:16:08.720 The Cato Institute is so interesting because it's a libertarian 0:16:08.720 --> 0:16:11.200 think tank and it's really thinking about individual liberty, about 0:16:11.240 --> 0:16:13.760 limited government, free markets. You come in it from that angle, 0:16:13.760 --> 0:16:16.920 which Jennifer, give us your global perspective here a bit, 0:16:17.000 --> 0:16:19.760 because this doesn't just get sign off from the United States. 0:16:19.920 --> 0:16:20.800 We go worldwide. 0:16:20.920 --> 0:16:22.920 We're just seeing what the EU is doing again today, 0:16:22.960 --> 0:16:26.880 for example, with Alphabet and competition within AI. Are they 0:16:26.880 --> 0:16:29.160 going to hit roadblocks there as well? 0:16:29.280 --> 0:16:31.560 I mean, that's certainly going to be a question depending 0:16:31.560 --> 0:16:34.960 on the nature of any particular transaction. And we've seen 0:16:34.960 --> 0:16:38.560 this happen in other cases when it comes to questions 0:16:38.600 --> 0:16:43.200 around large US tech companies and their potential acquisitions. For example, 0:16:43.240 --> 0:16:46.960 we certainly saw a large debate around the Microsoft Activision 0:16:47.000 --> 0:16:50.160 acquisition in Europe as well, and ultimately that was able 0:16:50.200 --> 0:16:53.200 to go through. We've also seen European regulators trying to 0:16:53.240 --> 0:16:56.920 put up various structural roadblocks that would allow some of 0:16:56.960 --> 0:17:00.520 America's leading tech companies to continue to innovate, continue to 0:17:00.560 --> 0:17:03.160 go into new markets. So I think it's certainly a 0:17:03.160 --> 0:17:06.960 worthy question of not only how might such transactions play 0:17:06.960 --> 0:17:09.439 out when it comes to US regulators, but if this 0:17:09.640 --> 0:17:13.200 is something that's a global international debate, are there other 0:17:13.280 --> 0:17:16.160 regulators where there might be other conversations that get had 0:17:16.200 --> 0:17:16.800 along the way. 0:17:17.240 --> 0:17:20.040 It's interesting Jennifer that Netflix has tried to front run 0:17:20.160 --> 0:17:22.600 a lot of these concerns by putting out the statement 0:17:22.640 --> 0:17:26.440 that consumers will win from their perspective because already they'll 0:17:26.440 --> 0:17:29.040 signed up to Netflix and HBO and we'll broadly they'll 0:17:29.040 --> 0:17:31.280 probably get more bang for the bug. But they're also 0:17:31.400 --> 0:17:33.880 having to talk about how they're going to benefit content 0:17:34.040 --> 0:17:36.720 creation or indeed the industry of Hollywood writ large. 0:17:36.760 --> 0:17:37.920 Should they have to do that? 0:17:38.240 --> 0:17:42.240 Will the narrative be based on that in any way 0:17:42.359 --> 0:17:44.720 as to how this might help jobs and creativity. 0:17:45.800 --> 0:17:47.600 I think one of the big questions is going to 0:17:47.640 --> 0:17:50.960 be around that market definition. Is the market the definition 0:17:51.280 --> 0:17:54.639 definition include markets for content creation? And if so, what 0:17:54.720 --> 0:17:57.480 does that mean in this today and age where we 0:17:57.560 --> 0:18:01.200 have such significant amounts of user generator content. Is it 0:18:01.280 --> 0:18:04.479 only about studio created content or is it also about 0:18:04.760 --> 0:18:07.920 looking at content more holistically the way short form video 0:18:08.040 --> 0:18:11.600 or even long form video on platforms like YouTube have 0:18:11.720 --> 0:18:15.840 arisen to allow creative's new outlets. So we'll certainly see 0:18:16.040 --> 0:18:19.120 that be part of the conversation as well, possibly if 0:18:19.119 --> 0:18:20.920 that gets included in the market definition. 0:18:21.160 --> 0:18:23.320 Jennifer hudleson great to catch up with you, Senior Tech 0:18:23.320 --> 0:18:26.320 fellow over at the Cato Institute. Now we're going to 0:18:26.359 --> 0:18:29.920 think about entertainment a little bit more because Walt Disney 0:18:30.200 --> 0:18:33.000 is bringing Jimmy Kimmel back for at least one more 0:18:33.080 --> 0:18:35.520 year now, the late night star who was suspended in 0:18:35.560 --> 0:18:39.920 September over remarks about slain GOP activist Charlie Kirk. Where 0:18:39.920 --> 0:18:42.720 he's going to continue to host Jimmy Kimmel Live until 0:18:42.760 --> 0:18:45.320 May twenty twenty seven under a new one year deal 0:18:45.480 --> 0:18:47.000 with Disney's ABC network. 0:18:47.320 --> 0:18:48.640 It's all according to sources. 0:18:49.119 --> 0:18:50.719 Ed okay, coming up. 0:18:50.720 --> 0:18:55.359 Investors have been disappointed in Apple's lack of AI strategy. 0:18:55.440 --> 0:18:58.440 Now that weakness maybe a strength. We're going to talk 0:18:58.440 --> 0:18:59.960 about why next. This has been big ten. 0:19:13.280 --> 0:19:16.480 Take a look at Apple shares since June. Have you 0:19:16.560 --> 0:19:17.000 noticed this? 0:19:17.520 --> 0:19:19.960 Back then, analysts were talking about the iPhone maker falling 0:19:20.000 --> 0:19:22.520 behind big rivals in the AI race, But now the 0:19:22.560 --> 0:19:26.000 company is the beneficiary of rising doubts about the AI trade. 0:19:26.359 --> 0:19:28.720 Here to talk us through is Brumberg Gequiti's reporter. 0:19:28.560 --> 0:19:31.800 Carmen Ranicky, who is gonna help us really illustrate a 0:19:31.840 --> 0:19:35.600 story that everyone is reading today. If almost we'd forgot, 0:19:35.600 --> 0:19:37.600 we'd all thought Apple had been beaten up, and actually 0:19:37.680 --> 0:19:39.800 it is worth four point one trillion dollars and the 0:19:39.800 --> 0:19:42.040 second most valuable company on the SP five hundred. 0:19:42.200 --> 0:19:44.959 The narrative shifted, Yeah, it totally shifted. 0:19:45.000 --> 0:19:47.720 It's really like a complete turnaround from the beginning of 0:19:47.760 --> 0:19:50.639 the year. Now it's you know, in spitting distance of 0:19:50.800 --> 0:19:53.560 taking over there's the biggest company from Nvidia, right that 0:19:53.680 --> 0:19:56.920 gap is ever narrowing in terms of market caps. So really, 0:19:56.960 --> 0:20:00.240 what we've seen is that people are getting more worried 0:20:00.240 --> 0:20:03.600 about the AI trend. They're looking at these companies more critically, 0:20:03.920 --> 0:20:06.320 and Apple sort of at the same time has benefited 0:20:06.359 --> 0:20:09.200 because it's not seen as this huge AI play I think. 0:20:09.200 --> 0:20:11.400 At the same time as well, what we've seen is 0:20:11.480 --> 0:20:14.800 that there's been a little bit more shine around the 0:20:14.960 --> 0:20:18.119 new iPhone iPhone seventeen. The big story for Apple, at 0:20:18.160 --> 0:20:20.000 least I've been hearing for the last few years, is 0:20:20.440 --> 0:20:24.080 the upgrade cycle, right, people getting the new phones that 0:20:24.119 --> 0:20:26.159 they've had for four or five years, and analysts and 0:20:26.160 --> 0:20:28.520 investors are starting to see that happen and they're excited 0:20:28.560 --> 0:20:31.320 about it more and more going forward. But you know, 0:20:31.680 --> 0:20:34.920 at the same time, Apple's valuation is near record high 0:20:34.960 --> 0:20:37.119 as it trades at thirty two times forward earnings or 0:20:37.160 --> 0:20:40.120 nearly thirty three times forward earnings. That's more than any 0:20:40.160 --> 0:20:43.520 other stock in the mag seven aside from Tesla. 0:20:44.240 --> 0:20:47.919 So it's expensive. And what's extraordinary is that thirty three times. 0:20:48.040 --> 0:20:48.840 I mean, we hardly have. 0:20:48.840 --> 0:20:51.600 A C trade at those sources of levels, right, Yeah, 0:20:51.600 --> 0:20:54.240 And if you think about it, it's pretty incredible because 0:20:54.320 --> 0:20:58.520 Apple's revenue growth is very small compared to Nvidia, for example. 0:20:58.560 --> 0:21:00.919 I mean, they've been doubling revenue and having these you know, 0:21:01.400 --> 0:21:03.840 huge numbers. Apple's not been doing that. 0:21:03.880 --> 0:21:05.159