WEBVTT - Apple's Big US Investment, Musk's Federal Worker Orders 0:00:02.759 --> 0:00:10.039 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:10.080 --> 0:00:15.800 where innovation, money and power collide in Silicon Valley and beyond. 0:00:16.239 --> 0:00:40.520 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:35.200 --> 0:00:35.960 Live from New York Home. 0:00:36.000 --> 0:00:39.160 Caroline Hyde and I'm Jackie Devallis in San Francisco. 0:00:39.280 --> 0:00:41.120 This is Bloomberg Technology. Coming up. 0:00:41.200 --> 0:00:43.680 Apple to spend five hundred billion dollars in the US 0:00:43.760 --> 0:00:47.280 and boost hiring as it seeks relief from Trump's tariffs. 0:00:47.600 --> 0:00:51.520 Plus Microsoft cancels some leases for US data center capacity. 0:00:51.560 --> 0:00:55.200 According to td count analysts, has the company's AI. 0:00:55.080 --> 0:00:56.480 Computing strategy changed. 0:00:56.680 --> 0:00:59.040 We discuss and a look at how Elon Musk's of 0:00:59.080 --> 0:01:02.160 federal worker orders to justify their jobs as dividing the 0:01:02.200 --> 0:01:05.399 Trump administration. But first we check in on markets that 0:01:05.480 --> 0:01:07.800 once again full we were down hard on Friday. We 0:01:07.880 --> 0:01:10.520 continue on the lower side of by nine ten percent, 0:01:10.640 --> 0:01:13.200 bouncing off our lows, but still near the inter day 0:01:13.200 --> 0:01:15.880 woes of the day on the Nasdaq one hundred. Dig 0:01:15.920 --> 0:01:19.120 into what's the point higher and the drags. More broadly, 0:01:19.440 --> 0:01:21.560 Apple has been bouncing around on the back of its 0:01:21.600 --> 0:01:23.440 news that we're currently up six tens percent on the 0:01:23.520 --> 0:01:25.920 juggernaut that is going to be investing five hundred billion 0:01:25.959 --> 0:01:27.800 dollars here in the United States, and they deed adding 0:01:27.800 --> 0:01:31.600 twenty thousand jobs, but less than forty billion per year 0:01:31.800 --> 0:01:34.360 increase on previous spending habits. 0:01:34.800 --> 0:01:37.040 Is this all that new we're going to discuss. 0:01:37.120 --> 0:01:39.679 But Microsoft really the watchword of the day when it 0:01:39.680 --> 0:01:41.280 comes to a point stragger off by more than a 0:01:41.280 --> 0:01:45.320 percentage point. This is as Microsoft is potentially in an 0:01:45.400 --> 0:01:49.560 oversupply position coming to its data center capacity. A Friday 0:01:49.560 --> 0:01:53.120 note from Tdcawen via Channel checks they say they're avoiding 0:01:53.200 --> 0:01:55.800 leases in the US totally a couple of hundred megawatts. 0:01:56.120 --> 0:01:57.720 They're checking on the fact that there might be a 0:01:57.760 --> 0:02:01.280 pullback and converting certain statements of qualification and note today 0:02:01.280 --> 0:02:04.000 they say they may be shifting workloads, reallocating from the 0:02:04.080 --> 0:02:08.959 US from abroad. Microsoft has thus far declined to comment 0:02:09.080 --> 0:02:12.840 on this particular note, but they do reiterate their spending target. 0:02:12.919 --> 0:02:15.080 Let's talk it through with one of the analysts on 0:02:15.200 --> 0:02:18.600 those notes, TD Cowen's Michael Elliots. It is great to 0:02:18.639 --> 0:02:21.120 have you on, Michael and short to us about the 0:02:21.200 --> 0:02:24.640 nuance you have been speaking to potential suppliers here and 0:02:24.680 --> 0:02:28.200 with channel checks what for you discovered, Yes. 0:02:28.280 --> 0:02:30.680 So I flagged for you that going back to September 0:02:30.720 --> 0:02:33.880 of twenty twenty four, we started to identify i's like 0:02:33.960 --> 0:02:36.920 pullback on the part of Microsoft related to activity that 0:02:36.960 --> 0:02:39.520 they had in certain markets in the US that continued 0:02:39.560 --> 0:02:42.959 in October of twenty twenty four, and as we highlighted 0:02:43.000 --> 0:02:45.360 in a report that we published in January, we really 0:02:45.360 --> 0:02:47.520 did see Microsoft take a step back from the market 0:02:47.520 --> 0:02:50.920 in a more meaningful way related to Davis on leases 0:02:50.960 --> 0:02:53.639 that they were in process on, not things that had 0:02:53.639 --> 0:02:54.840 been fined, but things that they. 0:02:54.720 --> 0:02:58.400 Were working on. You know, this is a continuation of that. 0:02:58.520 --> 0:03:00.880 You know, we're seeing them pair bad on some of 0:03:00.880 --> 0:03:04.560 the incremental leasing activity that they previously were contemplating. 0:03:04.760 --> 0:03:07.239 But I really want to emphasize here. You know, as 0:03:07.280 --> 0:03:08.160 we think about the. 0:03:08.080 --> 0:03:10.160 Activity levels of the Microsoft, what we're seeing is we're 0:03:10.160 --> 0:03:11.440 still seeing them being active. 0:03:11.800 --> 0:03:12.840 It seems like we're. 0:03:12.680 --> 0:03:15.600 Seeing a shift in the location in which they're looking 0:03:15.639 --> 0:03:18.639 to take capacity. You know, there's been a talk from 0:03:18.639 --> 0:03:22.400 the Microsoft CEO around inference and the need for to 0:03:22.480 --> 0:03:25.880 generate revenue, and we're seeing them look for capacity in 0:03:25.919 --> 0:03:26.640 and around. 0:03:26.400 --> 0:03:28.320 Their existing cloud availability zones. 0:03:28.680 --> 0:03:30.480 Now I'll leave it to you to interpret, you know 0:03:30.560 --> 0:03:32.200 what that could potentially mean. 0:03:32.480 --> 0:03:35.080 But I want to emphasize that we are still seeing them. 0:03:34.960 --> 0:03:37.920 Be active in the market and in areas where we've 0:03:37.960 --> 0:03:40.640 seen signed leases be impacted. 0:03:40.760 --> 0:03:41.840 It really has more to do. 0:03:41.920 --> 0:03:45.640 With power delays at the facility level rather than a 0:03:45.640 --> 0:03:48.760 wholesale pullback from leases that they had found. 0:03:49.920 --> 0:03:53.800 Michael, our own Bloomberg intelligence analyst, noted this morning that 0:03:53.880 --> 0:03:57.200 this report, along with such Jinadella's comments on a podcast 0:03:57.280 --> 0:04:01.040 last week, suggested that perhaps they're shifting the strategy more 0:04:01.120 --> 0:04:05.400 toward renting rather than building from scratch. How do you 0:04:05.520 --> 0:04:07.960 view this strategy? 0:04:08.600 --> 0:04:09.160 Can you hear me? 0:04:10.440 --> 0:04:12.120 Yes? How would you view the strategy? 0:04:13.200 --> 0:04:13.440 You know? 0:04:13.600 --> 0:04:15.520 So, what I would say to you is that historically 0:04:15.560 --> 0:04:18.719 we've seen a mix of data center leafing and self 0:04:18.720 --> 0:04:22.360 builds be done. It's the two of them are part 0:04:22.440 --> 0:04:24.560 of the go to market around data centers. You know, 0:04:24.880 --> 0:04:28.960 we've seen more leasing historically out of the third party 0:04:29.240 --> 0:04:32.360 data center operators with Microsoft, and we have historically and 0:04:32.400 --> 0:04:35.320 I think that's a function of the accelerated demand needs 0:04:35.320 --> 0:04:39.840 associated with AI. Now, over time, do we think that 0:04:39.960 --> 0:04:42.960 Microsoft could shift more to a self build strategy? There's 0:04:42.960 --> 0:04:45.279 a potential for that certainly as a. 0:04:45.360 --> 0:04:49.320 Bank and accelerate the development pipeline. But one of the. 0:04:49.279 --> 0:04:50.960 Messages that I want to be clear here for your 0:04:51.000 --> 0:04:53.960 views is that we're still seeing broad demand strength in 0:04:54.040 --> 0:04:57.720 terms of overall data center demand. Right we see Microsoft 0:04:57.760 --> 0:04:59.039 is in the market, will be it to a lesser 0:04:59.080 --> 0:05:01.760 degree we're seeing or will be very active, particularly on 0:05:01.760 --> 0:05:05.799 the Hills of Stargate project. We're seeing in terms of Google, 0:05:05.800 --> 0:05:08.640 they're ramping their demands, same with Meta, while Amazon is 0:05:08.640 --> 0:05:12.440 said all in all, we're seeing very strong data center demand. 0:05:13.680 --> 0:05:16.400 That's td Cowan analyst Michael Elias, thank you so much 0:05:16.440 --> 0:05:18.960 for joining us. Now, let's look at other stories today. 0:05:19.320 --> 0:05:22.640 Apple planning to hire twenty thousand new workers and produce 0:05:22.720 --> 0:05:25.080 AI service here in the US. That's along with a 0:05:25.080 --> 0:05:29.000 five hundred billion dollar domestic investment over the next four years. 0:05:29.120 --> 0:05:32.680 Bloomberg Intelligence analysts and Agrana joins us now to discuss 0:05:32.760 --> 0:05:36.400 arak break down what Apple's plans are for this investment. 0:05:37.800 --> 0:05:39.960 So when you look at it, unlike the other big 0:05:40.000 --> 0:05:42.839 tech companies, Apples not ramped up its CAPEX so far 0:05:43.240 --> 0:05:46.040 because they're really in the you know, they believe in 0:05:46.240 --> 0:05:48.680 going out and renting some of this stuff from other 0:05:48.760 --> 0:05:51.960 cloud providers, you know, whether that's Aws or Google Lord, 0:05:52.200 --> 0:05:54.560 you know, you know, the other vendors that are out there. 0:05:55.120 --> 0:05:57.440 What it seems to me now that because of the 0:05:57.480 --> 0:06:00.720 importance of AI for their products and services, they want 0:06:00.720 --> 0:06:02.680 to do some of this in house. They talked about 0:06:02.760 --> 0:06:06.559 AI servers, so we anticipate that to be an area. Second, 0:06:06.640 --> 0:06:08.960 we think it could be the AI models itself. They 0:06:08.960 --> 0:06:10.440 could spend a lot of money on R and D 0:06:10.520 --> 0:06:14.960 over there. And the third is, you know, semiconductor manufacturing, 0:06:15.160 --> 0:06:18.680 not manufacturing, but designing, and then you know, use those 0:06:18.720 --> 0:06:22.440 designs to get those ships manufactured with TSFC for example. 0:06:23.320 --> 0:06:26.560 The crop say for many Anna Rag is how much 0:06:26.640 --> 0:06:29.839 things have changed or not. Can you just give us 0:06:29.839 --> 0:06:32.599 a view whether this is as certain analysts would know, 0:06:32.839 --> 0:06:35.560 once again Tim Cook being a rather good politician, or 0:06:35.640 --> 0:06:38.640 is this a general change in direction for Apple. 0:06:40.120 --> 0:06:41.760 I think this is a little bit of both. 0:06:41.920 --> 0:06:45.120 I think the bigger dollar amount is a bit staggering, 0:06:45.120 --> 0:06:48.640 to be frank. Now, some of that would go into 0:06:48.720 --> 0:06:51.599 a fund, They'll go into some R and D initiatives, 0:06:51.640 --> 0:06:54.039 so some of them may not actually fall down to 0:06:54.080 --> 0:06:57.080 the capex line. The way you know, a financial analyst 0:06:57.160 --> 0:06:59.600 would look at it because it could be an operating 0:06:59.600 --> 0:07:04.080 expense for example. But the AI server part will definitely 0:07:04.160 --> 0:07:06.799 hit CAPEX, and these guys generate about one hundred billion 0:07:06.839 --> 0:07:09.200 of them, so there is an impact on the free 0:07:09.200 --> 0:07:12.040 cash flow line for investors. But I think it's a 0:07:12.080 --> 0:07:14.760 mix of both. There is a need for more high 0:07:14.800 --> 0:07:17.080 tech stuff to being in the US, but it'd be 0:07:17.200 --> 0:07:18.760 very difficult to do the lower and stuff in the 0:07:18.840 --> 0:07:21.600 US in my view. But you know, AI servers and 0:07:21.960 --> 0:07:24.440 A related investments are of importance. 0:07:25.280 --> 0:07:27.080 Aneron do you have a sense of how much this 0:07:27.160 --> 0:07:29.960 is just lip service to kind of fend off perhaps 0:07:30.040 --> 0:07:33.720 some of the threat of tariffs for the company. 0:07:35.120 --> 0:07:37.320 I think it's from an AI side of it. 0:07:37.400 --> 0:07:38.120 They are behind. 0:07:38.200 --> 0:07:40.320 I think I don't think anybody would would say that 0:07:40.400 --> 0:07:43.239 Apple has any of the you know, leading large language 0:07:43.240 --> 0:07:46.080 models or even small language models. Right now. They have 0:07:46.160 --> 0:07:48.560 said okay, they're going to use open ai for their 0:07:48.760 --> 0:07:51.640 particular products. When it comes to you know your crea question, 0:07:51.720 --> 0:07:54.080 it goes to open ai. We think down the road 0:07:54.120 --> 0:07:56.640 they would use other models as well. It's possible they're 0:07:56.680 --> 0:07:59.400 going to use Google's model, but there should be you 0:07:59.480 --> 0:08:01.280 know they should be making an effort to put their 0:08:01.320 --> 0:08:03.920 own models in there as well. Now that's not easy. 0:08:04.320 --> 0:08:06.960 You can understand, you know how much money it's taken 0:08:07.000 --> 0:08:08.920 Opening Eye to come up with these models over the 0:08:08.960 --> 0:08:11.280 last several years. So I think, you know, if they 0:08:11.320 --> 0:08:14.320 are serious about AI on the in their products, you 0:08:14.360 --> 0:08:15.680 know they'll have to spend some money. 0:08:16.040 --> 0:08:19.720 Braybag Intelligence Anna a grana, We thank you. Let's get 0:08:19.760 --> 0:08:23.040 all of this and the context of ongoing tariff concerns 0:08:23.040 --> 0:08:26.440 in the market. Epec Oskodeskia is with US senior market 0:08:26.440 --> 0:08:29.680 analyst at Swiss Code. Look, we analyze the Apple spending 0:08:29.800 --> 0:08:33.119 here in the US in the context of US China relations. 0:08:33.360 --> 0:08:35.120 We think about AI spend. 0:08:34.840 --> 0:08:37.360 What's happening over in China and Ali Baba in the 0:08:37.400 --> 0:08:40.960 context of China and US relations epech How much of 0:08:40.960 --> 0:08:42.320 this is a concern going forward? 0:08:43.679 --> 0:08:45.560 Well right now, we obviously do. 0:08:45.760 --> 0:08:49.480 How a world that has shifted its focus on geopolitical tension, 0:08:49.600 --> 0:08:52.679 so the technology war is just going to get for 0:08:52.840 --> 0:08:57.240 more heated from this from this point on. Especially, we 0:08:57.280 --> 0:08:59.880 thought last year that the Chinese delay was a cum 0:09:00.480 --> 0:09:03.319 but this year, with China coming back on the international 0:09:04.040 --> 0:09:07.120 platform with new AI models, and there is going to 0:09:07.120 --> 0:09:10.560 be some potential in this chip war and the trade 0:09:10.600 --> 0:09:13.320 war and the geopolitical attentions to take in other turn. 0:09:13.720 --> 0:09:19.600 Now for Apple, we actually think that is it looks 0:09:19.720 --> 0:09:23.320 in the actual context of things that it looks like 0:09:23.400 --> 0:09:27.160 more of a political decision to us, and we believe 0:09:27.280 --> 0:09:34.839 that the geopolitically led motivations and business investments could eventually 0:09:35.080 --> 0:09:38.640 destroy long term, medium to long term value for a 0:09:38.679 --> 0:09:39.800 company like Apple. 0:09:41.080 --> 0:09:41.959 In fact, what does. 0:09:41.760 --> 0:09:45.640 This mean for earnings coming up next? I mean this 0:09:45.720 --> 0:09:50.120 week and video major infrastructure player chip making. Now you 0:09:50.200 --> 0:09:54.280 have tariffs as part of another added layer of uncertainty. 0:09:54.559 --> 0:09:57.000 What are you expecting on that front later this week? 0:09:58.160 --> 0:10:00.960 Well, you know what, we expect mb to Nvidia to 0:10:01.000 --> 0:10:04.440 post strong earnings later this week. And we actually believe 0:10:04.480 --> 0:10:08.119 that the high concentration of big technology names in Nvidia's 0:10:08.160 --> 0:10:10.960 client book is going to be a hedge, is going 0:10:10.960 --> 0:10:13.880 to turn into something positive for Nvidia, at least in 0:10:13.920 --> 0:10:17.199 the short term and in the context of geopolitical tensions. 0:10:17.240 --> 0:10:20.400 Because Nvidia has made around fifty percent of its revenues 0:10:20.520 --> 0:10:24.560 from big US technology companies that actually pledge to continue 0:10:24.600 --> 0:10:27.439 to spend big on AI. So we think that Nvidia 0:10:27.600 --> 0:10:31.559 is in quite a protected position from this geopolitical tensions 0:10:31.600 --> 0:10:32.240 point of view. 0:10:33.200 --> 0:10:36.480 The video was hit pretty hard earlier this year when 0:10:36.520 --> 0:10:38.400 deep Sea came out too the scene. How much of 0:10:38.440 --> 0:10:41.280 those concerns have actually died off at this point. 0:10:42.559 --> 0:10:45.600 Well, we were talking about deep Seek a lot, actually, 0:10:45.640 --> 0:10:47.480 and it comes down to the same thing that I 0:10:47.600 --> 0:10:52.800 just said. The concentration of big technology shucks an Nvidia's client, 0:10:52.840 --> 0:10:55.560 but could eventually turn into a positive thing that could 0:10:55.640 --> 0:10:59.839 protect Nvidia's revenues from well cheaper options like deep Seak 0:11:00.520 --> 0:11:03.439 is pretending to have. This being said, Deep Sek also 0:11:03.520 --> 0:11:06.600 said or DeepC is also believed to have used cheaper 0:11:06.640 --> 0:11:09.600 models of Nvidia chips in order to build his own model, 0:11:09.640 --> 0:11:13.560 which means that Nvidia is not necessarily well hits negatively 0:11:13.840 --> 0:11:14.480 Biden News. 0:11:14.559 --> 0:11:16.760 It is just that is. 0:11:16.840 --> 0:11:20.800 Most premium chips could see their own demand plateau. But 0:11:21.000 --> 0:11:23.800 even that in the short one, we think that the 0:11:23.800 --> 0:11:25.959 big technology companies in the. 0:11:25.960 --> 0:11:28.000 US has got the MVS back covered. 0:11:28.160 --> 0:11:31.840 This being said, in the medium to long run, these companies, 0:11:31.880 --> 0:11:34.640 these big technology companies from the US are working on 0:11:34.679 --> 0:11:38.120 their own custom made chips and that is a respector. 0:11:38.160 --> 0:11:41.080 Apeg it feels as though the pressure on in Vidia 0:11:41.160 --> 0:11:44.959 spills over from Fridays when we're worried about ultimately compute 0:11:45.000 --> 0:11:48.240 capacity demand. The note coming from TV care and the 0:11:48.320 --> 0:11:50.760 issues of whether we're thinking that Microsoft is in some 0:11:50.800 --> 0:11:53.920 sort of overcapacity state here just weigh in on whether 0:11:54.000 --> 0:11:56.600 Wednesday and the numbers out of Nvidia might put that 0:11:56.640 --> 0:11:57.560 to rest or not. 0:11:58.920 --> 0:12:01.080 Well, we believe that earning are going to be strong. 0:12:01.160 --> 0:12:03.920 We estimate that the revenues are going to be between 0:12:03.960 --> 0:12:06.400 thirty eight to forty billion US dollar range, closer to 0:12:06.440 --> 0:12:09.400 the top range to closer to forty billion US dollars 0:12:09.720 --> 0:12:12.560 on the launch of black Wild chips and on strong 0:12:12.640 --> 0:12:15.000 AI demand from the big technology clients. 0:12:15.360 --> 0:12:16.240 We also think. 0:12:16.080 --> 0:12:19.320 Actually that the forecasts are going to be optimistic due 0:12:19.360 --> 0:12:22.600 to the Stargate projects and the new pledges from the 0:12:22.600 --> 0:12:26.640 big technology companies to continue spending on AI. This being said, 0:12:26.880 --> 0:12:30.640 the overall market conditions start looking less favorable right now 0:12:30.679 --> 0:12:33.160 than they did last year, and in the sense the 0:12:33.200 --> 0:12:36.800 investors might become a little pickier on the profit margins, 0:12:37.040 --> 0:12:41.199 on the concentration of for big technology clients, on competition, 0:12:41.520 --> 0:12:44.600 but also on the supply chain and capacity constraints. 0:12:44.679 --> 0:12:46.800 So where are you going to fall further? The nasda's 0:12:46.800 --> 0:12:48.880 currently training in the lowest in February. The third, if 0:12:48.880 --> 0:12:50.760 you're looking the nast that one hundred, it feels as 0:12:50.760 --> 0:12:53.280 though China and compute capacity is just going to keep 0:12:53.280 --> 0:12:54.800 pushing pressure on these valuations. 0:12:55.840 --> 0:12:59.080 Definitely. We also think that the investors now start seeing 0:12:59.120 --> 0:13:02.360 potential in Chine, and with high valuations in the US 0:13:02.440 --> 0:13:05.920 technology stocks and this valuation gap, there is potential for 0:13:06.040 --> 0:13:09.240 more funds to feed into the Chinese technology stocks, even 0:13:09.400 --> 0:13:12.560 more so as two major risks for the Chinese technology 0:13:12.559 --> 0:13:14.280 big technology companies. 0:13:13.880 --> 0:13:14.400 Has paid it. 0:13:14.480 --> 0:13:16.720 The first one is the fact that the chip war 0:13:17.040 --> 0:13:20.560 has delayed the AI progress of the Chinese technology companies 0:13:20.600 --> 0:13:23.760 but hasn't stopped it. And the second is the waning 0:13:23.920 --> 0:13:27.320 risk of government where she Jimpin actually showed his support 0:13:27.400 --> 0:13:29.280 to the Chinese big technology leaders. 0:13:30.480 --> 0:13:32.880 What's kind of the time horizon that investors should keep 0:13:32.880 --> 0:13:36.080 in mind if we're really going to start seeing signs 0:13:36.120 --> 0:13:39.880 of China really starting to catch up to American AI players. 0:13:41.600 --> 0:13:45.679 I mean in terms of efficiency and most efficient models. 0:13:45.720 --> 0:13:48.200 I think that we are not there just yet. We 0:13:48.320 --> 0:13:50.480 need to wait at least a few quarters. I will 0:13:50.520 --> 0:13:53.040 say two to three quarters in nord to see what 0:13:53.160 --> 0:13:56.320 the Chinese AI models are worse. But in terms of 0:13:56.480 --> 0:14:00.520 business and the revenues, it's not the best model, most 0:14:00.559 --> 0:14:03.480 efficient models. They are going to make the biggest revenues. 0:14:03.520 --> 0:14:06.079 It is how these AI tools are going to feed 0:14:06.120 --> 0:14:09.680 into services. And in the sense the Chinese technology giants 0:14:09.760 --> 0:14:13.240 like earlybud By intens and they do have huge platforms, 0:14:13.360 --> 0:14:16.160 they do have a huge reach within China and beyond 0:14:16.240 --> 0:14:20.240 China that could eventually turn their AI tools into profits 0:14:20.240 --> 0:14:22.800 without them being as efficient as US peers. 0:14:23.640 --> 0:14:33.080 That's ipek Oscar dish Kaya, thanks so much for joining us. 0:14:34.240 --> 0:14:37.240 El Musk has sent emails to over two million federal 0:14:37.280 --> 0:14:40.120 workers over the weekend asking them to defend their work 0:14:40.240 --> 0:14:42.640 or risk losing their job for the deadline to respond 0:14:42.760 --> 0:14:43.440 by today. 0:14:43.720 --> 0:14:44.400 Now, this order is. 0:14:44.360 --> 0:14:47.960 Actually facing pushback from other powerful figures within the Trump administration, 0:14:48.360 --> 0:14:51.040 with several agencies telling their employees to refrain for responding 0:14:51.080 --> 0:14:54.120 on the email commoes. MaTx Chafkin weighs in for more. 0:14:54.680 --> 0:14:56.720 Who is pushing back here. 0:14:57.320 --> 0:15:01.080 We're seeing pushback from a number of federal agencies, the 0:15:01.240 --> 0:15:04.360 FBI being one of them, and the Department of Defense. 0:15:04.560 --> 0:15:08.320 We've also seen some agencies like the Social Security Administration 0:15:08.640 --> 0:15:10.920 say yeah, you should respond to this email. 0:15:11.120 --> 0:15:12.600 You know, if you need any guidance, let us know. 0:15:12.800 --> 0:15:16.520 So this is I'd say this is probably the pushback 0:15:16.560 --> 0:15:19.880 that we're seeing where where certain agencies are saying don't 0:15:19.920 --> 0:15:23.680 do this. Meanwhile, Musk is tweeting very loudly all weekend 0:15:23.680 --> 0:15:25.560 about how easy it is to respond to this email, 0:15:25.680 --> 0:15:28.400 how reasonable it is. I'd say this is one of 0:15:28.480 --> 0:15:32.320 the more significant fissures we've seen with Elon Musk and 0:15:32.360 --> 0:15:34.720 other figures within the Trump administration. 0:15:35.960 --> 0:15:39.680 Max el Or Musk did this before at Twitter, as 0:15:39.760 --> 0:15:42.320 we've been mentioning on the show for the last couple weeks. 0:15:42.400 --> 0:15:44.360 There is a lot that we can draw from how 0:15:44.400 --> 0:15:47.560 he handled that situation when he did this back then. 0:15:48.000 --> 0:15:51.280 Did he actually consider the responses he was getting back 0:15:51.280 --> 0:15:53.240 from employees or did he just go ahead and fire 0:15:53.280 --> 0:15:54.240 them anyway, Well. 0:15:54.120 --> 0:15:57.480 This is like a slogan that he used to challenge 0:15:57.520 --> 0:16:01.120 people at Twitter. Most memorably, he used it in a 0:16:01.200 --> 0:16:05.000 tweet at the then CEO of Twitter, Prague Argowall, who 0:16:05.080 --> 0:16:08.040 was sort of trying to push back gently against Musk. 0:16:08.080 --> 0:16:10.160 He said, what have you done this week? 0:16:10.360 --> 0:16:10.480 Now? 0:16:10.640 --> 0:16:12.240 Now it's become this kind. 0:16:12.040 --> 0:16:14.440 Of like I said, it's almost like a slogan, and 0:16:14.680 --> 0:16:17.400 Musk has made clear it doesn't seem like he even 0:16:17.440 --> 0:16:18.640 so much cares. 0:16:18.480 --> 0:16:19.320 What people say. 0:16:19.320 --> 0:16:23.360 In fact, he was suggesting that employees use a large 0:16:23.400 --> 0:16:26.840 language model chatbot to respond to the note. It's like 0:16:26.960 --> 0:16:28.960 it's like he wants them to know that he is 0:16:29.040 --> 0:16:32.560 running his Twitter playbook, and that Twitter play book involves 0:16:32.840 --> 0:16:37.240 mass layoffs and also this kind of super aggressive, chaos 0:16:37.320 --> 0:16:40.920 driven let's attack the previous regime and we're seeing all that. 0:16:41.000 --> 0:16:44.400 You can also see why if you're Cash Pattel, the 0:16:44.440 --> 0:16:47.920 new director of the FBI, you might not love some 0:16:48.200 --> 0:16:50.720 other person kind of stirring the pot. 0:16:50.480 --> 0:16:53.440 In this way. But also there's the element of risk. 0:16:53.520 --> 0:16:58.120 The FBI does really important and secret work that perhaps 0:16:58.120 --> 0:17:01.200 they shouldn't be having to vindicate all distribute on a note. 0:17:01.000 --> 0:17:03.320 Right, I mean, the email did say please, don't you know, 0:17:03.360 --> 0:17:07.399 reveal any classified information, So I suppose on some level 0:17:07.800 --> 0:17:10.000 Elon Musk thought about that. But yes, one of the 0:17:10.040 --> 0:17:14.600 reasons we've seen from agencies and sort of people in 0:17:14.680 --> 0:17:17.320 government and a management perspective for saying don't respond to 0:17:17.359 --> 0:17:20.200 this is the risk that you send something that you 0:17:20.200 --> 0:17:22.159 shouldn't have said that. You know, many jobs in the 0:17:22.160 --> 0:17:24.960 federal government deal with sensitive or even secret or top 0:17:24.960 --> 0:17:28.359 secret information, and so yes, that would be a concern 0:17:28.400 --> 0:17:28.760 as well. 0:17:29.800 --> 0:17:30.960 Again it does it. 0:17:30.960 --> 0:17:34.520 It's super unclear what the goal here is beyond just 0:17:34.600 --> 0:17:37.679 creating a pretext to let more people go. And that 0:17:37.840 --> 0:17:39.919 is the thing that Elon Musk has said over and 0:17:39.960 --> 0:17:41.280 over again. It's what he wants to do. 0:17:42.119 --> 0:17:45.000 That's Bloomberg, Max Chaffin, thanks so much for joining us. 0:17:45.200 --> 0:17:47.960 Let's get to DC for more on Musk's impact, this 0:17:48.000 --> 0:17:51.639 time on the Consumer Financial Protection Bureau. The agency is 0:17:51.680 --> 0:17:54.439 one of Musk's first targets where hundreds of workers have 0:17:54.560 --> 0:17:58.280 already lost their jobs. Bloomberg's Tyler Kendall joins us. Now 0:17:58.800 --> 0:18:01.960 this blitz at the CSPB is well under way, Tyler, 0:18:02.119 --> 0:18:07.359 what kind of response has this generated from Republican lawmakers? Well, 0:18:07.440 --> 0:18:11.639 Republican lawmakers, of course, have long targeted the CFPV, saying 0:18:11.640 --> 0:18:15.439 that it poses undo of regulations that they would like 0:18:15.480 --> 0:18:17.800 to see more streamedline. And we should note that there's 0:18:17.840 --> 0:18:20.480 new Bloomberg News reporting that there also seems to be 0:18:20.560 --> 0:18:23.720 some concern among the acting head of the CFPB the 0:18:23.720 --> 0:18:27.760 current OMB director rus Vot Bloomberg News, saying that he 0:18:27.800 --> 0:18:30.480 appears to be voicing some concerns that this process might 0:18:30.480 --> 0:18:33.080 be happening a little too quickly here and that. 0:18:32.960 --> 0:18:36.080 That could open this up to legal scrutiny. 0:18:35.800 --> 0:18:37.280 Which at the end of the day, if it's not 0:18:37.359 --> 0:18:39.399 upheld in court, that could mean none of these changes 0:18:39.480 --> 0:18:42.440 end up being enacted. We should note that a spokesperson 0:18:42.520 --> 0:18:45.240 for Vote does say that no such tensions exist, but 0:18:45.280 --> 0:18:47.760 it doesn't mean that there aren't still legal questions moving 0:18:47.760 --> 0:18:51.440 forward here, particularly considering we're not quite sure what legal 0:18:51.480 --> 0:18:55.800 basis Elon Musk has considering his role as an advisor 0:18:55.840 --> 0:18:59.320 to President Trump to enact such widespread job cuts, although 0:18:59.320 --> 0:19:01.720 it does appear that he does have the backing from 0:19:01.720 --> 0:19:04.040 the White House, considering that just last month, President Trump 0:19:04.080 --> 0:19:07.160 suggested that he wouldn't mind if the CFPB was eliminated. 0:19:08.160 --> 0:19:09.879 Whether or not there are indeed a word about the 0:19:09.880 --> 0:19:12.800 haphazard nature in which they're trying to take down and 0:19:12.840 --> 0:19:15.840 shut off the CFPB. There is a note in that 0:19:16.000 --> 0:19:18.200 same story that the Cato Institute is pointing out here 0:19:18.200 --> 0:19:20.960 that basically, you're taking away the police of Wall Street, 0:19:21.040 --> 0:19:23.760 You're taking away the police of big tech. How is 0:19:23.800 --> 0:19:25.760 woll Streem responding, Because I know you've spoken to Jamie 0:19:25.800 --> 0:19:26.360 Diamond on this. 0:19:27.760 --> 0:19:28.639 Right, Thanks Caroline. 0:19:28.680 --> 0:19:30.600 While I caught up with him on Capitol Hill a 0:19:30.640 --> 0:19:32.280 couple of weeks ago, and I asked him what his 0:19:32.359 --> 0:19:36.040 message to consumers would be if there is no CFPB 0:19:36.160 --> 0:19:38.159 in place, and he said that ultimately he feels that 0:19:38.200 --> 0:19:40.359 other regulators would pick up the slack, whether that be 0:19:40.440 --> 0:19:43.320 the SEC, the OCC, or the FED, and that ultimately 0:19:43.359 --> 0:19:47.760 he supports a holistic approach to restructuring financial regulators. But 0:19:47.840 --> 0:19:49.640 we should say on the other side of this, of course, 0:19:49.680 --> 0:19:52.720 there is big criticism, such as Senator Elizabeth Warren, the 0:19:52.800 --> 0:19:55.840 ranking member on Senate Banking. This is largely considered to 0:19:55.880 --> 0:19:59.080 be her brainchild. She tomorrow is hosting a panel a 0:19:59.200 --> 0:20:01.640 forum to we'll get the way forwards here to see 0:20:01.880 --> 0:20:04.480 what sort of remedies they could implement in order to 0:20:04.600 --> 0:20:05.680 protect consumers. 0:20:05.680 --> 0:20:06.159 We should not. 0:20:06.280 --> 0:20:08.879 She did invite Elon Musk to appear at the forum, 0:20:08.880 --> 0:20:11.119 but we are not expecting him to be in attendance. 0:20:11.440 --> 0:20:14.359