WEBVTT - CDK Hack, Apple EU Warning 0:00:02.920 --> 0:00:10.799 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.840 --> 0:00:15.000 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.040 --> 0:00:18.720 Eastern on Applecarplay and Android Auto with the Bloomberg Business app. 0:00:18.760 --> 0:00:22.000 Listen on demand wherever you get your podcasts, or watch 0:00:22.040 --> 0:00:24.360 us live on YouTube. 0:00:25.000 --> 0:00:28.160 So here's a headline for you. Blacksuit cyber crime gang 0:00:28.280 --> 0:00:31.800 is blamed for major CDK ransomware attacks. 0:00:31.800 --> 0:00:32.560 So this is the deal. 0:00:33.040 --> 0:00:36.159 Fifteen thousand car dealerships across the US in Canada have 0:00:36.200 --> 0:00:39.600 gone days now without software systems that are crucial to 0:00:39.680 --> 0:00:43.199 running their business, and this is after multiple cyber attacks 0:00:43.200 --> 0:00:46.519 on CDK Global. Now that company's just a handful of 0:00:46.520 --> 0:00:51.400 dealer management systems that provide auto retailer's ability to basically function, 0:00:51.560 --> 0:00:56.000 schedule appointments, customer records, etc. And so apparently Blacksuit cyber 0:00:56.120 --> 0:00:59.120 crime Gang is blamed in that attack. 0:00:59.200 --> 0:00:59.840 It's a real deal. 0:01:00.000 --> 0:01:02.960 Buddy Mine manages a dealership in Jersey and he said 0:01:02.960 --> 0:01:05.720 it's definitely. It impacts everything they do. And the net 0:01:05.720 --> 0:01:09.280 result is it just takes longer to serve your customer, 0:01:09.840 --> 0:01:10.280 gives them. 0:01:10.240 --> 0:01:12.319 More time to walk out the door, and. 0:01:12.319 --> 0:01:14.080 So it's impacting, you know, a little bit of an 0:01:14.120 --> 0:01:16.920 impact on units sold per day they're noticing, so they 0:01:16.959 --> 0:01:19.200 need to get that fixed as quickly as possible. 0:01:19.200 --> 0:01:19.679 That's interesting. 0:01:19.680 --> 0:01:21.160 But also like when you go to a car dealership, 0:01:21.160 --> 0:01:23.440 you already spend half your day there, so you extended 0:01:23.560 --> 0:01:26.240 and like forget it. Steve Mann is Bloomberg Intelligence Global 0:01:26.240 --> 0:01:28.960 Auto is an industrials research analyst, and he joins us. Now, Steve, 0:01:28.959 --> 0:01:31.039 you've been following this and the hack. 0:01:31.319 --> 0:01:32.080 What happened? 0:01:33.240 --> 0:01:37.040 Oh, this is very significant. I mean, I mean, Paul 0:01:37.200 --> 0:01:39.760 just said he spoke to some of the dealership in 0:01:39.760 --> 0:01:42.160 New Jersey. If I've reached out to some of the 0:01:42.200 --> 0:01:46.080 dealerships that I've that I've talked to, the impact is significant. 0:01:46.160 --> 0:01:49.800 It's not just only sales, but it's also service and parts. 0:01:50.760 --> 0:01:53.800 You know, the systems interrupted to a point where they 0:01:53.840 --> 0:01:58.920 can't even get certain cars registered and delivered to their customers, 0:01:58.960 --> 0:02:02.080 the ones that's already sold. So you know, Inventor is 0:02:02.120 --> 0:02:06.240 gonna get a little pick up. It's gonna be you know, 0:02:06.280 --> 0:02:08.880 I don't know when it's gonna get fixed. They probably 0:02:08.880 --> 0:02:10.960 have to pay that fine, and I think they will 0:02:10.960 --> 0:02:13.280 pay that fine. But at the end of the day, 0:02:13.639 --> 0:02:16.239 I think if I look at from the automaker's perspective, 0:02:16.800 --> 0:02:20.799 it's it's a temporary, temporary blip. Inventory is gonna rise, 0:02:20.880 --> 0:02:23.679 but I think sales will be delayed, and hopefully when 0:02:23.680 --> 0:02:27.400 this gets resolved, customers will come back. More customers will 0:02:27.440 --> 0:02:29.200 come back to the to the showroom. 0:02:29.600 --> 0:02:33.880 And it seems I mean Bloomberg News reporting CDK plans 0:02:33.960 --> 0:02:35.560 to make the ransomware payment. 0:02:35.960 --> 0:02:39.720 Oh yeah, frustrating. It's just but I guess they kind 0:02:39.720 --> 0:02:40.040 of have to. 0:02:40.080 --> 0:02:42.200 I don't know, all right, Steve talked to us about 0:02:42.639 --> 0:02:48.320 China europe tariffs. We've got the European Union reporting you know, 0:02:48.440 --> 0:02:50.679 we talked to you last week initiating some tariffs here. 0:02:51.080 --> 0:02:53.840 Now Beijing's kind of responding here. What's the latest. 0:02:55.240 --> 0:02:59.160 Yeah, it's uh, it's it's a big deal for the Germans, 0:02:59.240 --> 0:03:02.960 especially the luck through automakers like BMW, Mercedes and Audi 0:03:03.400 --> 0:03:07.280 which Volkswagen owns Audi. Uh. You know, they have about 0:03:07.320 --> 0:03:11.120 eighty percent of the market, the luxury car market in China, 0:03:11.680 --> 0:03:15.640 so they sell a huge amount of cars in China. 0:03:15.840 --> 0:03:20.480 About a third to forty percent of these companies' revenues 0:03:20.520 --> 0:03:24.280 actually generate in China, so they yeah, so they want 0:03:24.280 --> 0:03:27.639 to make good with the Chinese. As you know, Germany 0:03:27.720 --> 0:03:32.000 has been against the tariffs. So if the Germans are 0:03:32.080 --> 0:03:36.800 able to get something from China and help ease some 0:03:36.880 --> 0:03:40.640 of the tariffs or China. You know, if China can 0:03:41.240 --> 0:03:42.920 get the Germans to help them ease some of the 0:03:43.000 --> 0:03:47.120 tariffs in the EU, I think it will benefit you know, 0:03:47.160 --> 0:03:51.040 potentially companies like Stilentis as well, which is which also 0:03:51.160 --> 0:03:52.880 has a new joint venture. 0:03:53.160 --> 0:03:56.080 But here's the thing that I get confused, is it 0:03:56.160 --> 0:04:00.160 China's making a pitch to individual countries versus the European 0:04:00.280 --> 0:04:04.160 Union trying to operate as one body in relation to tariffs, 0:04:04.200 --> 0:04:06.880 and I wonder how that's gonna work itself out. 0:04:08.160 --> 0:04:12.200 Yeah, I think it's it's that conquer, divine and conquer 0:04:12.520 --> 0:04:16.479 strategy they're they're taking. So but you know, I think 0:04:16.520 --> 0:04:20.160 the Germans probably has the most to lose out of 0:04:20.200 --> 0:04:24.599 the global automakers here. You know, about sixteen percent of 0:04:24.640 --> 0:04:27.960 their battery electric vehicles that are produced in China, it's 0:04:27.960 --> 0:04:31.560 actually shipped out globally. So China plays an important part 0:04:31.920 --> 0:04:35.320 for the BEEV market as a low cost producer. So 0:04:36.080 --> 0:04:37.680 you know, I don't think there's a lot of other 0:04:38.600 --> 0:04:42.039 automakers that are you know that have that many bev's 0:04:42.120 --> 0:04:45.040 produced in China and sold elsewhere around the world. 0:04:45.839 --> 0:04:48.560 And Steeve just a red headline crossing the Bloomberg terminal. 0:04:48.600 --> 0:04:52.160 Now Canada now gets into the game. Canada announces planned 0:04:52.360 --> 0:04:56.080 to curb imports of Chinese made evs. 0:04:56.480 --> 0:04:57.680 I mean, what's going on here? 0:04:57.720 --> 0:05:00.839 I mean, I mean, first of all, just give us 0:05:00.839 --> 0:05:04.599 a sense of how good, how competitive are these Chinese evs, 0:05:04.600 --> 0:05:06.960 because if you tell me they're good vehicles, let's bring 0:05:07.000 --> 0:05:07.599 them into the market. 0:05:07.680 --> 0:05:10.600 I don't know, Yeah, I think some if you talk 0:05:10.640 --> 0:05:13.320 to some of the al makers, they actually have the 0:05:13.320 --> 0:05:16.680 same thinking. Let's let's let's compete, right. I think competition 0:05:16.920 --> 0:05:20.080 will make the whole industry better. You saw that with 0:05:20.200 --> 0:05:25.080 Tesla being the you know, fourth or third automaker in 0:05:25.080 --> 0:05:27.720 the US and actually helped drive a lot of the 0:05:27.800 --> 0:05:31.960 b EV costs down. But you know, it's not surprising 0:05:32.000 --> 0:05:36.520 that Canada is is implementing tariffs. Uh. They are part 0:05:36.560 --> 0:05:40.200 of the US Mexico Canada Free Trade Agreement, and I 0:05:40.240 --> 0:05:43.240 think you know they have to close that that door, 0:05:43.279 --> 0:05:45.880 that back door where the Chinese evs can come in. 0:05:46.440 --> 0:05:49.800 It is it is very competitive. I think you know, 0:05:49.960 --> 0:05:52.960 Chinese evs are cheap enough that if you know, some 0:05:53.120 --> 0:05:56.159 argue that even with the tariffs, even with some engineering 0:05:56.240 --> 0:06:00.800 change to to so that they're they fit thet they 0:06:00.800 --> 0:06:05.719 fit the regulatory safety and mission rules here, is still 0:06:05.760 --> 0:06:09.760 be a very competitive price vehicle for North America. 0:06:10.760 --> 0:06:13.400 So then to that point, we're waiting for Mexico now, right, 0:06:13.480 --> 0:06:15.080 because I think we talked about this before. So not 0:06:15.160 --> 0:06:17.719 only is Canada gonna put tariffs on EV imports, they're 0:06:17.720 --> 0:06:19.680 also going to curb imports. 0:06:19.400 --> 0:06:20.520 Of Chinese made evs. 0:06:20.800 --> 0:06:22.440 The idea is that if Mexico doesn't have any of 0:06:22.440 --> 0:06:25.000 those restrictions, that they can just import EV's from China 0:06:25.080 --> 0:06:27.880 and then through Mexico go into the US. And that's 0:06:27.880 --> 0:06:30.680 a different way of operating. When do we get that 0:06:30.720 --> 0:06:31.440 from Mexico. 0:06:32.240 --> 0:06:36.200 I think there are some negotiation that's happening now with 0:06:36.440 --> 0:06:39.839 Mexico to kind of implement similar tariff. I've heard that 0:06:40.400 --> 0:06:44.400 VOVO is already kind of lobbying. VOVO is actually part 0:06:44.440 --> 0:06:49.560 of Chile, is actually lobbying the Mexican government to not implement, 0:06:49.839 --> 0:06:54.320 to not put tariffs in place. So then negotiations are ongoing. 0:06:55.200 --> 0:06:57.719 I don't think we were gonna wait, have to wait 0:06:57.760 --> 0:06:59.480 too long to hear any news from that. 0:07:00.080 --> 0:07:03.279 All right, So stepping back a little bit, give us 0:07:03.320 --> 0:07:07.000 the latest thinking out of Detroit and other auto capitals 0:07:07.040 --> 0:07:08.240 around the world about. 0:07:09.000 --> 0:07:11.080 EV's versus the hybrids. 0:07:12.280 --> 0:07:15.679 Is the hybrid going to be I guess the stepping 0:07:15.720 --> 0:07:19.000 stone to a pure EV environment? Do you think is 0:07:19.000 --> 0:07:19.800 that still the thinking? 0:07:20.680 --> 0:07:22.720 Yeah, I think that is still the thinking. I think 0:07:22.760 --> 0:07:28.840 with BEEV sales slowing down or growth slowing down, the 0:07:28.880 --> 0:07:33.920 automakers do need something else to meet the cafe, the 0:07:34.360 --> 0:07:39.040 few economy regulations, the emissions regulations. So hybrid is a 0:07:39.080 --> 0:07:42.200 stopgap measure. But if you talk to the all the 0:07:42.280 --> 0:07:45.280 automakers just still spending a lot of money on BEV. 0:07:45.440 --> 0:07:48.000 They think that is the future because at the end 0:07:48.040 --> 0:07:51.880 of the day, hybrid vehicles do still spill spell out 0:07:52.800 --> 0:07:58.000 pollution or greenhouse gases. So you know, as you know, 0:07:58.040 --> 0:08:02.000 these emission standards, these few economy standards, they're only going 0:08:02.080 --> 0:08:03.400 to get tighter and tighter. 0:08:04.360 --> 0:08:06.840 All right, Steve, we appreciate it, Thank you very much. 0:08:06.920 --> 0:08:08.880 I feel like your sector is moving so fast right 0:08:08.880 --> 0:08:11.000 now in terms of all the rules and regulations. Steve 0:08:11.080 --> 0:08:15.200 Man Bloomberg Intelligence, Global Autos and industrials research analyst. 0:08:16.800 --> 0:08:20.680 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:08:20.760 --> 0:08:23.280 weekdays at ten am Eastern on Apple car. 0:08:23.320 --> 0:08:25.040 Play and Android Auto. 0:08:24.720 --> 0:08:27.480 With the Bloomberg Business app. You can also listen live 0:08:27.560 --> 0:08:30.760 on Amazon Alexa from our flagship New York station Just 0:08:30.800 --> 0:08:33.439 Say Alexa playing Bloomberg eleven thirty. 0:08:35.120 --> 0:08:37.120 One of the pieces of news crossing the tape here, 0:08:37.520 --> 0:08:40.160 Alex just reaching is you know Apple, there's some concerns 0:08:40.160 --> 0:08:44.280 there at the European Union regulators once again looking at 0:08:44.280 --> 0:08:46.640 a big US tech company, in this case Apple, looking 0:08:46.679 --> 0:08:51.439 at their app store and maybe some abuses. Their Temlin 0:08:52.720 --> 0:08:56.760 Basent Joints is here. Temlin is a technologyannelst for Bloomberg Intelligence. 0:08:57.160 --> 0:08:59.600 He was in the US, but now he's in London. 0:09:00.080 --> 0:09:01.920 Get to London. I have no idea how that happened. 0:09:02.040 --> 0:09:03.440 I did not complane. 0:09:03.559 --> 0:09:04.880 I mean a ship would take a way too long. 0:09:04.960 --> 0:09:05.920 Yeah, I did not approve that. 0:09:06.360 --> 0:09:08.640 But anyway, Tamlin, thanks so much for joining us here. 0:09:08.800 --> 0:09:09.040 Talent. 0:09:09.160 --> 0:09:11.839 Tell us what's happening with Apple today as it relates 0:09:11.880 --> 0:09:13.920 to the European Union and some of the regulators there. 0:09:15.000 --> 0:09:18.160 Yeah. Sure, So what happened today is the European Commission 0:09:18.760 --> 0:09:23.280 announced preliminary findings in an investigation into Apple under the 0:09:23.400 --> 0:09:27.760 Digital Markets Act. This is the sweeping new competition rules 0:09:27.760 --> 0:09:30.880 that the European Union is sort of implemented in March 0:09:30.920 --> 0:09:35.120 of this year. Now, the findings of this probe relate 0:09:35.400 --> 0:09:39.960 to anti steering rules, so essentially to Apple's rules that 0:09:40.040 --> 0:09:43.080 it has in place to sort of prevent app developers 0:09:43.480 --> 0:09:47.240 from informing users of maybe cheaper subscription options outside of 0:09:47.280 --> 0:09:50.120 the app store. Now this might sound familiar because just 0:09:50.200 --> 0:09:53.400 in early March, before the DMA took effect, the Commission 0:09:53.440 --> 0:09:57.440 did find Apple one point eight billion euros over sort 0:09:57.480 --> 0:10:02.000 of the same anti steering. Now, what today their commission 0:10:02.040 --> 0:10:06.360 said is that Apple is still not complying now with 0:10:06.520 --> 0:10:10.640 the d m A in terms of really letting developers 0:10:10.760 --> 0:10:15.440 freely engage with users and direct them to cheaper options. Specifically, 0:10:15.520 --> 0:10:18.360 this kind of they want developers to be able to 0:10:19.240 --> 0:10:22.480 market within the app and show cheaper subscriptions within that. 0:10:23.000 --> 0:10:26.240 So it's really this is kind of more pressure on 0:10:26.320 --> 0:10:28.760 those sort of app store revenues that Apple. 0:10:29.360 --> 0:10:31.320 So what does Apple say to that, Like, well, what's 0:10:31.360 --> 0:10:33.400 their defense to that, because presumably they had months to 0:10:33.480 --> 0:10:34.320 kind of get it together. 0:10:35.559 --> 0:10:38.760 They did, and they haven't responded. What do they said 0:10:38.840 --> 0:10:41.440 is they think that they do comply with all of this. 0:10:41.720 --> 0:10:43.800 What's interesting about the DMA, though, is that this is 0:10:43.840 --> 0:10:49.240 the DMA that European Commission did play a strong role 0:10:49.320 --> 0:10:53.560 in drafting these rules, and it's also responsible for enforcing them, 0:10:53.840 --> 0:10:57.959 and there are a lot of sort of subjective interpretations 0:10:58.000 --> 0:11:01.199 in terms of first complying with it. So I think 0:11:01.320 --> 0:11:03.680 what we are going to see is probably the European 0:11:03.679 --> 0:11:07.320 Commission taking a very strict view of what's reasonable in 0:11:07.360 --> 0:11:12.160 these circumstances and probably really try to get strict adherance here. 0:11:12.200 --> 0:11:14.440 So it's going to be going to be up to 0:11:14.480 --> 0:11:16.960 them to decide whether Apple is complied or not, and 0:11:17.000 --> 0:11:19.079 then Apple can then sort of appeal to the courts. 0:11:19.080 --> 0:11:20.960 But I do think it's it's pretty likely we're going 0:11:21.000 --> 0:11:24.920 to see another fine in this and some behavioral remedies 0:11:24.960 --> 0:11:25.800 coming down the line. 0:11:26.040 --> 0:11:28.720 You know, Alex, I love talking to Tamlin. Good guy, 0:11:28.840 --> 0:11:31.720 smart guy, But you know what, it just doesn't matter. 0:11:32.040 --> 0:11:34.640 Apple stock up a tenths of one percent today, It's 0:11:34.679 --> 0:11:37.800 a nine percent year to date. We've seen this time 0:11:37.840 --> 0:11:41.160 and time again where the Europeans just start nitpicking at 0:11:41.200 --> 0:11:45.400 these US technology companies, Tamila, what's the feeling within the 0:11:45.440 --> 0:11:49.440 regulatory environment of Europe as to really what they're trying 0:11:49.480 --> 0:11:51.800 to do here, because it just doesn't seem like it's 0:11:51.960 --> 0:11:54.360 even relevant. I mean, it just at the end of 0:11:54.400 --> 0:11:57.599 the day, they just these whether it's Google or Facebook, 0:11:57.720 --> 0:12:00.320 or they just write checks here to make could all 0:12:00.400 --> 0:12:04.120 go away? I mean, is that kind of do European 0:12:04.160 --> 0:12:08.319 regulators recognize that it just doesn't seem to be that 0:12:08.360 --> 0:12:09.600 I material what they're doing. 0:12:09.520 --> 0:12:11.880 Right, Yeah, So I think if you look at this 0:12:11.920 --> 0:12:14.880 specific investigation, you know, this is one that sort of 0:12:14.920 --> 0:12:17.040 came out of sort of Spotify, which of course is 0:12:17.200 --> 0:12:20.920 headquartered in Europe, and the app developers are complaining that 0:12:20.920 --> 0:12:23.079 the Apple is squeezing them too hard. So I think 0:12:23.559 --> 0:12:26.200 in some of these instances, Europe is trying to protect 0:12:26.559 --> 0:12:30.760 some local players by sort of ordering a sort of 0:12:30.800 --> 0:12:33.880 loosening of these rules that sort of maybe benefit the 0:12:33.920 --> 0:12:38.160 gatekeeper on the NBA, which DNA, which would be at Apple, Google, 0:12:38.160 --> 0:12:40.720 Microsoft brothers, and they are sort of trying to show 0:12:41.679 --> 0:12:44.840 domestic industry that they are trying to pry open the markets. 0:12:45.280 --> 0:12:47.160 But I do think you're right that I think at 0:12:47.160 --> 0:12:50.360 this point investors are sort of kind of just shrugging 0:12:50.360 --> 0:12:53.040 this off. This is just one thing after another. I 0:12:53.080 --> 0:12:55.840 will point that may point out that a difference under 0:12:55.840 --> 0:12:59.040 the DMA is that the timeline is really much quicker 0:12:59.040 --> 0:13:02.079 than under sort of former case law, where it may 0:13:02.160 --> 0:13:05.800 take three four years until you got a result after 0:13:05.840 --> 0:13:09.400 an industiation. Here that this finding came just three months 0:13:09.440 --> 0:13:12.560 after the inquiry opened, and we're going to have sort 0:13:12.600 --> 0:13:16.040 of a final remedial measure by early next year. So 0:13:16.280 --> 0:13:19.480 I do think the timeline is faster. Whether or not 0:13:19.720 --> 0:13:22.319 this results and sort of the impact that the regulators 0:13:22.360 --> 0:13:25.400 might be looking for, I think definitely remains to be seen, 0:13:25.440 --> 0:13:28.040 and I think investors are definitely looking a little bit 0:13:28.080 --> 0:13:30.160 of skew at it and thinking maybe this is sort 0:13:30.200 --> 0:13:31.040 of just more of the same. 0:13:31.120 --> 0:13:34.680 And Alex, I mean, you know, it's really almost, maybe 0:13:34.720 --> 0:13:37.360 even more than thirty years ago that Microsoft started going 0:13:37.400 --> 0:13:40.440 through the same whole thing with the European Union, and 0:13:40.520 --> 0:13:43.839 again it investors became conditioned to it's no big deal. 0:13:43.840 --> 0:13:45.360 They just write it check and it kind of goes away. 0:13:45.480 --> 0:13:48.160 The tobacco industry, you know, investors kind of said, put 0:13:48.200 --> 0:13:51.800 it in context, it's not that big a deal, and 0:13:51.880 --> 0:13:54.480 you kind of wonder, you know, given that the US 0:13:54.600 --> 0:13:57.760 regulators have taken a very light touch to technology and 0:13:57.760 --> 0:14:00.360 then allowing these companies to get so big, like the 0:14:00.360 --> 0:14:03.360 Europeans are trying to do what they can to kind 0:14:03.400 --> 0:14:05.280 of rein it in, but it seems almost too little, 0:14:05.280 --> 0:14:06.080 too late, right. 0:14:06.120 --> 0:14:08.040 And also you can make the argument too that you know, 0:14:08.080 --> 0:14:10.320 Europe doesn't have a lot of technology companies. They have some, 0:14:10.400 --> 0:14:14.439 of course, like ASML for example, Yes, but yeah, exactly SAP, 0:14:14.640 --> 0:14:17.760 but I mean, can you name anymore? No, there's some, 0:14:18.000 --> 0:14:20.160 But I think that that's kind of the point. Maybe 0:14:20.240 --> 0:14:22.640 take a look at you know, European stocks versus the 0:14:22.720 --> 0:14:24.680 S and P and market cap like twenty years ago 0:14:24.920 --> 0:14:28.360 versus now, Oh my gosh, forget that different. Hey Tamlin, 0:14:28.480 --> 0:14:30.520 what's going on with Apple in general? Like it's it's 0:14:30.640 --> 0:14:32.320 it seems to be making a little bit of a 0:14:32.360 --> 0:14:35.000 comeback here. It's actually ups extensive one percent, despite you know, 0:14:35.000 --> 0:14:36.840 in video for example, down over two percent. 0:14:36.880 --> 0:14:37.560 What do you make of that? 0:14:38.680 --> 0:14:40.600 Yeah, I mean I think some of this comes some 0:14:40.720 --> 0:14:43.720 sort of the recent announcement to sort of build AI 0:14:43.880 --> 0:14:47.160 into the into the iPhone and maybe maybe sort of 0:14:47.200 --> 0:14:51.560 accelerate the recycle in terms of getting people to buy 0:14:51.560 --> 0:14:56.200 those phones. I do think it probably definitely. I don't 0:14:56.240 --> 0:15:01.600 think the regulatory headwinds are really causing it much damage 0:15:01.680 --> 0:15:04.480 right now. I will point out that although the US 0:15:04.560 --> 0:15:07.320 is definitely like ASSAD taking a light touch approach, the 0:15:07.360 --> 0:15:09.480 one area they are getting involved in is on sort 0:15:09.480 --> 0:15:12.120 of these apps for rules, where where Apple's obviously been 0:15:12.120 --> 0:15:14.360 in litigation with Epic for years and years and years. 0:15:14.400 --> 0:15:16.720 So I think on both sides of the Atlantic, there 0:15:16.960 --> 0:15:20.080 are some pressure on that on those services revenues that 0:15:20.160 --> 0:15:22.360 we might see shaking out over the next you know, 0:15:22.520 --> 0:15:24.440 nine to eighteen months to see how that plays out. 0:15:24.560 --> 0:15:27.720 So Timmley, you've you've been based both in the US 0:15:28.040 --> 0:15:31.040 and now in the UK. What's your view of kind 0:15:31.040 --> 0:15:35.400 of the technology and landscape and the ability for new 0:15:35.440 --> 0:15:39.320 technologies to kind of be developed and grow in in 0:15:39.360 --> 0:15:41.760 the UK and Europe. What's what's your view given your 0:15:41.760 --> 0:15:43.040 experience in the US. 0:15:43.760 --> 0:15:47.840 Yeah, well, I think the US probably probably has more 0:15:47.840 --> 0:15:51.560 of a fostering environment for that startups stage. I think 0:15:51.560 --> 0:15:55.880 that's why you've seen some of your US companies really flourished. 0:15:56.080 --> 0:15:58.720 I do think in Europe there's trying to create that 0:15:58.760 --> 0:16:03.040 fostering environment, specifically for the artificial intelligence field. I think 0:16:03.080 --> 0:16:06.280 you have seen some they are. There's an AI regulation 0:16:06.360 --> 0:16:08.880 that's taken effect. I don't think it's nearly as strict 0:16:08.880 --> 0:16:10.680 as it could have been. I think a large reason 0:16:10.720 --> 0:16:15.080 for that are lawmakers, specifically in France and Germany, really 0:16:15.080 --> 0:16:18.760 wanted to try to foster and incubate beat AI industries 0:16:18.800 --> 0:16:20.760 that they had going on. So I think we'll have 0:16:20.840 --> 0:16:23.240 to see whether that works out and whether we have 0:16:23.320 --> 0:16:28.400 the European large scale AI players. I think historically definitely, 0:16:28.480 --> 0:16:30.920 I think you've seen more of that sort of startup, 0:16:31.000 --> 0:16:33.520 startup fostering taking place in the US than Europe. 0:16:33.680 --> 0:16:36.080 All right, Tamlin, we really appreciate it. Thank you so much. 0:16:36.320 --> 0:16:37.920 Do you like living in Europe? By the way, are 0:16:37.920 --> 0:16:38.720 you enjoying the UK? 0:16:39.640 --> 0:16:39.840 Yeah? 0:16:39.920 --> 0:16:40.520 Quite nice? 0:16:40.680 --> 0:16:43.920 Excellent, right, I get you. It's not ninety two degrees there. 0:16:43.960 --> 0:16:46.800 Yeah, humidity. I'm just put that out there, all right, Tamlin. 0:16:46.920 --> 0:16:48.120 We appreciate you. Thank you. 0:16:48.560 --> 0:16:52.760 Tamlin based in joining US A Bloomberg Intelligence technology analyst 0:16:53.320 --> 0:16:56.200 from the UK. Here's my question for you, Paul, what 0:16:56.240 --> 0:16:58.240 do you think is going on with tech right now? Like? 0:16:58.360 --> 0:16:59.800 Is this like a rebalancing to the end of the 0:16:59.840 --> 0:17:03.360 cour order. Is this like a pause? Is there something 0:17:03.400 --> 0:17:05.400 more disastrous going on here? What do you think? 0:17:05.520 --> 0:17:07.400 I don't think so. I mean again, we just heard. 0:17:07.520 --> 0:17:11.399 I just got a note from Vince from out in 0:17:11.440 --> 0:17:14.760 the audience. Bid in stocks's quarter end window dressing. That's 0:17:14.800 --> 0:17:17.119 all he's hearing so far, Vince Cignarella kind of rating 0:17:17.160 --> 0:17:19.560 in here. So no, I think tech is you know, 0:17:19.600 --> 0:17:20.639 I just think it's a pause here. 0:17:20.640 --> 0:17:22.600 I mean, I think they're gonna be. 0:17:22.119 --> 0:17:24.280 The question for a lot of folks, is you know 0:17:24.400 --> 0:17:27.960 tech has been the leader in this stock market performance 0:17:28.040 --> 0:17:29.200 for years now? 0:17:29.359 --> 0:17:30.480 Can it continue to be? 0:17:30.960 --> 0:17:33.600 And I just think you look at the tech spending 0:17:34.119 --> 0:17:37.080 and you see where it continues to be a significant 0:17:37.080 --> 0:17:39.439 growth story, and just in terms of old total tech 0:17:39.520 --> 0:17:41.720 spending throughout the entire tech stack. 0:17:41.880 --> 0:17:42.720 Led by AI. 0:17:43.160 --> 0:17:46.159 So maybe the AI trade maybe got the sector a 0:17:46.160 --> 0:17:49.000 littlehead of itself. Maybe time for a pause, but boy, 0:17:49.240 --> 0:17:51.359 the longer term trend seems really solid. 0:17:53.760 --> 0:17:57.639 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:17:57.720 --> 0:18:01.080 weekdays at ten am Eastern on Focar playing Endroyd Auto 0:18:01.119 --> 0:18:04.040 with the Bloomberg Business app. Listen on demand wherever you 0:18:04.119 --> 0:18:08.960 get your podcasts or watch us live on YouTube. 0:18:08.720 --> 0:18:10.560 And the NASDA gets flat on the day. I mean, 0:18:10.600 --> 0:18:12.880 go figure. I feel like we're definitely on our way back. 0:18:12.960 --> 0:18:16.720 Alleren Gilbert's CEO of Wealthfuised Financial, is joining us right 0:18:16.720 --> 0:18:19.239 now for her take. So, Alaren Paul and I were 0:18:19.280 --> 0:18:21.719 talking just earlier about what is going on. Is it 0:18:21.800 --> 0:18:24.280 a tech breather, is it rebalancing into the end of 0:18:24.320 --> 0:18:26.840 the quarter. Is last week kind of the start of 0:18:26.880 --> 0:18:27.920 something more severe? 0:18:28.160 --> 0:18:28.920 How do you view it? 0:18:30.800 --> 0:18:34.000 Yeah, I mean I think let's not forget it's starting 0:18:34.000 --> 0:18:37.120 to be summer. People are off to the Hamptons, off 0:18:37.200 --> 0:18:41.040 to international trips, et cetera. So part of this would 0:18:41.080 --> 0:18:44.760 be just seasonality. But another part is I think we're 0:18:44.880 --> 0:18:48.560 going through a shift when it comes to AI from 0:18:48.680 --> 0:18:52.200 development to deployment, and so I think with that, we're 0:18:52.240 --> 0:18:55.119 going to see a broadening out of the market, not 0:18:55.560 --> 0:18:59.040 just the companies like Nvidia that are the start of AI, 0:18:59.600 --> 0:19:03.280 but moving into how companies can monetize it. And so 0:19:03.359 --> 0:19:05.919 I think we're going to continue to see this broadening 0:19:05.960 --> 0:19:09.159 out with other companies that are able to actually profit 0:19:09.240 --> 0:19:09.560 from it. 0:19:10.240 --> 0:19:12.320 What are some of those companies on what are some 0:19:12.400 --> 0:19:16.120 of those sectors that can benefit from the actual deployment 0:19:16.440 --> 0:19:17.359 of this technology. 0:19:18.000 --> 0:19:21.080 Well, it goes across all sectors really, but you know, 0:19:21.080 --> 0:19:27.120 when we think about even even just industrials and how 0:19:27.520 --> 0:19:32.800 the technology here is going to be able to broaden out. 0:19:33.480 --> 0:19:37.000 You know, even companies like Caterpillar and John Deere are 0:19:37.000 --> 0:19:41.080 going to be able to use AI to improve efficiencies. 0:19:41.080 --> 0:19:45.480 So really it's across all sectors, whether it's healthcare or industrials, 0:19:45.680 --> 0:19:46.160 et cetera. 0:19:46.520 --> 0:19:47.720 So that's the AI play. 0:19:47.760 --> 0:19:50.040 And then you do like, plus, let's look at valuation 0:19:50.200 --> 0:19:51.920 and where we're at, what's a good bet? 0:19:52.000 --> 0:19:53.400 Like do you like industrials right now? 0:19:55.080 --> 0:19:57.520 I do like industrials. We think that that is going 0:19:57.560 --> 0:20:00.400 to be a backbone and when we look to add 0:20:00.760 --> 0:20:05.560 infrastructure spending, that is going to continue to be a theme. So, 0:20:06.080 --> 0:20:07.639 you know, and I think we have to take in 0:20:07.720 --> 0:20:11.480 mind where we are with the FED and that we're 0:20:11.480 --> 0:20:14.879 definitely about to see ray cuts, you know, and the 0:20:14.960 --> 0:20:17.560 question is just when do they start. But we know 0:20:17.680 --> 0:20:20.119 that trend is going to be our friend, and so 0:20:20.200 --> 0:20:23.080 I think you can't give up on technology. It's going 0:20:23.160 --> 0:20:27.119 to continue to be the driver here moving forward, and 0:20:27.160 --> 0:20:30.840 with interest rates that will go down. That's a risk 0:20:30.920 --> 0:20:33.240 on move in the market, so we have to be mindful, 0:20:33.280 --> 0:20:35.639 but it is all about what are you buying at 0:20:35.640 --> 0:20:36.240 what price? 0:20:37.160 --> 0:20:40.280 All right, Lauren, you're a graduate of the University of Texas, 0:20:40.280 --> 0:20:43.000 so that means by default you must have an energy call. 0:20:43.600 --> 0:20:46.359 What do you think what do you think energy stocks 0:20:46.359 --> 0:20:47.840