WEBVTT - US Mulls Iran Military Options; Big Tech AI Spending Bonanza 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:09.960 --> 0:00:13.160 Good morning, I'm Nathan Hager and I'm Karen Moscow. Here 0:00:13.160 --> 0:00:14.920 are the stories we're following today. 0:00:15.280 --> 0:00:18.120 Karen, those levels are at four year highs for oil 0:00:18.160 --> 0:00:22.119 as President Trump keeps his naval blockade on Iran's ports 0:00:22.160 --> 0:00:26.600 and reportedly considers new strikes. The President says a deal 0:00:26.800 --> 0:00:29.920 has to include Iron giving up its nuclear program. 0:00:30.400 --> 0:00:31.560 They've come a long way. 0:00:32.120 --> 0:00:33.839 The question is whether or not they're going to go 0:00:33.880 --> 0:00:34.400 far enough. 0:00:34.520 --> 0:00:37.960 So at this moment, there will never be a deal 0:00:38.640 --> 0:00:40.280 unless they agree that. 0:00:40.320 --> 0:00:42.080 There will be no no clear workers. 0:00:42.280 --> 0:00:44.920 President Trump spoke at the White House yesterday. This morning, 0:00:44.960 --> 0:00:47.840 Axios is reporting that the President will meet later today 0:00:47.840 --> 0:00:50.640 with the head of US Central Command to discuss potential 0:00:50.800 --> 0:00:54.480 new military options. We get more from Bloomberg's Jumana Bursecci 0:00:54.520 --> 0:00:55.040 in Duban. 0:00:55.320 --> 0:01:00.440 Those include targeted and limited operations. Could be limited attacks 0:01:00.440 --> 0:01:03.960 on infrastructure once again, it could be a Special Forces 0:01:04.040 --> 0:01:07.399 operation to go and extract highly enriched uranium that there's 0:01:07.400 --> 0:01:11.120 also talk about a specific operation that they would conduct 0:01:11.160 --> 0:01:14.080 to reopen a small part of the street to allow 0:01:14.160 --> 0:01:16.360 for commercial vessels to pass through. 0:01:16.680 --> 0:01:20.200 Bloomberg's Jumana BURSETCI reports those options had crude oil on 0:01:20.280 --> 0:01:22.440 the Brent trading as high as one hundred and twenty 0:01:22.480 --> 0:01:25.760 six dollars a barrel overnight. Right now, Brent is up 0:01:25.800 --> 0:01:27.920 two and a half percent at just about one hundred 0:01:27.920 --> 0:01:31.319 and twenty one dollars West Texas Intermediate. It's just shy 0:01:31.319 --> 0:01:33.800 of one hundred and eight, and the war is really 0:01:33.800 --> 0:01:36.679 adding to painted the pump. In California, Triple A says 0:01:36.680 --> 0:01:40.640 that state's average gas price topped six dollars a gallon 0:01:40.720 --> 0:01:43.319 for the first time since October of twenty twenty three. 0:01:43.840 --> 0:01:46.679 On Nithan, Defense Secretary Pete Haiks had faced questions about 0:01:46.680 --> 0:01:49.280 the war as he appeared before the House Armed Services 0:01:49.280 --> 0:01:52.800 Committee to defend the Pentagons proposed one point five trillion 0:01:52.840 --> 0:01:56.160 dollar budget. Bloomberg's Amy Morris supports from Washington. 0:01:56.640 --> 0:01:59.040 The budget request is on top of a trillion dollar 0:01:59.080 --> 0:02:03.520 appropriations from congressional lawmakers for this fiscal year. Lawmakers questioned 0:02:03.520 --> 0:02:06.560 hag Seth over the war's economic impact, noting that it's 0:02:06.600 --> 0:02:10.400 cost twenty five billion dollars so far. Ranking Member Adam 0:02:10.440 --> 0:02:12.280 Smith of Washington. 0:02:11.800 --> 0:02:15.280 We had to start this war, you just said, sixty 0:02:15.360 --> 0:02:19.840 days ago because the nuclear weapon was an imminent threat. 0:02:20.600 --> 0:02:22.919 Now you're saying that it was completely obliterate. 0:02:23.040 --> 0:02:25.520 Had not given up their nuclear ambitions. 0:02:25.800 --> 0:02:29.560 Hag Seth dismissed the criticism as political and rebuked lawmakers 0:02:29.600 --> 0:02:33.680 both Republicans and Democrats, who pushed him for answers in Washington. 0:02:33.720 --> 0:02:35.360 Amy Morris Bloomberg Radio. 0:02:35.280 --> 0:02:38.200 Amy, thanks, the latest war developments and surging oil prices 0:02:38.240 --> 0:02:42.720 maybe overshadowing the latest earnings from big tech. Let's start 0:02:42.760 --> 0:02:45.640 with Alphabet. Shares of the Google parent are up more 0:02:45.680 --> 0:02:48.480 than six percent in early trading. I get the details 0:02:48.480 --> 0:02:49.800 from Bloomberg's John Tucker. 0:02:50.320 --> 0:02:53.720 Google's cloud business, which only became profitable three years ago, 0:02:53.800 --> 0:02:58.000 continues to grow quickly, accelerated by demand for AI software 0:02:58.080 --> 0:03:02.600 and infrastructure. The Gemini chatbot app and enterprise tools are 0:03:02.600 --> 0:03:05.680 gaining in popularity. The company expects to spend up to 0:03:05.680 --> 0:03:08.960 one hundred ninety billion dollars this year on capital expenditures. 0:03:09.280 --> 0:03:11.640 That's up from a previous estimate of one hundred eighty 0:03:11.639 --> 0:03:14.920 five billion dollars, which was already double what it's spent 0:03:15.120 --> 0:03:17.960 in twenty twenty five. John Tucker, Bloomberg. 0:03:17.560 --> 0:03:20.640 Radio, All right, John, thank you. Amazon shares they are 0:03:20.720 --> 0:03:23.720 up almost two percent. This morning, the company reported sales 0:03:23.760 --> 0:03:27.000 and profit that beat analyst estimates. Shar's got a boost 0:03:27.000 --> 0:03:29.920 in part by a Bloomberg report that Anthropic, one of 0:03:29.919 --> 0:03:33.680 Amazon's biggest AI investments, is weighing a funding round that 0:03:33.800 --> 0:03:37.440 may more than double its valuation to nine hundred billion dollars. 0:03:37.760 --> 0:03:40.280 CEO Andy jase He says Amazon is spending at a 0:03:40.360 --> 0:03:43.360 rapid rate to expand data center capacity to meet the 0:03:43.360 --> 0:03:47.200 intense demand for artificial intelligence computing power. 0:03:47.600 --> 0:03:51.560 I think it's no secret that you've got you know, 0:03:51.760 --> 0:03:58.400 the AI labs are spending an incredible amount of money 0:03:58.440 --> 0:04:01.240 on compute at this point, and you can compute both 0:04:01.280 --> 0:04:04.480 on the AI side as well as on the core side. 0:04:04.760 --> 0:04:08.080 CEO Andy Jassey says, sales at Amazon Web Services we're 0:04:08.160 --> 0:04:11.200 thirty seven point six billion dollars during the quarter. That's 0:04:11.240 --> 0:04:13.280 of twenty eight percent from a year ago. 0:04:13.600 --> 0:04:15.320 Well, on the flip side, care and shares of meta 0:04:15.360 --> 0:04:18.520 platforms are down about eight and a quarter percent in 0:04:18.560 --> 0:04:21.880 early trading. The Facebook parent is raising its spending out 0:04:21.880 --> 0:04:24.760 look for the year, now projecting full year capital expenditures 0:04:24.760 --> 0:04:26.400 of one hundred and twenty five to one hundred and 0:04:26.480 --> 0:04:30.720 forty five billion dollars driven by Meta's AI strategy and 0:04:31.200 --> 0:04:35.200 higher component pricing. Now that exceeds analyst estimates and marks 0:04:35.200 --> 0:04:38.240 the roughly seven point four percent increase from Meta's previous 0:04:38.240 --> 0:04:39.720 projections back in January. 0:04:40.160 --> 0:04:42.400 Hey then charees a Microsoft. They're down more than one 0:04:42.440 --> 0:04:45.240 and a half percent. The world's largest software company expects 0:04:45.279 --> 0:04:48.239 sales in its Azure cloud unit to increase about forty 0:04:48.279 --> 0:04:52.240 percent in the current quarter and anticipates modest acceleration in 0:04:52.279 --> 0:04:54.960 the second half of the calendar year. It did say 0:04:54.960 --> 0:04:58.720 capital expenditures, largely for data centers, will total about one 0:04:58.800 --> 0:05:01.400 hundred and ninety billion dollar to the end of December, 0:05:01.440 --> 0:05:03.799 and that's more than Wall Street had expected. 0:05:04.040 --> 0:05:07.679 Karen Shares of Qualcomm are surging ten and a half percent. 0:05:07.760 --> 0:05:11.080 The biggest maker of smartphone processor says it's making headway 0:05:11.080 --> 0:05:13.840 in the lucrative data center market and predicts the China 0:05:13.960 --> 0:05:18.400 phone industry will bounce back. Big tech earnings continue today. 0:05:18.440 --> 0:05:20.480 We hear from Apple this afternoon. 0:05:21.080 --> 0:05:25.000 Well. Nathan Shares at Belle Ackman's Pershing Square USA plunged 0:05:25.040 --> 0:05:28.279 eighteen percent in its small Street debut. The drop came 0:05:28.320 --> 0:05:31.880 after they combined initial public offering for the closed end 0:05:31.920 --> 0:05:36.080 fond and his alternative asset manager raised five billion dollars. 0:05:36.120 --> 0:05:38.960 Pershing was hoping to bring in twenty five billion. Ackman 0:05:39.040 --> 0:05:41.560 spoke with Bloomberg yesterday about his goal to build a 0:05:41.600 --> 0:05:45.040 long term diversified holdings company like Warren Buffett. 0:05:45.160 --> 0:05:47.279 Look at Berkshire for the last sixty years, it's built 0:05:47.440 --> 0:05:51.040 most of its value running becoming effectively an insurance holding company. 0:05:51.040 --> 0:05:53.200 That's what Buffett is built over time, and it was 0:05:53.279 --> 0:05:56.200 his successful management of the assets. When you hear Buffet 0:05:56.200 --> 0:05:58.800 buying Apple, it wasn't Buffet buying Apple. It wasn't even 0:05:58.800 --> 0:06:02.479 Berkshire buying Apple. The Berkshire insurance subsidiaries buying Apple. And 0:06:02.520 --> 0:06:03.960 we're going to do the same thing. We're going to 0:06:04.000 --> 0:06:05.960 manage A goal of how to use is to build 0:06:05.960 --> 0:06:08.480 a long term, diverse fight holding company akin to what 0:06:08.480 --> 0:06:09.480 Buffett has done. 0:06:09.720 --> 0:06:12.279 And Pershing Square founder Bill Lackman spoke with our Danny 0:06:12.279 --> 0:06:13.800 Berger on Bloomberg Deals. 0:06:13.839 --> 0:06:15.960 Well, first, Karen, let's turn to the economy. Now, the 0:06:15.960 --> 0:06:20.279 Federal Reserve is leaving interest rates unchanged, but that decision 0:06:20.400 --> 0:06:23.120 may have been overshadowed by a big announcement from current 0:06:23.160 --> 0:06:24.720 Fed chair Jay Powell. 0:06:25.400 --> 0:06:29.320 He's staying after my term as chair ends on May fifteen, 0:06:29.520 --> 0:06:31.480 I will continue to serve as a governor for a 0:06:31.520 --> 0:06:35.560 period of time to be determined. I plan to keep 0:06:35.600 --> 0:06:39.279 a low profile as a governor. There's only ever one 0:06:39.400 --> 0:06:42.320 chair of the Federal Reserve Board. When Kevin Worsh is 0:06:42.360 --> 0:06:43.640 confirmed and sworn. 0:06:43.360 --> 0:06:44.599 In, he will be that chair. 0:06:45.800 --> 0:06:49.000 Jay Powell's term as FED Chair ends two weeks from tomorrow, 0:06:49.040 --> 0:06:51.160 but his seat on the Board of Governors doesn't expire 0:06:51.240 --> 0:06:55.080 until twenty twenty eight. The announcement drew harsh criticism from 0:06:55.120 --> 0:06:57.120 Treasury Secretary Scott Bessant. 0:06:57.560 --> 0:07:00.240 I think it's highly unusual for someone who says he's 0:07:00.240 --> 0:07:04.680 an institutionalist and cares about norms at the FED. This 0:07:04.760 --> 0:07:08.479 is a violation of all Federal Reserved norms. 0:07:08.640 --> 0:07:09.400 And I've got to. 0:07:09.400 --> 0:07:12.800 Tell you also, Larry, I think it is an insult 0:07:13.200 --> 0:07:18.239 to Kevin Warsh, Mickey Bowman, and Chris Waller to think 0:07:18.640 --> 0:07:22.560 that these other Republican nominees do not care about the 0:07:22.600 --> 0:07:27.720 institution of the FED and that he alone can maintain 0:07:27.840 --> 0:07:29.040 the integrity of the FED. 0:07:29.360 --> 0:07:32.240 Treasury Secretary Scott bess And spoke with Larry Kudlow on 0:07:32.320 --> 0:07:35.240 Fox Business Now. Palell says he's concerned about a series 0:07:35.280 --> 0:07:37.400 of legal attacks on the FED and that he will 0:07:37.520 --> 0:07:41.440 leave once a probe into the fed's building renovation project is, 0:07:41.480 --> 0:07:45.040 in his words, truly over. Well back in Washington, Careen, 0:07:45.040 --> 0:07:47.680 the longest partial government shut down in history is a 0:07:47.720 --> 0:07:50.600 step closer to ending. The House has approved the first 0:07:50.600 --> 0:07:53.200 part of a two part plan to reopen the Department 0:07:53.200 --> 0:07:54.160 of Homeland Security. 0:07:54.600 --> 0:07:56.600 On this vote, the eyes of two hundred and fifteen. 0:07:56.640 --> 0:07:57.720 The nays are two. 0:07:57.560 --> 0:07:59.720 Hundred and level of one member voting. 0:07:59.720 --> 0:08:02.840 Press listen the concurrent resolution is adopted. 0:08:03.080 --> 0:08:06.920 That resolution would funnel seventy billion dollars into immigration enforcement 0:08:06.960 --> 0:08:09.160 for the next three and a half years. Today, House 0:08:09.160 --> 0:08:11.560 Speaker Mike Johnson hopes to pass the second part of 0:08:11.600 --> 0:08:14.200 the plan to fund the rest of DHS outside ice 0:08:14.240 --> 0:08:17.760 and border patrol through September thirtieth. All this comes after 0:08:17.800 --> 0:08:19.800 the White House told Congress it will not be able 0:08:19.840 --> 0:08:23.040 to pay most DHS workers after today because the fund 0:08:23.080 --> 0:08:25.200 it tapped for April payments has run out. 0:08:25.640 --> 0:08:28.280 Well Nathan, former FBI Director James Comy, has made his 0:08:28.280 --> 0:08:31.080 first court appearance on a second criminal indictment under the 0:08:31.080 --> 0:08:32.120 Trump administration. 0:08:32.240 --> 0:08:33.080 He's facing two. 0:08:33.040 --> 0:08:37.079 Federal charges related to threatening President Trump's life. The case 0:08:37.120 --> 0:08:40.000 centers on a now deleted Instagram post or the numbers 0:08:40.040 --> 0:08:42.719 eighty six and forty seven were arranged with seashells. 0:08:43.040 --> 0:08:44.240 Critics say it could. 0:08:44.080 --> 0:08:46.800 Have been a reference to killing the president, but Komy 0:08:46.920 --> 0:08:50.160 says that was not his intent. Comy did not enter 0:08:50.200 --> 0:08:52.360 a plea and the government did not ask that he 0:08:52.480 --> 0:08:55.560 be detained. A plea hearing date has not been set. 0:08:55.720 --> 0:08:55.880 Well. 0:08:55.880 --> 0:08:58.960 Finally, Karen, Live Golf maybe coming to an end. Bloomberg 0:08:59.000 --> 0:09:01.360 News has learned Saudi A. Ray Baba's Public Investment Fund 0:09:01.400 --> 0:09:05.240 plans to stop financial support for the league after this season. 0:09:05.720 --> 0:09:08.360 The move would bring a jarring into the breakaway league 0:09:08.360 --> 0:09:12.160 that fractured pro golf and fundamentally altered the sports economics 0:09:12.160 --> 0:09:16.080 by luring stars away from the PGA Tour with giant contracts. 0:09:16.400 --> 0:09:19.400 Live cost the Saudi Public Investment Fund and estimated five 0:09:19.559 --> 0:09:25.440 billion dollars over just four years. 0:09:25.440 --> 0:09:27.040 Time now for look at some of the other stories 0:09:27.040 --> 0:09:29.360 making news in New York and around the world. For that, 0:09:29.400 --> 0:09:32.160 we're joined by Bloomers Michael Barr, Michael, good Morning. 0:09:32.040 --> 0:09:35.400 Good morning. Karen King, Charles and Queen Camilla were in 0:09:35.440 --> 0:09:38.199 New York City as part of their historic state visit. 0:09:38.600 --> 0:09:41.840 The royal couple started the New York leg of their 0:09:41.880 --> 0:09:45.520 trip yesterday with a visit to the Nine to Eleven Memorial. Later, 0:09:45.640 --> 0:09:50.120 Charles attended the Greater Together Reception at Rockefeller Plaza to 0:09:50.400 --> 0:09:54.040 mark the fiftieth anniversary of the King's Trust. That's the 0:09:54.160 --> 0:09:57.680 charity that King Jeralds started to help people aged eleven 0:09:57.720 --> 0:10:01.000 to thirty to develop life skill, get ready for work, 0:10:01.040 --> 0:10:02.880 and access job opportunities. 0:10:03.160 --> 0:10:07.120 At this reception, we can celebrate both my King's Trust 0:10:07.200 --> 0:10:10.800 and the enduring cultural bond between the people in the 0:10:10.840 --> 0:10:15.240 United Kingdom and the United States, which causes a relationship 0:10:15.280 --> 0:10:20.079 route in shared creativity, enterprise, and values. 0:10:20.480 --> 0:10:23.400 King Charles also gathered with leaders of some of the 0:10:23.440 --> 0:10:28.000 world's biggest companies to encourage US UK investment and visited 0:10:28.040 --> 0:10:32.000 a Harlem urban farm program. The Trump administration is hailing 0:10:32.040 --> 0:10:35.160 the Supreme Court decision on the Voting Rights Act as 0:10:35.160 --> 0:10:39.280 a quote complete and total victory for American voters. The 0:10:39.280 --> 0:10:41.680 White House said in a statement, the color of one's 0:10:41.679 --> 0:10:45.000 skin should not dictate which congressional district you belong in. 0:10:45.480 --> 0:10:49.600 Congressman Rich McCormick was asked about fellow Republicans in Georgia 0:10:49.679 --> 0:10:52.280 calling for a special session to draw new maps in 0:10:52.320 --> 0:10:53.640 his state before. 0:10:53.360 --> 0:10:54.840 We started early voting. So I don't think we can 0:10:54.880 --> 0:10:56.880 do it in Georgia. I wouldn't be appropriate. 0:10:56.920 --> 0:10:57.480 At this point. 0:10:57.880 --> 0:11:00.840 Justice Selena Kagan called the ruling the LA chapter in 0:11:00.880 --> 0:11:05.440 the Conservative majorities now completed demolition of the Voting Rights Act. 0:11:05.800 --> 0:11:08.160 Police are calling a stabbing on a London street and 0:11:08.280 --> 0:11:11.760 act of terrorism. Two Jewish men were injured. The suspect 0:11:11.800 --> 0:11:15.520 was arrested after trying to attack the responding officers. Global 0:11:15.559 --> 0:11:18.000 News twenty four hours a day and whenever you want 0:11:18.000 --> 0:11:20.640 it with Bloomberg News. Now. I'm Michael Barr, and this 0:11:20.760 --> 0:11:21.640 is Bloomberg Heron. 0:11:22.520 --> 0:11:23.600 Thanks Michael all the time. 0:11:23.679 --> 0:11:26.400 Now for our Bloomberg Sports Update, and for that we 0:11:26.440 --> 0:11:27.839 bring in John Stashauer. 0:11:28.080 --> 0:11:28.560 Thanks Darren. 0:11:28.600 --> 0:11:31.000 A couple of teams stayed alive in the NBA playoffs. 0:11:31.000 --> 0:11:34.160 Detroit beat Orlando. The Magic Steel lead three games to two. 0:11:34.320 --> 0:11:36.959 Houston beat the Lakers, who still have three two. Also, 0:11:37.040 --> 0:11:41.280 Cleveland beat Toronto and the Calves lead three to two overtime. 0:11:41.320 --> 0:11:44.200 In the Stanley Cup playoffs, Philadelphia a one nothing went 0:11:44.280 --> 0:11:46.440 over Pittsburgh. The Flyers win the series four games to 0:11:46.480 --> 0:11:50.880 two Vegas and double overtime over Utah. Also, Montreal won 0:11:50.920 --> 0:11:53.840 three to two at Tampa Bay. The Canadians and Golden 0:11:53.880 --> 0:11:57.160 Knights have three two series leads. That's a Bloomberg Sports Uptea. 0:11:57.360 --> 0:12:00.880 Cool. Stay with us more from Bloomberg day Break coming 0:12:00.960 --> 0:12:02.040 up after this. 0:12:06.240 --> 0:12:10.199 Coast to coast on Bloomberg Radio, nationwide on Sirius XM, 0:12:10.400 --> 0:12:13.440 and around the world on Bloomberg dot Com and the 0:12:13.520 --> 0:12:14.839 Bloomberg Business app. 0:12:15.080 --> 0:12:18.360 This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. 0:12:18.440 --> 0:12:21.440 The high seas standoff continues between the US and Iran 0:12:21.480 --> 0:12:24.160 with no led up to the naval blockade of Iran Sports, 0:12:24.200 --> 0:12:26.520 but now more than two months into the war, President 0:12:26.520 --> 0:12:29.840 Trump says a further military response is still an option. 0:12:30.400 --> 0:12:32.559 We've got an amazing military. 0:12:32.640 --> 0:12:32.720 Now. 0:12:33.040 --> 0:12:35.000 Now they have to cry uncle. 0:12:35.200 --> 0:12:37.560 That's all they have to do is just say we 0:12:37.640 --> 0:12:38.120 give up. 0:12:38.480 --> 0:12:40.400 I was President Trump at the White House yesterday. 0:12:40.480 --> 0:12:43.000 Joining us this morning from our European headquarters in London 0:12:43.080 --> 0:12:46.000 is Bloomberg Opinion columnist Mark Champion, covering the Middle East 0:12:46.000 --> 0:12:49.280 and international affairs. Great to have you with us, Mark, 0:12:49.320 --> 0:12:52.120 as we watched this pretty sharp reaction in the commodities 0:12:52.160 --> 0:12:55.680 markets to reports that President Trump may be getting a 0:12:55.760 --> 0:12:58.640 briefing at least on new military options. What are we 0:12:58.720 --> 0:13:02.079 hearing this morning? Could the possibilities be good morning. 0:13:02.920 --> 0:13:03.680 Yes, good morning. 0:13:03.800 --> 0:13:06.800 I mean essentially, what we know is that we have 0:13:06.840 --> 0:13:11.240 a continuing blockade, and then you know, what we don't 0:13:11.280 --> 0:13:17.320 know is whether President Trump will also now you know, 0:13:17.480 --> 0:13:21.559 restart the war. That would in a sense be an 0:13:21.600 --> 0:13:23.920 acknowledgment that he doesn't think that the blockade is going 0:13:24.000 --> 0:13:25.960 to work fast enough for him. 0:13:27.200 --> 0:13:29.400 So, you know, we'll see how that goes. 0:13:30.080 --> 0:13:32.480 It's you know that there's been so much said at 0:13:32.520 --> 0:13:36.200 various different times, you know, by the White House that 0:13:36.679 --> 0:13:39.120 turned out not to be you know, quite how things 0:13:39.880 --> 0:13:44.840 are quite accurate. So but you know, on the other 0:13:44.880 --> 0:13:48.320 side in Iran, you see, you know, this is really 0:13:48.320 --> 0:13:51.960 a sort of test of wills, tests of how much 0:13:52.000 --> 0:13:53.640 economic pain each side can take. 0:13:54.480 --> 0:13:56.880 So you see, you know, oil prices going up. 0:13:57.440 --> 0:14:00.280 On the other side, you see the real the anion 0:14:00.360 --> 0:14:03.800 currency weakening very sharply as a result of the blockade. 0:14:04.400 --> 0:14:07.600 Both sides that you know, are feeling the pain. 0:14:08.559 --> 0:14:10.400 The one thing you can be sure of is that 0:14:10.440 --> 0:14:13.640 the Iranians won't say we give up. But you know, 0:14:13.679 --> 0:14:16.480 they may want to come back to the table and 0:14:16.559 --> 0:14:19.960 to preempt either you know, either try and end the blockade, 0:14:20.520 --> 0:14:25.440 either do it by force, you know, by attacking the 0:14:25.440 --> 0:14:28.600 Gulf States again. Certainly they will do that if the 0:14:28.600 --> 0:14:32.400 Americans start restart the war or the Iranians, you know, 0:14:32.640 --> 0:14:35.239 may come back to the table and try and negotiate. 0:14:35.280 --> 0:14:37.360 Again. We've had our own reporting. 0:14:37.360 --> 0:14:39.720 The US Central Command has asked for permission to use 0:14:39.760 --> 0:14:43.560 a hypersonic missile in the in the conflict. 0:14:44.400 --> 0:14:46.880 What potential impact could that have? 0:14:48.560 --> 0:14:50.200 What depends on what they want to use it for, 0:14:50.320 --> 0:14:52.560 I mean, in in you know, in the round. I 0:14:52.600 --> 0:14:56.560 would say not much that sounds you know, you say 0:14:56.600 --> 0:14:59.360 these things much as you know President Putin has in Ukraine, 0:14:59.520 --> 0:15:02.840 we're going to is a hypersonic missile. It does, you know, 0:15:02.920 --> 0:15:06.600 kind of focus attention and it's useful in terms of 0:15:06.680 --> 0:15:10.640 psychological warfare. But you know, the munitions that the US 0:15:10.640 --> 0:15:15.080 has used until now have been extremely effective. What it 0:15:15.120 --> 0:15:16.920 is that they would want to do with a hypersonic 0:15:16.960 --> 0:15:19.720 missile that they couldn't do with, you know, with other kinds, 0:15:20.480 --> 0:15:23.640 not quite sure. You know, they are very good at 0:15:24.160 --> 0:15:29.440 evading air defenses. Sophisticated air defenses. Iran's air defenses are 0:15:29.440 --> 0:15:33.240 pretty much destroyed, so you know, not quite clear. 0:15:34.240 --> 0:15:36.400 Of course, all this is coming is Defense Secretary Pete 0:15:36.400 --> 0:15:39.160 Heggsat has faced some pretty tough questioning on Capitol Hill 0:15:39.200 --> 0:15:42.240 about how the war has been going, the idea of, 0:15:42.480 --> 0:15:45.640 particularly from Democrats, that the US may be heading into 0:15:45.640 --> 0:15:49.440 a quagmire in Iran. Does this look like a quagmire 0:15:49.720 --> 0:15:54.520 at this point to you? Mark not necessarily a quagmire. 0:15:54.560 --> 0:15:57.520 I would very much doubt that this turns into an 0:15:57.560 --> 0:16:01.760 extended war along the lines of Vietnamar again, Stan, even Iraq. 0:16:02.520 --> 0:16:03.600 You know, I think they will. 0:16:03.880 --> 0:16:07.240 Both sides actually do want to need an exit, but 0:16:07.280 --> 0:16:09.320 they also think that the other side is going to 0:16:09.320 --> 0:16:09.960 blink first. 0:16:10.400 --> 0:16:14.160 And that's the real problem here. I really don't see it. 0:16:14.920 --> 0:16:15.120 You know. 0:16:15.840 --> 0:16:17.800 First of all, you know, in order for there to 0:16:17.880 --> 0:16:21.360 be that kind of quagmire, you really need for boots 0:16:21.360 --> 0:16:23.720 to be on the ground, Americans to put troops in. 0:16:24.440 --> 0:16:26.920 And that's what really gets you sucked in, makes it 0:16:26.960 --> 0:16:30.480 difficult to get out. You know, I don't think we're 0:16:30.520 --> 0:16:35.440 going to see that, certainly, not at scale. But nevertheless, 0:16:35.600 --> 0:16:39.080 you know, they even months, you know, weeks or months 0:16:39.680 --> 0:16:43.040 is going to be very, very painful for the global economy, 0:16:43.520 --> 0:16:46.800 and possibly a lot more painful for Europe and Asia 0:16:46.840 --> 0:16:48.240 than it is for the United States. 0:16:48.560 --> 0:16:51.560 Appreciate your perspective this morning. Mark, Thanks so much for 0:16:51.640 --> 0:16:54.960 joining us on Daybreak That is Bloomberg opinion columnist Mark 0:16:55.040 --> 0:16:58.200 Champion covering the Middle East and international affairs from our 0:16:58.240 --> 0:17:01.720 European headquarters in London. You could read much more of 0:17:02.040 --> 0:17:07.560 Mark's thoughts on the conflict at Olpin go on the Bloomberg. 0:17:07.160 --> 0:17:08.679 Terminal Karen Nathan. 0:17:08.800 --> 0:17:11.880 Another major story where following involves earnings from big tach 0:17:12.000 --> 0:17:14.800 We heard from four big ones after the bell and 0:17:14.880 --> 0:17:16.440 we want to break it all down with the Bloomberg 0:17:16.480 --> 0:17:22.360 Intelligence analyst Matt Bloxam. Matt, good morning. So Alphabet, Meta platforms, Amazon, 0:17:22.359 --> 0:17:25.480 and Microsoft. We're seeing investor reaction mixed. What was your 0:17:25.520 --> 0:17:27.640 big takeaway from the earnings? 0:17:28.280 --> 0:17:31.040 Yeah, so a few things. I'll see that there's another 0:17:31.160 --> 0:17:34.880 step up in capital spending by these big companies. 0:17:34.880 --> 0:17:37.240 So where we're already absorbing. 0:17:37.000 --> 0:17:40.080 A seventy percent year, and you increase twenty six versus 0:17:40.119 --> 0:17:42.959 twenty five, which would take this combined spending to six 0:17:43.080 --> 0:17:47.080 hundred and fifty billion dollars based on the overnight reporting 0:17:47.240 --> 0:17:50.399 that six point fifty has now increased to seven hundred 0:17:50.440 --> 0:17:53.600 and twenty three billion dollars, a big chunk of that 0:17:53.640 --> 0:17:57.360 coming from Microsoft and also for Meta, and I think 0:17:57.400 --> 0:18:00.440 some mixed reactions to kind of whether that increased investment 0:18:00.920 --> 0:18:04.560 makes sense, and certainly investors still trying to kind of 0:18:05.160 --> 0:18:08.320 understand when the payback is going to come from these 0:18:08.359 --> 0:18:10.000 investments and how big it's going to be. 0:18:10.040 --> 0:18:11.120 And we saw with. 0:18:11.119 --> 0:18:14.480 Alphabet the parent of Google, that you know, Google's businesses 0:18:14.520 --> 0:18:17.960 are firing on all cylinders, great growth in the kind 0:18:17.960 --> 0:18:20.640 of core ads business, but also really strong growth from 0:18:20.680 --> 0:18:25.680 their cloud business, which increases revenue sixty three percent year 0:18:25.720 --> 0:18:28.199 on year. And a similar story at Amazon where all 0:18:28.200 --> 0:18:32.000 of its different businesses, including cloud, are growing pretty well. 0:18:32.280 --> 0:18:35.280 But at the other end you had Meta, where you know, 0:18:35.320 --> 0:18:37.480 they're not exposed to as many of the kind of 0:18:37.600 --> 0:18:42.679 leavers that's AI's creating much more still focused on and 0:18:43.160 --> 0:18:48.000 ads based business, their large language models lagging behind rivals 0:18:48.040 --> 0:18:52.840 like Anthropic and Open Eye, but they were stepping up kapex, 0:18:53.000 --> 0:18:56.479 and I don't think investors were convinced that the management 0:18:56.520 --> 0:18:59.720 team they have the clarity of what the kind of 0:19:00.200 --> 0:19:03.480 revenue generating opportunity and the return profile looks like. 0:19:04.160 --> 0:19:06.280 Yeah, And when it comes to meta, it seemed like 0:19:06.320 --> 0:19:08.919 CEO Mark Zuckerberg was maybe a bit vague when it 0:19:08.960 --> 0:19:12.440 came to the analysts call, uh, do analysts. 0:19:12.080 --> 0:19:13.440 Really need to hear more from him? 0:19:13.480 --> 0:19:13.640 Then? 0:19:15.320 --> 0:19:18.040 I think maybe not, maybe not so much. Hear more 0:19:18.080 --> 0:19:19.920 from him, but see more in the in the in 0:19:20.040 --> 0:19:22.560 the business and the numbers. And you actually see them 0:19:22.640 --> 0:19:27.040 kind of move forward with their large language model so 0:19:27.119 --> 0:19:30.520 that people feel they've got more bows to their they 0:19:30.600 --> 0:19:33.040 got the kind of opportunity, and also just kind of 0:19:33.080 --> 0:19:36.960 see them solidify the kind of active user basement. Also 0:19:37.000 --> 0:19:40.080 got they've got a huge active user base across their 0:19:40.080 --> 0:19:44.159 different products. But it did dip a little bit in 0:19:44.240 --> 0:19:46.560 the quarter, and I think, you know, there's these kind 0:19:46.600 --> 0:19:51.600 of lingering concerns that as the AI proposition evolves, that 0:19:51.800 --> 0:19:55.639 maybe some of these you know, big established social network 0:19:55.640 --> 0:19:59.240 business and mashing platforms could become more vulnerable and maybe 0:19:59.240 --> 0:20:01.400 the ad dollars will kind of shift elsewhere. 0:20:02.080 --> 0:20:04.640 And we did. We did talk about Amazon just a bit. 0:20:04.800 --> 0:20:07.320 Is cloud division another bright spot here? But we also 0:20:07.400 --> 0:20:10.280 get that report on anthropic can you walk us through 0:20:10.280 --> 0:20:12.240 that too? Is how did that help Amazon? 0:20:14.520 --> 0:20:16.680 There's been so many Anthropic reports. 0:20:16.280 --> 0:20:21.400 Which that Anthropic is wearing a funding round in Anthropy 0:20:21.440 --> 0:20:23.720 is one of Amazon's biggest AI investments. 0:20:24.320 --> 0:20:26.200 Yeah, you know, I think obviously there's a lot of 0:20:26.240 --> 0:20:29.679 focus on how much these businesses are worth, and I 0:20:29.720 --> 0:20:32.120 think that that particular funding ground could put an even 0:20:32.160 --> 0:20:35.479 bigger valuation on Anthropic. So that's kind of definitely a 0:20:35.480 --> 0:20:38.879 big positive carry for Amazon. I think obviously, you know, 0:20:39.080 --> 0:20:44.680 they're potentially kind of very complementary partners with your anthropics 0:20:44.800 --> 0:20:50.080 claud models being super popular with the enterprise community, and 0:20:50.119 --> 0:20:54.160 obviously tying that together with Amazon's market leading Amazon Web 0:20:54.200 --> 0:20:57.560