WEBVTT - Global Chips Battle Intensifies, Apple Nears Deal with OpenAI 0:00:02.440 --> 0:00:07.080 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.640 --> 0:00:11.400 From the heart where innovation, money and power. 0:00:11.520 --> 0:00:13.920 Collie in Silicon Valley, NBN. 0:00:14.240 --> 0:00:18.239 This is Bloomberg Technology with Caroline Hyde and Ed loved. 0:00:18.079 --> 0:00:33.880 Love and Karline Hein and Bloomberg's world headquarters in New York. 0:00:34.200 --> 0:00:36.720 Now I'm Ed Loudlow in San Francisco. This is Bloomberg 0:00:36.760 --> 0:00:37.959 Technology coming up. 0:00:38.159 --> 0:00:41.479 Full chip coverage ahead. We're bringing the latest headlines from 0:00:41.479 --> 0:00:43.160 in video, arm, Intel and more. 0:00:44.000 --> 0:00:46.680 Plus, Apple nears a deal with open Ai to add 0:00:46.760 --> 0:00:48.279 chat GPT to the iPhone. 0:00:48.520 --> 0:00:52.440 Details ahead and shares of game stock. They surge him 0:00:52.440 --> 0:00:56.040 in speculation that Roaring Kitty is back liking the stock. 0:00:56.200 --> 0:00:58.040 We discussed that and so much more throughout the sabat 0:00:58.080 --> 0:01:00.920 first Le's turn around, attention to the macro picture, some 0:01:01.040 --> 0:01:02.400 new headlines coming out from. 0:01:02.320 --> 0:01:03.000 The New York FED. 0:01:03.000 --> 0:01:05.240 When it comes to consumer sentiment of the direction of 0:01:05.280 --> 0:01:08.000 travel and inflation, and it's still running hot, Dave pot 0:01:08.040 --> 0:01:11.920 three percent in terms of where consumers see inflationary pressures 0:01:11.920 --> 0:01:14.160 being in about a year. That's overall in the midterm. 0:01:14.280 --> 0:01:16.560 We're still holding on too. Gains though three tens percent higher. 0:01:16.560 --> 0:01:19.120 Remember we get a CPI print on Wednesday PPI on 0:01:19.160 --> 0:01:21.000 Tuesday a lot to digest. 0:01:20.680 --> 0:01:21.759 From the macro perspective. 0:01:21.880 --> 0:01:24.920 Two year yield remaining higher, so boring costs coming down, 0:01:24.959 --> 0:01:28.520 yield slipping so two years money going in. Yields go 0:01:28.600 --> 0:01:31.399 lower by some two basis points. Bloomberg Dollar Index also 0:01:31.520 --> 0:01:33.560 down a little bit. Look some of the anxiety around 0:01:33.560 --> 0:01:36.240 in flesher around inflation just stiling back a little bit 0:01:36.280 --> 0:01:38.600 on the day despite that New York Fed data. Let's 0:01:38.640 --> 0:01:39.840 move on and have a look at what's happening in 0:01:39.880 --> 0:01:42.360 the world at bitcoin, because well, even though dollar's only 0:01:42.360 --> 0:01:44.640 off by about ten percent, crypto is surging higher, up 0:01:44.680 --> 0:01:45.600 two point four percent. 0:01:45.640 --> 0:01:46.959 And ed, I know you're going to. 0:01:46.880 --> 0:01:49.160 Focus in on game Stop and this is more the 0:01:49.320 --> 0:01:52.280 reader cross from some of that means stock frenzy and 0:01:52.320 --> 0:01:54.560 when it means on the related names in crypto. 0:01:54.680 --> 0:01:56.360 We're up two percent on bitcoin. What if you've got 0:01:56.400 --> 0:01:57.040 on the micro. 0:02:00.160 --> 0:02:06.800 Stop memestock mania is back. This is a two day 0:02:06.880 --> 0:02:09.680 chart to kind of illustrate the point. GameStop was up 0:02:09.680 --> 0:02:12.480 one hundred and ten percent in the session it was halted. 0:02:12.520 --> 0:02:15.320 We're now up around sixty percent, and it's just from 0:02:15.360 --> 0:02:19.640 one social media post from Roaring Kitty aka Keith Gill 0:02:20.080 --> 0:02:24.520 aka the source of all the original interests around GameStop. 0:02:24.560 --> 0:02:26.440 You know about the movie, you know about what happened 0:02:26.440 --> 0:02:29.280 on Reddit. I think Reddit's higher, robinhood is higher. There's 0:02:29.280 --> 0:02:31.600 a lot of trading that's going on. Later in the show, 0:02:31.600 --> 0:02:34.480 we're going to dig really deep, but I give you 0:02:35.080 --> 0:02:38.640 game Stop. We're looking at other stories in the chip sector. 0:02:38.960 --> 0:02:42.000 In principle, there are three clear headlines and semiconductors. 0:02:42.000 --> 0:02:45.280 Intel is up three point five percent. The Journal reporting. 0:02:44.919 --> 0:02:47.720 It's close with the deal with Apollo for eleven billion 0:02:47.760 --> 0:02:49.880 dollars of financing for an Ireland fab. 0:02:50.440 --> 0:02:52.120 ARM is up more than five percent. 0:02:52.240 --> 0:02:56.400 Nike reporting that ARM is readying an AI product next year, 0:02:56.440 --> 0:02:58.880 didn't say where it got the info, but SoftBank's going 0:02:58.919 --> 0:03:01.519 to support them financially bring it to market. And then 0:03:01.600 --> 0:03:03.480 videos actually high three ten to one percent. It had 0:03:03.480 --> 0:03:07.839 been lower after the Information reported that China is instructing 0:03:07.919 --> 0:03:12.000 domestic companies to stop ordering chips from Nvidia. We have 0:03:12.080 --> 0:03:14.440 a very big segment coming up everything chips. The big 0:03:14.480 --> 0:03:16.400 take today is on chips. There are a lot of 0:03:16.400 --> 0:03:19.720 individual stories to pass through. There is a lot going on, and. 0:03:19.600 --> 0:03:22.400 There is a lot of discussion of China visa VI 0:03:22.520 --> 0:03:25.960 the US coming from well key leaders in US government. 0:03:26.000 --> 0:03:26.440 We had a. 0:03:26.400 --> 0:03:29.280 Great conversation with Janet Yellen earlier own AMERI Horder and 0:03:29.280 --> 0:03:32.040 sitting down with her for an exclusive really discussing China 0:03:32.080 --> 0:03:35.000 in particular. Janey Ellen really feeling that China is not 0:03:35.080 --> 0:03:38.200 playing by the rules on trade and sort of going 0:03:38.240 --> 0:03:40.760 on to say that maybe we will see China escalating 0:03:40.800 --> 0:03:42.640 in the so called tit for tat on trade. 0:03:42.800 --> 0:03:45.080 Just take a lesson. Listen to what Treasures actually told 0:03:45.160 --> 0:03:45.640 us earlier. 0:03:47.760 --> 0:03:52.360 He believes it unacceptable as I do, to be completely 0:03:52.440 --> 0:03:58.240 dependent on China in these areas, and he wants to 0:03:58.320 --> 0:04:03.480 make sure given this that China is really not playing 0:04:03.600 --> 0:04:07.440 by the rules in this sense. They have enormous subsidies 0:04:08.160 --> 0:04:11.120 in critical areas of advanced manufacturing. 0:04:11.560 --> 0:04:14.680 There's a focus on increasing tariffs at a time where 0:04:14.720 --> 0:04:17.960 there's anxiety around inflation. How does this alter the picture 0:04:17.960 --> 0:04:20.520 of your investment landscape visus A. Janet Wi is with 0:04:20.600 --> 0:04:23.719 us RBC Bruin Dolphin, head of market Analysis, and it 0:04:23.880 --> 0:04:27.839 is a time where investors try and navigate seeming headwinds, 0:04:28.040 --> 0:04:30.119 but an ability to keep on going for the growth 0:04:30.120 --> 0:04:32.479 of AI how do you think this lands the China 0:04:32.560 --> 0:04:33.640 versus US at the moment? 0:04:33.760 --> 0:04:37.279 Janet, good morning, hairline. Thanks for having me. 0:04:37.400 --> 0:04:40.239 I think in terms of the tech investment side, we 0:04:40.279 --> 0:04:44.960 will still be heavily preferring the US. I mean, the 0:04:45.120 --> 0:04:48.279 DOS is a hop of innovation, and I think the 0:04:49.000 --> 0:04:52.080 regulatory pressure on China would remain, and I think the 0:04:52.120 --> 0:04:55.839 trade tension parality will hit China more than the US. 0:04:56.320 --> 0:04:57.560 So I think from an. 0:04:57.440 --> 0:05:00.599 Investment perspective, I think all these trade tennis, it's obviously 0:05:00.640 --> 0:05:04.720 it's not great from our price or from global growth 0:05:04.880 --> 0:05:08.200 trade and the global market and certainty point of view. 0:05:08.200 --> 0:05:11.560 But I think sticking with the US investment seems. 0:05:11.279 --> 0:05:14.680 To be the right approach exactly. I'm trying to pass 0:05:14.680 --> 0:05:17.000 all of this together, right. I think there's a growing 0:05:17.160 --> 0:05:21.000 confidence that inflationary pressures are easing off, but a big 0:05:21.040 --> 0:05:25.400 part of that is US fiscal policy. Right, we're talking 0:05:25.520 --> 0:05:28.719 or Jalant Yellen talking about how China has some anti 0:05:28.760 --> 0:05:31.800 competitive practices, but here in the United States, if you 0:05:31.839 --> 0:05:35.120 take the chip industry, this country is also pumping billions 0:05:35.120 --> 0:05:38.440 of dollars into supporting its growth. How does that impact 0:05:38.520 --> 0:05:39.520 you as an investor? 0:05:41.279 --> 0:05:43.640 I think the clear evidence is that. 0:05:45.040 --> 0:05:48.400 There's a lot of investment from a sovereign perspective into 0:05:48.560 --> 0:05:51.920 a semiconductors given it is such an important strategic sector. 0:05:52.240 --> 0:05:55.360 So I think the conclusion is that there will be 0:05:55.600 --> 0:05:58.039 lots of money going into it, lots of investment, A 0:05:58.080 --> 0:06:00.320 lot of big players will be involved, and I think 0:06:00.360 --> 0:06:05.000 primarily again the US companies are likely to be benefit 0:06:05.400 --> 0:06:08.840 from this initiative, and that's why we still have a 0:06:08.880 --> 0:06:14.039 positive stance on the general semiconductor value chain story, either 0:06:14.040 --> 0:06:19.680 from the equipment production or from the design, from the manufacturing, 0:06:19.960 --> 0:06:24.279 the boundaries along the whole supply chain. I think there's 0:06:24.320 --> 0:06:26.279 still going to be lots of investment going into it. 0:06:26.320 --> 0:06:30.000 I think valuations in these US companies are still quite 0:06:30.120 --> 0:06:32.840 reasonable given that they're strong earnings growth, and I think 0:06:32.880 --> 0:06:35.599 we still have pretty good visibility into the twenty twenty 0:06:35.600 --> 0:06:39.960 five earnings from the order's guidance, etc. So I think 0:06:40.520 --> 0:06:45.520 the investment thesis we have is that invest in US tech, 0:06:45.720 --> 0:06:48.000 particularly favoring in the semi conductory sector. 0:06:49.400 --> 0:06:52.800 Janet, do we see a rate cut from the FED 0:06:52.880 --> 0:06:56.279 this year to your mind, and if so, when and 0:06:56.320 --> 0:06:57.120 in what increment? 0:06:58.920 --> 0:06:59.320 Well, it is. 0:06:59.320 --> 0:06:59.960 Difficult to say. 0:07:00.000 --> 0:07:02.440 I think the bar for a rage cut is definitely 0:07:02.520 --> 0:07:07.080 higher now will await the CPI print on Wednesday, But 0:07:07.120 --> 0:07:09.800 I think the Fed, I think they have a leaning 0:07:09.920 --> 0:07:12.160 on the next move being a rage. 0:07:11.960 --> 0:07:13.160 Cut rather than a rate hype. 0:07:13.240 --> 0:07:17.600 So I think there's still some preference aren't eventually cutting. 0:07:17.640 --> 0:07:20.000 I think they're really each thing on doing that, but 0:07:20.040 --> 0:07:22.520 they just need the data to allow that so our viewers, 0:07:22.520 --> 0:07:24.360 that is more likely to happen in the fourth quarter. 0:07:24.640 --> 0:07:27.040 But I think the FAT can really move, you know, 0:07:27.520 --> 0:07:29.680 where the data allows. I think there's a lot of 0:07:29.800 --> 0:07:31.520 chatter about how the FED may not be able to 0:07:31.600 --> 0:07:34.680 move because of the timing of the presidential election, but 0:07:34.960 --> 0:07:37.440 we think the FED will focus on the data instead 0:07:37.440 --> 0:07:40.760 of trying to be a pure not to be political. 0:07:41.120 --> 0:07:42.600 I want to go back to what you just mentioned 0:07:42.600 --> 0:07:46.320 about valuations looking pretty good at these levels, and many Janet, 0:07:46.360 --> 0:07:49.640 have just been I mean holding their breath the ARM 0:07:50.320 --> 0:07:53.120 ninety times future earnings valuation that we've seen in ARM 0:07:53.160 --> 0:07:54.640 pops on the day we're going to have a much 0:07:54.680 --> 0:07:56.840 deeper dive into the chip sector in a moment with 0:07:56.880 --> 0:07:59.960 their own in king. But Janet, from an investment landscape perspective, 0:08:00.040 --> 0:08:03.480 do you have to keep on building in the AI 0:08:03.640 --> 0:08:06.400 infrastructure play or do we broaden out at this moment. 0:08:07.880 --> 0:08:10.120 So, I think to your point about the valuation of 0:08:10.360 --> 0:08:13.440 our I can't really comment on an individual company, but 0:08:13.480 --> 0:08:16.560 obviously we know that within the sector there are a 0:08:16.600 --> 0:08:21.880 lot of players and there will be different ranges of evaluations. 0:08:22.160 --> 0:08:24.920 I've talked about it as a group because of the 0:08:24.960 --> 0:08:26.960 straw and a scroll. I think some of the major 0:08:27.000 --> 0:08:30.240 players are the valuations are reasonable, but you have to 0:08:30.240 --> 0:08:33.560 to really look into an individual case. I think in 0:08:33.640 --> 0:08:36.240 terms of the broadening of the thing, we already have 0:08:36.400 --> 0:08:40.120 seen that. I mean there is more confirmation from meget 0:08:40.120 --> 0:08:43.160 cap tech companies that there is commercialization of AI that 0:08:43.280 --> 0:08:46.959 is gaining traction. We see that from Alphabet, Microsoft, Amazon, 0:08:47.000 --> 0:08:50.840 for example. So it has broadened out beyond the just 0:08:50.880 --> 0:08:53.240 the cheap sector. And I think there has been quite 0:08:53.240 --> 0:08:56.720 a significant pickup in the utility sector right because of 0:08:56.720 --> 0:08:59.880 the electricity demounts. So I think they will continue to broaden, 0:09:00.160 --> 0:09:02.120 but I think it has already started. 0:09:03.320 --> 0:09:06.760 I look at evaluation of one particular means Stop today 0:09:06.840 --> 0:09:11.320 janet three thousand times future earnings is where the current 0:09:11.400 --> 0:09:13.920 price of game stop is. Are we going to see 0:09:14.000 --> 0:09:16.439 mean stock frenzy really hit us hard once again. 0:09:18.200 --> 0:09:19.880 Well, it is hard to say. I think right now 0:09:20.000 --> 0:09:23.959 we are seeing a couple of individual stops having that reaction. 0:09:25.440 --> 0:09:27.680 I'm not sure if that's going to last. Is a 0:09:27.679 --> 0:09:32.080 lot driven by social media, but I do think that 0:09:32.600 --> 0:09:36.080 what the current situation is an indication that the risk 0:09:36.200 --> 0:09:40.240 sentiment is back. I think, you know, the positive risk 0:09:40.240 --> 0:09:43.840 sentiment is not constrained anymore by you know, this high 0:09:43.880 --> 0:09:46.679 interest rate and environment, these current level of bios. I 0:09:46.720 --> 0:09:51.120 think the market rally or the market sentiment has already 0:09:51.320 --> 0:09:54.840 you know, we already passed the stage when it's totally 0:09:54.880 --> 0:09:59.680 just driven by the fad and bornios for example. So 0:09:59.760 --> 0:10:02.959 there there's clearly have plenty of cash still sitting around, 0:10:03.240 --> 0:10:04.439 are waiting to be deployed. 0:10:04.880 --> 0:10:05.040 Right. 0:10:06.000 --> 0:10:09.320 Risk sentiment is back, says RBC Brew and Dolphin head 0:10:09.320 --> 0:10:11.720 of market analysis, Janet Marie. Great to have you on 0:10:11.720 --> 0:10:22.640 the show. Let's continue our coverage of semiconductors is Today's 0:10:22.640 --> 0:10:25.720 Bloomberg Big Take focuses on the eighty one billion dollar 0:10:25.760 --> 0:10:29.760 investments made by the US and European Union towards the 0:10:29.800 --> 0:10:33.360 next generation of semis joining US as Bloomberg Zin and King, 0:10:33.440 --> 0:10:35.320 one of the members of the team that went through 0:10:35.320 --> 0:10:37.120 this with the big take. We have a case study 0:10:37.120 --> 0:10:40.679 today right which is Intel in Ireland. The Journal reporting 0:10:40.800 --> 0:10:44.559 that there is advance exclusive talks to Apollo for eleven 0:10:44.600 --> 0:10:47.240 billion in financing. Actually we broke that they were in 0:10:47.320 --> 0:10:50.440 talks quite some time ago. But the need for cash 0:10:50.640 --> 0:10:54.400 and a global footprint is clear through the lens of Intel. 0:10:54.640 --> 0:10:54.840 Yeah. 0:10:54.880 --> 0:10:57.240 No, I mean Intel is actually in a slightly different 0:10:57.640 --> 0:11:01.720 situation to some of its rivals like TS and Samsong. Frankly, 0:11:01.760 --> 0:11:04.520 it needs the money way more than they do, and 0:11:04.559 --> 0:11:07.240 they can afford to be selective where they take government money, 0:11:07.240 --> 0:11:10.560 what terms they take. Intel, because of the situation it's 0:11:10.559 --> 0:11:13.000 put itself in over the last five or so years, 0:11:13.400 --> 0:11:16.520 really needs the cash from pretty much any source it 0:11:16.559 --> 0:11:19.839 can get if it's to fulfill what it's trying to do, and. 0:11:19.840 --> 0:11:23.200 Let's talk about fulfilling what it and more broadly, the 0:11:23.280 --> 0:11:26.800 US is trying to do what globally countries and companies 0:11:26.800 --> 0:11:28.880 are trying to do. Do we get to an extent 0:11:28.920 --> 0:11:30.280 where we have too much supply in. 0:11:31.480 --> 0:11:33.800 I mean, this is the concern at the moment. The 0:11:33.840 --> 0:11:37.120 concern really though, is focused on what's called the sort 0:11:37.120 --> 0:11:41.080 of legacy chips, the older types of production, the type 0:11:41.120 --> 0:11:44.080 of thing that Intel, TSMC and Samsong are building here 0:11:44.080 --> 0:11:47.600 in the US. Frankly, there's not enough supply of that 0:11:47.679 --> 0:11:50.360 kind of production right now, so not so much worried 0:11:50.360 --> 0:11:54.200 about that, but some of the more simpler kind of 0:11:54.200 --> 0:11:57.040 stuff in view of the amount of production being put 0:11:57.080 --> 0:11:59.800 in place in places like China, that is certainly something 0:11:59.800 --> 0:12:01.640 that people are focused on and worried about. 0:12:02.400 --> 0:12:05.200 AI is a big driver of this. Let's take a 0:12:05.200 --> 0:12:08.360 look at today's big take. Specifically, the headline global chip 0:12:08.400 --> 0:12:12.280 battle intensifies with the eighty one billion dollar subsidies surge, 0:12:12.600 --> 0:12:15.360 But within that there are two different stories. There's kind 0:12:15.440 --> 0:12:19.120 of like the long term capacity on sharing story, and 0:12:19.160 --> 0:12:22.200 then there's psych everyone's knee jerk reaction to keep up 0:12:22.240 --> 0:12:23.520 with what's happening in real time. 0:12:23.960 --> 0:12:26.880 Yeah, I mean, there's you know, everybody's focused on AI. 0:12:27.160 --> 0:12:30.319 But if we believe that this is the future of computing, 0:12:30.360 --> 0:12:33.079 if we believe that this isn't just a step function, 0:12:33.160 --> 0:12:36.600 that this is something quite dramatically different, then obviously the 0:12:36.679 --> 0:12:40.360 ability to control that has enormous implications, both in terms 0:12:40.400 --> 0:12:45.640 of economics and insecurity, and having that production close at 0:12:45.720 --> 0:12:48.559 hand is really important, and this. 0:12:48.600 --> 0:12:52.040 Goes global, not to mention what's currently underway and reporting 0:12:52.080 --> 0:12:55.600 with ARM getting more deeply into AI and soft bank banking, 0:12:55.640 --> 0:12:59.200 that we've got so much to digest. Ianking, a brilliant 0:12:59.320 --> 0:13:01.880 deep dive comes to the big take. Go read it 0:13:01.960 --> 0:13:04.280 online on your terminal. But let's stick with what this 0:13:04.360 --> 0:13:07.800 all means in terms of competitiveness US versus China. 0:13:08.040 --> 0:13:10.520 President Joe Biden is said, of course, to not. 0:13:10.520 --> 0:13:13.040 Just thinking about the chip sector, but more broadly about 0:13:13.360 --> 0:13:16.760 tariffs for drupling them on than Chinese electric vehicles, for example, 0:13:16.880 --> 0:13:19.440 sharply increasing levees for other key industries. 0:13:19.160 --> 0:13:21.160 And it's come as soon as today. 0:13:21.480 --> 0:13:23.680 For more, let's bring in Eliza Tobin, senior director for 0:13:23.720 --> 0:13:27.160 Economy at the Special Competitive Studies Project, And Liza, we 0:13:27.160 --> 0:13:29.160 were just talking about this in the context of a 0:13:29.240 --> 0:13:33.319 frenzy of money from government to support the chip industry. 0:13:33.640 --> 0:13:37.319 But meanwhile Biden's trying to push back EV's coming to China, 0:13:37.400 --> 0:13:40.199 trying to push back solar coming to China from China 0:13:40.240 --> 0:13:43.800 to the US. Is that really got any bite to it? 0:13:43.800 --> 0:13:45.280 It seems more like bark right now. 0:13:47.400 --> 0:13:51.199 Good morning, Caroline ed Greater be on with you. Yes, No, 0:13:51.400 --> 0:13:53.880 this is a really strong move from the Biden administration, 0:13:54.040 --> 0:13:57.560 as you noted the reporter saying that they are thinking 0:13:57.600 --> 0:14:01.560 of quadrupling the terrif right on Chinese evs. As we know, 0:14:02.000 --> 0:14:06.160 China has rocketed to become the top producer of evs 0:14:06.200 --> 0:14:08.600 in just the last few years. They struggled for a 0:14:08.640 --> 0:14:11.920 long time to build a competitive auto export industry and 0:14:11.920 --> 0:14:15.800 now they have gotten there with evs. So currently US 0:14:15.880 --> 0:14:20.520 automakers are insulated by the existing Trump era tariffs, which 0:14:20.560 --> 0:14:23.760 are about twenty seven point five percent, But clearly the 0:14:23.760 --> 0:14:27.360 Biden administration is concerned that going forward, China could use 0:14:27.400 --> 0:14:31.720 its dumping strategy to underprice US automakers and flood the 0:14:31.720 --> 0:14:34.520 market as they are already doing in Europe and elsewhere. 0:14:35.680 --> 0:14:38.040 Eliza, good Morning is ed in San Francisco. So, as 0:14:38.080 --> 0:14:41.200 you point out, sources say that the EV tariff would 0:14:41.280 --> 0:14:44.240 rise to one hundred and two point five percent. But 0:14:44.360 --> 0:14:46.960 based on what you just said, I don't get it. 0:14:47.240 --> 0:14:50.400 I checked, okay, and there are four China made evs 0:14:50.440 --> 0:14:55.240 that retail in this country at incredibly small volumes, Pollstar 0:14:55.320 --> 0:14:59.400 two and four, the new Lotus that's coming, and the 0:14:59.560 --> 0:15:04.840 Volvo ex thirty. What's the point in the tariff if 0:15:04.880 --> 0:15:07.760 those are only the only four models available and they 0:15:07.760 --> 0:15:10.360 only sell in very small numbers. 0:15:10.720 --> 0:15:13.680 The Biden administration is trying to get a head of 0:15:13.720 --> 0:15:17.359 the floods. So, as you noted, right now we are insulated. 0:15:17.800 --> 0:15:22.360 American consumers are by and large not buying Chinese evs. 0:15:22.440 --> 0:15:24.400 They're not coming into our market. But I think they 0:15:24.480 --> 0:15:28.240 see the writing on the wall. German automakers are under threat. 0:15:28.720 --> 0:15:32.680 Europe is importing these things. They're going into Japan, they're 0:15:32.680 --> 0:15:37.640 going in elsewhere, threatening other global automakers. So if the 0:15:37.680 --> 0:15:41.640 Biden administration wants to give the IRA subsidies, the Inflation 0:15:42.120 --> 0:15:46.480 Reduction Acts subsidies, which of course incentivize green tech production 0:15:46.600 --> 0:15:49.520 here in the United States, I think the administration wants 0:15:49.560 --> 0:15:52.440 to give these incentives of fighting chances so that we 0:15:52.480 --> 0:15:56.080 can retain an auto industry here in the United States 0:15:56.080 --> 0:15:59.800 as the world transitions to evs. So it's actually a 0:16:00.280 --> 0:16:03.560 time to raise the terrorists because it won't directly impact 0:16:03.640 --> 0:16:07.320 people's pocketbooks because as you noted, Americans are not yet 0:16:07.360 --> 0:16:08.560 buying Chinese evs. 0:16:08.880 --> 0:16:12.320 And yet, Eliza, you know, when you're thinking about special 0:16:12.360 --> 0:16:15.440 competitiveness in particular, this is the project that you focus 0:16:15.440 --> 0:16:19.960 in on. All of this is undermining, undermining ultimately the 0:16:19.960 --> 0:16:23.920 efficiency of global trade subsidies here, tariffs there, All of 0:16:23.960 --> 0:16:29.080 it will sort of it isn't a mediating what should 0:16:29.080 --> 0:16:30.760 be just the natural flow of things. 0:16:31.440 --> 0:16:33.840 Is this what is necessary ultimately from. 0:16:33.720 --> 0:16:37.720 Your perspective, to ensure that US does remain competitive when 0:16:37.720 --> 0:16:39.239 it comes to key industries. 0:16:39.720 --> 0:16:44.320 There has been this national debate over efficiency versus resilience, 0:16:44.400 --> 0:16:48.320 and the lesson from COVID, from Russia's invasion of Ukraine, 0:16:48.560 --> 0:16:52.040 from these other global supply chain crises we've had in 0:16:52.080 --> 0:16:56.160 the last few years is that efficiency economic efficiency is 0:16:56.240 --> 0:16:58.200 not the only thing we need to think about as 0:16:58.240 --> 0:17:02.160 a nation, and so there's been increasing discussions of resiliency 0:17:02.640 --> 0:17:05.000 and what steps do we need to take as a 0:17:05.119 --> 0:17:08.760 nation to make sure that we continue to build emerging 0:17:08.800 --> 0:17:13.359 technologies here in the United States. We have suffered from 0:17:13.960 --> 0:17:17.640 massive de industrialization over the last several decades as we've 0:17:17.680 --> 0:17:22.359 outsourced the production of our technology to East Asia, especially China. 0:17:22.680 --> 0:17:27.879 So now there's a national conversation about looking ahead, we 0:17:27.920 --> 0:17:30.159 want to make sure we're able to build some of 0:17:30.200 --> 0:17:33.440 these emerging technologies here in the United States not only 0:17:33.480 --> 0:17:36.520 design them, but build them, because that's essential to our 0:17:36.560 --> 0:17:41.280 long term growth in productivity as well as our national security, 0:17:41.359 --> 0:17:43.560 making sure we can make things here at home. 0:17:44.880 --> 0:17:47.440 Liza Tobin of the SCSP, thank you very much. So 0:17:47.520 --> 0:17:49.920 coming up on the program, French President a Manue Macron 0:17:50.160 --> 0:17:53.480 t outs billions of dollars in foreign investments from tech giants. 0:17:53.480 --> 0:17:54.840 We're going to have those details. 0:17:54.440 --> 0:17:57.399 Next, Karen, such global conversation. Meanwhile, let's just bos in 0:17:57.440 --> 0:17:59.919 what's happening for us doc over here? We're not seventy 0:18:00.200 --> 0:18:03.600 percent in the last couple of days on squarespace. Why 0:18:03.760 --> 0:18:07.359 it's going private Permira and all cash transaction, valuing the 0:18:07.400 --> 0:18:10.879 company in approximately six point nine billion dollars. We're going 0:18:10.920 --> 0:18:14.120 to see some vcs giving some more investment General Atlantic 0:18:14.240 --> 0:18:15.360 Acel for example. 0:18:15.720 --> 0:18:16.840 This is bruly meg Technology. 0:18:31.760 --> 0:18:34.480 Microsoft it plans to spend four point three billion dollars 0:18:34.520 --> 0:18:38.639 building cloud and AI infrastructure in France, announcing its latest 0:18:38.640 --> 0:18:42.119 major outlay on artificial intelligence technology. Now, Microsoft is aiming 0:18:42.160 --> 0:18:45.160 to help train a million people support two thousand, five 0:18:45.240 --> 0:18:47.639 hundred startups in France by twenty twenty seven. 0:18:47.800 --> 0:18:47.960 Now. 0:18:48.000 --> 0:18:50.919 Earlier this year, unveiled a partnership and a fifteen million 0:18:50.920 --> 0:18:55.000 euro investment into mistral Ai. It's a Parisian startup competing 0:18:55.000 --> 0:18:57.000 with the course the likes of open Ai. And we 0:18:57.040 --> 0:18:59.600 want to stick with France with investment in France because 0:18:59.640 --> 0:19:02.600 in manual Macron has just unveiled more than fifteen million 0:19:02.680 --> 0:19:06.680 euros in foreign investments from US tech giants like Microsoft, 0:19:06.680 --> 0:19:09.320 but also like Amazon, like IBM, like banks such as 0:19:09.320 --> 0:19:12.320 Morgan Stanley. It's all a part of well trying to 0:19:12.359 --> 0:19:16.280 spa France's economy, to repair its public finances, basically establish 0:19:16.440 --> 0:19:20.400 Paris as well as Europe's post Brexit business and financial hub, 0:19:20.880 --> 0:19:23.040 joining us on all of this. It's Blomberg opinion. Coconomists 0:19:23.119 --> 0:19:26.240 Lionel Laurent. You know, it's interesting. It's a bit of 0:19:26.240 --> 0:19:30.080 a PR exercise that happens every year over at the 0:19:30.119 --> 0:19:33.760 Elyc Palace. But what ultimately is being done by Macron 0:19:33.840 --> 0:19:35.600 to inject some optimism. 0:19:36.119 --> 0:19:39.000 You're right, choose France. It's a bit of a cheesy slogan. 0:19:39.080 --> 0:19:41.520 It could be the cover of an investment brochure, but 0:19:41.640 --> 0:19:45.960 it's not just PR because since he's become president this 0:19:46.000 --> 0:19:48.359 has really bit about the art of the deal Micron style. 0:19:48.480 --> 0:19:49.760 Every year he gathers one. 0:19:49.720 --> 0:19:53.040 Hundred and fifty one hundred and eighty international CEOs wines 0:19:53.080 --> 0:19:56.399 and dines them in Versailles and gives them the pitch 0:19:56.600 --> 0:19:59.360 of the French economy. He'll say, it's doing its job, 0:19:59.400 --> 0:20:01.879 it's doing the work. He's done the work of reforming France. 0:20:02.280 --> 0:20:04.760 And what are you going to do for France From 0:20:04.760 --> 0:20:07.719 the corporate side, which is invest and I think this 0:20:07.800 --> 0:20:10.959 is that puts it, I think a cut above Davos 0:20:11.000 --> 0:20:15.680 because there is investment. You could argue if it's expansion 0:20:15.880 --> 0:20:18.600 of the existing staff instead of new projects. You can 0:20:18.720 --> 0:20:22.280 argue if even fifteen billion is that sort of world 0:20:22.320 --> 0:20:25.880 changing or impressive at the level of tech. But look, 0:20:26.040 --> 0:20:29.440 I think there is something genuinely real to this. There's 0:20:29.480 --> 0:20:32.480 a there's a seed of depth to this that's not just. 0:20:32.440 --> 0:20:36.040 Pr Yeah, Leonor, I think Mistrel put France on the 0:20:36.080 --> 0:20:38.080 map a little bit, you know, in terms of the 0:20:38.080 --> 0:20:43.919 conversation around AI development. But beyond that, we don't often 0:20:43.960 --> 0:20:46.520 go to you, you know, during the program as frequently 0:20:46.520 --> 0:20:49.040 as we do other countries, and it's at a time 0:20:49.040 --> 0:20:52.120 where France's economy is on a shakier footing. 0:20:52.840 --> 0:21:00.600 Wow, that that cuts the here brutal, brutal. I think 0:21:00.680 --> 0:21:04.200 you touched on something which is about relative relative worth 0:21:04.280 --> 0:21:07.680 right now. Mccare came into power at a time when 0:21:07.720 --> 0:21:10.640 the UK was effectively voting itself out of European leadership 0:21:10.960 --> 0:21:15.240 with Brexit, and Angela Merkle's twilight years had begun. I think, honestly, 0:21:15.560 --> 0:21:17.719 as long as the UK is seen as a kind 0:21:17.720 --> 0:21:20.760 of Brexit tainted economy, and as long as Germany's industrial 0:21:20.800 --> 0:21:23.840 model is seen to be suffering, France will still have 0:21:24.000 --> 0:21:26.800 a card to play. Now. I think those two cards, 0:21:26.840 --> 0:21:30.760 to be precise, are human capital. It still has smart, 0:21:30.760 --> 0:21:34.840 talented engineers being pumped out of its graduate schools and universities. 0:21:35.240 --> 0:21:37.399 And the other thing is tax credits. There's an R 0:21:37.440 --> 0:21:39.879 and D tax credit in France that explains why so 0:21:39.960 --> 0:21:43.760 much of what you're seeing is R and D research centers, 0:21:43.800 --> 0:21:47.119 whether it's tech or banks. So clearly there is something 0:21:47.160 --> 0:21:48.320 in it for these companies. 0:21:48.400 --> 0:21:53.760 It's not as pr Leonel Laurent of Bloomberg opinion from France, 0:21:53.840 --> 0:22:04.840