Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From the Heart where Innovation, money and power Collie in
Speaker 2: Silicon Valley, nbon.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
Speaker 4: Live from New York and San Francisco.
Speaker 5: This is Bloomberg Technology coming up full chip coverage as TSMC.
Speaker 4: Earnings jump, but China risks remain for the sector.
Speaker 6: Plus Apple makes plans to license more Hollywood films for
Speaker 6: its streaming push.
Speaker 5: And Bloomberg Intelligence breaks down the odds of a TikTok
Speaker 5: van under a Trump presidency.
Speaker 4: Who bring you all the details?
Speaker 5: We want to talk about the China risks with the
Speaker 5: Biden administration as he's mentioned, and really considering more trade
Speaker 5: restrictions Bloomberg Intelligence, and with a note saying this along
Speaker 5: with Donald Trump's own comments on defending Taiwan or not
Speaker 5: defending them earlier this week in a Bloomberg Business Week interview,
Speaker 5: could be quote beneficial for regional manufacturers in the US.
Speaker 5: I'm talking Intel, Global Founderies, Micron, Bloomberg Intelligence analysts cringe
Speaker 5: and Savanni's with us. You altered the note and just
Speaker 5: dissect for us a moment how much geopolitical risks do
Speaker 5: you think there is affecting some of these names that
Speaker 5: do have exposure to China.
Speaker 7: Yeah, at this point, it's more of a headline risk
Speaker 7: rather than a fundamental risk. Right, It's speculative at best,
Speaker 7: so we don't know how much to quantify, but for context,
Speaker 7: it's important to understand the run that socks has had.
Speaker 7: Right especially these high flying AI names. It seems like
Speaker 7: almost nothing but positivity has been priced in. So I
Speaker 7: think this sort of any sort of roadblock, even if
Speaker 7: not quantifiable, sort of seems like a good opportunity for
Speaker 7: folks to lock in their profits and sort of the
Speaker 7: valuations to take a breeder. Beyond that, the China risks
Speaker 7: have been there for the last two years. We have
Speaker 7: seen sanctions getting increased over time, but when you look
Speaker 7: at impact in terms of fundamentals and revenues, it's mainly
Speaker 7: been one or two key large players that have seen
Speaker 7: the impact. So again, the response to this news, with
Speaker 7: the most of the sector reacting like that, seems more
Speaker 7: of a again, headline risk.
Speaker 8: At this part.
Speaker 6: You notice in your research that these are headwinds for
Speaker 6: fab less names. But the other name you linger on
Speaker 6: is of course Intel, and I think yesterday in the program,
Speaker 6: we were trying to understand the logic here. Intel is
Speaker 6: trying to grow its own business of being a contract
Speaker 6: manufacturer for third parties. If something happens politically or in China,
Speaker 6: in Taiwan, is Intel the only alternative, the only name
Speaker 6: that would benefit directly in that line of business.
Speaker 7: Congen So you if to divide the manufacturing world into
Speaker 7: the leading edge, which is really where they're chips and
Speaker 7: smartphone and TC chips get manufactured, and the lagging edge.
Speaker 7: You know, in the leading edge, there's really tree names
Speaker 7: that come to top TSMC, Samsung and in Intel, and Intel's
Speaker 7: main push has been tatered around to really leverage this
Speaker 7: risk point that hey, if something were to happen in
Speaker 7: Taiwan or TSMC, we would be sort of your insourcing
Speaker 7: champion here in the US. So definitely, you know, such
Speaker 7: news do benefit them. Again, this is not something quick.
Speaker 7: You cannot turn off TSMC tonight and turn on and
Speaker 7: take all the capacity at Intel. But in the long
Speaker 7: term still increases you know, if in your risk models
Speaker 7: still makes you favor regional manufacturers like Intel in global foundry,
Speaker 7: and speaking of the lagging edge, I think we have
Speaker 7: a lot more options in that area because a lot
Speaker 7: of US integrated device manufacturers have their own lagging edge capacity,
Speaker 7: so there's less reliance on Taiwan in that end, But yes,
Speaker 7: in the leading edge intel in terms of US and Europe.
Speaker 6: I asked that question because for the second time this week,
Speaker 6: intels up more than five percent in a session where
Speaker 6: some of the other names TSMC being one are under pressure.
Speaker 6: Bloomberg Intelligence analyst Kunjan Savanni, thank you. Let's bring in
Speaker 6: Amy Sellko, now principal analyst at Albright Stonebridge Group, and
Speaker 6: let's discuss the impact of potential trade cubs, expansion of
Speaker 6: trade cubs, and Trump on Chinese American relations. I mean, Amy,
Speaker 6: the chip sector is absolutely in focus right now. Just
Speaker 6: respond to what you heard from Kunjendre on their thesis
Speaker 6: on geopolitics and who may or may not benefit in
Speaker 6: a Trump presidency.
Speaker 9: Well, I think it is really early to say, and
Speaker 9: I think that's why we're seeing so much volatility because
Speaker 9: while we have a sense from Trump himself, from his
Speaker 9: vice president, from his top advisors how he looks at
Speaker 9: competition with China, the prescriptions that he will use really
Speaker 9: are unclear to date, based on what the Biden administration
Speaker 9: is doing. We are seeing the potential for more curves
Speaker 9: on American and non American semiconductor products, particularly hardware, going
Speaker 9: to support China in increasing its focus on technology self
Speaker 9: reliance a key theme coming out of the Third Planum.
Speaker 9: That is what we're hearing that Shi Jinping is saying.
Speaker 9: We need more indigenous innovation. We need technology to help
Speaker 9: us build our own semiconductor industry because we cannot rely
Speaker 9: on an uncertain geopolitical landscape, given uncertainty in the United
Speaker 9: States and in Europe to key suppliers and of course
Speaker 9: Japan of this technology hardware to China. As a result
Speaker 9: of that, of course, American, European, Japanese hardware providers of
Speaker 9: China's semiconductor global semiconductor manufacturing are being pressured to restrict
Speaker 9: what they are going to continue to sell and service
Speaker 9: in China. That's where so much of this uncertainty is
Speaker 9: because the question of how what are the restrictions. Will
Speaker 9: the United States be successful in negotiating with the Dutch,
Speaker 9: with the Japanese governments to really expand restrictions on what
Speaker 9: can be provided to China is the key.
Speaker 5: How much do you believe that the threats will become reality.
Speaker 5: How much do you think that the Dutch and the
Speaker 5: Japanese will curtailed servicing technology that already exists in China.
Speaker 9: Well, I think there's going to continue, of course, to
Speaker 9: be American industry pressure that not they alone face those restrictions,
Speaker 9: Caroline and so. While of course US industry doesn't want
Speaker 9: to see more restrictions on what they can sell to
Speaker 9: China if there is not a direct national security concern,
Speaker 9: they right now are unfairly competing against Japanese and Dutch
Speaker 9: companies that are continuing to sell to China, and so yes,
Speaker 9: I do think that there's going to be more pressure
Speaker 9: to expand those restrictions. I do not think what we
Speaker 9: were rumored to be hearing about that there was going
Speaker 9: to be a massive expansion is going to come into place,
Speaker 9: certainly not in the Biden administration. I think there will
Speaker 9: be incremental steps to restrict certain companies in China from
Speaker 9: receiving from receiving more semiconductor hardware products in the near term.
Speaker 9: The Trump administration, which is what we are talking about here,
Speaker 9: is the big unknown amy.
Speaker 6: It takes two to tango right, and you don't have
Speaker 6: a crystal ball. But if you take the EV industry
Speaker 6: as a parallel example, what China did was give large
Speaker 6: volume subsidy, but it had a limited shelf life. Do
Speaker 6: you recognize a sort of willingness from the Chinese government
Speaker 6: to sort of fund their response to any sort of
Speaker 6: political or geopolitical policy that either administration comes with in November?
Speaker 4: Yeah, I think that's the key key point.
Speaker 9: I think the Dutch and the Japanese are very concerned,
Speaker 9: not just for their companies that are providing the technology
Speaker 9: hardware to China, were they to be restricted, It's not
Speaker 9: just their profits, it's China's retaliation.
Speaker 4: I think Shi Jinping.
Speaker 9: Has been extremely clear that if a stranglehold on certain
Speaker 9: high tech products and services continues visa via China market,
Speaker 9: he is going to respond. He is not, as he
Speaker 9: has said, going to sit idly by and watch those
Speaker 9: restrictions continue to expand. And so the Dutch, the Japanese
Speaker 9: and the US government have to think long and hard
Speaker 9: on the kinds of retaliatory tools China has available right now.
Speaker 9: For example, sport restrictions on graphite caroline to Japan, something
Speaker 9: Japanese industry desperately needs. My final point, though, would be
Speaker 9: China has to weigh its retaliation to make sure the
Speaker 9: retaliatory moves don't harm further and all ready very very
Speaker 9: shaky economy in China, well said at the leftfidge it
Speaker 9: had a few years ago.
Speaker 5: You advise corporates, you advise nonprofit clients at the moment,
Speaker 5: ultimately about.
Speaker 4: Business and policy interests.
Speaker 5: Can you advise us in our audience about Taiwan about
Speaker 5: some of the sentiment that seemed to be displayed by
Speaker 5: an interview of being by BusinessWeek with former President Trump
Speaker 5: that maybe they wouldn't come to Taiwan's aid. What does
Speaker 5: that mean for TSMC and for Taiwan.
Speaker 9: Well, obviously the silence coming from Taiwan is deafening.
Speaker 1: Here.
Speaker 9: They are not responding todent former President Trump's Bloomberg interview there. Instead,
Speaker 9: they're choosing to stand by what the platform of the
Speaker 9: Republican Party traditionally has been, which is to include Taiwan
Speaker 9: in it and to say that, of course, the United
Speaker 9: States and Taiwan have a legislatively mandated very strong relatedationship
Speaker 9: that does include US provisions to come to Taiwan's aid.
Speaker 9: Of course, it's up to the commander in chief. So
Speaker 9: Taiwan authorities must be worried, but I will say the
Speaker 9: worry is probably not severe right now because most of
Speaker 9: the advisors around President Trump, including his selection of vice
Speaker 9: presidential candidate with JD. Vans, are very strong supporters of Taiwan,
Speaker 9: and so within a Trump two administration were that to
Speaker 9: come to pass, there are going to be very significant
Speaker 9: conversations around how the United States continues to focus more
Speaker 9: on Asia than Europe, which is clearly a platform that
Speaker 9: we're starting to hear coming out of the Republican Convention,
Speaker 9: and what that means for US policy towards Taiwan.
Speaker 8: So I wouldn't be.
Speaker 9: So quick to conclude that President Trump is going to
Speaker 9: abandon Taiwan in the event of some kind of conflict
Speaker 9: that would really be going against traditional US policy, particularly
Speaker 9: among the Republicans.
Speaker 5: Amy so important to have your expertise. We thank you,
Speaker 5: Amy Seller, co principle analyst at All bright Stonebridge Group.
Speaker 4: We thank you, Ed.
Speaker 5: What's so interesting is we see this volatility in the
Speaker 5: individual stocks today as we question ultimately some of the
Speaker 5: valuations where we've run to in the videos.
Speaker 4: And the like.
Speaker 6: Yeah, I think what's so astonishing about the conversation. We
Speaker 6: just had detail, but we didn't even discuss about another factor,
Speaker 6: which is the AI driven boom right growth driven by
Speaker 6: demand for AI accelerator manufacturing TSMC has clients everywhere, and
Speaker 6: so I just wonder how maybe we'll talk to Jensen
Speaker 6: about it in a few weeks time. But it's like
Speaker 6: geopolitics takes away one market. There are plenty waiting the
Speaker 6: wings to get some capacity, and I just thought it
Speaker 6: was weird that we're right bring that up.
Speaker 5: But then Goldman Sachs's top research analyst today currently saying,
Speaker 5: maybe you need to question the ultimate demand of AI
Speaker 5: in the longer term. Will it really drive this productivity
Speaker 5: group story on Jim Cavolo from some of our colleagues
Speaker 5: in Bloomberg News today.
Speaker 4: Meanwhile, coming up, Apple we know is in.
Speaker 5: Talks to license more films from major Hollywood studios.
Speaker 4: Look, it's an effort to bolsterous Apple TV plus streaming
Speaker 4: service being reported by Bloomberg. Stick with us. This is
Speaker 4: Bloomberg Technology Media News now.
Speaker 5: Bloomberg reporting that Apple is in talks with several major
Speaker 5: Hollywood studios about acquiring more films for their Apple Plus
Speaker 5: streaming service, which currently features almost entirely original production. There's
Speaker 5: a lot going on in Hollywood. Chris Paul Mary breaks
Speaker 5: it down for us. Let's just start on the Apple
Speaker 5: news for now. Who would they be garnering from? Is
Speaker 5: it like relief for some of those studios right now?
Speaker 2: We didn't report the exact names, but you know, you
Speaker 2: can imagine sort of all the all the big folks
Speaker 2: in the entertainment business, whether it's you know, Universal, Warner Brothers, Comcast, Disney,
Speaker 2: all of those players, and what's going on here is
Speaker 2: is Apple TV originally had a strategy to focus really
Speaker 2: on high quality original programming. You know, it's had some,
Speaker 2: for sure hits, Ted Lasso The Morning Show, but it's
Speaker 2: not as watched as some of the other big players
Speaker 2: in the industry, and in particular they're film Slate. You know,
Speaker 2: they made a big billion dollar commitment to make original
Speaker 2: movies and to put them at least the first in
Speaker 2: theaters as well. Hollywood applauded. But you know they've had
Speaker 2: more than their share of Dud's our Guyle big action
Speaker 2: movie two hundred million dollars. It's one I just saw
Speaker 2: this weekend, fly Me to the Moon. Nice movie, but
Speaker 2: you know, not really burning it up. So this is
Speaker 2: a shift in strategy to try to get more library
Speaker 2: content on there and and build the audience for Apple TV.
Speaker 6: That's probably, Chris, what Netflix has, right. You know, I
Speaker 6: was actually watching World of Warcraft the other day on Netflix,
Speaker 6: which is a twenty sixteen film. I won't give my
Speaker 6: review of it, but that's where you go to, right.
Speaker 6: Netflix has this sort of endless catalog. How much volume
Speaker 6: dollar wise is Apple going to have to put into
Speaker 6: this to like fight back?
Speaker 2: Numbers on Apple's are scarce to come by some of
Speaker 2: the other operators, but.
Speaker 8: We're seeing this across the industry.
Speaker 2: We're seeing both There was originally the theory was all
Speaker 2: these streaming services going to have walled gardens in their
Speaker 2: own content and it wasn't going to be sold elsewhere,
Speaker 2: And that's completely broken down. Now we have shows on
Speaker 2: multiple streaming services TV outlets. In a way, it makes
Speaker 2: it easier for consumers to find stuff, but it just
Speaker 2: it does devalue away the exclusivity of the programming.
Speaker 5: Yeah, what continues to hurt is legacy TV. Chris, And
Speaker 5: you're out with some of that ft reporting today that
Speaker 5: maybe Warner Brothers, Discovery and David saslav Over at the
Speaker 5: company are thinking of splitting up studios streaming from the
Speaker 5: legacy TV.
Speaker 2: Why well, first of all, there's stock prices just in
Speaker 2: the dumps, just a real terrible performer.
Speaker 1: Either.
Speaker 2: They put these two companies together, Warner Brothers in Discovery
Speaker 2: with these big plans to really beef up the max
Speaker 2: streaming beef's business.
Speaker 8: And it just hasn't worked.
Speaker 2: And David Szaz left the CEOs sort of acknowledged that
Speaker 2: this month at Sun Valley he said that the industry's
Speaker 2: fisting to need more consolidation. Now, whether this particular split
Speaker 2: up is the way to do that getting a lot
Speaker 2: of skepticism from analysts or the problem is that the
Speaker 2: traditional TV networks, although they're declining and we're talking about you, TNT,
Speaker 2: CNN and that, are still the cash generators, and the
Speaker 2: studio and the streaming business aren't making as much money
Speaker 2: and need the money to invest in new programming. So
Speaker 2: with forty billion or so in debt on the books,
Speaker 2: how that's going to rationalize itself is very difficult to
Speaker 2: figure out, and that that's why analysts are.
Speaker 8: Skeptical that this is the route. But I think the
Speaker 8: stock is up.
Speaker 2: Because people are applauding that the company recognized that it
Speaker 2: needs to do something different.
Speaker 6: One fors us love to think about bloom Best Chris Palm, Mary,
Speaker 6: thank you very much.
Speaker 4: Time now for talking tech.
Speaker 5: First up, Publicis It raises its guidance. The advertising agency
Speaker 5: posted stronger growth in the first half as He's net
Speaker 5: revenue growing by five to six percent this year, up
Speaker 5: from four to five percent previously. But the company is
Speaker 5: announced earlier this year that it would attempt to strengthen
Speaker 5: its data analysis and artificial intelligence capabilities as in an
Speaker 5: effort to combat the slump in the advertising industry. Meanwhile,
Speaker 5: India's Emphasis also raising its sales forecast for the year.
Speaker 5: Now the company expects revenue to grow three to four
Speaker 5: percent on a constant currency basis in the fiscal year
Speaker 5: through March twenty twenty five. Because a sign that clients
Speaker 5: are gradually increasing tech spend, Who's to buy a resilient
Speaker 5: global economy. The battle for potential ether ETF assets is
Speaker 5: already on the way. Even as the funds have yet
Speaker 5: to launch issuers, including the Black Crocs, Fidelity, and Vesco,
Speaker 5: they're already coming forward with how much or how little
Speaker 5: they're going to charge their respective ether ETF said.
Speaker 6: Okay, let's dive more into that with Bloomberg's Isabelle Lee,
Speaker 6: who's one of the bylines on our reporting about it
Speaker 6: this morning. It ranges from zero point two percent fee
Speaker 6: to two and a half percent fee on the gray
Speaker 6: scale ethereum trust, but that one has no conditions attached
Speaker 6: to it. Essentially, what does all that mean? What does
Speaker 6: that tell you, Isabelle?
Speaker 10: So this few r has been really going on for
Speaker 10: a while in this highly competitive space because theoretically, the
Speaker 10: lower your fee, the more attractive it will be to issuers.
Speaker 10: And yesterday was important because a lot of issuers filed
Speaker 10: what they call an S one and that revealed the
Speaker 10: feast and we went through all of them and the
Speaker 10: face range from nineteen basis points to twenty for contact.
Speaker 10: That is very cheap. They're cheap, as some would call it. Yes,
Speaker 10: Grayscale is on the higher end at around two and
Speaker 10: a half percent, but that's an exception because they're trying
Speaker 10: to launch or to convert their trust into an ETF.
Speaker 10: But all that to say, these funds are really priced
Speaker 10: at such a low fee, and in fact a lot
Speaker 10: of them have conditions. For instance, black Rock will have
Speaker 10: a partial waiver in the first year. Several said that
Speaker 10: in the first six months it'll be free. And I
Speaker 10: think issuers really learned their lesson because during the Bitcoin
Speaker 10: ETF a lot of them really just lowered and lowered
Speaker 10: as each day passed and even canceled leading up to
Speaker 10: the launch. But for now, in the first get go
Speaker 10: they were already cheap.
Speaker 4: I mean, I don't know if they did learn the
Speaker 4: lesson because they're really cheap again the waiving fees.
Speaker 5: They're saying you can be free for six months, but
Speaker 5: what pats are also anticipating is ultimately less inflows this
Speaker 5: time round. The problem with eth is that you could
Speaker 5: stake it if you're not putting in an ETF, and
Speaker 5: therefore that's an opportunity cost.
Speaker 10: Right Exactly, we have City Group expecting four to five
Speaker 10: billion launch for the first six months in inflows and
Speaker 10: for Contact black Rock, so that's only one ETF called
Speaker 10: in one billion in the first four days and as
Speaker 10: a whole now it's been seven months, but then we
Speaker 10: can see sixteen billion in total for the cohorts, so
Speaker 10: it's really a weak demand. And to your point, why
Speaker 10: would you buy an ether ETF. So that's really it's
Speaker 10: kind of a harder sell because for a bitcoin, yes
Speaker 10: it's digital gold, hedge, cans inflation, you buy it. But
Speaker 10: for Ether, the participants really want it for staking, so
Speaker 10: having it in a trust and the fund is really
Speaker 10: a little questionable for others, so the demand is less.
Speaker 10: And also those who want crypto exposure, the big Wall
Speaker 10: Street firms already got it in January, and it's a bitcoin.
Speaker 10: It's the biggest coin, it's the most stable, it's the
Speaker 10: most established, So why had your bets on something smaller?
Speaker 10: Although as thing to think about is Ether is kind
Speaker 10: of the leader of the alt coin world, so this
Speaker 10: may pave the way for smaller alt coins. Who knows,
Speaker 10: we'll already have Solona filing.
Speaker 5: So yeah, this was questioning around Solona, and ultimately the
Speaker 5: question around Selana is because.
Speaker 4: What's the SEC view it as?
Speaker 5: And I think this is the issue with the staking,
Speaker 5: right is the SEC it's just not comfortable that it
Speaker 5: ultimately isn't a security if you're able to put it
Speaker 5: aside and raise funds and yield on it.
Speaker 10: A lot of issuers already made concessions they were removed
Speaker 10: Staking because this racisn't do a question is Ether security,
Speaker 10: So they really had to compromise on a lot of things.
Speaker 10: But then if you still ask the Ether boss, they're
Speaker 10: just happy, said there's going to be an ETF out there. It's,
Speaker 10: you know, a major milestone in the crypto industry, second milestone.
Speaker 4: So there are pros and cons of it.
Speaker 10: But it's definitely a landmark if you will think about it.
Speaker 4: Slowly but surely, yes, us.
Speaker 11: Catching up with Europe and giving access to these sorts
Speaker 11: of Canada and Canada, Well said Isabel Lee, with all
Speaker 11: the take as we look towards what could be of
Speaker 11: course that eth ETF going live as soon as well
Speaker 11: Tuesday next weekend.
Speaker 4: Welcome back to bluemog Technology.
Speaker 6: I'm Caroline Hyde in New York and I made Ludlow
Speaker 6: in San Francisco.
Speaker 4: Look, what is the.
Speaker 5: Ability now of a TikTok ban if Donald Trump wins
Speaker 5: the White House in November.
Speaker 4: Well, some analysis have been done by Bloomberg.
Speaker 5: Intelligence crunching those numbers in its latest report. And I'm
Speaker 5: pleased to say we're joined by Senior Technology and as
Speaker 5: Mandate seeingh who sort of went through the tea leaves
Speaker 5: of what was being written in the Bloomberg BusinessWeek story
Speaker 5: that interview with President Trump former president, and ultimately it
Speaker 5: feels as though maybe he's less against TikTok, but because
Speaker 5: of Meta and because of US companies.
Speaker 12: Yes, And look, his views are pretty clear, even though
Speaker 12: they have changed since the time he was in the
Speaker 12: White House to where they are now. But at least
Speaker 12: he has said it clearly that he doesn't want to
Speaker 12: ban TikTok, and because his ratings have gone up. I mean,
Speaker 12: we are in an environment where, you know, every day
Speaker 12: the poll ratings are changing, and I think right now
Speaker 12: the market is behaving as if Trump was to get
Speaker 12: elected and he is against the band, even though the
Speaker 12: law has been passed that TikTok needs to get divested
Speaker 12: within the next one year or it will be banned.
Speaker 12: So clearly the market is saying otherwise because Meta has
Speaker 12: gone down, Snapchat has gone down, and the stocks have
Speaker 12: reacted that you know, the banter isn't going to go through.
Speaker 12: And look, he's driving the campaign through TikTok. I mean,
Speaker 12: Trump is on social media on TikTok. That's the one
Speaker 12: thing you wouldn't have expected. So he's getting a lot
Speaker 12: of donors to his campaign from TikTok, and we know
Speaker 12: the swing voters are probably on TikTok, so he can
Speaker 12: appeal to those TikTok users by telling them, hey, you're
Speaker 12: not banning this platform anymore.
Speaker 4: True social TikTok.
Speaker 5: Who would it ultimately affect the most in terms of
Speaker 5: market capitalization, in terms of user figures, if indeed TikTok
Speaker 5: stays around, has it got to be matter or there others?
Speaker 12: Yeah, So our initial analysis was TikTok has almost you know,
Speaker 12: one third of the US adults users, more than sixty
Speaker 12: percent of people under the thirty age group, and they
Speaker 12: spend almost eighty minutes a day.
Speaker 4: Where did they have time?
Speaker 12: They apparently do, But the thing is if they were
Speaker 12: if TikTok was banned, then you know platforms like Snapchat
Speaker 12: that has a lot of video content, short videos, YouTube shorts,
Speaker 12: Instagram reels, they are the three that will benefit the
Speaker 12: most because that eighty minutes will get split into you know,
Speaker 12: wherever people can spend their time, even ruad blocks or Netflix,
Speaker 12: because at the end of the day, it's a zero
Speaker 12: some game.
Speaker 4: But they're not just get to talk to people in
Speaker 4: real life. They can find it.
Speaker 12: I think that's where they consume all their news and
Speaker 12: all their content, so they'll spend time on social media.
Speaker 12: Question is where do they do that?
Speaker 6: Yeah, man, this is your research. It focuses on TikTok,
Speaker 6: But you know that the public comments by former President
Speaker 6: Trump about his kind of logic that if they ban TikTok,
Speaker 6: it kind of opens the door to Meta and it's
Speaker 6: wide range of properties being all encompassing kind of explains
Speaker 6: to us your process how the sausage is made, so
Speaker 6: to speak. But also I guess the next research coming
Speaker 6: from you is the risks to met if Trump were
Speaker 6: to end up in the White House.
Speaker 12: Yeah, I mean, look at the anti trust risk is
Speaker 12: there for all these large platforms, and specifically in the
Speaker 12: case of Vetta given it owns, you know, three of
Speaker 12: the most popular websites where people spend most of their time,
Speaker 12: and there's always been that concern against divesting any of
Speaker 12: those platforms. So clearly Meta is the most exposed on
Speaker 12: that front. But I still think, you know, when it
Speaker 12: comes to Trump, there's always volatility and uncertainty. You know,
Speaker 12: even the TSMC comments like the whole Silicon Valley supported him,
Speaker 12: and now you're hearing you know the comments around TSMC.
Speaker 12: So there's always that uncertainty associated with you know, President Trump,
Speaker 12: and it could change. The opinion could change, you know,
Speaker 12: a few months from after he gets reelected.
Speaker 4: If it does.
Speaker 5: Indeed, Mande saying of bloem Meg Intelligence, thank you so much.
Speaker 5: And look, maybe it's not just the words of Donald
Speaker 5: Trump but also his new running mate that are being
Speaker 5: passed at the moment, JD Vance and his ties Silicon
Speaker 5: Valley and venture capital drawing praise from some in the community.
Speaker 4: Take a listen. I had a fantastic experience with JD.
Speaker 13: I worked with him for about a year when he
Speaker 13: was just starting out in Silicon Valley. He's going to
Speaker 13: be good at PRIs Silicon Valley. He's going to be
Speaker 13: good for the country because he is pro growth, he
Speaker 13: is pro innovation, and he's also pro eliminating those regulations
Speaker 13: that strangle industry, that strangle growth.
Speaker 5: Let's get the take of Teddy Goff, co founder and
Speaker 5: managing partner at the strategy of marketing agency Precision, which
Speaker 5: advises world leaders. But you're also the digital director for
Speaker 5: President Obama as a re election campaign, so we can
Speaker 5: garner some of a political affiliation from that, Teddy and
Speaker 5: I want to get your take on what it means
Speaker 5: to have potentially a venture capitalist in the White House.
Speaker 5: How much do you think that there will be real
Speaker 5: changes to policy making for innovation of small companies.
Speaker 8: Well, thanks for having me.
Speaker 14: You know, first of all, I think the most import
Speaker 14: thing is whether there is a change in administration or not.
Speaker 14: You know, obviously, as you were just talking about in
Speaker 14: the previous segment, when it comes to former President Trump
Speaker 14: potentially future president Trump, there's always a degree of volatility, uncertainty,
Speaker 14: there's always palace intrigue. It's not exactly clear that his
Speaker 14: vice president is going to have all that much influence
Speaker 14: over him.
Speaker 8: Certainly his first vice president did not.
Speaker 14: But you know, I think it'll be broadly good for
Speaker 14: much of the tech industry if j Devance becomes vice president.
Speaker 14: He's a sort of of that community, or at least
Speaker 14: in the past few years in his career, and he
Speaker 14: shares some of their interests, I think, particularly with respect
Speaker 14: to deregulating AI and cryptocurrency. I do think it's worth
Speaker 14: keeping in mind that the tech industry is non monolithic.
Speaker 14: There are deep divides within the tech industry, and you know,
Speaker 14: by definition, the Republican Party isn't in lockstep with them
Speaker 14: on all of those issues. So, you know, I think
Speaker 14: when it comes to deregulation, tax policy, AI, cryptocurrency, there
Speaker 14: is you know, some degree of consonants between what a
Speaker 14: Jdvans wants.
Speaker 8: And what much of the tech industry wants.
Speaker 14: But when it comes to Section two thirty, privacy, even competition,
Speaker 14: to some degree, they're going to be at odds. And
Speaker 14: so you know, I think this is going to be
Speaker 14: good for the tech industry in certain ways and you know,
Speaker 14: bad for them and others.
Speaker 6: Teddy, Good Morning's ED in San Francisco. Let's talk a
Speaker 6: little bit about TikTok. You just heard our analysts Man
Speaker 6: deep sing outline a thesis not just as a means
Speaker 6: of political communication, but a point of policy. How much
Speaker 6: do you think the American voter cares about TikTok? What
Speaker 6: may or may not happen in either outcome. One hundred
Speaker 6: and seventy million Americans use TikTok, and we always say
Speaker 6: on this show that many of them that use it
Speaker 6: quite like it, and so I just find that interesting.
Speaker 6: It's a world, you know, and I wonder how critical
Speaker 6: you think it will be in this presidential election cycle.
Speaker 14: You know, the reality is that, you know, we're a
Speaker 14: country where you have essentially two options as to who
Speaker 14: they vote were, and you've got dozens of issues upon
Speaker 14: which to assess those options. So it's difficult for any
Speaker 14: individual issue to change people's minds. Even abortion may not
Speaker 14: be a decisive voting issue for all that many people,
Speaker 14: as you know, kind of dominant in the culture as
Speaker 14: it is. That being said, elections in this country tend
Speaker 14: to be one on the margins. There are certainly a
Speaker 14: lot of young people who don't want to have their
Speaker 14: TikTok taken away from them. It may impact some of
Speaker 14: their votes, but again, you know, they're they're looking at
Speaker 14: all of these issues and this you know, kind of
Speaker 14: unprecedentedly deep divide between the you know, between the two parties,
Speaker 14: and you know, I think there probably aren't all that
Speaker 14: many for whom this would be the one issue that
Speaker 14: gets them from from one side to the other. If
Speaker 14: there is, though, you know, I think it's going to
Speaker 14: benefit Trump, you know, because you know, these young people
Speaker 14: who love their TikTok don't want to take it away,
Speaker 14: and he's the one guy saying not to do it and.
Speaker 4: Also using it.
Speaker 5: And I'm interested as a digital director and port formal
Speaker 5: life and still advising with precision.
Speaker 4: How much should you be leaning into.
Speaker 5: Various parts of the social media spectrum right now?
Speaker 4: How much also have you got.
Speaker 5: To be thinking about artificial intelligence muddying the way in
Speaker 5: which come individuals consume that content.
Speaker 14: Well, I think every candidate for office has got to
Speaker 14: be on social media, and I think putting to the
Speaker 14: side whether you do or don't assess TikTok as a
Speaker 14: national security risk, and obviously that's a tough thing to
Speaker 14: put to the side. It's an absolutely critical communications platform,
Speaker 14: as you were just saying, it's where almost all of
Speaker 14: America's young people spend their time, you know, a huge
Speaker 14: amount of time. They're not necessarily their for news, but
Speaker 14: they're going to get news while they're there, and more
Speaker 14: broadly than just political news, they're going to get cultural information.
Speaker 14: It's going to shape what they think about, you know,
Speaker 14: the culture wars written large and so you know, Democrats
Speaker 14: Republicans too have to have to play there, you know.
Speaker 14: I think though the truth of the matter is that
Speaker 14: no individual account is going to be able to get
Speaker 14: that much traction on TikTok. Let's just not how the
Speaker 14: platform works, and there's too many creators, too much content,
Speaker 14: and too many people spending too much time. So, you know,
Speaker 14: the question, I think is more broadly than just you know,
Speaker 14: one account. How can political movements generate lots and lots
Speaker 14: of voices that you know, that can accrete to lots
Speaker 14: and lots of you know, eyeballs upon their you know,
Speaker 14: upon their.
Speaker 6: Point of view, Teddy, you advised Obama on social strat
Speaker 6: in his reelection. The weekend's events, the assassination attempt showed
Speaker 6: the risk of social media, the spread of misinformation. Does
Speaker 6: ire the campaign have a handle on how to use
Speaker 6: it safely?
Speaker 14: Well, my opinion, of course, is that one of the
Speaker 14: two campaigns has no interest in in using it safely.
Speaker 14: And I don't want to come across as a as
Speaker 14: a hyperpartisan, but I just think there's lots of evidence
Speaker 14: to that effect. You know, I think, you know, the
Speaker 14: truth of the matter is, I think that disinformation is
Speaker 14: really really hard to counter, and there's been lots of
Speaker 14: academic research into this, lots of you know, political experiments done,
Speaker 14: lots of corporate experiments done.
Speaker 8: You can try fact checks, you can.
Speaker 14: Try you know, warnings, you can try, you know, all
Speaker 14: the various sort of disinformation mitigation techniques that are out there,
Speaker 14: and the fact of the matter is it's still powerful,
Speaker 14: and once it's out there, it tends to sink in
Speaker 14: people's minds, and more broadly, it tends to just make
Speaker 14: people question what is and isn't true. And I think
Speaker 14: the consequence of that is they tend to believe that
Speaker 14: things are true that they want to believe, and disbelieve
Speaker 14: the things that they don't want to believe. And there
Speaker 14: may not be great ways to counter individual pieces of misinformation.
Speaker 14: So what you've got to do as a campaign is
Speaker 14: just try to get your story out there as best
Speaker 14: you can. You know, you keep playing whack them all
Speaker 14: with different pieces of disinformation. They're they're again, they're just
Speaker 14: too hard to counter. You've just got to have the
Speaker 14: most forceful, effective, proactive message you possibly can, and you know,
Speaker 14: obviously hope that that is to you know, to kind
Speaker 14: of overcome the effects of the disinformation that you're going
Speaker 14: to have a very tough time countering.
Speaker 6: Teddy, We're out of time, Teddy Goff, co founder, managing
Speaker 6: partner A Precision, Thank you now coming up on the show,
Speaker 6: we're going to be joined by Chaun Tang, founding partner
Speaker 6: of the Berkeley Skydeck Fund, to discuss the future of
Speaker 6: Silicon Valley and global startup cultures. Coming up next the
Speaker 6: Boombog technology. For today's VC Spotlight, Let's talk about startup
Speaker 6: culture with Sean Tang, founding partner of the Berkeley Skydeck Fund,
Speaker 6: which has eighty five million dollars under management and supports
Speaker 6: entrepreneurial activity through Berkeley Skydeck, which is you see, Berkeley's
Speaker 6: largest and most prominent accelerator. We're familiar with accelerators here
Speaker 6: in the Bay Area. Here in San Francisco, Y combinator
Speaker 6: Jason Calacanis has a similar organization, and we are familiar
Speaker 6: with Stamford Grads GSB. Going into tech, let's start with
Speaker 6: let's say we're less familiar with what Berkeley's doing, but
Speaker 6: it is massive the volume of startups that you are
Speaker 6: founding and supporting.
Speaker 15: Yeah, Ed, I want to say, I'm extremely excited to
Speaker 15: be here and share a little bit more about what
Speaker 15: we're doing at Berkeley. What we've come to realize that
Speaker 15: we have a platform that's a little bit different from
Speaker 15: what you would expect our first look, you would think
Speaker 15: the official incubator platform for a school is meant to
Speaker 15: bring out the talent and the technology from campus. About
Speaker 15: six years ago we had this million, this amazing insight
Speaker 15: that what we want to do is turned our entire
Speaker 15: ecosystem into a giant platform to build companies in general.
Speaker 15: So our doors are now open to founders around the world.
Speaker 15: We're not only inviting our our own students, folks from
Speaker 15: Europe and beyond.
Speaker 5: Interesting now put into context therefore the amount of companies
Speaker 5: that are being birthed where they're going on to follow
Speaker 5: on funding because the statistics are really pronounced.
Speaker 1: Yeah, I think that's exactly right.
Speaker 15: So early stage investment is an extremely challenging thing to do.
Speaker 15: We have four thousand plus companies that are choosing to
Speaker 15: apply to us every single year. We're an extremely exclusive program.
Speaker 15: Only one percent of the four thousand that apply are
Speaker 15: being picked. Of the forty that we then invest in,
Speaker 15: only twenty will raise from institutional investors. Of those, only
Speaker 15: ten will go out and raise a and beyond. We
Speaker 15: have a giant portfolio though, of two hundred plus companies
Speaker 15: that we've invested in, and on the screen what you
Speaker 15: see are some of our huge wins.
Speaker 6: Last summer, Gary Tan came on the show and talked
Speaker 6: about the y Combinator S twenty three batch, and it
Speaker 6: was interesting because they made it mandatory to be in
Speaker 6: person in San Francisco for that class onward, do you
Speaker 6: have any similar rules? You know, you talked about attracting
Speaker 6: talent from outside of the Bay to the Bay. What
Speaker 6: is the point of attraction?
Speaker 15: Absolutely, let's talk about why a founder wants to come
Speaker 15: to us as opposed to YC or to one of
Speaker 15: the other.
Speaker 1: Brands that you have talked about.
Speaker 15: Berkeley is all about giving them introductions to the ecosystem
Speaker 15: here through our grads, our students, our lums, our faculty.
Speaker 15: So when they're in person here, the exposure that they
Speaker 15: get to the top corporates, to the top investors is
Speaker 15: unheard of. So what we ask is that they are
Speaker 15: here in person for most of the six months, they
Speaker 15: live here, and they work here. In a lot of cases,
Speaker 15: they even move their families here.
Speaker 5: Let's just talk about the wins and what industries they're
Speaker 5: shaking up. I mean, I'm going to take a wild
Speaker 5: guess that artificial intelligence is pretty prominent in some of
Speaker 5: the current intake.
Speaker 1: You're completely right, Caroline.
Speaker 15: What we've seen from venture as a category, so AI
Speaker 15: is changing all of our lives in an amazing way.
Speaker 1: It's a disruption a VC. That's what you want to see.
Speaker 15: You want to invest in the industries and the products
Speaker 15: that will change all of our lives over the next
Speaker 15: ten years. So we are extremely excited about all the
Speaker 15: products that will come out in that category. About two
Speaker 15: years ago, we were very early to that game. About
Speaker 15: ten percent or so of our portfolio back in twenty
Speaker 15: twenty two fell into that category. Now in twenty twenty four,
Speaker 15: ninety percent or in AI.
Speaker 5: John, it's great having some time with you, John Tang Panning,
Speaker 5: partner of the Berkeley Skydeck Fund.
Speaker 4: Keep an eye out for some of those.
Speaker 1: Today.
Speaker 5: Another announcement from open ai the debut of GPT four
Speaker 5: O Mini. Now it's the newest model, it's smaller, it's
Speaker 5: cheaper variation of the GPT four O and the.
Speaker 4: Company's most powerful model yet.
Speaker 5: Basically it's for prelacing the older one GPT three point
Speaker 5: five turbo model. Let's bring in Bloomberg Seth Fehman for
Speaker 5: more and look Seth Yay. Cheaper, smaller, I mean, is
Speaker 5: it all about a race to like being the most accessible.
Speaker 4: At the moment.
Speaker 3: Yeah, I mean, I know it's super exciting, and this
Speaker 3: is not GBT five. This is not some breakthrough model.
Speaker 3: It almost feels a kit to smartphone manufacturers releasing a
Speaker 3: wider range of pricing tiers. This is designed to appeal
Speaker 3: to a broader mix of developers and business customers who
Speaker 3: may I need the most expensive, the most robust, the largest,
Speaker 3: large language models.
Speaker 4: But it's not.
Speaker 3: Gonna, you know, change the world at the moment with
Speaker 3: the breakthrough seth.
Speaker 6: When I hear GPT four O Mini, my brain just
Speaker 6: goes straight to like iPod Mini, I'm never going to
Speaker 6: be able to get over that. Open Ai always introduces
Speaker 6: these kind of latest models in interesting ways. I think
Speaker 6: people get some early access to it, right, sometimes journalists,
Speaker 6: sometimes developers. Have we got any feedback on how it's
Speaker 6: working and what it can do?
Speaker 3: Yeah, I mean I think a couple of companies got
Speaker 3: access to this and we heard that it's being used
Speaker 3: to kind of go through received and pull out you know,
Speaker 3: interesting actionable information or help to respond to emails. But again,
Speaker 3: this is just going to feel like a bit irrigant
Speaker 3: from what we know that's already out there. We have
Speaker 3: not personally used it yet, and I think it's really
Speaker 3: important to also note that this is a smaller version
Speaker 3: of a model that largely is not released yet. The
Speaker 3: most high profile features from four to zero, you know,
Speaker 3: the ability to process audio and visual information in real time,
Speaker 3: are really not out there yet because Opening I is
Speaker 3: working through safety issues. So it's a smaller version of
Speaker 3: a largely unreleased prior model.
Speaker 5: And of course there was a fair amount of backlash
Speaker 5: praft the previous announcement Sky for example, where are we on.
Speaker 1: All of this?
Speaker 3: Yeah, I mean we're still waiting for them to start
Speaker 3: through it. I think they've changed the voice in a
Speaker 3: particular one that you're referring to, but right now they're
Speaker 3: still doing a Red Team safety review of the larger
Speaker 3: four O model. We are understanding what the smaller one is.
Speaker 3: It will eventually have many of the same features, but
Speaker 3: as it stands today, it's still a work in progress.
Speaker 5: Seth, we love it. Thank you very much for joining
Speaker 5: all things four Mini. Numbers and names keep evolving. Meanwhile,
Speaker 5: we're just going to take a check in on the market,
Speaker 5: aren't were, Because look, we are.
Speaker 6: Taking another hit today yeah, end of the show, but
Speaker 6: the Nazaq one hundreds down almost percent on a two
Speaker 6: day basis, its biggest two day drop going back to
Speaker 6: October of last year. Recurring themes former President Trump's comments
Speaker 6: to BusinessWeek concerned about the chip sector competition US and China.
Speaker 6: I think it's a story that will stay with US.
Speaker 6: Caro from New York City and San Francisco. With a
Speaker 6: pretty ugly looking stock chart on the screen, this is
Speaker 6: Bloomberg Technology.