WEBVTT - Trump Threatens 25% Tariffs on Apple 0:00:00.960 --> 0:00:05.199 From the heart of where innovation, money and power collide 0:00:05.480 --> 0:00:10.760 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:12.520 Caroline Hyde and Ed. 0:00:12.520 --> 0:00:28.080 Ludlow live from New York. 0:00:28.120 --> 0:00:30.800 This is Blomberg Technology, and we get straight to our 0:00:30.840 --> 0:00:33.880 top story. President Trump taking aim and Apple yet again, 0:00:34.360 --> 0:00:37.400 threatening a twenty five percent tariff on the iPhone maker 0:00:37.680 --> 0:00:41.200 if they don't produce the devices in the United States 0:00:41.240 --> 0:00:44.160 for US consumers. Shares as you see, down yet another 0:00:44.200 --> 0:00:47.360 two point seven percent. We're dropping below that three trillion 0:00:47.400 --> 0:00:50.919 dollar market capitalization, and we're bringing the analysis Blombergs. Mike 0:00:50.960 --> 0:00:53.800 Shepherd joins us we have seen Tim Cook in the 0:00:53.840 --> 0:00:56.720 line of fire from Donald Trump for at least the week. 0:00:56.840 --> 0:01:00.440 Now, how does he respond, Mike, This is. 0:01:00.400 --> 0:01:04.160 A tough one for him, Caro, because the President's dander 0:01:04.280 --> 0:01:07.480 really is up here. Last week he singled him out 0:01:07.600 --> 0:01:11.160 during an appearance with reporters while he was traveling to 0:01:11.200 --> 0:01:14.679 the Middle East, and he noted Cook's absence during a 0:01:14.920 --> 0:01:18.679 forum with other CEOs in Riab where he called out 0:01:18.800 --> 0:01:21.240 Tim Cook. Tim Cook, do I see? And he said, 0:01:21.280 --> 0:01:23.840 I don't think Tim is here, And then later he 0:01:24.160 --> 0:01:28.080 pointed to Apple's intention to move some of its China 0:01:28.080 --> 0:01:31.840 based iPhone production for the US to India to avert 0:01:31.959 --> 0:01:35.319 what would be higher costs related to tariffs on goods 0:01:35.319 --> 0:01:38.800 coming from China. Trump wants to see something different, though. 0:01:38.800 --> 0:01:40.920 He wants that production not to go to India but 0:01:41.040 --> 0:01:43.440 to the US. He would like to see domestic production 0:01:43.600 --> 0:01:46.880 move here. And whatever Tim Cook has been promising the President, 0:01:47.080 --> 0:01:49.280 with whom in the past he's had a good relationship, 0:01:49.560 --> 0:01:53.000 clearly wasn't enough. And remember Tim Cook did meet with 0:01:53.040 --> 0:01:55.480 Trump at mar A Lago after the election, and he 0:01:55.560 --> 0:01:58.280 attended the inauguration too. He had a visible spot along 0:01:58.320 --> 0:02:01.920 with other tech leaders in the capital rot Tuanda on 0:02:02.000 --> 0:02:03.400 that day, January twentieth. 0:02:03.680 --> 0:02:06.280 And we're not seeing for Tim. 0:02:06.080 --> 0:02:08.680 Cook the results that he might have hoped for in 0:02:08.720 --> 0:02:10.160 this relationship with the President. 0:02:10.320 --> 0:02:13.160 The signals have been their Mike, as you mentioned, the 0:02:13.280 --> 0:02:17.000 little problem with Tim Cook that Trump spoke of last 0:02:17.040 --> 0:02:20.080 week being that of shifting manufacturing from China to India, 0:02:20.320 --> 0:02:22.600 and then the ft with a report showing that that 0:02:22.680 --> 0:02:26.160 India manufacturing focus had been being doubled down on in 0:02:26.200 --> 0:02:30.040 the last week. More broadly, to speak to the relationship 0:02:30.080 --> 0:02:32.800 therefore that we see of Tim Cook with the US 0:02:32.800 --> 0:02:35.160 and investing him because already he had promised five hundred 0:02:35.160 --> 0:02:35.799 billion dollars. 0:02:37.040 --> 0:02:39.480 He had promised five hundred billion dollars and it was 0:02:39.560 --> 0:02:43.880 not insignificant, and he had talked about moving some iPhone 0:02:44.360 --> 0:02:50.200 related chip production here and other efforts here, including training 0:02:50.240 --> 0:02:53.440 and other works, but it wasn't enough. Trump is really 0:02:53.480 --> 0:02:58.600 about the symbolism. He wants the iconic products, including the iPhone, 0:02:58.800 --> 0:03:01.680 but others as well made here in the US. But 0:03:01.720 --> 0:03:04.720 one of the problems is, of course, the workforce. We 0:03:04.760 --> 0:03:07.560 don't have the workforce, and then the cost. Do we 0:03:07.600 --> 0:03:09.720 have the workforce that is prepared to do the kind 0:03:09.800 --> 0:03:14.440 of high tech, high skill assembly of these phones that 0:03:14.480 --> 0:03:16.960 you see on mass in China and in India and 0:03:17.000 --> 0:03:20.240 in Vietnam. We really don't. And Tim Cook has made 0:03:20.280 --> 0:03:23.040 this point over and over again, as have other chief 0:03:23.080 --> 0:03:26.800 executives when they talk about the challenge of bringing production 0:03:27.040 --> 0:03:30.440 here to the US. So is a difficult moment for 0:03:30.520 --> 0:03:33.760 Tim Cook and trying to figure out this relationship with 0:03:33.800 --> 0:03:34.360 the US. 0:03:34.880 --> 0:03:35.440 The cost. 0:03:35.640 --> 0:03:37.960 There are estimates all over the place about how much 0:03:38.040 --> 0:03:41.960 more an iPhone would cost if it were produced here, 0:03:42.240 --> 0:03:46.280 from beginning to end. One analyst out this morning saying 0:03:46.320 --> 0:03:48.880 as high as thirty five hundred dollars per unit. That 0:03:48.920 --> 0:03:50.760 may be high, but it gives you an idea of 0:03:50.840 --> 0:03:53.600 just how much more of a cost there may be 0:03:53.640 --> 0:03:56.800 for moving production here, which Caro, it's important to note, 0:03:56.840 --> 0:04:00.640 would take years to reroute all those supply lines, find 0:04:00.640 --> 0:04:01.800 that land, et cetera. 0:04:02.320 --> 0:04:03.800 Well, said Mike Sheppard. 0:04:03.840 --> 0:04:05.920 We appreciate it, of course, that being Dan ives a 0:04:05.920 --> 0:04:08.960 Webburshoe called about a thirty five hundred price tag, and 0:04:09.000 --> 0:04:11.640 indeed he called it a fairy tale. And it's calling 0:04:11.640 --> 0:04:15.240 this an absurd directive coming from the president. Let's get 0:04:15.240 --> 0:04:18.840 more analysis with Gil Luria Da Davison managing director joining us. 0:04:18.880 --> 0:04:20.960 Now you have a buy rating on Apple, a two 0:04:21.000 --> 0:04:23.000 hundred and fifty dollars price target. Does any of that 0:04:23.160 --> 0:04:25.960 change if they indeed have to bring production hitting the 0:04:26.040 --> 0:04:26.680 United States? 0:04:27.960 --> 0:04:31.760 It does not. This is really just a matter of timeframes. Yes, 0:04:31.880 --> 0:04:34.400 if we needed to make an iPhone right now in 0:04:34.440 --> 0:04:38.160 the US, it would be very expensive. But can we 0:04:38.279 --> 0:04:42.320 do this in five years? If Apple was to commit 0:04:42.680 --> 0:04:45.719 to bringing production on iPhones to the US in five 0:04:45.800 --> 0:04:50.680 years and invested its considerable resources into doing that, it 0:04:50.720 --> 0:04:54.120 wouldn't be that much more expensive. And that's what the 0:04:54.160 --> 0:04:57.840 President is looking for. And I'm surprised that Apple is 0:04:58.440 --> 0:05:01.560 at a point where they're negotiat eating this badly that 0:05:01.640 --> 0:05:04.760 the President has to go out publicly and threaten them. 0:05:05.279 --> 0:05:08.960 You've seen other technology CEOs do a much better job 0:05:09.400 --> 0:05:13.400 of giving the President what he wants and moving forward 0:05:13.800 --> 0:05:17.919 and making those commitments. And I'm surprised that Apple is 0:05:18.160 --> 0:05:20.720 continuing to be humbled. Let's not forget this has been 0:05:20.760 --> 0:05:24.440 a humbling week for Apple. Yes, at Google Io, we've 0:05:24.480 --> 0:05:28.440 seen that that Google is way ahead on AI on Android. 0:05:29.000 --> 0:05:32.280 Then there was the embarrassing announcement from Open Ai and 0:05:32.400 --> 0:05:35.880 Johnny Ive. Apple needs to do a better job of 0:05:35.920 --> 0:05:39.559 negotiating because if it does commit to a long term path, 0:05:39.920 --> 0:05:42.960 it could make iPhones in the US at a competitive price. 0:05:43.400 --> 0:05:44.840 It doesn't have to do it today. 0:05:45.200 --> 0:05:47.800 How Gil, at the moment, we're hearing that we don't 0:05:47.800 --> 0:05:49.960 have the skill set in the United States. We don't 0:05:49.960 --> 0:05:53.160 have the ecosystem of supply chain here. It has taken 0:05:53.640 --> 0:05:55.960 decades to build it up in China, It's taken years 0:05:55.960 --> 0:05:58.080 to build up in India. What do they have to 0:05:58.120 --> 0:05:59.800 go about sorting here in the United States? 0:06:00.040 --> 0:06:01.200 Three to five year timeframe. 0:06:02.320 --> 0:06:05.560 Yeah, that's exactly right. It is a skills issue. But 0:06:06.080 --> 0:06:10.279 if you give them five years, we can hire internationally, 0:06:10.360 --> 0:06:13.039 we can develop the skill Here. Apple is sitting on 0:06:13.160 --> 0:06:16.440 fifty billion dollars of cash and it produces one hundred 0:06:16.440 --> 0:06:19.919 billion dollars of cash every year. That is, that is 0:06:20.080 --> 0:06:23.240 enough to accomplish great things. And if the great thing 0:06:23.320 --> 0:06:26.320 Apple needs to accomplish right now is to develop that 0:06:26.360 --> 0:06:30.200 skill set domestically, then it should be focusing its own 0:06:30.279 --> 0:06:31.920 resources on that. 0:06:32.200 --> 0:06:33.840 Again, Gil jumping in there. 0:06:34.360 --> 0:06:39.240 The opportunity cost of diverting that cash away from R 0:06:39.279 --> 0:06:41.120 and D. Boy, they have to catch up in terms 0:06:41.160 --> 0:06:44.520 of Generator AI and integrating it there, but instead having 0:06:44.520 --> 0:06:46.719 to focus on production here in the United States? Is 0:06:46.720 --> 0:06:49.960 that not an opportunity cost? That does indeed drag down 0:06:50.000 --> 0:06:51.440 the price target it needs for the stock. 0:06:53.120 --> 0:06:55.240 It is a headwind and that's the head whend they're 0:06:55.279 --> 0:06:57.440 dealing with this year. That's why the stock is down 0:06:57.520 --> 0:07:00.000 so much, is that they've been caught in this cross 0:07:00.080 --> 0:07:02.920 us fire and they didn't need to again. All they 0:07:02.920 --> 0:07:06.279 needed to do is make some early commitments, start down 0:07:06.320 --> 0:07:09.600 a path, and then this path either it leads them 0:07:09.640 --> 0:07:14.320 to a successful outcome or they have a fallback of saying, okay, 0:07:14.440 --> 0:07:17.440 let's just absorb the twenty five percent tariff from India. 0:07:17.560 --> 0:07:20.239 That's why when people say it'll cost thirty five hundred 0:07:20.240 --> 0:07:22.560 dollars to make an iPhone in the US, that's not 0:07:22.640 --> 0:07:25.880 a real thing. The only possibility year is that they're 0:07:25.880 --> 0:07:28.720 going to say, okay, even in a five year time frame, 0:07:28.760 --> 0:07:30.400 it's going to cost us so much to make an 0:07:30.440 --> 0:07:34.320 iPhone that will absorb the twenty five percent tariff from 0:07:34.400 --> 0:07:39.000 India and absorb it through higher prices, slightly lower margin, 0:07:39.240 --> 0:07:43.120 and push it down to vendors. So this is really 0:07:43.160 --> 0:07:45.720 just a matter of them doing a better job negotiating 0:07:46.000 --> 0:07:49.880 moving forward. But yes, absolutely this is a drag on 0:07:49.920 --> 0:07:52.840 the stock. It has been this year, and until they 0:07:53.080 --> 0:07:56.160 find a path forward and get out of the headlines, 0:07:56.400 --> 0:07:57.800 it'll continue away on the stock. 0:07:57.960 --> 0:07:59.760 So, Gil, if you're saying it's not a real thing, 0:08:00.200 --> 0:08:03.160 estimate what an iPhone made in America would cost. Are 0:08:03.200 --> 0:08:06.280 you anticipating that they do stomach a twenty five percent 0:08:06.360 --> 0:08:10.200 tariff coming on just continue into import or are you 0:08:10.280 --> 0:08:13.000 anticipating that they do go about a three to five 0:08:13.080 --> 0:08:16.320 year investment plan in the US When look the term 0:08:16.400 --> 0:08:18.720 of President Trump is in five years. 0:08:20.400 --> 0:08:22.920 I think they need to proceed on both pasts again 0:08:23.000 --> 0:08:25.440 this year. They can't make iPhones in the US now 0:08:25.480 --> 0:08:27.640 this year, not in the next three years, so they 0:08:27.680 --> 0:08:31.520 are going to have to try to negotiate that tariff 0:08:31.600 --> 0:08:34.280 down or absorb it in the short term, which is 0:08:34.320 --> 0:08:37.440 what they're doing, and then proceed on both paths, because 0:08:37.440 --> 0:08:40.280 to your point, this administration isn't going to be in 0:08:40.360 --> 0:08:43.120 power forever and they're going to have to find out 0:08:43.120 --> 0:08:46.800 over time how what it is going to cost. I 0:08:46.840 --> 0:08:49.080 think that we're also minimiz I think that I've heard 0:08:49.120 --> 0:08:53.200 some comments minimizing the changes to manufacturing in the US. 0:08:53.360 --> 0:08:56.040 Manufacturing is going to change dramatically over the next few 0:08:56.120 --> 0:08:58.840 years in the US for a variety of reasons, because 0:08:59.200 --> 0:09:02.560 labor has become more expensive in China and Taiwan, because 0:09:02.720 --> 0:09:05.680 robotics are getting that much better. So in a five 0:09:05.760 --> 0:09:08.800 year timeframe they may be able to accomplish these goals. 0:09:08.880 --> 0:09:12.480 They have to pursue that now they don't have a choice. 0:09:12.800 --> 0:09:14.679 But at the same time they need to use that 0:09:14.720 --> 0:09:17.720 as leverage to go back to the administrator and say, hey, 0:09:18.120 --> 0:09:21.000 give us five years to do this. Let's take off 0:09:21.080 --> 0:09:24.160 that twenty five percent on India because we are making 0:09:24.160 --> 0:09:27.440 a firm commitment to the five year timeframe and that'll 0:09:27.440 --> 0:09:31.080 buy them the time to find a good resolution that 0:09:31.240 --> 0:09:35.120 is possible, and mister Cook is a skillful enough negotiator 0:09:35.160 --> 0:09:37.199 that he needs to be able to accomplish that. 0:09:37.400 --> 0:09:39.880 But how frustrating do you think it is for investors, 0:09:39.880 --> 0:09:42.400 for yourself or indeed Tim Cook, to just think about 0:09:42.440 --> 0:09:44.760 the inefficiencies that have to be built into the business 0:09:44.840 --> 0:09:47.000 model now. Even if they do bring over a component 0:09:47.000 --> 0:09:48.920 building here in the US, it's not going to be 0:09:48.960 --> 0:09:50.600 an easy task and they're likely to have to still 0:09:50.640 --> 0:09:52.640 assemble in China and India for the time being. 0:09:55.040 --> 0:10:00.320 Well, it's a reality. I think sometimes other countries and 0:10:00.400 --> 0:10:02.480 some CEOs are a little bit in denial over the 0:10:02.480 --> 0:10:05.480 fact that President Trump got seventy seven million votes and 0:10:05.600 --> 0:10:09.559 believes he has a mandate to make these very profound 0:10:09.679 --> 0:10:14.400 changes to the global order, including changing the way the 0:10:14.400 --> 0:10:17.760 global supply chain works. This is not going to change 0:10:17.760 --> 0:10:20.920 in the next three years. This is something that all 0:10:21.000 --> 0:10:23.920 these companies and by the way, these countries have to 0:10:23.960 --> 0:10:27.520 acknowledge and move forward with, and we as analysts and 0:10:27.559 --> 0:10:30.720 investors have to adapt to it. We can't go back 0:10:30.760 --> 0:10:33.400 in time and change the outcome of the US elections. 0:10:33.800 --> 0:10:36.960 This is the administration, this is its policy, and we 0:10:37.080 --> 0:10:40.400 have to adapt as investors, which means that Apple is 0:10:40.440 --> 0:10:44.240 going to have a choppy year for sure, and other 0:10:44.320 --> 0:10:47.680 companies that try to negotiate badly are going to have 0:10:47.760 --> 0:10:52.560 choppy years. That's why we favor companies that have handled 0:10:52.600 --> 0:10:56.600 this better. Microsoft, Amazon I've handled this a lot better. 0:10:56.960 --> 0:10:59.839 Their business is more resilient to this, and they should 0:10:59.880 --> 0:11:03.080 be better able to get through the rest of this 0:11:03.160 --> 0:11:04.920 year and the rest of this administration. 0:11:05.520 --> 0:11:08.839 All lies on the political navigation of Tim Coke. 0:11:08.960 --> 0:11:10.120 Next, Gil Luria. 0:11:10.200 --> 0:11:13.040 Great to have you Da Davidson coming up, renowned computer 0:11:13.080 --> 0:11:15.400 scientist in Ai developed and row and he's going to 0:11:15.400 --> 0:11:17.200 be joining us to talk about his new VC fund. 0:11:17.520 --> 0:11:20.559 But also this talent, the skill issue that we're just 0:11:20.600 --> 0:11:22.480 talking about with Gil Luria, can that be brought here 0:11:22.520 --> 0:11:23.360 to the United States. 0:11:23.920 --> 0:11:24.880 Let's just take a quick. 0:11:24.720 --> 0:11:26.240 Check on the market's ahead of that though, because the 0:11:26.280 --> 0:11:29.280 Nazak is under pressure as we dial up tariff anxiety. 0:11:29.400 --> 0:11:30.600 Nazak off by more than percent. 0:11:30.760 --> 0:11:33.160 We see this semiconductor index also off by two percent, 0:11:33.160 --> 0:11:35.760 and video gets sold for Apple in the line of fire. 0:11:35.800 --> 0:11:54.160 This is bluebog technology. The big news today it is 0:11:54.280 --> 0:11:57.440 Apple shares trading low as investors react to President Trump's 0:11:57.480 --> 0:12:00.280 threat of a twenty five percent tariff on the company 0:12:00.320 --> 0:12:03.240 if it doesn't bring more iPhone production to the United States. 0:12:03.640 --> 0:12:07.360 But doing that requires skills many American workers currently do 0:12:07.440 --> 0:12:10.040 not have. We're pleased to welcome to the show Andrew 0:12:10.080 --> 0:12:13.040 and his world renowned computer scientist, thought leader and also 0:12:13.080 --> 0:12:16.240 the co founder of online education company called Serah, and 0:12:16.440 --> 0:12:19.640 is also announcing his second fund targeting AI startups. Andrew, 0:12:19.679 --> 0:12:21.960 it is wonderful to have your voice on the show. 0:12:22.000 --> 0:12:24.280 And before we get into really the AI talent that 0:12:24.320 --> 0:12:26.240 you've been building, I just want to get your take 0:12:26.320 --> 0:12:28.559 on the labor skills that are currently needed in the 0:12:28.640 --> 0:12:31.520 US for this manufacturing pivot. If we were to bring 0:12:31.679 --> 0:12:35.160 iPhone manufacturing to the United States, could we do it 0:12:35.280 --> 0:12:36.880 in a near ative time frame? 0:12:38.040 --> 0:12:40.480 It will take years to develop the talent based needed 0:12:40.600 --> 0:12:42.480 to bring a lot of advanced manufacturing back to the 0:12:42.559 --> 0:12:45.440 United States. I think there's a certain largely to making 0:12:45.480 --> 0:12:48.240 sure that advanced manufacturing is under the control of the 0:12:48.360 --> 0:12:51.240 US and our allies, and that's important, not just US 0:12:51.280 --> 0:12:54.920 but also I trusted Ollies. Several years ago, I actually 0:12:55.000 --> 0:12:58.760 visited Wisconsin where the first Trump administration and fox Con 0:12:59.320 --> 0:13:01.880 might be put fed into Wiscon Valley, which is an 0:13:01.920 --> 0:13:06.560 attempt to move semiconductor, sorry, move display manufacturing panel display 0:13:06.559 --> 0:13:10.040 manufacturing to the United States in Wisconsin, and frankly it 0:13:10.080 --> 0:13:13.200 was a great effort, but it really struggled to gain 0:13:13.320 --> 0:13:16.320 traction because it's very difficult to find the talent in 0:13:16.360 --> 0:13:20.079 Wisconsin or the US more broadly, with the advanced manufacturing skills, 0:13:20.320 --> 0:13:24.480 manufacturing today is often a high skill requiring knowing about robotics, 0:13:24.520 --> 0:13:27.480 knowing about software. It's not just people assembling little things 0:13:27.480 --> 0:13:29.480 with their hands anymore. And we've got a lot of 0:13:29.559 --> 0:13:31.560 work to do to grow that talent in the US. 0:13:31.720 --> 0:13:34.040 Where could we bring in from and where have you 0:13:34.160 --> 0:13:37.000 seen that skill set among allies that can be broad 0:13:37.000 --> 0:13:39.080 in because in many ways it's feeling as though we're 0:13:39.080 --> 0:13:39.760 not bringing in. 0:13:39.800 --> 0:13:41.439 Talent from abroad at this moment either. 0:13:42.920 --> 0:13:46.680 I think that in the case of manufacturing talent, curly 0:13:46.760 --> 0:13:49.439 China has a lot of it. I think Taiwan interestingly 0:13:49.600 --> 0:13:52.240 also has a lot of manufacturing talent. So I feel 0:13:52.240 --> 0:13:55.040 like and obviously also Japan. I think some parts of 0:13:55.120 --> 0:13:57.480 career as well, especial when it comes to semiconductors. But 0:13:57.559 --> 0:14:01.600 so many of our allies do have skilled manufacturing talent. 0:14:01.720 --> 0:14:04.080 But how to work with them to import some of 0:14:04.080 --> 0:14:06.520 those skills to the US is I think something still 0:14:06.520 --> 0:14:09.000 to be figured out. And then on the other sid 0:14:09.040 --> 0:14:11.240 of the spectrum they alluded to, I think one of 0:14:11.320 --> 0:14:13.760 the best things that US could do to ensure American 0:14:13.760 --> 0:14:17.160 competitiveness in AI and other advanced technology fields is to 0:14:17.920 --> 0:14:21.720 frankly support our universities and support high skill immigration. 0:14:22.480 --> 0:14:26.280 How have you been considering the cuts to science funding 0:14:26.320 --> 0:14:29.520 in particular? Is that impacting your sector? The sector you 0:14:29.520 --> 0:14:32.640 want to invest more in with your second fund. 0:14:33.000 --> 0:14:35.960 So AFUNS Adventure Studio. We work with many entrepreneurs to 0:14:35.960 --> 0:14:39.440 build companies and I feel like over the last many decades, 0:14:39.520 --> 0:14:43.040 America led the world in science and technology, and this 0:14:43.160 --> 0:14:45.720 is an eraror when we have strong institutions like the 0:14:45.800 --> 0:14:49.320 National Science Foundation and the NAH the funded open research. 0:14:49.800 --> 0:14:52.200 One thing that I think not many people fully understand 0:14:52.320 --> 0:14:55.600 is when say, the National Science Foundation funds and researcher 0:14:55.640 --> 0:14:58.040 the writer research paper there's published a free anyone in 0:14:58.080 --> 0:15:01.560 the Internet can can read it. Yes, it holds their adversaries. Yes, 0:15:01.600 --> 0:15:03.720 it helps the whole world. But the country it helps 0:15:03.760 --> 0:15:07.200 the most is America because when an American researcher on American 0:15:07.240 --> 0:15:11.160 assault publishes a paper, that diffusion of knowledge is fastest 0:15:11.200 --> 0:15:14.640 within America. And yes, other countries, including our adversaries, can 0:15:14.680 --> 0:15:17.680 benefit from it too, but that openness of research helps 0:15:17.680 --> 0:15:19.960 the country that does it the most. And so I 0:15:20.000 --> 0:15:24.120 think America's ability to attract amazing international I always once 0:15:24.120 --> 0:15:26.760 an international student myself on an F one visa, and 0:15:26.800 --> 0:15:28.520 I came to the US study and it ended up 0:15:28.840 --> 0:15:31.800 saying and hopefully making some positive contributions to this country. 0:15:32.160 --> 0:15:36.920 I think welcoming school immigration would be a they would 0:15:36.920 --> 0:15:39.720 be an important piece of insurance American competitiveness. 0:15:39.760 --> 0:15:41.920 Well, let's talk about your positive contribution when it comes 0:15:41.960 --> 0:15:44.480 to raising one hundred and ninety million dollars second fund 0:15:44.480 --> 0:15:48.200 to invest in ai talent and startups and sort of 0:15:48.200 --> 0:15:50.480 co found them in many ways. What sector is you 0:15:50.600 --> 0:15:53.360 looking at and are they US built companies alone? 0:15:54.600 --> 0:15:57.440 We are building the majority of countries we built are 0:15:57.480 --> 0:16:00.960 in the US, but we are also working with businesses 0:16:01.000 --> 0:16:05.200 in Japan and Taiwan. Career and so on, Afan's Adventure studio. 0:16:05.320 --> 0:16:08.320 So what I decided was unlikely traditional VC. You know, 0:16:08.360 --> 0:16:11.440 I don't want to be competing for or chasing deal flow, 0:16:11.880 --> 0:16:15.840 so we exclusively work of entrepreneurs to co found companies. 0:16:15.920 --> 0:16:18.760 What that means is my team is alongside the entrepreneurial 0:16:18.840 --> 0:16:21.880 We're writing code and customers debating what features to build. 0:16:22.320 --> 0:16:25.560 And because my team is fortunate to be close to 0:16:25.640 --> 0:16:29.000 the AI technology, a less of local across many different 0:16:29.040 --> 0:16:32.880 industry sectors, recruit great AI talent and apply our technical 0:16:32.920 --> 0:16:36.160 expertise to all sorts of different sectors where AI can 0:16:36.160 --> 0:16:36.720 be applied. 0:16:37.280 --> 0:16:39.960 Well come back as that portfolio continues to grow. 0:16:40.120 --> 0:16:41.720 Andrew has been a joy speaking with you. 0:16:41.800 --> 0:16:44.640 Congratulations on the new fund and thank you for sharing 0:16:44.640 --> 0:16:47.200 your expertise and drawing. Of course, managing general partner at 0:16:47.200 --> 0:16:50.040 the AI Fund, It's also founder of Deep Learning AI and. 0:16:50.000 --> 0:16:51.840 Of course co founder of Coursera. 0:16:52.440 --> 0:16:55.400 Sticking with artificial intelligence and forropic well, it's rolling out 0:16:55.400 --> 0:16:58.040 two new versions of its claud AI software, including a 0:16:58.120 --> 0:16:58.760 longer laid. 0:16:58.680 --> 0:17:00.480 Update to the high end model. 0:17:00.720 --> 0:17:02.720 This is as a startup really advised to stay ahead 0:17:02.760 --> 0:17:06.240 of a crowded market. Mike Kreiger joined ed a little 0:17:06.240 --> 0:17:09.880 earlier Andthropic's chief product officer, Our really. 0:17:10.280 --> 0:17:12.199 You know constraint for the slaunch was we wanted to 0:17:12.240 --> 0:17:14.520 be available to you know, as many people as want 0:17:14.560 --> 0:17:16.520 it on the launch day itself as well, and so 0:17:16.560 --> 0:17:19.080 it'll be generally available. It'll be in claud dot ai 0:17:19.240 --> 0:17:22.080 for our more end users. It'll also be available in 0:17:22.080 --> 0:17:24.760 the API for usage on day one, and then as 0:17:24.800 --> 0:17:27.000 people scale up their usage, you know, there's often you know, 0:17:27.080 --> 0:17:29.199 capacity and rate limit conversations that we need to have 0:17:29.280 --> 0:17:31.119 just because the models aren't really in demand. But in 0:17:31.200 --> 0:17:32.720 terms of being generally available. 0:17:32.720 --> 0:17:36.680 It's day one coming up tech IPOs and we're back. 0:17:36.920 --> 0:17:39.359 We'll discuss a Bream and ch equity Zen. This is 0:17:39.359 --> 0:17:58.359 reuly Meg technology. Now as the broader market sells off 0:17:58.560 --> 0:18:02.400 shares of Mountain of Hinge Health, both trading higher after 0:18:02.440 --> 0:18:05.520 making their public debuts just yesterday. Their success is giving 0:18:05.600 --> 0:18:07.560 hope to other tech startups that have been waiting to 0:18:07.600 --> 0:18:10.560 go public in some cases for many years. 0:18:10.920 --> 0:18:11.800 Let's talk about it all. 0:18:11.880 --> 0:18:14.520 Briann lynches with US head of market Insights at equity 0:18:14.600 --> 0:18:16.840 Zen and one of the largest pre IPO platforms for 0:18:16.960 --> 0:18:19.840 private shares. It's in the secondary market and brand. Look, 0:18:20.000 --> 0:18:22.840 are we seeing the creaking open? Is it companies that 0:18:23.040 --> 0:18:24.840 have to come to the market or are we going 0:18:24.840 --> 0:18:26.560 to start to see companies that just want to come 0:18:26.600 --> 0:18:27.320 in this environment? 0:18:28.800 --> 0:18:31.040 Thanks for having me now. If you had asked me 0:18:31.080 --> 0:18:33.640 a few weeks ago if we would be seeing positive 0:18:33.680 --> 0:18:36.720 IPO activity right now, I would have said no. But 0:18:36.800 --> 0:18:40.040 these few companies that have bit the bullet and decided 0:18:40.080 --> 0:18:43.240 to go out Eutro last week, Hinge Health, and mount 0:18:43.240 --> 0:18:46.879 In yesterday are performing well in are outperforming the market. 0:18:47.000 --> 0:18:49.240 So I think, you know, we're not in a market 0:18:49.359 --> 0:18:52.840 environment where we'll see the floodgates open up. But for 0:18:52.960 --> 0:18:57.160 companies that need to go public for liquidity or other reasons, 0:18:57.400 --> 0:19:00.359 or feel like they have a really compelling story, they 0:19:00.440 --> 0:19:02.719 might just be brave and decide to despite you know, 0:19:02.760 --> 0:19:04.280 the volatility there is. 0:19:04.320 --> 0:19:06.800 What are the story necessities. It's interesting that core we've 0:19:06.840 --> 0:19:10.480 now really outperforming. We're at priced despite the initial volatility. 0:19:10.720 --> 0:19:13.640 So we've got an AI focus, you've got release services 0:19:13.640 --> 0:19:16.480 and consumer focus businesses. Thus far, does it have to 0:19:16.520 --> 0:19:19.160 be there or could we even go into broader hardware 0:19:19.240 --> 0:19:19.920 and deep tech? 0:19:21.359 --> 0:19:23.520 I think we can go broader into a hardware detech. 0:19:23.600 --> 0:19:26.480 There's other names that are on our radars. Rebra Swan 0:19:26.560 --> 0:19:29.480 who has filed and you know, has been on the 0:19:29.520 --> 0:19:32.600 IPO pipeline for some time now. But what's interesting is 0:19:33.000 --> 0:19:35.399 the companies we've seen recently. You have a fintech, you 0:19:35.400 --> 0:19:37.360 have a health tech, you have an ad tech company, 0:19:37.440 --> 0:19:41.520 so very different companies, but there are some similarities. These 0:19:41.560 --> 0:19:44.760 are older companies that are over a decade plus years old, 0:19:45.080 --> 0:19:48.000 so there's a lot of investors and early employees who've 0:19:48.000 --> 0:19:51.560 been reading a very long time for liquidity. Surprisingly, when 0:19:51.560 --> 0:19:54.400 you look at the two from yesterday, these are unprofitable 0:19:54.440 --> 0:19:57.080 companies as well, so it's a little bit surprising to 0:19:57.080 --> 0:19:59.720 see how well they've then received given that they're not 0:19:59.800 --> 0:20:03.000 yet profitable. They're almost there, but it seems like maybe 0:20:03.000 --> 0:20:06.720 that's not a requirement now for public market investors when 0:20:06.720 --> 0:20:10.080 you're achieving thirty five plus percent growth rates and hundreds 0:20:10.119 --> 0:20:13.320 of millions of dollars in revenue. So I think there's 0:20:13.520 --> 0:20:16.600 a similar story well we're seeing across some of these sectors. 0:20:17.200 --> 0:20:20.480 And another thing to notice, these have been down round IPOs, 0:20:20.520 --> 0:20:24.160 you know, the to yesterday both raising in their IPO 0:20:24.320 --> 0:20:28.320 at valuations below their last round of private funding, and 0:20:28.440 --> 0:20:30.800 especially for a lot of these companies that last raise 0:20:30.880 --> 0:20:33.480 in twenty twenty one, twenty twenty two, I think that's 0:20:33.480 --> 0:20:35.280 going to be a reality in the market. So just 0:20:35.320 --> 0:20:37.680 some commonalities and things that we may expect to see 0:20:37.680 --> 0:20:39.000 as others enter the market. 0:20:39.200 --> 0:20:41.600 Bran, Let's talk though about some of the pressures that 0:20:41.600 --> 0:20:44.639 can be taken off by the secondary market, because liquidity 0:20:44.760 --> 0:20:47.080 for employees that have been there a long time, liquidity 0:20:47.119 --> 0:20:48.600 for the venture that's back them for a long time, 0:20:48.640 --> 0:20:51.600