WEBVTT - US-China Trade Tensions Grow 0:00:02.560 --> 0:00:13.440 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.480 --> 0:00:17.279 from coast to coast with Caroline Hide in New York 0:00:17.600 --> 0:00:20.400 and Eva Low in San Francisco. 0:00:22.600 --> 0:00:26.200 This is Bloomberg Tech coming up. Escalating trade tensions between 0:00:26.280 --> 0:00:29.000 China and the US and now Europe too, will discuss 0:00:29.000 --> 0:00:31.880 what the latest trade showdown means for the tech sector. 0:00:32.040 --> 0:00:35.000 US concerns of an AI bubble grow louder among global 0:00:35.080 --> 0:00:38.320 fund managers, will discuss the valuation anxiety in their latest 0:00:38.320 --> 0:00:39.680 Bag of America survey. 0:00:40.280 --> 0:00:44.680 And Instagram makes some changes with tighter content restrictions for teenagers. 0:00:44.880 --> 0:00:47.519 Will discussed with Instagram's global director of Policy. 0:00:47.600 --> 0:00:49.479 But first to check in on these public markets, and 0:00:49.520 --> 0:00:52.440 once again, anxiety returns to the four We are worried 0:00:52.479 --> 0:00:55.840 about US, China, Europe, China and the trade tit for 0:00:56.000 --> 0:00:58.800 tat that really moves out into the world of shipping. 0:00:58.840 --> 0:01:00.800 We're down nine tens percent on the index of the 0:01:00.880 --> 0:01:04.240 NASA one hundred, but bitcoin crypto in the eye of 0:01:04.240 --> 0:01:06.280 the storm and one hundred and fifty billion dollars wiped 0:01:06.280 --> 0:01:08.480 out in terms of market cap. Across the industry. We 0:01:08.560 --> 0:01:12.400 see margin call's leverage flush out. It really is a dal. 0:01:12.200 --> 0:01:14.640 Up of worries when it comes to geopolitical risk. 0:01:14.480 --> 0:01:18.160 Here, Okay, let's get to our top story. Treasurary Secretary 0:01:18.200 --> 0:01:22.520 Scott Besson said he still expects Presidents Trump and Jijingping 0:01:22.880 --> 0:01:26.640 to meet, though China's latest escalation in that trade conflict 0:01:26.680 --> 0:01:30.160 between the world's two largest economies raises questions about all 0:01:30.200 --> 0:01:33.800 issues can be resolved before that meeting. Bloomberg Senior Technology 0:01:33.880 --> 0:01:36.440 editor Mike Shepherd joins us, Mike, what do we need 0:01:36.480 --> 0:01:39.520 to know? What's the latest on those US China trade talks. 0:01:40.720 --> 0:01:43.720 Well, the latest really is that China is hitting the 0:01:43.840 --> 0:01:47.199 gas rather than hitting the break now, as the two 0:01:47.200 --> 0:01:49.960 sides prepared to meet to discuss these ahead of a 0:01:50.000 --> 0:01:55.120 possible summit between Presidents Donald Trump and shujiin Ping, China. 0:01:55.280 --> 0:01:59.880 Earlier today unveiled new measures aimed at US shipping, saying 0:02:00.320 --> 0:02:03.720 a South Korean company with strong US ties and the 0:02:03.800 --> 0:02:07.680 US operations of that venture Hanua, and then also unveiling 0:02:07.720 --> 0:02:11.160 other possible por fees. This is the latest escalation in 0:02:11.200 --> 0:02:13.919 an area where Beijing feels like it has an advantage 0:02:14.120 --> 0:02:17.400 over the supply chain. China is has been the world's 0:02:17.480 --> 0:02:21.240 largest shipbuilder since twenty seventeen, and it follows the last 0:02:21.240 --> 0:02:25.560 week's move where China imposed new export controls on sales 0:02:25.720 --> 0:02:29.400 rare earths minerals to the US and to other countries 0:02:29.440 --> 0:02:32.560 around the world. Again another area where they have a 0:02:32.680 --> 0:02:35.840 hold on the supply chain. And even as Sacott Bessant 0:02:35.880 --> 0:02:38.120 is saying that he sees the prospects for a meeting 0:02:38.200 --> 0:02:42.120 between Donald Trump and Hijimping, he has also indicated that 0:02:42.200 --> 0:02:44.840 he sees China's moves against rare earths and he hasn't 0:02:44.880 --> 0:02:48.360 commented yet on the shipping decision by China, but he 0:02:48.440 --> 0:02:51.320 sees those steps as aiming at Bazooka at the global 0:02:51.480 --> 0:02:53.880 supply chain, and it is not the tone you would 0:02:53.880 --> 0:02:56.399 expect the two sides to be striking as they try 0:02:56.480 --> 0:02:57.880 to reach some sort of an agreement. 0:02:58.080 --> 0:03:01.800 The global supply chain is key, and Mike Europe really 0:03:01.800 --> 0:03:04.880 considering what its own options are where leverage can be 0:03:04.919 --> 0:03:08.200 applied to protect its own manufacturers because the rare earth 0:03:08.280 --> 0:03:09.760 implications are large for them too. 0:03:11.200 --> 0:03:13.640 The rare Earth's implications are huge, and they're looking at 0:03:13.800 --> 0:03:16.680 at a number of fronts. One area of particular concern, 0:03:16.760 --> 0:03:20.520 of course, has been the vehicle industry and electric vehicles 0:03:20.560 --> 0:03:24.240 more specifically, and what the EU is considering now is 0:03:24.280 --> 0:03:27.720 whether to require Chinese firms that want to operate within 0:03:27.800 --> 0:03:30.720 the block to share technology. And this is sort of 0:03:31.040 --> 0:03:34.840 taking a page from Beijing's own playbook. Any foreign company 0:03:34.840 --> 0:03:37.240 that wanted to do business with the Chinese partner in 0:03:37.320 --> 0:03:42.000 mainland China had to share technology with that partner as 0:03:42.160 --> 0:03:44.920 really the price of admission, and the EU is now 0:03:44.960 --> 0:03:47.360 considering the same, and it is worried because it is 0:03:47.400 --> 0:03:51.320 seeing byd make such inroads into the European market and 0:03:51.360 --> 0:03:54.280 putting some of the European makers and their own EV 0:03:54.600 --> 0:03:58.880 ambitions in jeopardy now would require not only the sharing 0:03:58.960 --> 0:04:02.600 of technology, but this also joins CARA other steps that 0:04:02.640 --> 0:04:06.000 are aimed at trying to rein in China on the continent, 0:04:06.040 --> 0:04:09.600 and that includes a doubling last week of tariffs on 0:04:09.680 --> 0:04:13.160 steel imports, clearly a move aimed at China. And this 0:04:13.240 --> 0:04:16.960 also follows something that we were covering very closely over 0:04:17.000 --> 0:04:20.760 the past two days, the Dutch decision to seize Nexperia 0:04:20.800 --> 0:04:25.480 from its Chinese owner, Wingtech, a venture that was subject 0:04:25.480 --> 0:04:29.520 to possible US sanctions. We learned today if it did 0:04:29.600 --> 0:04:33.320 not replace its Chinese CEO, and that prompted the government 0:04:33.480 --> 0:04:36.680 of the Dutch government to move and to seize control 0:04:36.920 --> 0:04:40.640 of the local Nexperia from its Chinese parent. 0:04:41.400 --> 0:04:43.680 Bloomberg's Mike Sheppard, thank you very much. Let's get more 0:04:43.720 --> 0:04:46.880 details in the story Mike mentioned. China retaliates after the 0:04:47.000 --> 0:04:50.320 Dutch government invoked a Cold War era law to take 0:04:50.360 --> 0:04:54.880 control of chip maker Nextperia, with Beijing now blocking Nexperia 0:04:55.160 --> 0:04:58.479 and its subcontractors from exporting products from the Asian nation. 0:04:58.960 --> 0:05:01.640 The company is a s theory of China's wing tech 0:05:01.680 --> 0:05:05.400 technology and a key supplier of mature chips used by 0:05:05.400 --> 0:05:08.920 the automotive and consumer electronic industries. 0:05:08.480 --> 0:05:11.719 Carat Now, I look these US China trade tensions and 0:05:11.839 --> 0:05:15.080 European China trade tensions clearly weighing and cross risk assets. 0:05:15.279 --> 0:05:18.120 Most notably though, crypto It continued to lose ground after 0:05:18.120 --> 0:05:21.280 our historic round of liquidations that triggered a sharp sell 0:05:21.320 --> 0:05:23.800 off over the weekend. Remember look, bitcoin is in a 0:05:23.839 --> 0:05:27.080 technical correction. The market value of all cryptocurrencies felled by 0:05:27.080 --> 0:05:28.640 more than one hundred and fifty billion over the last 0:05:28.640 --> 0:05:31.800 twenty four hour period, according to coin Gecko data. Personal 0:05:31.800 --> 0:05:34.679 we turned to is Bloomberg's baby Lipshals covers tech assets 0:05:34.720 --> 0:05:37.920 for US, and this is washing out the leverage from 0:05:37.960 --> 0:05:38.360 the system. 0:05:38.520 --> 0:05:40.800 Yeah, washing out the leverage. You have people getting margin called. 0:05:40.839 --> 0:05:43.200 The thing that's interesting with crypto when you talk to 0:05:43.279 --> 0:05:46.520 your kind of regular joe crypto trader, they sometimes use 0:05:46.600 --> 0:05:49.560 fifty times leverage, which means that if they're that leverage 0:05:49.560 --> 0:05:51.760 and you see any type of pullback, they don't get 0:05:51.800 --> 0:05:53.720 to say, oh, actually, let me try to get some 0:05:53.760 --> 0:05:56.480 massets together, they immediately get margin called. That's when you 0:05:56.520 --> 0:05:58.760 see some of this leverage be fleshed out so quickly. 0:05:59.040 --> 0:06:00.960 And this comes back to the debate twenty four to 0:06:01.040 --> 0:06:04.320 seven trading. If you're asleep or taking a weekend off 0:06:04.400 --> 0:06:06.359 to watch some college football, and all of a sudden 0:06:06.360 --> 0:06:08.960 Bitcoin pulls back, well, guess what, your portfolio just. 0:06:09.000 --> 0:06:09.640 Got blown up. 0:06:09.680 --> 0:06:11.840 And that is something that we saw really happen and 0:06:11.880 --> 0:06:13.800 play out over the weekend. And when you see the 0:06:13.800 --> 0:06:16.359 back and forth with the US and China, we're going 0:06:16.440 --> 0:06:17.800 to continue to see this volatility. 0:06:18.920 --> 0:06:19.200 Bailey. 0:06:19.279 --> 0:06:21.640 One of the best read stories on the Bloomberg terminal 0:06:21.680 --> 0:06:24.200 and on the website is the latest Bank of America 0:06:24.279 --> 0:06:27.960 fund manager survey, and in particular the focus on how 0:06:28.080 --> 0:06:32.239 the market feels about AI valuations and equity markets. 0:06:32.560 --> 0:06:33.320 What do we need to know? 0:06:33.839 --> 0:06:36.159 You look at it and say that are there fears 0:06:36.200 --> 0:06:38.640 of a bubble? Looking at that fifty four percent of 0:06:38.760 --> 0:06:41.479 participants in that October pool pointing to tech stocks being 0:06:41.800 --> 0:06:45.280 too expensive. You look at the Nasdaq one hundred forward 0:06:45.440 --> 0:06:48.120 pe nearly twenty eight versus an average over the last 0:06:48.160 --> 0:06:51.600 decade of twenty three. So all signs do point to overvaluation. 0:06:51.720 --> 0:06:54.200 When I talk to portfolio managers, the question is where 0:06:54.279 --> 0:06:57.240 you allocating capital? Is it that mag seven plus Broadcom? 0:06:57.560 --> 0:06:59.360 And also if we're going to say that, hey, this 0:06:59.480 --> 0:07:02.720 is a market could be overvalued, these are investors who 0:07:02.800 --> 0:07:05.960 get paid to at least outperform their peers. So when 0:07:05.960 --> 0:07:08.000 you see where stocks have been trading for the last 0:07:08.080 --> 0:07:09.600 six months, or even if you go back to that 0:07:09.680 --> 0:07:12.680 April bottom, if you missed out on the immediate snapback, 0:07:12.920 --> 0:07:14.880 you kind of continue to buy even if you. 0:07:14.920 --> 0:07:16.560 Think the stock market is overvalued. 0:07:16.720 --> 0:07:18.840 We see investors kind of bending over backwards, doing some 0:07:18.920 --> 0:07:22.280 mental gymnastics, saying, Okay, well maybe it's overvalued on the 0:07:22.360 --> 0:07:24.880 forward price to earnings, but if we really look out 0:07:24.920 --> 0:07:27.360 to twenty twenty eight, well, what does Nvidia look like 0:07:27.480 --> 0:07:30.280 then then they're justifying buying now. But there's so much 0:07:30.360 --> 0:07:32.800 talk about fraud, and we've seen it with large cap 0:07:32.880 --> 0:07:35.080 tech with some of these smaller companies. I often keep 0:07:35.080 --> 0:07:38.040 an eye on the Golden Sacks unprofitable basket. That's a 0:07:38.120 --> 0:07:41.080 returned about forty eight percent year to date, so quickly 0:07:41.160 --> 0:07:45.520 outstripping the Magnificent seven, quickly outstripping the Nasdaq one hundred. 0:07:45.800 --> 0:07:48.200 Is that a short squeezer? Is that people taking on risk? 0:07:48.440 --> 0:07:50.960 It's really been a topic of conversation depending on who 0:07:51.040 --> 0:07:52.600 you talk to, whether that's in the private. 0:07:52.480 --> 0:07:55.080 Or the public markets, topic of conversation on the earnings calls. 0:07:55.120 --> 0:07:57.200 So we've just had a CFO City group being asked 0:07:57.200 --> 0:08:00.880 about froth evaluations in AI. This is focused chutional investors 0:08:00.920 --> 0:08:02.560 as well as retail investors. 0:08:02.240 --> 0:08:05.320 And it's undeniable and the question is are you going 0:08:05.400 --> 0:08:07.440 to hit on one of those ten investments. I look 0:08:07.440 --> 0:08:09.880 at a company like Oaklow in the nuclear space, up 0:08:09.920 --> 0:08:11.800 four hundred and seventy percent this year. 0:08:12.200 --> 0:08:14.400 Quantum stocks are up hundreds of percents. 0:08:14.920 --> 0:08:16.920 Is that a bet on these being kind of the 0:08:17.080 --> 0:08:20.120 next wave of companies or is this investor saying you 0:08:20.200 --> 0:08:21.800 know what if I hit one out of the twelve 0:08:21.920 --> 0:08:25.160 companies and Quantum ends up being kind of the next paradigm. Well, 0:08:25.200 --> 0:08:27.440 at least I got in on Invidia, the next in Vidia, 0:08:27.440 --> 0:08:27.800 if you will. 0:08:27.840 --> 0:08:31.760 On the ground floor, which is the biggest story today, 0:08:31.920 --> 0:08:34.959 the CFO of a bank saying something quite measured, or 0:08:34.960 --> 0:08:37.400 a Bank of America survey of all the fund managers 0:08:37.440 --> 0:08:39.760 that they track CFO. 0:08:39.920 --> 0:08:42.679 I think when you see management teams start to kind 0:08:42.720 --> 0:08:46.559 of grapple publicly with the idea of froth and publicly 0:08:46.679 --> 0:08:49.320 discussing whether they're going outright say are we in an 0:08:49.360 --> 0:08:52.040 AI bubble or not? Whether you want to ascribe a 0:08:52.080 --> 0:08:53.720 lot of value to what we've seen and heard from 0:08:53.760 --> 0:08:56.360 the likes of Sam Altman talking about kind of it 0:08:56.520 --> 0:08:59.840 is an AI bubble or Jeff Bezos. Every leader at 0:08:59.880 --> 0:09:03.000 these biggest companies in the world, whether it's tech giants 0:09:03.240 --> 0:09:06.000 or whether it's the c suite of banks, are grappling 0:09:06.080 --> 0:09:06.760 with this debate. 0:09:07.040 --> 0:09:07.840 And it's going to be. 0:09:07.920 --> 0:09:09.800 Something that is a theme in this earning season, whether 0:09:09.840 --> 0:09:11.760 you want to talk about tariffs, but it's going to 0:09:12.000 --> 0:09:16.120 inevitably come back to AI bubble valuations and expectations because 0:09:16.280 --> 0:09:19.040 there is so much debate around the cycling of money 0:09:19.080 --> 0:09:22.080 and what this actually will mean with building out data centers, 0:09:22.240 --> 0:09:25.719 buying these chips, open AI, partnering with seemingly everyone. What 0:09:25.920 --> 0:09:28.240 that does mean when we look back a year from now, 0:09:28.320 --> 0:09:30.600 two years from now, was this kind of the buildout 0:09:30.640 --> 0:09:33.480 of the next generation in terms of AI, or was 0:09:33.520 --> 0:09:35.320 this something that we all kind of should have seen 0:09:35.400 --> 0:09:37.359 the signs that there was a potential. 0:09:37.040 --> 0:09:41.560 Top Bloomberg's Bailey lip Schultz with big Bailey lip Schultz 0:09:41.600 --> 0:09:43.679 fans here on Bloomberg Tech try saying that in the 0:09:43.720 --> 0:09:46.120 morning without a coffee, thank you very much. So coming 0:09:46.240 --> 0:09:49.319 up AMD and now this is a new agreement with 0:09:49.480 --> 0:09:52.600 Oracle supplying even more AI chips. 0:09:52.640 --> 0:09:55.640 We have the details on that. Next, this is Bloomberg Tech. 0:10:11.520 --> 0:10:15.079 AMD says Oracle is set to deploy fifty thousand of 0:10:15.160 --> 0:10:19.160 their four fifty chips into data center computers starting next year. 0:10:19.360 --> 0:10:22.719 It's the latest commitment in the AI infrastructure frenzy. Here 0:10:22.760 --> 0:10:25.680 with the details BLOOMBOGSI and King who leads our coverage 0:10:25.720 --> 0:10:28.880 of semiconductors. This is an important deal for AMD. It's 0:10:28.880 --> 0:10:30.959 one of the only stocks on the socks that's in 0:10:31.040 --> 0:10:33.880 the green right now, What do we need to know 0:10:34.040 --> 0:10:36.840 about it the specificity of where these chips are going. 0:10:37.280 --> 0:10:39.120 So the first thing to note is that these chips 0:10:39.160 --> 0:10:44.040 don't actually exist. These are new products promised for next year. 0:10:44.440 --> 0:10:47.560 So what this is is another affirmation that AMD has 0:10:47.720 --> 0:10:50.199 a role in the future of this massive build out, 0:10:50.240 --> 0:10:53.280 that it is perhaps more than just an alternative to 0:10:53.400 --> 0:10:56.520 in video, that people are actually looking at it's technology 0:10:56.559 --> 0:10:58.360 and saying, hey, we'll have some of that. We like that, 0:10:58.760 --> 0:11:00.720 We're going to commit at least part of our data 0:11:00.840 --> 0:11:01.719 center build to that. 0:11:02.360 --> 0:11:04.079 And what's interesting is, and it comes hot on the 0:11:04.120 --> 0:11:07.960 heels of course of open AMD teaming up Oracles down 0:11:08.040 --> 0:11:11.240 significantly today they've got AI world upon us. But how 0:11:11.360 --> 0:11:14.760 much are we seeing AMD reap the rewards? How much 0:11:14.880 --> 0:11:17.280 will some of these be built out in data centers 0:11:17.320 --> 0:11:19.079 and the margins be impacted for Oracle here? 0:11:20.240 --> 0:11:22.880 Yeah, I mean we've obviously saw the massive open AI 0:11:22.960 --> 0:11:26.719 announcement with am D another affirmation, a separate affirmation from this, 0:11:27.040 --> 0:11:29.839 that hey, they've got a role. Oracle has been a 0:11:29.880 --> 0:11:36.120 customer of AMD for a while. This gives Oracle more options. Obviously, 0:11:36.640 --> 0:11:41.080 everybody else, including Oracle, is paying most of their money 0:11:41.200 --> 0:11:43.360 to in video right now. The margins are massive, the 0:11:43.400 --> 0:11:45.600 prices are massive, So this creates an alternative. 0:11:45.840 --> 0:11:47.880 Let's go back to what you said about these chips 0:11:47.960 --> 0:11:52.160 don't yet exist. AMD, much like in Vidia, has future 0:11:52.240 --> 0:11:56.199 generations of their GPU that they've designed and announced, but 0:11:56.280 --> 0:11:59.680 they're not yet in production. How do we best understand 0:11:59.760 --> 0:12:03.280 where AMD stands in this market for this lead edge 0:12:03.360 --> 0:12:06.319 accelerator versus it in VideA in the next year or so. 0:12:06.520 --> 0:12:07.880 Yeah, I mean, I think the best way to look 0:12:07.920 --> 0:12:10.520 at it is up until the Open AI announcement, it 0:12:10.600 --> 0:12:14.280 seemed like everybody was kind of AMD curious that they 0:12:14.320 --> 0:12:17.360 were getting, you know, orders which were substantial and bringing 0:12:17.440 --> 0:12:20.400 in a good amount of money for the company, but 0:12:20.559 --> 0:12:22.520 compared to what was on offer, compared to what was 0:12:22.559 --> 0:12:25.400 happening at in video, really nothing. I mean, they were 0:12:25.440 --> 0:12:29.760 the best of follow a group that's following in VideA. 0:12:30.080 --> 0:12:32.520 What we're seeing now is at least the beginnings of 0:12:32.679 --> 0:12:35.320 these kind of volume orders and these future commitments, which 0:12:35.320 --> 0:12:38.280 would imply that they are a serious technology provider. 0:12:38.760 --> 0:12:41.360 In king with always the latest, thank you so much, 0:12:41.880 --> 0:12:46.480 seeking with chips shares a Samsung actually sliding over an 0:12:46.520 --> 0:12:49.720 Asia training hours despite the company reporting its biggest quarterly 0:12:49.840 --> 0:12:53.280 profit or expectations of in more than three years. Here 0:12:53.360 --> 0:12:55.560 to discuss it megs Peter Elstrom, and it's. 0:12:55.480 --> 0:12:57.920 Not about memory and demand for it. But why is 0:12:57.960 --> 0:12:58.840 the stock under pressure? 0:13:00.520 --> 0:13:03.360 Well, Samsung stock has really been on a run this year. 0:13:03.480 --> 0:13:05.520 It's up about seventy five It was up about seventy 0:13:05.520 --> 0:13:08.520 five percent before these earnings came out, So investors are 0:13:08.600 --> 0:13:10.880 taking a bit of profit here on the actual news, 0:13:11.200 --> 0:13:12.640 Samsung's numbers were pretty good. 0:13:12.679 --> 0:13:13.080 This is just. 0:13:13.120 --> 0:13:16.440 Preliminary earnings for them. They just put out revenue numbers 0:13:16.480 --> 0:13:19.120 and then operating profit. Just two numbers so far, and 0:13:19.120 --> 0:13:22.319 their operating profit was the biggest in at least three years. 0:13:22.360 --> 0:13:24.960 It was about eight point five billion dollars. So they 0:13:25.000 --> 0:13:27.719 are making more money. They're gaining some traction on the 0:13:28.000 --> 0:13:31.160 HBM side. These are the memory chips that are paired 0:13:31.200 --> 0:13:33.920 with the accelerators. But you were talking earlier with Bailey 0:13:33.960 --> 0:13:37.560 about some of these tech stocks getting ahead of themselves. 0:13:37.720 --> 0:13:39.800 Samsung is one of those examples, and it'll run up 0:13:39.840 --> 0:13:42.040 quite a bit now. The investors are taking a bit 0:13:42.120 --> 0:13:44.600 of profits, but the numbers look pretty strong. We're going 0:13:44.679 --> 0:13:47.040 to get final earnings from them later on in the month, 0:13:47.280 --> 0:13:49.640 we'll get more detail about exactly how much of this 0:13:49.840 --> 0:13:53.480 is coming from memory chips, the HBM chips in particular, 0:13:53.679 --> 0:13:56.800 how much from smartphones and other kinds of components. Samsung 0:13:56.880 --> 0:14:01.160 in this AI memory chip race has been behind sk Heinix, 0:14:01.200 --> 0:14:03.880 it's local competitor. Eske Henix has been very good at 0:14:04.160 --> 0:14:07.120 working with Nvidia in particular, But now Samsung appears to 0:14:07.160 --> 0:14:09.720 be making some progress. We get more detail on that later, 0:14:09.800 --> 0:14:11.559 but it does look like they're making some progress. 0:14:12.480 --> 0:14:16.560 Pete, you're the editor that leads our coverage of Asian technology, 0:14:16.720 --> 0:14:20.000 right how do we cover Samsung? That's a company that 0:14:20.120 --> 0:14:23.000 has all of these different arms and in the calendar, 0:14:23.760 --> 0:14:27.240 is Samsung the most important Asian technology company right now? 0:14:29.080 --> 0:14:32.760 Well, we've got a big week for tech companies in Asia, 0:14:32.800 --> 0:14:36.600 and particularly chip companies in Asia. TSMC comes later on 0:14:36.680 --> 0:14:39.360 in the week. TSMC, of course makes chips for everybody, 0:14:39.440 --> 0:14:42.680 but particularly they're the ones who actually manufacture those chips 0:14:42.720 --> 0:14:44.600 for Invidio when they go ahead and sell them to 0:14:45.160 --> 0:14:48.120 Open AI and the rest of their customers. So that's 0:14:48.200 --> 0:14:50.400 going to be a biggie. In between, we have ASML 0:14:50.560 --> 0:14:53.760 in Europe, which is another very important company in the 0:14:53.840 --> 0:14:57.320 chip ecosystem because they make the highest end chip equipment 0:14:57.400 --> 0:14:59.760 for manufacturing these high D chips. So both of those 0:14:59.760 --> 0:15:04.440 are to be important indicators. Samsung is very much in there. Recently, 0:15:04.560 --> 0:15:07.760 they've had some struggles as they fell behind sk Heinis 0:15:07.760 --> 0:15:09.880 in the memory chip business. In particular, it looked like 0:15:09.960 --> 0:15:12.600 Heiinis was going to run away with this market. Now, 0:15:12.720 --> 0:15:16.880 Samsung course big company within South Korea, the biggest company historically. 0:15:17.200 --> 0:15:19.360 They've made a lot of progress in terms of catching up, 0:15:19.440 --> 0:15:22.800 so they're important, and together Samsung and Skhinnicks give you 0:15:22.840 --> 0:15:25.680 an indication of how the AI market is doing. So 0:15:25.840 --> 0:15:28.440 both of those companies are partnering with open Ai too. 0:15:28.880 --> 0:15:31.360 As you mentioned earlier, open Ai seems to be partnering 0:15:31.440 --> 0:15:33.920 with everybody. They both have contracts to be able to 0:15:34.000 --> 0:15:37.760 supply those memory chips as open Ai embarks on this 0:15:37.960 --> 0:15:41.280 enormous construction project to build more data centers across the 0:15:41.440 --> 0:15:42.600 US and beyond the US. 0:15:42.760 --> 0:15:45.160 Samsung under pressure and you articulate how far the stock 0:15:45.160 --> 0:15:47.800 has run up recently, But is there any implication from 0:15:47.840 --> 0:15:50.400 the dialing up of geopolitical anxieties and the moment we 0:15:50.520 --> 0:15:53.080 know that China South Korea are getting embroiled from a 0:15:53.120 --> 0:15:56.360 shipping perspective, Peter, is there anything weighing more broadly or 0:15:56.400 --> 0:15:59.120 more is that Samsung will be engulfed and yet further 0:15:59.240 --> 0:16:01.200 tension between South career China and. 0:16:01.320 --> 0:16:05.480 More broadly, there are certainly tensions. I think everybody is 0:16:05.520 --> 0:16:08.560 watching the negotiations between the US and China. We of 0:16:08.600 --> 0:16:11.480 course had that flare up over the weekend where China 0:16:11.640 --> 0:16:15.120 threatened to use their control over the rare earth elements 0:16:16.080 --> 0:16:20.040 in the trade negotiations. President Trump responded by saying, perhaps 0:16:20.080 --> 0:16:22.160 tariffs would go to one hundred percent. I think that 0:16:22.560 --> 0:16:25.760 concerns everybody when it comes to South Korea, in particular 0:16:25.840 --> 0:16:28.080 in Samsung. Samsung is one of the companies that is 0:16:28.120 --> 0:16:31.240 building facilities within the US. They're one of the Chips 0:16:31.280 --> 0:16:34.200 Act beneficiaries, so they're doing construction in the US. They 0:16:34.240 --> 0:16:36.960 plan on adding a lot of capacity here, so as 0:16:37.040 --> 0:16:41.440 the Trump administration pushes for more domestic manufacturing, they seem 0:16:41.520 --> 0:16:43.600 to be one of the beneficiaries at this point. 0:16:43.640 --> 0:16:44.040 At least. 0:16:44.240 --> 0:16:46.120 They of course make these memory chips, which is really 0:16:46.160 --> 0:16:49.240 where they make all of their money. The mobile phone 0:16:49.280 --> 0:16:51.200 business may be a little bit higher profile, but the 0:16:51.280 --> 0:16:54.400 chips business is really where they make the profit. As 0:16:54.480 --> 0:16:56.440 they push ahead with that and they work more with 0:16:56.520 --> 0:16:59.960 TSMC in Nvidia on those memory chips, that should help 0:17:00.080 --> 0:17:02.560 their profits. But in terms of these trade wars, it's 0:17:02.640 --> 0:17:04.560 very important that they continue to build out in the 0:17:04.720 --> 0:17:06.760 US and build up those fabs that they have in 0:17:06.800 --> 0:17:07.200 the US. 0:17:08.680 --> 0:17:12.000 Bloomberg's Peter Elstrom on all Things Samsung, Thank you very much. 0:17:12.080 --> 0:17:14.439 Now coming up, we're going to speak with Tonal CEO 0:17:14.840 --> 0:17:19.640 Darren McDonald about the company's retail expassion expansion and it's 0:17:19.720 --> 0:17:22.439 pushed to infuse AI into all of its products. 0:17:22.480 --> 0:17:24.360 That's next. This is Bloomberg Tech. 0:17:31.880 --> 0:17:35.000 Tonal Systems, the maker of at home fitness equipment, says 0:17:35.040 --> 0:17:38.080 it's seen a return to revenue growth fueled by sales 0:17:38.119 --> 0:17:41.480 of its tech infused Tonal two. The company has experienced 0:17:41.520 --> 0:17:45.399 a turbulent few years after pandemic era lockdown's lifted and 0:17:45.480 --> 0:17:48.960 people went back to in person gyms and fitness classes. 0:17:49.040 --> 0:17:51.280 Let's talk more about the company's tund around efforts with 0:17:51.400 --> 0:17:55.879 Tonal CEO Darren McDonald. So there is a strategy now right, 0:17:56.000 --> 0:17:59.639 a different environment to say twenty through twenty twenty two, 0:18:00.440 --> 0:18:03.280 and I'm trying to make sense of what links it all. 0:18:03.600 --> 0:18:05.320 You seem to want to look at the. 0:18:05.320 --> 0:18:09.000 High street a little bit and retail. What is your 0:18:09.040 --> 0:18:09.760 big strategy. 0:18:10.480 --> 0:18:12.520 Well, yeah, just in the past year, we've actually rolled 0:18:12.560 --> 0:18:15.560 out from nineteen locations to over one hundred locations for 0:18:15.640 --> 0:18:17.960 a distribution, so we now we have more places people 0:18:18.000 --> 0:18:20.120 to see and touch and feel a Tonal product, which 0:18:20.200 --> 0:18:23.159 is incredible because we have seventy five percent NPS and 0:18:23.240 --> 0:18:25.879 some of the lowest journ in the category. So giving 0:18:25.920 --> 0:18:28.960 people an opportunity to actually experience this system means that 0:18:29.000 --> 0:18:30.720 people end up buying, and so just we want to 0:18:30.760 --> 0:18:31.480 really focus on that. 0:18:31.760 --> 0:18:34.520 Tonal systems are still higher end and if we learned 0:18:34.560 --> 0:18:37.359 anything from a couple of weeks ago when Peloton had 0:18:37.400 --> 0:18:41.640 its latest change in strategy, people are still very sensitive 0:18:41.720 --> 0:18:42.280 to pricing. 0:18:42.760 --> 0:18:46.399 They want more for less. What's your strategy for pricing? 0:18:47.080 --> 0:18:48.920 Yeah, you know, we feel like we've got the world's 0:18:48.960 --> 0:18:53.160 leading strength training system. It's a personal trainer on your wall. 0:18:53.400 --> 0:18:55.240 It's a full gym. You don't have to think about 0:18:55.280 --> 0:18:57.560 it in the sense that we personalize all the weights 0:18:57.600 --> 0:18:59.800 for you. So there isn't anything out there in the 0:19:00.119 --> 0:19:02.720 market like what we do. So the fact that we 0:19:02.760 --> 0:19:06.320 can personalize the workout. We can adjust weights in real time. 0:19:06.760 --> 0:19:08.800 We'll move weights up by one pound or decrease it 0:19:08.880 --> 0:19:10.879 by one pound if you're not doing well, and you 0:19:10.960 --> 0:19:13.240 don't have to think about it at all. And from 0:19:13.240 --> 0:19:16.080 our perspective, because of our platform, the way it's built, 0:19:16.119 --> 0:19:19.440 which sits on top of AI, it's not just entertaining you. 0:19:19.600 --> 0:19:22.560 It's really a strength training system that works with you, and. 0:19:22.680 --> 0:19:25.800 You are offering more to those who already have one 0:19:25.920 --> 0:19:29.080 with reformer pilates options being built in Darren and unfolded. 0:19:29.119 --> 0:19:32.119 But I'm interested in the artificial intelligence part of it 0:19:32.240 --> 0:19:35.080 that has been being baked into everyday workouts on the Tonal. 0:19:35.240 --> 0:19:36.040 How are you embracing it? 0:19:37.320 --> 0:19:40.000 Yeah, Well, as you said, Carolyn, we're super excited today 0:19:40.080 --> 0:19:42.440 to announce the fact that we're working with christ McGee 0:19:42.880 --> 0:19:46.760 and we're announcing our PLATES system. You know what's really 0:19:46.800 --> 0:19:48.479 great about it is that what we see on our 0:19:48.480 --> 0:19:50.760 platform is that almost two thirds of our members are 0:19:50.840 --> 0:19:53.639 interested in pilates, but only seventeen percent of them are 0:19:53.680 --> 0:19:56.200 actually doing it. And the reason for that is pretty clear. 0:19:56.320 --> 0:19:59.640 You know, we've got people who have difficulty getting into classes, 0:20:00.000 --> 0:20:03.000 they're inaccessible. You have to drive to them. The classes 0:20:03.080 --> 0:20:06.359 are often difficult to find, and so we rolled that 0:20:06.520 --> 0:20:10.560 out on our Tonal system. We have force curves that 0:20:10.600 --> 0:20:12.639 are very similar to what a reformer looks like, so 0:20:12.720 --> 0:20:15.720 as you move further away from from the machine, it 0:20:15.840 --> 0:20:19.320 actually increases in resistance as well. It's really unlike anything 0:20:19.400 --> 0:20:22.120