WEBVTT - Tesla Sales Fall in Europe, US Drone Makers Take on China 0:00:00.960 --> 0:00:05.199 From the heart of where innovation, money and power collide 0:00:05.519 --> 0:00:10.800 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:35.760 Caroline Hide and Ed Ludlow. 0:00:26.280 --> 0:00:27.160 Live from New York. 0:00:27.240 --> 0:00:30.240 I'm Caroline Hyde, and this is BlueBag Technology coming up 0:00:30.440 --> 0:00:33.640 tes the sales slump forty percent in Europe, having fallen 0:00:33.760 --> 0:00:37.000 in ten of the last twelve months. We get the analysis, 0:00:37.159 --> 0:00:40.920 plus foreign officials and tech execs push Trump's administration to 0:00:41.080 --> 0:00:44.159 rethink the US's global chip strategy and export limits. 0:00:44.440 --> 0:00:45.360 This is the debate. 0:00:45.200 --> 0:00:48.920 OURAI regulation heats up, and Ali Baba chairman Joe Side 0:00:49.159 --> 0:00:52.280 criticizes US tech giants for their massive spending on AI 0:00:52.400 --> 0:00:57.600 infrastructure and warns of a potential bubble in data center construction. 0:00:58.240 --> 0:01:00.320 We shine a light what's happening in the markets, bring 0:01:00.360 --> 0:01:03.640 you also breaking news as well as we understand that 0:01:04.160 --> 0:01:07.080 Russia is currently in the US saying that Russia agrees 0:01:07.160 --> 0:01:10.600 to ban on striking Ukraine energy assets. That was, of 0:01:10.640 --> 0:01:13.280 course something that had been discussed in the previous end 0:01:13.280 --> 0:01:15.200 of the show, but we are seeing of course the 0:01:15.319 --> 0:01:18.040 United States coming out there and saying indeed that Russia 0:01:18.080 --> 0:01:23.440 agrees to a ban on the striking of Ukrainian energy assets. 0:01:23.480 --> 0:01:25.119 Will bring you more on that story in a moment 0:01:25.120 --> 0:01:27.080 and the implications to the broader market. But right here, 0:01:27.160 --> 0:01:28.840 right now, we go back to what's happening in the 0:01:28.840 --> 0:01:30.800 tech space. I'm looking at US that currently off about 0:01:30.840 --> 0:01:34.240 five tens percent after yesterday's significant rally. I want to 0:01:34.280 --> 0:01:36.880 drill into some of the individual companies that have been 0:01:36.880 --> 0:01:40.319 on the move as well, and interestingly, after the phenomenal 0:01:40.400 --> 0:01:42.959 rally that we saw in Tesla yesterday, it's off by 0:01:43.000 --> 0:01:46.120 only about two tents of percent. That's in the light 0:01:46.240 --> 0:01:49.760 of that significant drop once again in European sales that 0:01:49.840 --> 0:01:52.240 are down forty percent from the month of February after 0:01:52.240 --> 0:01:55.080 performing a similar amount in the month of January, and 0:01:55.080 --> 0:01:57.320 we're now down forty three percent over the last two months. 0:01:57.360 --> 0:01:59.320 I'm shining like what happens to BYD as well. It's 0:01:59.360 --> 0:02:01.680 not by more than four percent, maybe even five percent 0:02:01.760 --> 0:02:04.960 after yesterday's rally, as it finally shows that it crescendoed 0:02:04.960 --> 0:02:07.760 further than Tesla in terms of its revenue for fiscal 0:02:07.760 --> 0:02:10.080 twenty twenty four. Let's drill into all of this, the 0:02:10.120 --> 0:02:12.120 pushes in the pools and pleased to welcome Craig. 0:02:12.000 --> 0:02:13.440 Trudell with us and Craig. 0:02:13.560 --> 0:02:17.040 Look, the moon music has been sour for Tesla in 0:02:17.120 --> 0:02:19.000 terms of sales when it comes to Asia, when it 0:02:19.000 --> 0:02:21.679 comes to Europe, and this is more of the same, 0:02:21.720 --> 0:02:23.640 but it's not dragging on the stock too much today. 0:02:25.200 --> 0:02:29.239 Yeah, I think it's really been something to watch the 0:02:29.400 --> 0:02:32.240 last few days now that we've seen this real rally 0:02:32.240 --> 0:02:36.160 in the shares. They were really getting beaten down and 0:02:36.240 --> 0:02:40.000 we saw, you know, the Trump administration sort of mount 0:02:40.040 --> 0:02:43.560 this push, you know, with the Commerce Secretary coming out, 0:02:43.960 --> 0:02:46.359 Howard Lutnik and saying, you know, go out and buy 0:02:46.440 --> 0:02:49.200 Tesla stock. It's never going to be this cheap again. 0:02:49.639 --> 0:02:52.720 We you know, didn't see an immediate sort of perking 0:02:52.800 --> 0:02:55.280 up of the shares as a result of that, but 0:02:55.600 --> 0:02:59.120 they really sort of furiously, you know, rallied to begin 0:02:59.240 --> 0:03:02.280 this week. And you know, even despite the fact that 0:03:02.560 --> 0:03:09.120 these numbers from the European Auto Manufacturers Association are really ugly, 0:03:09.160 --> 0:03:11.679 as you say, you know, this isn't just a last 0:03:11.760 --> 0:03:13.720 couple of months. It's ten of the last twelve that 0:03:13.760 --> 0:03:16.359 we've seen the red, as this chart shows. 0:03:16.480 --> 0:03:18.680 I think what's important is to shine a light on 0:03:18.720 --> 0:03:21.440 how much it's the opposite of the trend in you're 0:03:21.600 --> 0:03:24.320 more broadly though EV sales are actually are more than 0:03:24.400 --> 0:03:25.000 thirty percent. 0:03:25.200 --> 0:03:26.320 It really is an outlier. 0:03:27.680 --> 0:03:31.160 Yeah, absolutely, And we should of course note that this 0:03:31.200 --> 0:03:34.280 is not just a story about you know, Elon Musk 0:03:34.320 --> 0:03:38.800 and potential brand damage. There is a transition of the model. 0:03:38.800 --> 0:03:41.440 Why that's really important to keep in mind here where 0:03:41.760 --> 0:03:44.600 you know, when you change over a vehicle from one 0:03:44.640 --> 0:03:47.560 generation to the next, it means some disruption in your 0:03:47.600 --> 0:03:51.440 output that is having an effect on Tesla the beginning 0:03:51.640 --> 0:03:54.040 to begin the year. But you know, this is also 0:03:54.120 --> 0:03:56.840 the case that you know, the industry was preparing for 0:03:56.880 --> 0:04:00.000 twenty twenty five being a much tougher compliance year from 0:04:00.040 --> 0:04:03.800 and emissions perspective. So Tesla also is just going to 0:04:03.840 --> 0:04:06.840 have a lot more to deal with in terms of 0:04:06.880 --> 0:04:10.800 competition because other carmakers feel the need to bring their 0:04:10.800 --> 0:04:13.280 emissions down for those compliance reasons. 0:04:13.280 --> 0:04:16.520 If competition wasn't stiff enough coming from China's byd creature, Dell, 0:04:16.560 --> 0:04:19.240 we thank you so much. Meanwhile, let's get an investigate 0:04:19.279 --> 0:04:22.279 because Kathy would well maybe unsurprising me for many, is 0:04:22.320 --> 0:04:25.360 remaining bullish on Tesla but still calling for the stock 0:04:25.400 --> 0:04:27.760 to hit two than six hundred dollars in five years, 0:04:27.800 --> 0:04:30.680 almost ten times its current price, but a Megs daviding 0:04:30.720 --> 0:04:33.159 there sat down for an exclusive interview with the invest 0:04:33.160 --> 0:04:35.800 CEO that was over at HSBC Global Investment Summit in 0:04:35.839 --> 0:04:36.200 Hong Kong. 0:04:36.240 --> 0:04:40.160 Take listen, China is very important to Tesla, and I 0:04:40.200 --> 0:04:44.120 actually think that Elon Musk and May Musk his mother 0:04:44.640 --> 0:04:49.760 are are sort of ambassadors for the United States. Yes, yes, yes, yes, 0:04:50.560 --> 0:04:54.720 and rightly so so. But to answer your question directly, 0:04:54.800 --> 0:04:57.719 if China were to fail, that would be a short 0:04:57.800 --> 0:04:59.880 term hit to the stock. Would it take us away 0:05:00.120 --> 0:05:06.400 from twenty six hundred dollars? No, because the robotaxi story 0:05:06.920 --> 0:05:10.880 is much more a function of the Western world where 0:05:11.160 --> 0:05:14.000 ride hailing costs are so much higher than they are 0:05:14.000 --> 0:05:14.520 in China. 0:05:15.920 --> 0:05:18.359 That's going to take in Bailey Lipshitz, who's been delving 0:05:18.400 --> 0:05:24.040 into the resilient pollition coming from ARC invest. But really 0:05:24.080 --> 0:05:26.919 this isn't so much about warries and blips of European sales. 0:05:26.960 --> 0:05:30.120 This is about long time focus on AI and robotaxis No. 0:05:30.200 --> 0:05:32.800 Exactly, And as Craig Treudale pointed out earlier, she's been 0:05:32.839 --> 0:05:35.800 predicting the dawn of robotaxies from Tesla since at least 0:05:35.839 --> 0:05:38.600 twenty seventeen, so long term bullish. It is their biggest 0:05:38.600 --> 0:05:40.760 holding in the rc ETF. But one thing I want 0:05:40.800 --> 0:05:42.640 to call out when you look at this company when 0:05:42.680 --> 0:05:44.839 it trades on it's multiple If you pull the pe 0:05:45.240 --> 0:05:47.359 on Tesla relative to the rest of the mag seven 0:05:47.640 --> 0:05:48.880 p is north of ninety. 0:05:49.240 --> 0:05:51.919 Are you saying that Tesla doesn't trade on fundamental They 0:05:51.960 --> 0:05:53.200 don't trade on fundamentals. 0:05:53.200 --> 0:05:54.000 And also, keep in. 0:05:53.880 --> 0:05:56.400 Mind, show us, Bailey, you show us if you bought. 0:05:56.279 --> 0:05:58.560 ARC five years ago, you're up twenty seven percent. You're 0:05:58.600 --> 0:06:00.559 lagging the S and P five hundred by one hundred 0:06:00.600 --> 0:06:02.600 and twenty five percent, okay, and the Nazak by one 0:06:02.680 --> 0:06:05.400 hundred and fifty percent. So been a losing bet in 0:06:05.400 --> 0:06:08.279 the long term. But nonetheless, Kathy would sticking to those guns. 0:06:08.320 --> 0:06:09.760 It kind of does sound like some of the retail 0:06:09.760 --> 0:06:12.880 investors I talked to and the idea that the cyber 0:06:12.920 --> 0:06:14.920 truck was only part of a thesis and now we're 0:06:14.920 --> 0:06:17.640 looking to driverless taxis as well as the humanoid robot. 0:06:17.760 --> 0:06:18.960 And she doesn't even facts. 0:06:18.720 --> 0:06:20.800 You're in the human eye on robots, right, Yeah, No, 0:06:20.880 --> 0:06:22.719 I mean again, if you do the math with a 0:06:22.760 --> 0:06:24.880 current share count, that's an eight and a half trillion 0:06:24.920 --> 0:06:28.599 dollar company with her forecasts, So they're going to be 0:06:28.640 --> 0:06:31.200 doing a lot with driverless technology. Even if you add 0:06:31.279 --> 0:06:33.120 up some of the bigger carmakers with the likes of 0:06:33.160 --> 0:06:35.680 an Uber, you're still not even close to what that 0:06:35.760 --> 0:06:38.560 would look like. She's obviously been bullish. She's pounded the 0:06:38.560 --> 0:06:40.719 table for bitcoin to hit a million dollars at some 0:06:40.760 --> 0:06:43.080 point in the not too distant future. So really talking 0:06:43.080 --> 0:06:45.480 her book, but definitely something. 0:06:45.200 --> 0:06:46.320 To take a bit with a grain. 0:06:46.160 --> 0:06:48.640 Of salt we put into perspective of Kathy would the 0:06:48.680 --> 0:06:50.479 bets that has won out and she was a long 0:06:50.560 --> 0:06:55.159 term bull on Nvidio but actually removed her options and 0:06:55.279 --> 0:06:57.480 ultimately exposure to the company just as it started to 0:06:57.640 --> 0:07:00.800 rally hard. With Tesla, she has main committee, but they 0:07:00.839 --> 0:07:02.880 have pulled some of their chips off the table. 0:07:02.680 --> 0:07:04.919 Right, Yeah, it's a lower percentage of the holding of 0:07:04.960 --> 0:07:07.920 when you look at the flagship ETF that Ark Innovation ETF, 0:07:07.960 --> 0:07:11.120 now about eleven twelve percent of the ETF is allocated 0:07:11.160 --> 0:07:13.360 to that. That was closer to like one fifth when 0:07:13.360 --> 0:07:15.320 you look in that looked towards the beginning of the 0:07:15.400 --> 0:07:17.720 year the end of last year, so pulling back, but 0:07:17.800 --> 0:07:20.320 as you mentioned, kind of as the stock was rallying. Yes, 0:07:20.360 --> 0:07:23.080 it's down about a third year to date, but nonetheless, 0:07:23.080 --> 0:07:26.560 taking that long term view is retail investors will say, 0:07:26.560 --> 0:07:28.920 you've been right about Tesla for five six years at 0:07:28.960 --> 0:07:31.080 this point, and you're sitting pretty strongly in the green. 0:07:31.120 --> 0:07:32.320 But if you look at the rest of some of 0:07:32.360 --> 0:07:35.800 the investments that ARC has been pitching and been leaning into, 0:07:36.000 --> 0:07:37.800 they haven't all really worked out, and that's why there's 0:07:37.800 --> 0:07:41.520 been such a lag between the flagship ETF and pretty 0:07:41.560 --> 0:07:42.760 much every other tech index. 0:07:43.120 --> 0:07:46.360 Any Lipshaw's bringing us one investor take when it comes 0:07:46.360 --> 0:07:49.480 to Tesla, Let's go broader in terms of the overall 0:07:49.600 --> 0:07:52.000 market analysis of these EV numbers and the. 0:07:52.000 --> 0:07:52.600 Future for the company. 0:07:52.640 --> 0:07:56.120 Seth Goalstea and please say welcomes from morning Star Equity Strategist. 0:07:56.120 --> 0:07:58.280 You're also the chair of the EV committee over there. 0:07:58.360 --> 0:08:00.960 You currently have a hold rating Tesla. You've got a 0:08:00.960 --> 0:08:04.280 price target of two fifty, so actually below where we 0:08:04.360 --> 0:08:08.160 currently are after yesterday's rally. Why are we not sinking 0:08:08.440 --> 0:08:12.000 more on these yet further dire sales news out of Europe? 0:08:13.640 --> 0:08:16.160 Well, I think there's a lot of enthusiasm with the 0:08:16.200 --> 0:08:19.720 full self driving technology. Yesterday's news that full self driving 0:08:19.840 --> 0:08:23.080 was approved in China bodes well for China sales is 0:08:23.160 --> 0:08:25.880 a far bigger market for Tesla than Europe. And so 0:08:26.000 --> 0:08:28.040 when you look at full self driving, we have the 0:08:28.480 --> 0:08:31.280 robo taxi testing that's going to be launched in Austin, 0:08:31.520 --> 0:08:34.880 the full self driving unsupervised launch in Austin, and we'll 0:08:34.880 --> 0:08:37.360 come to California later this year. And then with the 0:08:37.440 --> 0:08:40.480 positive news of being able to launch the supervised level 0:08:40.520 --> 0:08:43.640 two version of full self driving in China, that bodes 0:08:43.679 --> 0:08:46.559 well for Tesla delivery. So I think that's the momentum 0:08:46.679 --> 0:08:51.480 that's that's carrying heavier today versus the European deliveries being down. 0:08:51.920 --> 0:08:56.480 Okay, it has that optimism enough to vindicate the about 0:08:56.480 --> 0:08:59.280 one hundred times future earnings that we currently trade at 0:08:59.280 --> 0:09:03.280 for Tesla. As we were just hearing from Bailey, well. 0:09:03.160 --> 0:09:05.960 Tesla's a very high growth stock, has been for years, 0:09:06.000 --> 0:09:10.199 and with Tesla's still having strong growth prospects, whether that's 0:09:10.240 --> 0:09:13.800 the energy storage system, whether that's robotaxis, full self driving, 0:09:13.800 --> 0:09:16.960 subscription softwarees, there is still a lot of room for 0:09:17.040 --> 0:09:19.760 the Tesla growth story to play out. So I think 0:09:19.760 --> 0:09:22.440 the market is still valuing the Tesla does still have 0:09:22.480 --> 0:09:24.839 a lot of growth left. Even if the Mile three 0:09:25.080 --> 0:09:29.520 model y are approaching that limit of deliveries, they still 0:09:29.520 --> 0:09:32.040 have the new more formal suv coming out later this 0:09:32.160 --> 0:09:35.160 year that should then push deliveries back into growth. 0:09:35.360 --> 0:09:39.120 Seth get into the details here. Therefore, is it the 0:09:39.160 --> 0:09:41.920 fact that they haven't really had an overhaul of their 0:09:42.000 --> 0:09:45.080 current product that is limiting current sales and of course 0:09:45.240 --> 0:09:47.320 the mismatches they try and iron out a new form 0:09:47.320 --> 0:09:49.720 of production, or actually is it the politicking of La 0:09:49.800 --> 0:09:50.960 must taking an effect here. 0:09:52.640 --> 0:09:55.040 It's still unclear what the drivers are behind the first 0:09:55.040 --> 0:09:57.839 two months to client, especially in the European market, you 0:09:57.880 --> 0:09:59.880 could have a lot of consumers waiting for their new 0:10:00.040 --> 0:10:03.280 model Why, which just began deliveries in Europe in March, 0:10:03.520 --> 0:10:05.800 so consumers could have been holding off until they could 0:10:05.840 --> 0:10:08.000 secure a new model Why. You also have the more 0:10:08.080 --> 0:10:11.360 affordable vehicle being launched, and so some consumers may be 0:10:11.480 --> 0:10:14.200 waiting for a lower price point vehicle from Tesla. But 0:10:14.280 --> 0:10:17.760 in the European market especially you finally have long range 0:10:17.960 --> 0:10:21.160 ed competition at a comparable price for years, a Tesla 0:10:21.280 --> 0:10:23.839 Model three year model. Why was the only long range 0:10:23.880 --> 0:10:25.839 in this case, I'm defining it at at least four 0:10:25.880 --> 0:10:28.960 under kilometers or more of range at the same price 0:10:29.000 --> 0:10:32.800 that would be as the same as an IC after subsidies. 0:10:32.880 --> 0:10:35.800 So for key markets like Germany or the UK, a 0:10:35.920 --> 0:10:39.000 Tesla was the most affordable long range eed. Now you 0:10:39.040 --> 0:10:41.760 have other competitors who are offering long range evs at 0:10:41.800 --> 0:10:44.680 a similar or slightly cheaper price point, and so there's 0:10:44.720 --> 0:10:48.200 true competition for the first time in the European market, 0:10:48.360 --> 0:10:50.480 and that could be leading some consumers to choose a 0:10:50.480 --> 0:10:52.400 different vehicle besides the Tesla. 0:10:52.720 --> 0:10:56.480 Latin America Europe can access BYD and I was interested 0:10:56.520 --> 0:11:00.000 in Kathywood's take there that BWEY isn't a compation competive 0:11:00.040 --> 0:11:02.480 so when it comes to av but we've heard that 0:11:02.559 --> 0:11:07.720 they are focusing on autonomous vehicle technology, So could it 0:11:07.800 --> 0:11:10.360 start to ramp up and take on the robotaxi future 0:11:10.400 --> 0:11:11.240 of Tesla too? 0:11:12.880 --> 0:11:16.000 Well, they very well could. Bid has a level two 0:11:16.080 --> 0:11:18.360 product that they offer in China for free right now, 0:11:18.440 --> 0:11:21.000 whereas even if you buy a Tesla and China you 0:11:21.040 --> 0:11:22.840 still have to pay for full self driving. 0:11:22.920 --> 0:11:24.040 So that could lead. 0:11:23.920 --> 0:11:27.120 Some consumers to choose a bid, both will be level 0:11:27.160 --> 0:11:30.040 two products inside China, and China is a unique market 0:11:30.080 --> 0:11:33.880 because the data for ad testing has to stay within China. 0:11:34.120 --> 0:11:36.720 You can't send it back to Tesla's headquarters in the 0:11:36.840 --> 0:11:40.800 US for refinement, and so China maybe a different market 0:11:40.840 --> 0:11:44.400 altogether where BID is more comparable to a Tesla. But 0:11:44.520 --> 0:11:46.520 if you're looking at a market like the US or 0:11:46.559 --> 0:11:49.599 Europe right now, I think Tesla would be more comparable 0:11:49.640 --> 0:11:52.880 with Alphabet's Waymo product as a robo taxi competitor. 0:11:53.320 --> 0:11:56.400 So with the current price, we're trading app more than 0:11:56.600 --> 0:12:00.680 your two fifty dollars, call you hold and brace for 0:12:00.760 --> 0:12:04.120 further volatility. Are we ever going to just see a 0:12:04.240 --> 0:12:07.199 calmer up into the right trajectory for Tesla stock. 0:12:08.920 --> 0:12:12.000 Well, if there are months and quarters of good news 0:12:12.080 --> 0:12:14.880 that comes out, then we could see Tesla's stocks start 0:12:14.920 --> 0:12:17.600 to rally. But when it was trading in the high 0:12:17.679 --> 0:12:20.520 four hundreds, like it was in mid December, we had 0:12:20.520 --> 0:12:22.880 a one star rating, we thought Tesla was to sell 0:12:23.000 --> 0:12:24.760 because we thought a lot of the good news was 0:12:24.800 --> 0:12:27.200 priced in, a lot of it was priced for perfection. 0:12:27.559 --> 0:12:30.720 Even when you're looking at valuing the robotaxi business, we 0:12:30.760 --> 0:12:31.680 assigned maybe. 0:12:31.480 --> 0:12:33.440 A lower valuation of some of the more. 0:12:33.280 --> 0:12:36.640 Bullish forecasts, because when you think of robotaxi, it's going 0:12:36.679 --> 0:12:39.000 to be a cheaper price point, which means the lower 0:12:39.040 --> 0:12:44.800 total addressable market for consumers and for Tesla's profitability. And 0:12:45.040 --> 0:12:48.000 they can't just take a thirty percent take like an 0:12:48.080 --> 0:12:50.720 uber can. They also have to manage their expensive That's 0:12:50.720 --> 0:12:54.160 another whole set of additional overhead expenses. So I do 0:12:54.200 --> 0:12:56.439 think it's going to be a very profitable business for them, 0:12:56.480 --> 0:12:59.640 but maybe not as profitable as the market's implying. 0:13:00.120 --> 0:13:02.960 How warried have you been about key man risk with 0:13:03.080 --> 0:13:05.920 Tesla as well, concerns about access to the pay he'd 0:13:05.960 --> 0:13:08.400 been promised, and indeed the focus he has over at 0:13:08.440 --> 0:13:09.400 the White House right now. 0:13:11.000 --> 0:13:14.520 Well, Elon Musk has always had multiple positions, you know, 0:13:14.559 --> 0:13:17.320 whether that was buying Twitter, turning into X a couple 0:13:17.360 --> 0:13:21.240 of years ago, or helping to lead SpaceX. He wasn't 0:13:21.280 --> 0:13:24.880 the CEO, but he still does take a leadership position 0:13:24.920 --> 0:13:28.000 in that company. He also has boring company, Neurolinks, so 0:13:28.320 --> 0:13:31.080 I'd imagine that Elon is still focusing most of his 0:13:31.160 --> 0:13:33.920 time and energy at Tesla. I think last week's event 0:13:34.080 --> 0:13:37.040 highlighted that that he's still focused on Tesla, and he's 0:13:37.040 --> 0:13:39.040 probably taking a little bit of a step back at 0:13:39.080 --> 0:13:41.800 some of his other companies, letting the management teams at 0:13:41.840 --> 0:13:46.679 places like SpaceX and X do more of the projects, 0:13:46.760 --> 0:13:48.959 take more of a leadership role so he can spend 0:13:48.960 --> 0:13:51.199 more time at the White House. I'm not too concerned 0:13:51.240 --> 0:13:53.560 right now that Elon's going to leave Tesla. I think 0:13:53.559 --> 0:13:55.760 they'll work out a deal that'll be a very favorable 0:13:55.840 --> 0:13:58.840 compensation package because the shareholders did both for it. So 0:13:58.880 --> 0:14:01.600 there is a lot of shareholders report for Elon wants 0:14:01.640 --> 0:14:03.880 to get paid, and I think what we'll see is 0:14:03.920 --> 0:14:06.280 Elon will get a pay package, we'll stay at Tesla, 0:14:06.320 --> 0:14:08.440 and so I don't see a lot of keyper service 0:14:08.480 --> 0:14:08.960 for testing. 0:14:09.200 --> 0:14:10.960 Seth Golstein, it has been great catching up with you. 0:14:11.200 --> 0:14:13.920 Thank you, morning star Crity strategists on things Tesla. Meanwhile, 0:14:13.960 --> 0:14:17.000 coming up major tech companies and foreign officials. They are 0:14:17.080 --> 0:14:21.040 pushing the Trump administration to rethink the country's global semiconductor strategy. 0:14:21.360 --> 0:14:22.480 We'll have the details next. 0:14:22.560 --> 0:14:25.080 Meanwhile, let's talk about some of those key tech executives 0:14:25.080 --> 0:14:29.680 and companies in Vidia, Broadcom, also Intel. Interesting report coming 0:14:29.720 --> 0:14:32.720 out this time. From analysis over at UBS, it looks 0:14:32.720 --> 0:14:35.720 as though Intel is reportedly strategizing to rejuvenate its chip 0:14:35.760 --> 0:14:40.160 design and broaden its foundry business. Could this be about 0:14:40.160 --> 0:14:43.600 securing these clients in VideA broadcom that being written up 0:14:43.600 --> 0:14:46.440 by UBS analysts and within a chury this has been 0:14:46.520 --> 0:15:02.200 big technology. Our own officials, our major tech companies are 0:15:02.280 --> 0:15:04.840 lobbying the White House so loose some trade restrictions placed 0:15:04.880 --> 0:15:06.840 on AI chips. Of course, that was back in the 0:15:06.840 --> 0:15:09.880 final days of the Biden administration. REUMAGS Mike Sheppard joins 0:15:09.920 --> 0:15:11.720 us for more on this. Now. It's a so called 0:15:11.760 --> 0:15:15.320 AI diffusion rule here, and it feels as though Oracle 0:15:15.480 --> 0:15:18.560 Nvidia are the key companies that would like this not. 0:15:18.480 --> 0:15:19.360 To go into act. 0:15:20.600 --> 0:15:23.280 Well, that's right, Caro, they have the most at stake here. 0:15:23.360 --> 0:15:26.080 And to back up a little bit to reminder audience 0:15:26.120 --> 0:15:29.640 of what this AI diffusion rule does to help understand 0:15:29.640 --> 0:15:32.760 where the companies are. Look, this rule divides the world 0:15:32.800 --> 0:15:36.040 into three tiers. It sets up a first tier of 0:15:36.160 --> 0:15:39.880 countries the closest US allies maybe about twenty of them 0:15:40.080 --> 0:15:43.800 that get unlimited access. And then there's another tier of 0:15:43.960 --> 0:15:47.840 countries the adversaries of the Usa, China, and Russia that 0:15:47.880 --> 0:15:50.840 are really cut off from access to the most advanced 0:15:50.880 --> 0:15:54.040 AI chips. But then there's this big fat middle of 0:15:54.120 --> 0:15:57.840 nations and that includes Israel, the United Arab Emirates, and 0:15:57.920 --> 0:16:01.400 even India, which all have their own ambitions and are 0:16:01.440 --> 0:16:04.680 all markets where Nvidia and Oracle are looking to do 0:16:04.760 --> 0:16:07.160 a lot of business. And the prospect of having to 0:16:07.200 --> 0:16:10.520 face restrictions on how much computing power they can sell 0:16:10.560 --> 0:16:13.800 to anyone nation, or having to deal with guardrails that 0:16:13.920 --> 0:16:18.560 could prove to be regulatory hurdles that might steer business elsewhere, 0:16:18.840 --> 0:16:22.800 is what is prompting this lobbying push by Nvidia and 0:16:22.840 --> 0:16:24.000 also by foreign leaders. 0:16:24.280 --> 0:16:26.480 I mean, just think if you're not able to house 0:16:26.800 --> 0:16:30.120 more than seven percent of your overall compute capacity in 0:16:30.200 --> 0:16:33.800 certain countries, that's really going to impact Oracle exactly its 0:16:33.840 --> 0:16:37.160 plants at the moment, plans over Malaysia, for example. So 0:16:37.680 --> 0:16:40.240 would they want a complete repeal? Are we likely to 0:16:40.280 --> 0:16:41.440 see a complete repeal? 0:16:42.600 --> 0:16:47.160 Well, the reporting from our colleagues Jenny Leonard and Mackenzie Hawkins, 0:16:47.240 --> 0:16:49.360 and a shout out to them for the great work 0:16:49.360 --> 0:16:52.600 that they did with this report. What they turned up 0:16:52.720 --> 0:16:56.160 was that Nvidian Oracle are most steadfastly against this role. 0:16:56.240 --> 0:16:58.280 They are the ones who really want to see it 0:16:59.200 --> 0:17:03.080 next all together and then started again from scratch. Everyone 0:17:03.160 --> 0:17:06.399 recognizes that there is a need for some sort of 0:17:06.480 --> 0:17:10.199 governance about where AI chips go. They do provide a 0:17:10.240 --> 0:17:13.800 security advantage or risk if they spread to widely, and 0:17:13.880 --> 0:17:18.199 the US is already subjected in video to restrictions on 0:17:18.320 --> 0:17:22.480 exports of chips also used in AI to China. We've 0:17:22.480 --> 0:17:25.080 seen that come up, for instance with deep Seek. But 0:17:25.280 --> 0:17:27.240 now what they want to do is they want this 0:17:27.280 --> 0:17:30.399 started from scratcher. Are there companies though, like Google and 0:17:30.440 --> 0:17:33.080 Anthropic that are willing to work with the rule but 0:17:33.119 --> 0:17:35.040 would like to see it recast in ways that are 0:17:35.080 --> 0:17:37.280 a little bit more favorable in bugs. 0:17:37.280 --> 0:17:40.160 Mike Shefford, thank you so much on the AI diffusion rule. 0:17:47.760 --> 0:17:49.120 It's time now for talking tech. 0:17:49.160 --> 0:17:51.600 First up, another TikTok executive steps down. 0:17:51.840 --> 0:17:52.840 Rick Channeley, who. 0:17:52.800 --> 0:17:55.679 Oversaw ad sales and global marketing, will step into an 0:17:55.720 --> 0:17:58.119 advisory role as part of a reorganization. Now it's the 0:17:58.200 --> 0:18:00.760 leadst management change by the social media company as it 0:18:00.800 --> 0:18:04.399 faces an April fifth deadline to reach a US sale deal. Now, 0:18:04.400 --> 0:18:06.920 according to the information at least eight other executives of 0:18:07.000 --> 0:18:10.439 Left TikTok since twenty twenty five plus Deep Seek unveiled 0:18:10.480 --> 0:18:14.800 its latest V three model, promising better programming capabilities. Chinese 0:18:14.840 --> 0:18:17.840 ai startup dropped the update without actually a formal announcement 0:18:17.960 --> 0:18:20.640 as it looks to remain competitive against its rivals. Deep 0:18:20.680 --> 0:18:23.120 Seak claims the V three model could address real world 0:18:23.200 --> 0:18:27.479 challenges while remaining accurate and efficient, and Ali Baba chairman 0:18:27.680 --> 0:18:31.240 Joe Sai says AI data centers maybe at the beginning 0:18:31.280 --> 0:18:34.280 of a bubble. Who's speaking over the HSBC Global Investment 0:18:34.320 --> 0:18:36.679 Summit in Hong Kong, and Sai said a lot of 0:18:36.800 --> 0:18:41.120 US data center announcements were duplicative and overlap with each other. 0:18:41.560 --> 0:18:44.159 So let's get more on that exact story of Bloomberg's 0:18:44.200 --> 0:18:47.840 Peter Elstrom and finding talk trying to push against these 0:18:48.040 --> 0:18:51.439 US giants that met the Amazons about their commitment to 0:18:51.480 --> 0:18:52.440 AI infrastructure. 0:18:53.960 --> 0:18:57.119 Yeah, it's interesting comments from Joe Sai. As you mentioned, 0:18:57.160 --> 0:19:00.000 he's chairman of Ali Baba. He's been through this for many, 0:19:00.040 --> 0:19:03.480 many years. He got a start in the dot com bubbles, 0:19:03.520 --> 0:19:05.320 so he's seen some of these bubbles in the past, 0:19:05.520 --> 0:19:07.880 and he's calling it out. He was at this conference 0:19:07.920 --> 0:19:12.000 in Hong Kong talking with investors and tech executives at 0:19:12.000 --> 0:19:14.160 that point, and he said he's concerned about this AI 0:19:14.200 --> 0:19:18.119 bubble forming, particularly around data centers. We have seen incredible 0:19:18.119 --> 0:19:21.320 amounts of money getting poured into these data centers, especially 0:19:21.320 --> 0:19:24.960 from the US tech companies Amazon and Microsoft and Google 0:19:25.040 --> 0:19:27.520 all are pouring tens of billions of dollars into these 0:19:27.560 --> 0:19:30.159 data centers. Of course, you'll re call that open Ai 0:19:30.280 --> 0:19:33.399 and SoftBank talked about spending five hundred billion dollars on 0:19:33.520 --> 0:19:35.359 data centers in the US, so they're really kind of 0:19:35.359 --> 0:19:38.720 crazy numbers. Alibab has not been shy about making these investments. 0:19:38.800 --> 0:19:42.040 In fact, they plan to spend more than fifty billion dollars. 0:19:42.200 --> 0:19:44.159 But the numbers are starting to add up, and the 0:19:44.240 --> 0:19:46.480 question is whether those are going to pay off with 0:19:46.560 --> 0:19:48.520 some profitable services down the line. 0:19:48.720 --> 0:19:52.120 And it speaks to investor anxiety over the last few 0:19:52.160 --> 0:19:54.399 months that we're just putting too much money in not 0:19:54.480 --> 0:19:58.280 getting enough reward out. In fact, Mizuho analysis coming out today, 0:19:58.280 --> 0:20:00.000 I always love the notes coming out from Jordan client 0:20:00.040 --> 0:20:02.320 and he pointed, perhaps these are sort of these pot 0:20:02.320 --> 0:20:05.840 shots being fired over in video and US giants buy 0:20:06.560 --> 0:20:09.359 China tech internet leaders, and he said, it's kind of 0:20:09.359 --> 0:20:12.120 funny that just straight after GtC, we're getting these negative 0:20:12.119 --> 0:20:15.080 shots against in video and the entire AI investment narrative 0:20:15.359 --> 0:20:18.639