WEBVTT - CPI Print and Google's Antitrust Defeat 0:00:01.400 --> 0:00:05.080 From Marhard where Innovation of Money and Power Collie in 0:00:05.200 --> 0:00:10.120 Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde 0:00:10.160 --> 0:00:11.080 and Ed Ludlow. 0:00:24.600 --> 0:00:27.160 I'm Caroline Heindel Bloomugswelte Quarters in New York. 0:00:27.280 --> 0:00:30.160 And I'm Ed Ludlow in San Francisco. This is Bloomberg 0:00:30.200 --> 0:00:31.280 Technology coming up. 0:00:31.320 --> 0:00:33.559 We go live to the White House to speak with 0:00:33.640 --> 0:00:36.720 Heather Bouchet of the Council of Economic Advisors, her take 0:00:36.760 --> 0:00:39.600 on today's CPI print and the impacts of the Inflation 0:00:39.680 --> 0:00:40.360 Reduction Act. 0:00:41.240 --> 0:00:44.440 Plus, Alphabet loses its anti trust fight with Epic Games 0:00:44.440 --> 0:00:47.720 as a federal court jury in California rules Google Play 0:00:47.840 --> 0:00:50.120 is a monopoly. Will break down the impact of the 0:00:50.120 --> 0:00:51.000 antitrust ruling. 0:00:51.320 --> 0:00:55.120 And space surveillance startup true anominally raises one hundred million 0:00:55.120 --> 0:00:57.440 dollars in its latest funning round to ramp up output 0:00:57.480 --> 0:01:00.560 of its satellite that can track national threats in orbit. 0:01:01.000 --> 0:01:04.360 We'll discuss with that and so much more throughout this hour. First, 0:01:04.400 --> 0:01:07.680 that's checking on these markets. And while the initial threat 0:01:07.880 --> 0:01:10.600 over the CPI print just running ever so slightly hot, 0:01:10.600 --> 0:01:13.400 and one particular point in the margin generally has died down, 0:01:13.480 --> 0:01:15.840 and we see two tens of percent up on the NASDAK. 0:01:16.000 --> 0:01:18.320 No great shapes we're seeing the two year you'll completely flat, 0:01:18.360 --> 0:01:20.520 having originally just spiked high, we come back down. We 0:01:20.640 --> 0:01:23.000 bribe Brieth what seems to be a bit of a size. 0:01:23.040 --> 0:01:25.760 People take on board the fact that really CPI is 0:01:26.120 --> 0:01:29.520 ultimately slowing, but still some areas are concerned maybe at 0:01:29.560 --> 0:01:30.960 BE rent, maybe at be of course. 0:01:30.800 --> 0:01:31.520 The cost of your cars. 0:01:31.520 --> 0:01:34.120 We've got so much to discuss with this inflationary environment 0:01:34.200 --> 0:01:34.880 core CPI. 0:01:34.959 --> 0:01:36.080 Let's get back to it for a moment. 0:01:36.200 --> 0:01:38.800 Ed The data they're coming in today basically matching estimates 0:01:38.800 --> 0:01:41.720 and reinforcing bets that the Federal Reserve we'll have to 0:01:41.800 --> 0:01:45.280 keep rates elevated to tame inflation in the longer term. 0:01:45.560 --> 0:01:47.400 But in the here and the now, we just try 0:01:47.440 --> 0:01:50.560 to really understand where we're dialing back on inflation. We 0:01:50.600 --> 0:01:52.600 want to get the view from the White House Council 0:01:52.640 --> 0:01:55.240 of Economic Advisors, to be precise, the member is Heather Bouchet. 0:01:55.320 --> 0:01:58.960 You join us now and look consumer prices in general. 0:01:59.080 --> 0:02:01.760 The print came in well where the market had seen it. 0:02:01.840 --> 0:02:03.960 The headline take to bob expectations on the month a 0:02:03.960 --> 0:02:05.120 month just episod slightly. 0:02:05.200 --> 0:02:07.400 But what was your read on today's print. 0:02:08.880 --> 0:02:11.200 Well, certainly, as you noted, the headline was a bit 0:02:11.240 --> 0:02:14.200 above market expectations. But when you look at the whole report, 0:02:14.480 --> 0:02:17.320 you see that the pace of inflation, you know, in 0:02:17.440 --> 0:02:20.080 various parts of the report, has been coming down in 0:02:20.120 --> 0:02:23.560 ways that are really important for consumers. So, for example, 0:02:23.840 --> 0:02:26.280 the pace of inflation for groceries or slower than they 0:02:26.280 --> 0:02:28.880 have been in over a year. And you know that 0:02:29.400 --> 0:02:31.640 is consistent with news that we were talking about right 0:02:31.639 --> 0:02:34.679 after Thanksgiving, where the price of a Thanksgiving dinner was 0:02:34.760 --> 0:02:37.400 cheaper this year than it was last year. And as 0:02:37.440 --> 0:02:39.960 we look forward to the holiday season, you see that 0:02:40.080 --> 0:02:42.160 some goods that are going to be important for families, 0:02:42.200 --> 0:02:44.400 sporting goods or toys or you know, things that they 0:02:44.480 --> 0:02:47.520 might buy for Christmas, like televisions or whatnot, those prices 0:02:47.560 --> 0:02:50.280 have also the pace is also slowed there as well. 0:02:50.720 --> 0:02:53.360 So there is some good news for consumers in there. 0:02:53.440 --> 0:02:55.480 And you know, when you look over the last quarter, 0:02:55.639 --> 0:02:58.600 the annualized rate of headline inflation is about two point 0:02:58.639 --> 0:02:59.160 two percent. 0:03:00.040 --> 0:03:03.040 I would say, though a lot of consumers don't feel it. 0:03:03.080 --> 0:03:05.880 Now you've rightly pointed out that consumer sentiment has been 0:03:05.880 --> 0:03:08.360 picking up. In December, it's up about thirteen percent. I 0:03:08.360 --> 0:03:11.800 think infation expectations they've been dialing back, but well to 0:03:11.960 --> 0:03:12.919 use on the. 0:03:13.040 --> 0:03:15.360 Day that we get yet another word of the year. 0:03:15.520 --> 0:03:17.800 One word of the year has been this vibe session, 0:03:18.160 --> 0:03:20.720 and the feeling is that people don't feel great, even 0:03:20.720 --> 0:03:23.920 though the economy seemingly is going pretty great. What do 0:03:23.960 --> 0:03:27.120 you say as an administration when that hits hard on 0:03:27.240 --> 0:03:30.160 a consumer that doesn't feel the way that you're currently 0:03:30.880 --> 0:03:32.560 talking about this economy right now. 0:03:33.480 --> 0:03:34.640 Well, let's be very clear. 0:03:34.760 --> 0:03:37.360 The President has been clear, his economic team has been clear. 0:03:37.480 --> 0:03:39.840 We understand that high prices have been hard on families 0:03:39.840 --> 0:03:43.200 and that this has post challenges. Pocketbook questions are really important. 0:03:43.600 --> 0:03:45.440 It's one of the reasons why when I looked at 0:03:45.440 --> 0:03:49.160 this report today, we see actually that wages have now 0:03:49.240 --> 0:03:52.880 been increasing faster than the pace of inflation for seven 0:03:52.920 --> 0:03:55.280 months now, and we know that it takes some time 0:03:55.360 --> 0:03:57.800 for things to you know, kind of for people's perception 0:03:57.800 --> 0:04:00.800 of what's happening in the economy to resonate. We're hopeful 0:04:00.840 --> 0:04:04.920 that as we see wages continued hopefully to outpace inflation, 0:04:05.240 --> 0:04:08.320 that'll help people be able to get their family budgets 0:04:08.320 --> 0:04:09.400 back under control. 0:04:09.680 --> 0:04:09.920 You know. 0:04:09.960 --> 0:04:11.800 The other thing we see, of course, is for the 0:04:11.960 --> 0:04:15.200 eighty percent of workers in the economy that are production 0:04:15.280 --> 0:04:17.919 and non supervisory workers, so not the managers, but the 0:04:17.960 --> 0:04:21.400 production and non supervisory workers, they have fully recovered their 0:04:21.440 --> 0:04:23.719 real wages back to where they had been pre pandemic. 0:04:24.080 --> 0:04:26.360 So that's certainly good news. But we know that the 0:04:26.400 --> 0:04:32.440 path to recover from this historic virus induced recession that 0:04:32.480 --> 0:04:34.360 we had and all of the challenges that we had 0:04:34.360 --> 0:04:36.919 getting back up online and the supply chain challenges, so 0:04:37.040 --> 0:04:40.640 much work went into making things function again in our economy, 0:04:40.760 --> 0:04:43.080 and hopefully as people go into this holiday season, they'll 0:04:43.080 --> 0:04:45.880 see that prices are that the pace is not as 0:04:45.960 --> 0:04:47.560 high as it was last year, and that'll help with 0:04:47.600 --> 0:04:49.080 consumer confidence over time. 0:04:50.440 --> 0:04:52.200 Heather, thank you for your time. It's ed here in 0:04:52.200 --> 0:04:56.280 San Francisco. Our technology audience its workers just have one 0:04:56.360 --> 0:05:00.159 very simple question, what specifics what areas are you you 0:05:00.279 --> 0:05:05.120 seeing the Inflation Reduction Act have a substantive impact in 0:05:05.960 --> 0:05:09.960 lowering inflation? In other words, are there any specific data 0:05:10.000 --> 0:05:13.120 points you can give us that show the IRA has worked. 0:05:14.560 --> 0:05:14.680 Well? 0:05:14.760 --> 0:05:18.080 Let me just focus on one today. So we saw 0:05:18.120 --> 0:05:21.880 in today's report on inflation, that the price of new 0:05:21.920 --> 0:05:24.560 cars has fallen for the past two months, and in fact, 0:05:24.640 --> 0:05:27.200 actually it's fallen for four out of the last six months. 0:05:27.640 --> 0:05:29.560 And one of the things that we've been tracking very 0:05:29.600 --> 0:05:32.240 carefully because of the Inflation Reduction Act is what's been 0:05:32.240 --> 0:05:36.159 happening with US auto industry as we've made these historic 0:05:36.279 --> 0:05:39.520 investments and in batteries and in electric vehicles, and of 0:05:39.520 --> 0:05:42.400 course we've seen that the number of electric vehicles has 0:05:42.480 --> 0:05:45.400 been rising, and we see that actually the price of 0:05:45.440 --> 0:05:48.920 those cars, because there's now more competition, has actually come down. 0:05:49.000 --> 0:05:51.119 So now the price of an electric vehicle is about 0:05:51.120 --> 0:05:53.679 within three thousand dollars of a car. 0:05:54.040 --> 0:05:55.479 Then that's before the. 0:05:56.960 --> 0:05:59.280 Tax credit that families can receive to buy those new 0:05:59.320 --> 0:06:02.880 electric vehicles. So that's one place where those investments are 0:06:02.960 --> 0:06:06.200 helping to bring changes for consumers and families while also 0:06:06.240 --> 0:06:08.080 creating good jobs here in the United States. 0:06:08.720 --> 0:06:10.800 In that case, he a what is the White House's 0:06:10.880 --> 0:06:15.240 reactions the news overnight that Ford has cut its production 0:06:15.360 --> 0:06:18.440 target for the F one to fifty lightning by fifty 0:06:18.520 --> 0:06:22.159 percent twenty four And what they're saying is they're simply 0:06:22.279 --> 0:06:25.160 matching their output to what is what they see as 0:06:25.160 --> 0:06:26.359 being consumer demand. 0:06:27.760 --> 0:06:31.160 Well, I can't comment on that today in the details, 0:06:31.200 --> 0:06:35.080 but you know, we are seeing these historic investments as 0:06:35.080 --> 0:06:37.720 a result of the Inflation Reduction Act. We are seeing 0:06:37.880 --> 0:06:41.360 this uptick in sales for electric fields that we've seen 0:06:41.400 --> 0:06:43.720 in the past. Of course, you know this is it 0:06:43.760 --> 0:06:47.160 is challenging to reshape an entire economy, to build a 0:06:47.240 --> 0:06:50.599 nuclear energy, clean energy economy. But knowing that the President 0:06:50.600 --> 0:06:52.960 has done what he could do working with Congress to 0:06:53.040 --> 0:06:54.800 be able to make sure that business has had the 0:06:54.800 --> 0:06:57.360 support they need to be able to make these investments, 0:06:57.600 --> 0:06:59.719 that's where our energy has been focused. 0:07:00.080 --> 0:07:03.680 There is, of course that tension that ultimately inflationary pressure 0:07:03.720 --> 0:07:07.640 hasn't been helped by geopolitics, by trade, in particular, by 0:07:07.640 --> 0:07:10.120 the fact that we are having to slow in some 0:07:10.480 --> 0:07:13.320 ways the supply chain between the US and China in particular. 0:07:13.640 --> 0:07:15.440 How much of a help or a hindrance is that, 0:07:15.480 --> 0:07:17.240 particularly the moment we think of what's happening in the 0:07:17.280 --> 0:07:17.880 chip sector. 0:07:19.200 --> 0:07:20.720 Well, let me just say a couple of things. 0:07:20.840 --> 0:07:22.680 You know, when you look at the pace of inflation, 0:07:23.280 --> 0:07:27.400 and if you were to overlay price changes along with 0:07:27.560 --> 0:07:31.800 changes in what has happened in the supply chain index 0:07:31.840 --> 0:07:34.000 that we look to. You actually see that a big 0:07:34.080 --> 0:07:36.400 part of why we've been able to get prices down. 0:07:36.560 --> 0:07:38.960 You know, right, they were at their peak nine point 0:07:38.960 --> 0:07:40.840 one percent. Now we're at three point one percent for 0:07:40.880 --> 0:07:43.720 headline inflation. You know, when you look at that shift, 0:07:43.800 --> 0:07:46.400 a lot of that mirrors these challenges that we saw 0:07:46.400 --> 0:07:49.480 in supply chains as an outcome of the pandemic, and 0:07:49.520 --> 0:07:51.520 as businesses had to get up and running, and yet 0:07:51.600 --> 0:07:53.960 there was still this virus around the world and upended 0:07:54.000 --> 0:07:55.240 these global supply chains. 0:07:55.560 --> 0:07:56.360 All the work that the. 0:07:56.320 --> 0:07:59.280 President did to make sure that goods were able to 0:07:59.320 --> 0:08:01.840 be transported, to make sure that the ports were working, 0:08:02.080 --> 0:08:05.440 that played a key role in where we are today 0:08:05.480 --> 0:08:08.080 and getting prices down. And of course global trade isn't 0:08:08.120 --> 0:08:10.520 a really important part of those global supply. 0:08:10.280 --> 0:08:11.880 Chains, Heather. 0:08:12.000 --> 0:08:14.880 In the technology industry, there are still companies that are 0:08:14.880 --> 0:08:19.720 reducing headcount and at the same time AI is driving 0:08:19.760 --> 0:08:23.080 a number of postings which seems to be adding to 0:08:23.440 --> 0:08:27.120 wage inflation because frankly, the numbers are astronomical on offer 0:08:27.360 --> 0:08:30.080 to hire the best talent in AI. Does the White 0:08:30.080 --> 0:08:33.560 House have any data that shows an AI impact on 0:08:33.600 --> 0:08:36.160 the labor force and indeed the economy right now. 0:08:37.200 --> 0:08:39.360 Well, at this moment, this technology is news. So I 0:08:39.400 --> 0:08:42.120 can't we don't have like a specific estimate, but I 0:08:42.160 --> 0:08:44.400 can tell you a couple of things. I mean, first, 0:08:44.600 --> 0:08:47.600 this is an issue that the President takes seriously. In fact, 0:08:47.640 --> 0:08:50.520 I believe today his AI Council is meeting and they're 0:08:50.520 --> 0:08:55.480 having conversations about these technologies. But you know, one of 0:08:55.520 --> 0:08:58.120 the things that we've seen in past instances where we've 0:08:58.120 --> 0:09:01.400 seen new technologies is that people's jobs tend to change, 0:09:01.400 --> 0:09:03.080 and it works its way as it works its way 0:09:03.120 --> 0:09:05.439 through the system. So we expect that, you know, as 0:09:05.520 --> 0:09:08.600 is new technologies come online that'll ship the composition of 0:09:08.640 --> 0:09:11.520 skills that workers need and how they're they're performing on 0:09:11.559 --> 0:09:13.920 the job. But just know that this is something that 0:09:13.960 --> 0:09:17.440 the administration is certainly focused on, as if the President 0:09:17.520 --> 0:09:19.320 is so focused on making sure that we're building an 0:09:19.360 --> 0:09:22.360 economy from the middle out and bottom up and prioritizing 0:09:22.720 --> 0:09:24.880 workers in our economic agenda. 0:09:28.280 --> 0:09:31.840 Hebbalshi, the White House Council of Economic Advisors, Thank you 0:09:31.960 --> 0:09:35.079 very much. Now, coming up, Google loses its a trust 0:09:35.120 --> 0:09:38.400 court fight with Fortnite maker Epic Games. We'll discuss well 0:09:38.400 --> 0:09:40.840 that all means for the two hundred billion dollars per 0:09:40.920 --> 0:09:53.600 year app store industry. That's next. Google Play deliberately wields 0:09:53.640 --> 0:09:56.800 monopoly power. That's what a federal court jury found yesterday 0:09:56.840 --> 0:10:00.280 after liberating less than four hours following a month long 0:10:00.320 --> 0:10:03.520 trial in San Francisco. The court fight was with Fortnite 0:10:03.520 --> 0:10:07.000 maker Epic Games, which should accuse both Google and Apple 0:10:07.320 --> 0:10:10.440 of being a duopoly in the app distribution marketplace and 0:10:10.559 --> 0:10:15.200 enriching themselves by charging developers excessively high fees to this 0:10:15.400 --> 0:10:18.719 games an Epic reminder actually lost it challenged Apple two 0:10:18.800 --> 0:10:21.679 years ago, the Supreme Court reviewing that one. Let's bring 0:10:21.720 --> 0:10:24.000 in Bloomberg's Mark German and Leah Nyland to break this 0:10:24.040 --> 0:10:27.280 all down. Outline the logic of these nine jurors in 0:10:27.320 --> 0:10:30.000 San Francisco. Leah, what was it that they decided on 0:10:30.080 --> 0:10:30.480 and why? 0:10:32.120 --> 0:10:32.920 Yeah, So they. 0:10:32.960 --> 0:10:36.160 Found that Google wields monopoly power in the market for 0:10:36.200 --> 0:10:40.240 app stores, and that it engaged in any competitive conduct 0:10:40.280 --> 0:10:44.920 by paying different people, including gaming companies and smartphonemakers to 0:10:45.040 --> 0:10:48.720 make the Google Play Store the Saul app store on 0:10:48.800 --> 0:10:52.400 various Android phones. And so it's a little bit different 0:10:52.520 --> 0:10:53.120 than in the. 0:10:53.080 --> 0:10:54.600 Apple App Store. You know in the. 0:10:54.600 --> 0:10:57.880 Apple case, you know, Apple does not allow any other 0:10:58.960 --> 0:11:01.960 app stores on the phone, and that's long been its policy. 0:11:02.520 --> 0:11:04.800 And Google, you know, there were all of these payments, 0:11:04.880 --> 0:11:07.280 some worth a significant amount of money. They were paying 0:11:07.320 --> 0:11:10.080 Samsung as much as eight billion dollars over four years 0:11:10.559 --> 0:11:13.439 to ensure that the Google Place or really was the 0:11:13.840 --> 0:11:17.760 best and most accessible access point for people using the 0:11:17.800 --> 0:11:20.680 Android phone. So, I mean, those payments are really what 0:11:20.800 --> 0:11:24.760 people think convinced this jury that you know, Google is 0:11:24.760 --> 0:11:27.640 a monopoly, whereas in the Apple case they didn't really 0:11:27.679 --> 0:11:30.000 have any of that type of evidence. 0:11:30.480 --> 0:11:33.480 To that end, though Mark the reader cross is clear 0:11:34.160 --> 0:11:37.680 and already actually we've seen both Alphabet and Apple having 0:11:37.720 --> 0:11:41.120 to think about the business model and ultimately ultimately how 0:11:41.160 --> 0:11:41.760 it evolves. 0:11:41.920 --> 0:11:43.600 Does it change from here on out on the back 0:11:43.640 --> 0:11:44.439 of this ruling. 0:11:46.000 --> 0:11:48.199 Oh, I certainly think so. So there was one remaining 0:11:48.280 --> 0:11:51.000 point in the Apple case with Epic Games, and that's 0:11:51.040 --> 0:11:53.520 heading to the Supreme Court likely in a few months now, 0:11:54.080 --> 0:11:56.960 and that is steering right the ability for any app 0:11:56.960 --> 0:11:59.160 in the App store to point a user to the 0:11:59.200 --> 0:12:02.520 web to complete transaction. That means the user wouldn't have 0:12:02.520 --> 0:12:06.160 to use Apple's billing system therefore saving the developer between 0:12:06.200 --> 0:12:09.240 fifteen and thirty percent off the top in terms of 0:12:09.240 --> 0:12:12.439 that Apple revenue share. And now that this jury sided 0:12:12.480 --> 0:12:15.560 with Google, potentially that puts this idea in the heads 0:12:15.559 --> 0:12:18.840 of the decision makers, the lawmakers on this last point 0:12:19.160 --> 0:12:22.760 to side with Epic Games and against Apple in this case. 0:12:22.800 --> 0:12:24.760 But there's a couple things that I want to outline here. 0:12:24.800 --> 0:12:27.800 I think Leigh is completely right. I think this came 0:12:27.840 --> 0:12:32.400 down to optics pr and those side agreements that Google 0:12:32.440 --> 0:12:35.640 had with Spotify, Google and other players to really promote 0:12:35.640 --> 0:12:38.760 the Google Play Store. For those unfamiliar, there's a fundamental 0:12:38.760 --> 0:12:42.360 difference between how app stores work on iOS, the iPhone platform, 0:12:42.360 --> 0:12:46.120 and Android, the Google platform. Android devices have supported side loading, 0:12:46.240 --> 0:12:48.880 third party app stores, the installation of apps from outside 0:12:48.880 --> 0:12:52.440 Google Play from the beginning. So the idea here is 0:12:52.480 --> 0:12:56.679 that Google doesn't necessarily have a monopoly on app stores. 0:12:57.280 --> 0:13:01.480 Google has a monopoly on Android smartphones, right, they have 0:13:01.520 --> 0:13:04.160 this ownership over the smartphones. They're paying, like le I said, 0:13:04.440 --> 0:13:08.000 Google to promote Google Play over a Samsung app store, right, 0:13:08.280 --> 0:13:11.640 They're pushing users towards the Google Play Store, right. So 0:13:11.720 --> 0:13:14.800 that's really the fundamental issue here. And in terms of 0:13:14.840 --> 0:13:17.360 how things are going to change. Google, they're probably going 0:13:17.400 --> 0:13:21.240 to have to allow third party billing platforms globally or 0:13:21.240 --> 0:13:23.720 at least in the US because of this lawsuit, and 0:13:23.720 --> 0:13:25.640 in Europe because of the Digital Markets Act in the 0:13:25.679 --> 0:13:28.560 European Union, they're going to have to stop those side deals. 0:13:28.600 --> 0:13:31.640 So you're going to see a lot more flattening and 0:13:31.679 --> 0:13:34.400 potentially more third party app Store is getting traction on 0:13:34.559 --> 0:13:37.600 Android and on the Apple side. Outside of the US 0:13:37.720 --> 0:13:39.880 in the European Union, you're likely to see the same 0:13:39.920 --> 0:13:41.280 thing kickoff in March. 0:13:42.160 --> 0:13:44.160 Well, we're going to wait for the new year, but 0:13:44.240 --> 0:13:46.480 for now it looks as though the businesses are going 0:13:46.520 --> 0:13:48.400 to have to realign somewhat. Bluem Meg's Mark Gumm and 0:13:48.480 --> 0:13:51.000 great breakdown there, Len Island. As always, we thank you 0:13:51.040 --> 0:13:52.239 so much for the expertise. 0:13:52.960 --> 0:13:55.280 Okay, time for talking text so us like Sam Altman 0:13:55.440 --> 0:13:58.800 is back on the conference circuit in touting AIS benefits 0:13:58.840 --> 0:14:02.839 to humanity. In his first public appearance since Altman regained 0:14:02.840 --> 0:14:05.679 control of Open AI, the CEO appeared at a forum 0:14:05.840 --> 0:14:10.000 hosted by Operation Hope to discuss AI's advances. He announced 0:14:10.040 --> 0:14:12.280 that he and John Hope Bryant, the founder of the 0:14:12.280 --> 0:14:15.840 Hope Organization will co chair a new AI ethics council 0:14:16.120 --> 0:14:19.800 based out of Atlanta. Plus, the world's most valuable chip maker, 0:14:19.840 --> 0:14:22.760 in Vidia, has become one of the leading investors in 0:14:22.920 --> 0:14:26.120 AI companies. That's according to estimates by Dealram. The chip 0:14:26.160 --> 0:14:29.760 maker participated in thirty five deals this year, almost six 0:14:29.800 --> 0:14:32.640 times more than last year, making in Vidia the most 0:14:32.640 --> 0:14:35.760 active large scale investor in AI in what was a 0:14:35.800 --> 0:14:39.040 banner year for deal making in the sector and speaking 0:14:39.040 --> 0:14:42.320 of in video, US Commerce Secretary Gina Rimondo says the 0:14:42.400 --> 0:14:45.720 US is looking into the specifics of three new AI 0:14:45.800 --> 0:14:49.880 accelerators that the company is developing for China. The announcement 0:14:49.920 --> 0:14:52.880 comes after vowing earlier this month to restrict any new 0:14:52.960 --> 0:14:56.320 chips that give that country AI capabilities. 0:14:56.360 --> 0:14:58.760 Caroline and that's stick on that one with the Commerce 0:14:58.760 --> 0:15:01.880 Secretary of Momundo. So just warning the US efforts to 0:15:01.960 --> 0:15:05.960 build out the domestic semiconductor industry could be delayed by 0:15:06.080 --> 0:15:10.280 years if companies are required to go through standard environmental reviews. 0:15:10.360 --> 0:15:13.320 Joining US now as someone who knows the space very well, 0:15:13.400 --> 0:15:17.040 Ben Nicklish is the CEO of Element Solutions, which produces 0:15:17.120 --> 0:15:20.120 chemicals in almost every EV but also in smartphones. Computers 0:15:20.160 --> 0:15:23.360 and develop the next generation chemicals that are going to 0:15:23.440 --> 0:15:26.400 enable tech advancements. And then to that end, how much 0:15:26.720 --> 0:15:31.240 is there a local domestic supply chain issue from an environmental. 0:15:30.720 --> 0:15:31.520 Perspective as well. 0:15:32.720 --> 0:15:36.400 Yeah, so there's been a significant ramp and investment in 0:15:36.440 --> 0:15:40.520 semiconductor capability in North America, but it's a muscle that 0:15:40.560 --> 0:15:42.600 we haven't flexed in a long time, and so we 0:15:42.680 --> 0:15:45.240 are bumping. We are seeing the supply chain bump into 0:15:45.240 --> 0:15:48.160 some issues getting capacity online, but we're confident that it 0:15:48.200 --> 0:15:51.120 will come online and there's a real need and capital 0:15:51.160 --> 0:15:51.640 behind it. 0:15:53.080 --> 0:15:58.720 There's just an absolute obsession with GPUs h one hundred 0:15:58.800 --> 0:16:03.080 AMD's out of three under decks, less discussion about the 0:16:03.120 --> 0:16:06.040 infinite list of other chips and the rule materials needed 0:16:06.680 --> 0:16:09.120 to support that infrastructure build out. What is life like 0:16:09.200 --> 0:16:10.200 for you? 0:16:10.200 --> 0:16:11.040 You threw the. 0:16:11.120 --> 0:16:13.760 Chaos of twenty twenty twenty twenty one, where there was 0:16:13.800 --> 0:16:15.920 a real chip crunch industry wide. 0:16:17.240 --> 0:16:21.240 Yeah, so the semiconductor industry has been through real volatility 0:16:21.280 --> 0:16:24.080 in the past several years. There weren't enough chips and 0:16:24.120 --> 0:16:27.440 then there was a big stockpile and so demand softened 0:16:27.560 --> 0:16:32.200 and capacity additions were slowed down. It's been a roller coaster. 0:16:32.560 --> 0:16:37.640 We're fortunate to see demand recovering, semiconductor fab utilization increasing, 0:16:38.240 --> 0:16:41.160 and our business is very well poised to benefit from that. 0:16:41.520 --> 0:16:42.400 From an element. 0:16:42.160 --> 0:16:47.880 Solutions perspective, we sell very small quantities of critical materials 0:16:47.920 --> 0:16:51.359 process chemistries that are used in the fabrication of semiconductors 0:16:51.360 --> 0:16:54.080 and printed circuit boards and the assembly of electronics hardware. 0:16:54.320 --> 0:16:56.960 Fortunately for us, we have ample capacity to meet the 0:16:57.000 --> 0:16:59.760 increasing demand that we expect next year and for many years. 0:16:59.760 --> 0:17:05.800 And trip you touch so many end markets smartphones, electric vehicles, 0:17:06.320 --> 0:17:09.240 Are you so far kind of upstream that you don't 0:17:09.280 --> 0:17:12.639 have the sensitivity to pressures on the end market or 0:17:12.720 --> 0:17:15.000 are you recognizing some pain in the consumer? 0:17:16.320 --> 0:17:18.920 So our business is unit driven, right, and we've been 0:17:19.640 --> 0:17:22.480 living through a very significant draw down, one of the 0:17:22.720 --> 0:17:26.000 largest drawdowns in the smartphone market in its history. Similarly 0:17:26.000 --> 0:17:29.840 in the semiconductor market, the automotive market was soft for 0:17:29.880 --> 0:17:32.879 a period back a few years ago. We're starting to 0:17:32.920 --> 0:17:35.240 see that recover. What's great for our business is that 0:17:35.280 --> 0:17:37.720 we're driven not just by units, but content per unit, 0:17:38.160 --> 0:17:42.280 and as cars become computers, as computing power proliferates, and 0:17:42.320 --> 0:17:46.639 as the technical requirements associated with that computing power become 0:17:46.680 --> 0:17:49.840 more challenging. That's a gain for us in terms of 0:17:49.880 --> 0:17:53.679 our volume and value in each unit and the margin 0:17:53.680 --> 0:17:55.120 opportunity associated with it. 0:17:55.960 --> 0:17:59.520 How much of a straight line is that inevitable move 0:17:59.600 --> 0:18:02.240 towards evs? For example, we would just had head of 0:18:02.240 --> 0:18:04.919 bouchet On of course, from the White House Council of 0:18:04.960 --> 0:18:07.480 Economic Advisors, and we were putting to her like some 0:18:07.520 --> 0:18:10.280 of the concerns surrounding the fact that the Ford lightning, 0:18:10.359 --> 0:18:12.880 for example, the F one fifty has been cut back, 0:18:12.920 --> 0:18:14.960 the twenty twenty four production has been cut. 0:18:14.760 --> 0:18:18.520 Back and indeed in half. Is it that we will be. 0:18:18.880 --> 0:18:21.480 Bumpy in the road towards the shift toward EV's. 0:18:21.680 --> 0:18:23.480 What is it that you see as a key blocker here? 0:18:24.320 --> 0:18:27.560 Sure if you think back three years ago, the rate 0:18:27.600 --> 0:18:30.720 of penetration of electric vehicles to the global automotive fleet 0:18:31.000 --> 0:18:34.720 wouldn't would have paled in comparison to what we've actually seen. Right, 0:18:34.800 --> 0:18:39.919 So automotive electrification has accelerated relative to prior expectations, and 0:18:40.160 --> 0:18:42.840 surely there will be bumps in the road as large 0:18:42.840 --> 0:18:45.919 companies grapple with changing supply chains. 0:18:46.200 --> 0:18:47.840 But the trend is there, you know. 0:18:47.800 --> 0:18:48.800 It's not a straight line. 0:18:48.800 --> 0:18:51.680 There's volatility around that line, but the trend is very positive. 0:18:51.680 --> 0:18:54.919 And for Element, you know, we have really differentiated capabilities 0:18:54.960 --> 0:18:58.000 that are enabling the high performance electric vehicles you see 0:18:58.040 --> 0:19:00.240 on the road today, and we get about one have 0:19:00.280 --> 0:19:03.639 to two times the value an electric vehicle versus a 0:19:03.680 --> 0:19:07.400 comparable internal combustion car. So we're excited by that increasing 0:19:07.440 --> 0:19:09.960 penetration and we see a lot of opportunity associated with. 0:19:09.960 --> 0:19:14.120 It, the opportunity being I'm sure market capitalization boosting. 0:19:14.240 --> 0:19:16.119 How are you seeing your investor base change. 0:19:15.880 --> 0:19:22.280 Ben, Our investor base is solid, sturdy, and very compelled 0:19:22.440 --> 0:19:24.680 by the opportunities we have in front of this company 0:19:24.680 --> 0:19:27.280 and the way we've been deploying capital and support of it. 0:19:28.280 --> 0:19:32.400 We are seeing more energy and attention towards our company 0:19:32.720 --> 0:19:37.960 from electrification, from innovation in high end electronics. We talked 0:19:37.960 --> 0:19:40.960 about AI or you were talking about AI earlier. In 0:19:41.000 --> 0:19:43.520 the proliferation of computing power to the edge of the network, 0:19:43.640 --> 0:19:48.240 those technical challenges are ripe for us to benefit from 0:19:48.280 --> 0:19:49.160 and enable. 0:19:50.400 --> 0:19:52.800 Bank the excitation development solutions, goods CAT shop. 0:19:52.840 --> 0:19:54.480 Of course, AI has been all we've been talking about 0:19:54.520 --> 0:19:56.359 for twenty twenty three. Back in twenty twenty two, it 0:19:56.400 --> 0:19:58.520 was all about crypto and it was still kind of 0:19:58.640 --> 0:20:01.520 all talking around the holiday table, as it seems to 0:20:01.560 --> 0:20:03.000 have been a bit on a run at least bitcoin 0:20:03.080 --> 0:20:05.320 or want to dig into that with Kristin Smith, CEO 0:20:05.320 --> 0:20:08.840 of Lockchain Association, because really all eyes have been on 0:20:09.240 --> 0:20:12.160 the price of bitcoin, but also and also a lot 0:20:12.200 --> 0:20:14.640 of old coins as well. Exuberant seems to have been 0:20:14.760 --> 0:20:18.640