WEBVTT - TikTok Deal Nearer Finish Line After Trump, Xi Call 0:00:00.040 --> 0:00:13.480 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.520 --> 0:00:17.319 from coast to coast with Caroline Hyde in New York 0:00:17.600 --> 0:00:19.560 and Edla Low in Sent Francisco. 0:00:23.160 --> 0:00:24.800 This is Bloomberg Tech coming up. 0:00:24.840 --> 0:00:27.760 Headlines out on a call between US President Trump and 0:00:27.880 --> 0:00:32.680 Chinese President Jijingping about a framework agreement for TikTok's US operations. 0:00:32.680 --> 0:00:33.640 We will break it down. 0:00:33.720 --> 0:00:37.080 Plus Apple rolling out its new iPhone designs in stores today. 0:00:37.240 --> 0:00:40.360 We'll discuss what the customer and the stock reaction is. 0:00:41.040 --> 0:00:44.320 And we sit down with FCC Commissioner and A Gomez 0:00:44.400 --> 0:00:47.600 to discuss the suspension of the Jimmy Kimmel Show and 0:00:47.720 --> 0:00:51.440 much more. iPhone seventeen on sale today. Caro went down 0:00:51.479 --> 0:00:54.040 to the store. We'll get the details in video. We're 0:00:54.080 --> 0:00:57.120 watching because we have not had any headlines out of 0:00:57.120 --> 0:01:00.760 that conversation with President Trump and Jijingping. Whether we in 0:01:00.840 --> 0:01:03.400 video is discussed or not, but that's what the market's watching, 0:01:03.520 --> 0:01:03.840 and I. 0:01:03.800 --> 0:01:04.680 Throw oracle up. 0:01:04.720 --> 0:01:07.240 We have had a headline out of that call. It 0:01:07.280 --> 0:01:10.880 is from China's news agency Jinhoar and it says that, 0:01:10.959 --> 0:01:15.360 according to Jijingping, China is prepared to respect the wishes 0:01:15.360 --> 0:01:17.880 of the companies that are involved in the TikTok deal. 0:01:18.160 --> 0:01:20.000 It has been reported that Oracle is part of the 0:01:20.040 --> 0:01:22.720 coalition and it's trading at a record high, but we 0:01:22.760 --> 0:01:25.520 do not have confirmation on the specifics, Caro. We're just 0:01:25.560 --> 0:01:27.640 watching that because it's the publicly traded name. 0:01:28.080 --> 0:01:32.000 Indeed, there are following headlines coming out from that readout 0:01:32.080 --> 0:01:34.679 of the call. She has asked for the US to 0:01:34.760 --> 0:01:39.319 refrain from taking unilateral trade measures, a cleif clear focus 0:01:39.360 --> 0:01:42.240 there for on tariff measures. She on TikTok, saying they 0:01:42.280 --> 0:01:45.280 welcome business talks following market rules, and she also saying 0:01:45.319 --> 0:01:49.280 on TikTok that the Chinese government respects the wishes of companies. 0:01:49.560 --> 0:01:51.720 Perfect person to discuss all of this is Bloomberg Senior 0:01:51.720 --> 0:01:54.360 Tech editor Mike Sheppard, who joins us from Washington. What 0:01:54.400 --> 0:01:56.920 do you make of the readout, Oll, Carol. 0:01:56.920 --> 0:02:00.000 We're still looking at this readout as it comes in 0:02:00.120 --> 0:02:03.240 and as we're trying to interpret its meaning. We are 0:02:03.280 --> 0:02:06.360 not seeing a clear cut signal that China has given 0:02:06.360 --> 0:02:10.359 its blessing to this framework agreement that was unveiled by 0:02:10.520 --> 0:02:14.960 Chinese negotiators and US negotiators after two days of talks 0:02:15.000 --> 0:02:15.680 in Madrid. 0:02:15.840 --> 0:02:17.959 There were very few details. 0:02:17.440 --> 0:02:20.720 On that accord at the time, but our reporting has shown, 0:02:20.760 --> 0:02:24.160 as Ed has pointed out just now that Oracle, as 0:02:24.200 --> 0:02:27.760 well as and recent Horowitz and silver Lake Capital Management, 0:02:27.840 --> 0:02:32.280 would be among the US buyers of TikTok's US operations 0:02:32.480 --> 0:02:36.640 should approval actually come down from the Chinese side. Donald Trump, 0:02:36.639 --> 0:02:39.280 for his part, of course, is eager to see see 0:02:39.280 --> 0:02:42.600 this deal go through. He wants TikTok to stay viable 0:02:42.680 --> 0:02:46.120 in the US. He credits it with his election comeback victory. 0:02:46.320 --> 0:02:48.320 But we have not heard from the President yet. 0:02:49.400 --> 0:02:52.600 Chet more headlines than another red headline on the Bloomberg terminal. 0:02:53.000 --> 0:02:57.800 G has asked the US to avoid undermining the outcomes 0:02:57.840 --> 0:03:00.840 from recent talks. I think that's a signal politically right. 0:03:00.880 --> 0:03:03.600 And remember these headlines are from a readout from China's 0:03:03.600 --> 0:03:06.560 state news agency. We also have another headline on TikTok. 0:03:06.960 --> 0:03:10.200 China would like to see the company's find resolution to 0:03:10.280 --> 0:03:14.200 the TikTok issue, according to G Again, Mike, we're following 0:03:14.200 --> 0:03:17.440 this in real time, but we're learning about China's attitude. 0:03:17.520 --> 0:03:20.400 We still don't have the concrete details of what the 0:03:20.440 --> 0:03:22.480 structure of a US TikTok is. 0:03:23.520 --> 0:03:26.360 Well, that's right, and it also doesn't sound like China 0:03:26.600 --> 0:03:29.080 is giving its full thumbs up there. It sounds like 0:03:29.639 --> 0:03:33.960 Hi Jimping is signaling that there are still some objections 0:03:34.080 --> 0:03:36.720 and that maybe something came up during the call with 0:03:36.840 --> 0:03:40.640 President Donald Trump that gave China pause. We did even 0:03:40.680 --> 0:03:44.240 hear from Trump yesterday a bit of a non committal tone, 0:03:45.160 --> 0:03:48.040 not quite a full walk back of what we heard 0:03:48.120 --> 0:03:51.480 at the beginning of the week following this framework agreement 0:03:51.560 --> 0:03:54.680 between the two sides on trade but especially on TikTok, 0:03:55.000 --> 0:03:57.880 but he was saying we'll see those were his exact 0:03:57.920 --> 0:04:00.800 words in a Fox interview, and let's use signal from 0:04:00.800 --> 0:04:03.080 the president that there may be more work to do. 0:04:03.400 --> 0:04:06.520 So we're still waiting to hear what the US version 0:04:06.600 --> 0:04:09.080 of events is and whether they think that they are 0:04:09.120 --> 0:04:12.800 any closer or perhaps further away when it comes to talks. 0:04:12.880 --> 0:04:14.600 It does sound like there are a lot of business 0:04:14.680 --> 0:04:17.800 issues still to resolve, including from the Chinese point of view. 0:04:18.040 --> 0:04:18.120 Ed. 0:04:18.200 --> 0:04:21.599 Remember this is key to understand. China does not want 0:04:21.680 --> 0:04:25.839 to sell TikTok. It wants to see byte dance hold 0:04:25.880 --> 0:04:28.640 on to this, and if it is sold, it wants 0:04:28.680 --> 0:04:32.159 to keep control of the algorithm and not see its 0:04:32.160 --> 0:04:36.000 company byte Dance is considered a real star in the 0:04:36.080 --> 0:04:39.200 Chinese tech universe. It does not want to see it 0:04:39.240 --> 0:04:41.799 diminished in any way, so there has to be a 0:04:41.839 --> 0:04:44.440 hefty price paid for this, and it also does not 0:04:44.520 --> 0:04:47.600 want to see the valuable algorithm transferred in any way 0:04:47.640 --> 0:04:48.520 to US owners. 0:04:48.920 --> 0:04:50.400 We're just going to try and bring up a chart 0:04:50.480 --> 0:04:53.360 because Oracle is still triading higher, but only by a 0:04:53.400 --> 0:04:55.960 percentage point. Now it is actually pulled back from its 0:04:56.000 --> 0:04:59.360 highs directly on the readout coming from the Chinese state 0:04:59.400 --> 0:05:01.520 press right now. Now, of course, Oracle's name in the 0:05:01.560 --> 0:05:04.440 mix for any sort of coalition of companies that were 0:05:04.440 --> 0:05:08.720 looking to be buying TikTok's US unit. Now we can 0:05:08.720 --> 0:05:10.480 see that it's just come off of its highs. So 0:05:10.520 --> 0:05:13.120 it looks as though, as you interpret, Mike, then indeed 0:05:13.120 --> 0:05:15.960 this doesn't feel like a done deal yet, and indeed 0:05:15.960 --> 0:05:18.120 that we are still trying to get the intricacies of 0:05:18.160 --> 0:05:21.359 what China says it likes to see companies to find 0:05:21.480 --> 0:05:24.719 resolution to TikTok issue. Of course, we need the US 0:05:24.800 --> 0:05:28.280 interpretation of all of this next steps, Mike. Therefore, because 0:05:28.279 --> 0:05:30.679 we were hoping that maybe other things were being considered 0:05:30.720 --> 0:05:33.119 in their pohlm call, not just TikTok, but in video 0:05:33.120 --> 0:05:33.640 them anymore. 0:05:34.760 --> 0:05:35.320 Well, that's right. 0:05:35.360 --> 0:05:37.680 There are a host of trade issues between the two 0:05:37.720 --> 0:05:39.479 sides to resolve, and I'm glad you brought up in 0:05:39.560 --> 0:05:43.800 video because the question of export controls that have restricted 0:05:43.839 --> 0:05:46.960 the chip maker's ability to sell its AI products in 0:05:47.040 --> 0:05:50.640 China have been a major sticking point between the two sides. 0:05:50.640 --> 0:05:54.159 We've seen Jensen Wong really advocate here in Washington over 0:05:54.200 --> 0:05:56.919 the past nine months for a relaxation of the US 0:05:56.920 --> 0:06:00.480 export controls, but he's also run into some headwinds in China, 0:06:00.520 --> 0:06:04.560 which is also moving to discourage Chinese companies from buying 0:06:04.600 --> 0:06:07.160 the company's chips. So there is a lot at stake, 0:06:07.200 --> 0:06:10.760 and it's unclear whether Donald Trump used this call to 0:06:10.800 --> 0:06:13.320 try to go to bat for Jensen Wang and Nvidia. 0:06:13.640 --> 0:06:16.719 The President has signaled his openness to the idea of 0:06:16.760 --> 0:06:21.240 perhaps selling a downgraded version of the new Blackwell line 0:06:21.320 --> 0:06:25.000 of AI chips in China, but again, that is a 0:06:25.120 --> 0:06:28.720 multi step process in terms of relaxing those export controls, 0:06:28.880 --> 0:06:32.360 and it's unclear whether this would factor into the conversation. 0:06:32.520 --> 0:06:34.640 Jensen Wong, for his part, certainly would like it to. 0:06:35.000 --> 0:06:38.480 They're feeling the sense of urgency in China where Huawei 0:06:38.520 --> 0:06:41.760 is really moving ahead by leaps and bounds when it 0:06:41.800 --> 0:06:45.080 comes to developing its AI chips and finding ways to 0:06:45.160 --> 0:06:47.719 deploy them in a way to better compete with Nvidia, 0:06:47.760 --> 0:06:49.000 as we just saw yesterday. 0:06:49.080 --> 0:06:54.320 Kara, Mike Shephard, we thank you for the breakdown instant analysis. 0:06:54.360 --> 0:06:56.960 Let's get more instant analysis for you. Sam Sak, Senior 0:06:56.960 --> 0:06:59.320 fellow at the New America Institute who has worked on 0:06:59.400 --> 0:07:03.120 Chinese technology policy for over a decade, So your viewpoint 0:07:03.160 --> 0:07:04.160 and expertise crucial. 0:07:04.160 --> 0:07:04.360 Hair. 0:07:04.640 --> 0:07:06.919 It feels as though maybe a deal isn't done. How 0:07:06.920 --> 0:07:09.760 do you interpret what really the outcome of a phone 0:07:09.800 --> 0:07:10.680 called can be sad. 0:07:12.200 --> 0:07:14.000 The pathway to a deal, and I don't just mean 0:07:14.040 --> 0:07:17.160 a TikTok deal, but a broader US China trade deal 0:07:17.320 --> 0:07:21.640 is strewn with obstacles. Both sides clearly want something that 0:07:21.680 --> 0:07:24.520 they can deliver. But let's break it down what's in 0:07:24.560 --> 0:07:28.160 the way. China realizes that they have real leverage here 0:07:28.960 --> 0:07:31.000 and they're not going to give into this easily. They 0:07:31.040 --> 0:07:33.760 know that Trump wants to take home something to his 0:07:34.400 --> 0:07:37.960 audience at home. The second thing is that there are 0:07:38.120 --> 0:07:42.600 hawks all over Congress in the administration who also work 0:07:42.760 --> 0:07:45.680 very hard to ban TikTok, only to see Trump look 0:07:45.720 --> 0:07:48.760 to trade it away. And they've raised hell about the 0:07:48.880 --> 0:07:53.000 idea that there are supposed national security concerns that are 0:07:53.000 --> 0:07:57.680 going to go unresolved about data access, about online content. 0:07:58.240 --> 0:08:01.640 So there's a real sort of complex web of issues 0:08:01.840 --> 0:08:04.320 that both leaders are going to have to work through 0:08:04.480 --> 0:08:08.480 to bring home the political win for their respective constituents. 0:08:09.000 --> 0:08:09.840 A political win. 0:08:09.920 --> 0:08:12.760 Thus far, had been signaled to the market that a 0:08:13.000 --> 0:08:16.920 US part of TikTok would form as a different app. 0:08:17.200 --> 0:08:19.480 Entirely the users one hundred and seventy million of them 0:08:19.480 --> 0:08:22.320 would migrate to a different app as reporting goes, and 0:08:22.360 --> 0:08:26.480 would be controlled by US investors. But how hard is 0:08:26.520 --> 0:08:29.000 that sort of a pill for China to swallow? There 0:08:29.040 --> 0:08:31.560 had been reports, of course, that China or byte Dance 0:08:31.600 --> 0:08:35.080 would license the underlying algorithm. Why has TikTok become like 0:08:35.160 --> 0:08:39.120 the lynchpin to so much more in US China relationship. 0:08:40.800 --> 0:08:43.920 The algorithm for a long time was the secret sauce. 0:08:44.040 --> 0:08:46.520 It was something that byte Dance was able to do 0:08:46.679 --> 0:08:50.120 far more effectively than its peers. But keep in mind 0:08:50.200 --> 0:08:52.920 this saga with TikTok has been playing out for about 0:08:52.960 --> 0:08:56.600 five years now, and so at what one time was 0:08:56.679 --> 0:09:00.680 seen as ahead of the game in getting users hooked 0:09:00.720 --> 0:09:03.839 on the app, the flywheel effect of then collecting more 0:09:03.880 --> 0:09:07.640 of their data. It's no longer really as cutting edge 0:09:07.640 --> 0:09:09.560 as I'd say it was five years ago when this 0:09:09.640 --> 0:09:12.480 first became an issue. But that doesn't mean that Beijing's 0:09:12.520 --> 0:09:15.719 going to let it go so easily. This is a 0:09:15.960 --> 0:09:20.480 Chinese brand that has succeeded globally beyond China's markets at 0:09:20.480 --> 0:09:24.160 a time when that's key to China's asserting influence in 0:09:24.200 --> 0:09:27.040 the world, and they're at the beginning of being able 0:09:27.040 --> 0:09:31.360 to field companies that market that consumers out China outside 0:09:31.360 --> 0:09:34.360 of China actually want. So they're not going to just 0:09:34.480 --> 0:09:37.800 give this over easily to the US, as much as 0:09:38.160 --> 0:09:40.600 they want to secure a deal as well. Also, they 0:09:40.600 --> 0:09:43.840 have big wants still on the table. They want export 0:09:43.920 --> 0:09:47.880 controls lifted. Mike mentioned about the Nvidia chips. Maybe they're 0:09:47.880 --> 0:09:51.199 holding out to see what exactly they can exert from Trump. 0:09:53.080 --> 0:09:55.280 Sam, I'm going to go back to the news because 0:09:55.320 --> 0:09:58.440 we are literally digesting what is a readout from China 0:09:58.520 --> 0:10:01.360 State News Agency and According to that read out, President 0:10:01.440 --> 0:10:03.880 g says that the Chinese government will respect wishes of 0:10:03.920 --> 0:10:07.800 companies in the context of TikTok, that on TikTok, they 0:10:07.880 --> 0:10:11.840 welcome business talks following market rules, and the final headline 0:10:11.880 --> 0:10:14.560 is that China likes to see companies find a resolution 0:10:14.679 --> 0:10:17.400 on the TikTok sale. We yet to get the readout 0:10:17.400 --> 0:10:19.680 from the United States side, but as somebody that's looked 0:10:19.679 --> 0:10:22.640 at Chinese technology policy, both from within the US government 0:10:22.640 --> 0:10:25.920 and from the private sector, is this a positive signal 0:10:25.960 --> 0:10:28.920 she's making or is it a negative signal, a warning. 0:10:30.520 --> 0:10:35.600 That She's administration has not changed its position. They're saying 0:10:35.640 --> 0:10:38.280 that now, but actually the reality is they've been saying 0:10:38.280 --> 0:10:41.679 that for a long time. I don't think that they 0:10:41.800 --> 0:10:44.960 care that much about TikTok, to be honest, but I 0:10:45.000 --> 0:10:48.640 think they know that Trump cares about it, and they 0:10:48.720 --> 0:10:52.160 see this as the lynchpin to opening up a broader 0:10:52.240 --> 0:11:00.720 set of asks beyond TikTok, export controls, tariffs lifted, they 0:11:00.760 --> 0:11:04.480 want access to the US market for more investment. There's 0:11:04.520 --> 0:11:06.920 a litany of things, and then it becomes it becomes 0:11:06.920 --> 0:11:09.560 a game of chicken. Who's going to blink first? And 0:11:09.679 --> 0:11:11.760 China knows they have something here. 0:11:12.600 --> 0:11:16.040 Sam Sachs from the New America Institute, fascinating to have 0:11:16.080 --> 0:11:18.560 you on amid the breaking news. We thank you. Coming up, 0:11:18.600 --> 0:11:20.120 we're going to be breaking down the week there was 0:11:20.160 --> 0:11:22.800 and tech markets we're still at record highs empowers. Martin 0:11:22.840 --> 0:11:37.040 Norton joins them that next this Bloomberg Tech breaking news. 0:11:37.040 --> 0:11:40.120 Some headlines coming across the Bloomberg terminal that Chinese President 0:11:40.160 --> 0:11:43.440 She is asking for the US to avoid undermining outcomes 0:11:43.679 --> 0:11:46.720 from recent talks. Mex Tyler Kennell joins us. Now from 0:11:46.760 --> 0:11:48.280 the White House, we've had to read out from the 0:11:48.400 --> 0:11:52.480 Chinese state press regarding that phone call between she and Trump. 0:11:52.760 --> 0:11:54.719 Now we await Trump's reaction. What do you make of 0:11:54.800 --> 0:11:56.880 the headlines? Right exactly? 0:11:56.920 --> 0:11:58.960 Caroline and her White House official tells us that we 0:11:59.000 --> 0:12:01.440 will get at the White House formal response and a 0:12:01.480 --> 0:12:03.960 post on truth social So our eyes at the moment 0:12:03.960 --> 0:12:06.880 are peeled on President trump social media feeds. But as 0:12:06.880 --> 0:12:09.440 you read that main headline here that Chinese state media 0:12:09.480 --> 0:12:12.840 is reporting that Jijingping says that the US should avoid 0:12:12.960 --> 0:12:16.280 undermining any recent progress in the talks, but that also 0:12:16.400 --> 0:12:19.479 the US should refrain from taking any sort of restrictive 0:12:19.600 --> 0:12:22.480 trade measures, and there's a few different angles and threads 0:12:22.480 --> 0:12:24.880 that we could really dig into when it comes to 0:12:25.040 --> 0:12:28.840 that idea that it appears that Jijingping is trying to portray, 0:12:28.920 --> 0:12:31.520 including that we saw really both sides ramping up the 0:12:31.559 --> 0:12:34.640 pressure ahead of those talks in Madrid earlier this week, 0:12:34.679 --> 0:12:37.800 including for example, the US adding some twenty three Chinese 0:12:37.840 --> 0:12:40.959 companies to its entity list over the weekend. You were 0:12:40.960 --> 0:12:43.480 talking in your earlier segment about this idea around the 0:12:43.520 --> 0:12:46.720 messaging of export controls, and we've also seen the US 0:12:46.760 --> 0:12:49.120 really harden its rhetoric when it comes to so called 0:12:49.240 --> 0:12:53.400 secondary tariffs against China, urging our allies to impose them 0:12:53.440 --> 0:12:56.520 over their imports of Russian energy supplies. We have to 0:12:56.600 --> 0:12:58.560 keep in mind put this into the context that our 0:12:58.640 --> 0:13:02.360 reporting has long showed that China has been upset, has 0:13:02.400 --> 0:13:04.880 been dismayed at this idea that they have been treated 0:13:05.000 --> 0:13:07.200 differently from other trading partners. 0:13:07.200 --> 0:13:08.280 That's why you'll recall it. 0:13:08.240 --> 0:13:11.280 Was so significant when that thirty four percent so called 0:13:11.280 --> 0:13:14.240 reciprocal tariff came back down to ten percent, but of 0:13:14.240 --> 0:13:17.360 course we still have twenty percent tariff related to fetanyl 0:13:17.400 --> 0:13:19.920 still on the table. And it's actions like those that 0:13:19.960 --> 0:13:22.080 perhaps will see some sort of movement on as we 0:13:22.120 --> 0:13:25.120 wait the readout on the White House's side. Now, as 0:13:25.120 --> 0:13:27.559 you well know, and we're discussing, the focus of today's 0:13:27.559 --> 0:13:29.680 call appear to be really on any sort of movement 0:13:30.000 --> 0:13:33.079 around TikTok. But when it comes to these other trade concessions, 0:13:33.080 --> 0:13:35.880 our analysts at Bloomberg Economics point out, we really haven't 0:13:35.920 --> 0:13:38.760 gotten many signs up to this point that there has 0:13:38.880 --> 0:13:41.320 been movement on that because most of these talks have 0:13:41.400 --> 0:13:45.120 really been about keeping that de escalation in place. Caroline 0:13:45.160 --> 0:13:48.200 and ed. Yesterday, President Trump suggested that he is considering 0:13:48.559 --> 0:13:52.640 extending that tariff truce deadline it's set to expire on 0:13:52.800 --> 0:13:56.040 November tenth. That comes just weeks after a potential face 0:13:56.080 --> 0:13:58.760 to face meeting. This call was largely seen as perhaps 0:13:58.800 --> 0:14:02.439 setting the stage for them that we're eyeing could potentially 0:14:02.520 --> 0:14:05.319 take place next month end of October in South Korea 0:14:05.400 --> 0:14:07.000 on the sidelines of the APEX summit. 0:14:07.600 --> 0:14:09.520 I've been both Tyler Kendall at the White House, Thank 0:14:09.559 --> 0:14:11.680 you very much. It's really hard to interpret carry the 0:14:11.679 --> 0:14:14.160 market response here. The S and P five hundred has 0:14:14.200 --> 0:14:16.600 paired what we're modest gains to basically trade flat, and 0:14:16.720 --> 0:14:20.680 yields have ticked higher since we got those headlines. We 0:14:20.680 --> 0:14:23.200 were waiting for this this phone called. Martin Norton is 0:14:23.320 --> 0:14:26.840 chief investment strategist at Empower and joins us now for more. 0:14:26.840 --> 0:14:29.560 I mean that trade headline is the main one both 0:14:29.600 --> 0:14:31.560 that g is calling on the President of the United 0:14:31.600 --> 0:14:34.760 States not to go back on what was discussed in talks. 0:14:35.080 --> 0:14:38.479 And you heard Tyler's reporting there as a market participant, 0:14:38.520 --> 0:14:41.880 where you braced and ready to move this morning, or 0:14:41.920 --> 0:14:43.280 did we get what we expected? 0:14:44.520 --> 0:14:47.280 You know, we're in a kind of a world where 0:14:47.320 --> 0:14:49.200 there's a bit of a shoving match, and I think 0:14:49.200 --> 0:14:53.600 it's largely to be expected. There's not a massive clarity 0:14:53.920 --> 0:14:57.320 around what this could look like, and it's continued back 0:14:57.400 --> 0:14:58.960 and forth at this point in time. 0:14:59.320 --> 0:15:02.200 I think what we're seeing more broadly is the. 0:15:02.560 --> 0:15:07.880 Degree to which geopolitics is entering and becoming another source 0:15:07.920 --> 0:15:12.200 of volatility for the markets, something that impacts individual companies 0:15:12.240 --> 0:15:14.680 and the market more broadly. And the news is sudden 0:15:14.880 --> 0:15:16.440 and it catches folks off. 0:15:16.240 --> 0:15:20.200 Guard, it does yep, sorry, ed you go no, no, no, 0:15:20.320 --> 0:15:22.120 I just wanted to point out the other red headline 0:15:22.200 --> 0:15:24.480 right because the news is just flying through the terminal 0:15:24.520 --> 0:15:27.480 as we speak. The other one is that President g 0:15:27.720 --> 0:15:30.960 Marta says that he wants the United States to refrain 0:15:31.400 --> 0:15:35.560 from taking unilateral trade measures. Again, we're trying to interpret 0:15:35.560 --> 0:15:38.440 a readout from China State News Agency, But what is 0:15:38.480 --> 0:15:40.360 your interpretation of that comment. 0:15:41.400 --> 0:15:43.880 I mean, it certainly seems like there are bigger things 0:15:43.920 --> 0:15:47.000 at play right now. I think the reporting that you 0:15:47.080 --> 0:15:51.640 all have just shared showing that, yes, TikTok is something 0:15:51.720 --> 0:15:55.360 that's a primary concern, but there are other primary concerns 0:15:55.360 --> 0:15:58.360 as it relates to the broader trade relationship, and right 0:15:58.360 --> 0:16:00.600 now both sides are trying to find these points of 0:16:00.680 --> 0:16:03.840 leverage to determine what can be pushed to gain kind 0:16:03.840 --> 0:16:05.760 of the greatest advantage in this conversation. 0:16:05.840 --> 0:16:08.400 So it seems like we're kind of listening into. 0:16:08.480 --> 0:16:11.200 One part of the conversation, but it's part of a 0:16:11.320 --> 0:16:14.280 much broader discussion that's been going on and continues to 0:16:14.320 --> 0:16:14.640 go on. 0:16:15.400 --> 0:16:18.640 Madre, it's interesting timing that JP Morgan Asset Management has 0:16:18.680 --> 0:16:22.600 put out this thought that actually what Trump's geopolitical risk 0:16:22.720 --> 0:16:25.200 right now is the AI story, and if we get 0:16:25.200 --> 0:16:27.360 a bad set of numbers, of any earnings look weak 0:16:27.400 --> 0:16:29.960 in some of these AI stars. That's where the market 0:16:30.000 --> 0:16:33.680 volatility really comes from. But actually the whole story around 0:16:33.760 --> 0:16:37.000 semiconductors is so intertwined with geopolitics as well, So how 0:16:37.040 --> 0:16:37.960 do you distinguish the two? 0:16:38.880 --> 0:16:41.840 Right, It's a pretty fascinating time. I mean, we're looking 0:16:41.920 --> 0:16:45.040 at company after company that seems to be very in 0:16:45.080 --> 0:16:47.560 tune to what the Trump administration wants, and I think 0:16:47.600 --> 0:16:51.360 it underscores this idea that AI isn't just a form 0:16:51.400 --> 0:16:54.680 of secular growth for companies and for the economy, but 0:16:54.720 --> 0:16:57.880 it's something that is akin to the space race in 0:16:57.960 --> 0:17:01.240 terms of sovereign interest, and so I think it adds 0:17:01.280 --> 0:17:04.880 this whole another dimension that we have to consider as 0:17:04.880 --> 0:17:07.920 we think about those sources of volatility. I think one 0:17:08.000 --> 0:17:11.480 consideration here is what does demand look like if we're 0:17:11.480 --> 0:17:15.480 looking at a more bifurcated world where potentially US and 0:17:15.600 --> 0:17:18.280 China aren't necessarily buying from each other as much as 0:17:18.280 --> 0:17:21.280 they are jocking with each other when it comes to AI. 0:17:21.680 --> 0:17:24.600 I'm not sure that necessarily changes the whole AA narrative. 0:17:24.640 --> 0:17:27.400 We know that there's massive, massive amounts of demand even 0:17:27.400 --> 0:17:30.280 here just domestically, but I think it's a whole new 0:17:30.320 --> 0:17:32.840 dimension that we have to consider as we take a 0:17:32.880 --> 0:17:36.200 look forward and try to project expectations, and. 0:17:36.280 --> 0:17:38.359 We try to stum up the fact that we're up 0:17:38.440 --> 0:17:40.840 sixteen percent year to date and then as that one 0:17:40.920 --> 0:17:43.879 hundred and we're a record highs So with all the 0:17:44.000 --> 0:17:47.080 underlying risks, should you be buying into this market? 0:17:47.920 --> 0:17:51.119 You know, in my mind at this juncture, we're at 0:17:51.119 --> 0:17:53.520 a point where it makes some sense to rebalance, to 0:17:53.560 --> 0:17:57.520 take some profits. We've had this tremendous run since April eighth, 0:17:57.600 --> 0:18:00.119 where we've seen a lot of these companies recover or 0:18:00.160 --> 0:18:02.560 even something like the Mags, even which had a much 0:18:02.560 --> 0:18:04.480 bigger hit in the first part of the year due 0:18:04.480 --> 0:18:06.679 to Deep Seek, even that area of the market is 0:18:06.680 --> 0:18:10.320 beginning to look pracy now. Companies have delivered, the earnings 0:18:10.400 --> 0:18:13.360 has been there, the investment in the future that Capex 0:18:13.400 --> 0:18:16.480 has been there. We're seeing demand from the hyperscalers based 0:18:16.480 --> 0:18:17.600 on AI workflows. 0:18:17.880 --> 0:18:19.800 So there's a lot of positives to point to. 0:18:20.240 --> 0:18:22.600 But it really wouldn't take much something coming out of 0:18:22.680 --> 0:18:26.000 left field like we saw with Deep Seek to maybe 0:18:26.040 --> 0:18:27.200 have people pull. 0:18:27.119 --> 0:18:27.600 Back a bit. 0:18:27.640 --> 0:18:29.960 And I think when we think about these innovation periods. 0:18:30.240 --> 0:18:33.360 It shouldn't be a straight line higher that would defy reality. 0:18:33.440 --> 0:18:35.800 It ought to be something that has fits and starts 0:18:35.840 --> 0:18:37.960 and moments of doubt. So I think when we're at 0:18:37.960 --> 0:18:40.720 a period where it feels somewhat euphoric, it's time to 0:18:40.760 --> 0:18:42.960 position for a potential moment of doubt. 0:18:43.400 --> 0:18:45.719 Not an alton of EmPATH. Great to have you on 0:18:45.880 --> 0:18:54.760 amid these moments of doubt you are looking currently it 0:18:54.800 --> 0:18:56.840 pictures of the Apple store in New York and Fifth Avenue. 0:18:56.880 --> 0:19:00.000 Earlier today, the company was rolling out several new iPhones 0:19:00.080 --> 0:19:02.600 signs that kind of the biggest overhaul that we've seen 0:19:02.600 --> 0:19:05.520 since twenty twenty. I was there as the Apple CEO, 0:19:05.600 --> 0:19:09.360 Tim Cook, walked around the store. There were NBA players there, 0:19:09.440 --> 0:19:13.399 and there were influencers, and there was me trying to 0:19:13.400 --> 0:19:15.520 get a moment with Tim Cook talking about perhaps some 0:19:15.560 --> 0:19:19.560 of the issues they had with getting enough iPhone pros 0:19:19.600 --> 0:19:21.880 into people's hands on the day. Of course, we're knowing 0:19:21.920 --> 0:19:24.640 that some of the timelines being pushed back, but it's not. 0:19:24.600 --> 0:19:25.240 Just the cue. 0:19:25.280 --> 0:19:28.439 The enormous queue that I saw lining the streets of 0:19:28.440 --> 0:19:30.639 New York, but that was replicated in London, wasn't It 0:19:30.680 --> 0:19:31.760 was over in Asia as well. 0:19:33.040 --> 0:19:33.760 Yep, it was. 0:19:33.800 --> 0:19:36.720 And it's interesting because you followed the clock around the world. 0:19:36.760 --> 0:19:39.560 Let's bring in Bloomberg's consumer tech editor Dana Wolman, and 0:19:39.640 --> 0:19:42.280 let's start on that piece. We have the information from 0:19:42.359 --> 0:19:46.000 Asia into Europe, now the United States. What's the reaction 0:19:46.080 --> 0:19:47.520 to iPhone seventeen launch day? 0:19:48.000 --> 0:19:51.560 So definitely some long lines in all the major markets 0:19:51.800 --> 0:19:55.760 where reporters have visited stores, and a relatively few of 0:19:55.760 --> 0:19:58.480 the customers who we interviewed mentioned the iPhone Ra, which 0:19:58.520 --> 0:20:00.960 is the skinny iPhone that got so much media attention 0:20:01.040 --> 0:20:03.919 ahead of the launch. It turned out that most of 0:20:03.960 --> 0:20:06.440 the customers who we interviewed were looking for the iPhone 0:20:06.480 --> 0:20:09.480 seventeen Pro or the Pro Max, which makes sense given 0:20:09.520 --> 0:20:12.800 that these phones are for pro users, power users and 0:20:12.960 --> 0:20:15.159 early adopters and tech enthusiasts are precisely the sort of 0:20:15.200 --> 0:20:17.400 people who might feel motivated to line up in front 0:20:17.440 --> 0:20:19.600 of a store around dawn the day of a launch. 0:20:20.280 --> 0:20:23.280 It's interesting that in the eye of the storm is 0:20:23.320 --> 0:20:26.240 of course the supply chain that Apple has largely based 0:20:26.280 --> 0:20:28.600 in China. We are getting more breaking news of the 0:20:28.640 --> 0:20:32.360 readout coming from the Trump She talks on the phone 0:20:32.480 --> 0:20:35.000 with President Trump, putting on Social that he's just completed 0:20:35.040 --> 0:20:38.439 a very productive call with President she. But I'm interested 0:20:38.520 --> 0:20:41.800