Speaker 1: Bloomberg Audio Studios, podcasts, radio news from Mahard where Innovation,
Speaker 1: money and power Collie in Silicon Valley, Nbon. This is
Speaker 1: Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 2: I'm Caroline Heide at Blomberg's World headquarters in New York.
Speaker 3: Ed Ludlow is off. This is Bloomberg Technology. Coming up the.
Speaker 2: US awards TSMC eleven point six billion dollars in grants
Speaker 2: and loans in an effort to boost that domestic semiconductor
Speaker 2: manufacturing or break down what the move means for the
Speaker 2: US chip production. Plus, in his annual letter to shareholders,
Speaker 2: JP Morgan CEO Jamie Diamond likens artificial intelligence to the
Speaker 2: invention of a steam engine.
Speaker 3: Will discuss his views on how the technology is changing
Speaker 3: the world and his work force and blue checks.
Speaker 2: They're back and Eno Musk's X the social platform makes
Speaker 2: a U turn as it offers premium features to popular
Speaker 2: accounts for free thatsas Musk takes on Brazilian court leaders.
Speaker 2: Details on that and so much more throughout this hour,
Speaker 2: But focus on the public markets as we look towards
Speaker 2: CPI print coming on Wednesday. All eyes focus on what
Speaker 2: the bond market is doing yields actually curringly up three
Speaker 2: basis points, and in fact we're seeing the highest levels
Speaker 2: for the entirety of this year. But it's not pulling
Speaker 2: back on any sort of risk taking in the equity
Speaker 2: market thus far. We still see the NASA pushing up
Speaker 2: some five tenths of a percent. So keep an eye
Speaker 2: on some of the key names that are driving US high.
Speaker 2: And even as bond markets do still worry about basically
Speaker 2: basically inflatory pressures and what that means for a federal
Speaker 2: reserve and the likelihood of a cup coming throughout the
Speaker 2: rest of the year, Bitcoin still charging to new highs
Speaker 2: for at three point five percent higher seventy seven hundred
Speaker 2: and fifty six, or we're back at near those all
Speaker 2: time highs. Move on, some of the other risk assets
Speaker 2: to the individual names are on the move in the
Speaker 2: individual benchmarks. Tesla best performed on the last that one hundred.
Speaker 2: We're up five percent. Now remember this a beaten up stock,
Speaker 2: worst perform on the S and P five hundred so
Speaker 2: far this year. And Elon Mus trying to switch the
Speaker 2: narrative here, trying to move from the worries about ultimately
Speaker 2: deliveries being weak even a concern about the cheaper models,
Speaker 2: and instead wants us to focus on robotaxis and whether
Speaker 2: or not that big unveil will be enough. The booster
Speaker 2: stock coming on August the eighth, so exactly four months time.
Speaker 3: I'm looking at.
Speaker 2: Amazon encroaching on all record highs percentage point one hundred
Speaker 2: and eighty seven, as yet more desire to be getting into.
Speaker 3: This stock pushes this name higher.
Speaker 2: I'm looking though, at the key story of the day,
Speaker 2: and this is where we've got a drill in for TSMC.
Speaker 2: Of course, Taiwanee Semiconductor giants getting eleven point six billion
Speaker 2: dollars in grants and loans to be putting its third
Speaker 2: fab in Phoenix, Arizona. This is all about the latest
Speaker 2: infrastructure play to ensure that we've got domestic chips made
Speaker 2: here in the United States. Then it could be the
Speaker 2: underpinning of artificial intelligence. This stock is up two point
Speaker 2: two five percent on the ADRs.
Speaker 3: What does it mean for the broader ecosystem? I'm pleased
Speaker 3: to say.
Speaker 2: Advisor's capital management partner and portfolio manager Joanne Foeni joins
Speaker 2: us with your expertise and the chip making field, and John,
Speaker 2: how important is it that we get foreign expertise into
Speaker 2: the US to continue with a supply chain that has
Speaker 2: proven to be broken on previous minds of what two
Speaker 2: or three years ago.
Speaker 4: Yeah, Caroline morning, You know, the value to the US
Speaker 4: of having more domestic manufacturing at the leading edge or
Speaker 4: close to the leading edge of semiconductors is strategically pretty important.
Speaker 5: Right.
Speaker 4: We are all looking at geopolitical instabilities and risks, particularly
Speaker 4: in the Asia Pacific, and so this builds on Taiwan
Speaker 4: Semi's ability to spread their manufacturing around the world. They
Speaker 4: already have announced plans in Japan and Germany for lagging
Speaker 4: edge manufacturing. They already have operations here in the US,
Speaker 4: but really really limited. This will bring to the US
Speaker 4: a significant portion of some manufacturing close to the leading
Speaker 4: edge by the time it's done.
Speaker 6: And that'll be that will help stabilize things.
Speaker 4: It also de risks Taiwan Semi a little bit for.
Speaker 3: Investors, Okay, de risk to a certain degree.
Speaker 2: What's been interesting is other companies, when coming into the
Speaker 2: United States wanting to boost their manufacturing, have worried about
Speaker 2: the limitation on labor. Have we got the right Ultimately,
Speaker 2: rest of the joined up approach here. Yes, you can
Speaker 2: get the money, you can get the grants and the loans,
Speaker 2: but if you've got the talent pool, yeah.
Speaker 6: It's a real challenge.
Speaker 4: So when I was working up at Albany Nanotech as
Speaker 4: part of the team there that was trying to bring
Speaker 4: manufacturing to upstate New York, and there wasn't much beyond
Speaker 4: IBM in the Hudson Valley. We had to invest in
Speaker 4: the local industrial infrastructure, if you like, not just labor,
Speaker 4: but also machine shops and other support to a fabrication facility.
Speaker 4: Intel is going to face those challenges in Ohio because
Speaker 4: there's very little infrastructure there in this area. Taiwan send
Speaker 4: Me at least already has plenty of operations in Phoenix,
Speaker 4: and they're going to have to do more, and so
Speaker 4: training programs in conjunction with local technical colleges and community
Speaker 4: colleges helped to create that funnel. Fortunately, chip fabrication plants
Speaker 4: tend to be very capital intensive. It's not a lot
Speaker 4: labor that ends up getting hired here, so these subsidies
Speaker 4: aren't really about creating jobs, although you hear other politicians
Speaker 4: say that probably most of the jobs are in the
Speaker 4: construction of the plant itself. Once the plant is up
Speaker 4: and running, you know, maybe one thousand or two people.
Speaker 4: So it's not a huge number. And I know people
Speaker 4: are focused on this concern about labor, but we do
Speaker 4: have great engineering schools in this country, and once the
Speaker 4: job opportunities are there, you tend to see more kids
Speaker 4: flow into those programs. Plus you add in the customized
Speaker 4: training programs from the companies.
Speaker 2: Okay, So the companies, when we think of TSMC being
Speaker 2: one that is really making the most of subsidies, loans
Speaker 2: grants being offered, so too is Intel as well. And
Speaker 2: I'm just interested as to how much you think this
Speaker 2: money this chipset will be filtering into foreign entities or
Speaker 2: indeed more more local US presence.
Speaker 4: Well, you know, the leading edge in manufacturing, unfortunately for
Speaker 4: the US companies, has been taken over by Taiwan, Semi
Speaker 4: and Samsung. Intel had made some mistakes in their planning
Speaker 4: for manufacturing design.
Speaker 6: They chose a path.
Speaker 4: That ultimately didn't didn't work out very well, and now
Speaker 4: Pat Gelsinger is trying to shift that path to the
Speaker 4: more modern alternative and it's going to take them some
Speaker 4: years and it's going to be costly. So in terms
Speaker 4: of the US strategic goal of creating more supply of
Speaker 4: chip manufacturing in this country, we have no choice but
Speaker 4: to include foreign companies like Taiwan, Same and Samsung. We
Speaker 4: will see if Intel ultimately as successful and bringing their
Speaker 4: manufacturing up to snuff, but right now they're trailing edge.
Speaker 2: Move it on and consider for US, Joanne, ultimately whether
Speaker 2: or not you say it takes some of the risk
Speaker 2: out for investors, does it really take the risk out
Speaker 2: of supply chain concerns going into the next ten twenty
Speaker 2: years that we've seen that hit so hard during COVID.
Speaker 4: No, Caroline, and I did you ask that question deliberately
Speaker 4: to get no answer. I mean, there is just a
Speaker 4: global integration of manufacturing, not just in chips, but you know,
Speaker 4: as we saw during COVID, also in protective clothing and devices,
Speaker 4: and we don't ever really want to undo that. We
Speaker 4: value incredibly and benefit incredibly from trade and having countries
Speaker 4: specialize in manufacturing the things that they're comparative advantage favors,
Speaker 4: and we get cheaper goods because of it. Consumers benefit
Speaker 4: around the world because of that, that separation of production
Speaker 4: by specialty. So we don't ever want to undo trade flows, right,
Speaker 4: But what we want to do is shore up the
Speaker 4: infrastructure of politics and economics, hopefully to keep disruptions to
Speaker 4: supply chains as low as we can now. Obviously COVID
Speaker 4: or something like that, another pandemic comes along and we're
Speaker 4: gonna have problems, and so we have tried to onshore
Speaker 4: more production of critical items, and that's what the Chips Act.
Speaker 6: Is all about.
Speaker 2: What's been interesting is there's been for example, Bloombag Intelligence saying, look,
Speaker 2: ASML chip equipment maker is likely to be another key
Speaker 2: player that fits from some of the grants.
Speaker 3: The loans, the support, the subsidies that the.
Speaker 2: US government currently has. Any other key players that come
Speaker 2: to mind, Well, yeah, I.
Speaker 4: Think that's the right to point out the equipment guys.
Speaker 4: The more chip fabrication facilities that are built, the better
Speaker 4: it is for LAMB research, for applied materials, for ASML KLA.
Speaker 4: You know, all the chip guys, and all the gas
Speaker 4: suppliers and the other smaller equipment suppliers like say of
Speaker 4: Eco instruments. You know, there's a lot of beneficiaries. This
Speaker 4: is a very large industry and so it's pretty broad.
Speaker 4: And also the companies that use these manufacturers Benvidia, a M, D. Apple,
Speaker 4: they all benefit by having a source of supply that's
Speaker 4: more globally diversified and therefore less subject to geopolitical risks.
Speaker 2: We always love having your perspective and currently thought and
Speaker 2: your nose when they're necessary. Taran Feenie of Advisor's Capital Management,
Speaker 2: thank you so much for joining us. Monday, Jamie Diamonds
Speaker 2: annual letter to Shareholders out and guess what the focus
Speaker 2: is out?
Speaker 3: Official intelligence?
Speaker 2: We want to dig in as to why he's once
Speaker 2: again calling this out in his letter. Fishinali Bassek of
Speaker 2: Blomberg News. Twenty seventeen was the first time he mentioned
Speaker 2: official intelligence in his share letter, but this time it
Speaker 2: is the key driver of the entire letter.
Speaker 7: It feels like, Yeah, it is the scale and the
Speaker 7: scope at which he mentions it that is different from
Speaker 7: prior years. But to your point, he has mentioned it
Speaker 7: a lot before, and certainly we know that JP Morgan
Speaker 7: has invested a lot of money in this, So what
Speaker 7: is different this time around the scale at which they're
Speaker 7: using it. The use cases have jumped from about three
Speaker 7: hundred use cases a year ago to about four hundred
Speaker 7: now and importantly also The number of data scientists and
Speaker 7: machine learning experts have also been rising over at JP Morgan.
Speaker 7: Interestingly enough, last year when he mentioned artificial intelligence, it
Speaker 7: was one of the specific issues, but it was still
Speaker 7: behind climate, and this time he listed this as the
Speaker 7: first and foremost issue for JP Morgan.
Speaker 3: Ahead, I mean, just to put a find a detail
Speaker 3: on it.
Speaker 2: What was it two thousand machine learning and AI data
Speaker 2: experts that they've got had, and also an emission that
Speaker 2: the talent pool is going to have to change.
Speaker 3: He's willing to say that will be jobs.
Speaker 7: Lost, absolutely, and also that the ones that are not
Speaker 7: lost will have to be retrained. He's pretty specific about that.
Speaker 7: In addition to the jobs, I think the investment that's
Speaker 7: being made is also very interesting, Caroline. Remember they have
Speaker 7: invested about two billion dollars to build new data centers.
Speaker 7: And he sees this movement to the cloud as inextricably
Speaker 7: linked to the AI revolution, if you will, and he
Speaker 7: has said that this movement towards AI in this society
Speaker 7: at large is as revolutionary as the steam engine or
Speaker 7: the advent of the internet, and so data centers are
Speaker 7: really interesting here for JP Morgan. About thirty percent last
Speaker 7: year of their applications had moved to the cloud. By
Speaker 7: the end of this year will be seventy percent. So
Speaker 7: that transformation is pretty drastic when you look at just
Speaker 7: a year over your tear change for JP Morgan.
Speaker 2: Yeah, because I think we like to focus in on
Speaker 2: the fact that Jamie Diamond's been there saying, look, your
Speaker 2: kids will only have three and a half day work weeks.
Speaker 2: They will be cancer free because of this AI technology.
Speaker 2: But he does then go into cloud. He does just
Speaker 2: go into technology more broadly.
Speaker 7: Yeah, he certainly does in a few different ways. It's
Speaker 7: flattered throughout the entirety of the annual letter. He talks
Speaker 7: about it in terms of JP Morgan's own investment, and
Speaker 7: I think interestingly as well, he talks about this year
Speaker 7: over year as well. But the competitive set not just
Speaker 7: from fintech, but from the likes of Apple, and the
Speaker 7: language also gets more pronounced as you go on. Whereas
Speaker 7: last year he kind of brings up Apple Pay and
Speaker 7: Apple Cards, certain services for Apple, this year he says
Speaker 7: it holds money and moves money, it lends money and
Speaker 7: so on. It effectively acts as a bank, And he
Speaker 7: brings us up in the vein of regulation and all
Speaker 7: the players that are not facing regulation in technology and
Speaker 7: financial services. So it just kind of underscores here his
Speaker 7: intensity to not only keep up but change JP Morgan
Speaker 7: as we look ahead.
Speaker 2: And maybe you'd say the close runner to his talk
Speaker 2: about technology is his less thing guarded approach to regulators.
Speaker 3: Throughout the entirety of the letter to we thank you
Speaker 3: so much.
Speaker 2: Nani Bask always able to jump on this news flow
Speaker 2: with us.
Speaker 3: We thank her for it.
Speaker 2: Meanwhile, let's just stick on the markets. Let's stick on
Speaker 2: artificial intelligence dominating.
Speaker 3: These markets a little bit more.
Speaker 2: January is with us 'BC Bruin Dolphin, head of market analysis,
Speaker 2: and look, we have seen markets continue to be near
Speaker 2: record tized, whether it's the S and P five hundred,
Speaker 2: whether it's the NASDAC and are you anticipating that remains
Speaker 2: the case, Janet, even as we worry about a CPI print,
Speaker 2: for example here in the US.
Speaker 1: Hi Carelin, thanks for having me. So we believe that
Speaker 1: this equitedual market led by artificial intelligence will continue, even
Speaker 1: though you know then might be bumpy inflation data along
Speaker 1: the way. We have already seen how the market has
Speaker 1: performed despite higher bond yields and despite our central bankers
Speaker 1: being being less dubbish recently, so I think there are
Speaker 1: more sickular and mega transfactors that.
Speaker 6: Is driving the equity market rally there.
Speaker 1: I think as long as the inflation is our rages,
Speaker 1: there's no shock. I think as long as bard yeals
Speaker 1: remain pretty stabilized, I think the MarCad rally can continue.
Speaker 3: Does it broaden?
Speaker 5: Though?
Speaker 2: There's a really interesting piece out on the Bloomberg today
Speaker 2: just showing how Wall Street at the moment is trying
Speaker 2: to find a different way of playing the AI optimism. Yes,
Speaker 2: you've already put your money into in video and it's
Speaker 2: up another seventy percent year to date, it was up
Speaker 2: two hundred percent or more than last year. But what
Speaker 2: about some of the emerging market players. What about the
Speaker 2: infrastructure to be had elsewhere? We're just showing a Japanese
Speaker 2: name tower that's done particularly well.
Speaker 1: Well, absolutely so, we actually favor a bass head of
Speaker 1: exploser to semiconductor equipment makers are related names, so of
Speaker 1: course Navidia would be the dominant player. But equally, we
Speaker 1: think there's plenty of opportunities across the entire semiconductor value chained.
Speaker 1: So I think some of the other players for example,
Speaker 1: in memories, in infrastructure, in intellectual property. They may not
Speaker 1: yet have the recognition or significant valley like Navidia, but
Speaker 1: there are plenty of opportunities, so we feel that it
Speaker 1: perhaps is a good way to play it via equal
Speaker 1: weight basket of stocks exposed to that theme rather than
Speaker 1: just you know, being a field selected stocks.
Speaker 2: For instance, it's interesting you mentioned in video and a
Speaker 2: lot of some of the risk in amid the exuberance
Speaker 2: around that name has been its relationship to China, the
Speaker 2: fact that ultimately it depends on China as the end market,
Speaker 2: and of course in manufacturing as well. How much do
Speaker 2: you think geopolitical headwinds are going to be something that
Speaker 2: we need to consider a bit more in the second
Speaker 2: half of the year.
Speaker 1: Well, we always need to consider geopolitical factors, but I
Speaker 1: do think that in that case US stocks are likely
Speaker 1: to outperform the x US regents if you talk about
Speaker 1: AI stocks for instance, because I think, as we all
Speaker 1: seen already, there are plenty of subsidies, looks and grants
Speaker 1: for a company to actually produce in America, so the
Speaker 1: entire value chain may shift more and more to America.
Speaker 1: So I do think that the American companies may be
Speaker 1: less impacted by these political residents. Obviously, the China play,
Speaker 1: we're not very very interested in that. I think some
Speaker 1: of the em plays may also be more at risk
Speaker 1: if there are more tosks of trade tensions and drop
Speaker 1: political tensions. So I do think us off should be
Speaker 1: better in the circumstances.
Speaker 3: I'BC Ruined Dolphin, head of market Analysis.
Speaker 2: Generally, it's always great to catch up with you on
Speaker 2: the show in your global perspective.
Speaker 3: We thank you for it. Look, we're going to go
Speaker 3: a little bit more global in a moment.
Speaker 2: We have a conversation on cybersecurity with the former try
Speaker 2: for staff, a cybersecurity and infrastructure security agency that.
Speaker 3: CASA, Kristen Todd.
Speaker 2: What she's seeing about concerns relating to Microsoft and ultimately
Speaker 2: exposure to China.
Speaker 3: That's up next.
Speaker 2: This is bloombag Technology. It's time now for talking tech.
Speaker 2: First up, Paddy Cosgrove. Well, he's returning to the Web
Speaker 2: Summit tech conference. The news comes after he resigned, remember
Speaker 2: back in October of last year, after he made a
Speaker 2: political statement on the conflict between Israel and Hamas following
Speaker 2: the October seventh terrorist attacks.
Speaker 3: Because where the.
Speaker 2: Co founder of the Web Summit tech conference confirmed the
Speaker 2: news on x that he is returning to his role
Speaker 2: as CEO.
Speaker 3: Plus's AI demand.
Speaker 2: Quickens Ali Babara's slashing the cloud prices globally defend off
Speaker 2: rivals and revived growth.
Speaker 5: Now.
Speaker 3: The move comes amid a surge in.
Speaker 2: Demand for cloud computing to support a global boom in
Speaker 2: AI development, as well as some pretty complicated internal restructuring,
Speaker 2: and some key lawmakers have struck a deal on national
Speaker 2: data privacy here in the United States. The landmark agreement
Speaker 2: reached by the House Energy and Commerce Chair and the
Speaker 2: Senate Commerce Chair, would be the first time established federal
Speaker 2: consumer data privacy rights would be formed and allow Americans
Speaker 2: to sue companies such as Google and Meta over violations. Meanwhile,
Speaker 2: the Department of Homeland Security Cyber Safety Review Board has
Speaker 2: been out with a report on Microsoft that was pretty damning.
Speaker 2: It assessed the Microsoft Exchange online intrusion that occurred in
Speaker 2: May and Junior twenty twenty three. Stig in to what
Speaker 2: that report showed, the limitations and over all the cybersecurity
Speaker 2: spaces it sits right now. Former chief of Staff for
Speaker 2: Cybersecurity and Infrastructure Security Agency Kissed and Todd is with
Speaker 2: US and currently serving as the president of Wondrous and
Speaker 2: it's great to have some time with you. Kissed and
Speaker 2: we don't want to sort of overlook this. It came
Speaker 2: at the beginning of last week, but it almost sort
Speaker 2: of highlighted one oh one cybersecurity etiquette that seemed to
Speaker 2: have been failed over at Microsoft.
Speaker 3: Can you just detael a little bit about what you
Speaker 3: thought about the report?
Speaker 8: Sure, So, the Cyber Safety Review Board, it was launched
Speaker 8: in twenty one and it was really executed in twenty
Speaker 8: twenty two. This was the third investigation that it conducted,
Speaker 8: and last August, the Secretary of Homeland Security said that
Speaker 8: the review Board was going to look into this intrusion
Speaker 8: that occurred, as you said in May and June, and
Speaker 8: what it found, most specifically was that the intrusion was
Speaker 8: preventable and should have never occurred. The intrusion itself hacked
Speaker 8: into the email systems of over five hundred individuals in
Speaker 8: twenty two organizations, but specifically it hacked into the email
Speaker 8: of the US Secretary of Commerce Gina Ramundo and the
Speaker 8: US Ambassador to China, Nick Burns, prior to an official
Speaker 8: visit to China, and what the review board attributed this
Speaker 8: breach that should have been preventable to was the fact
Speaker 8: that it identified Microsoft as having poor security practices, a
Speaker 8: lack of transparency into the breach, and a lacks corporate
Speaker 8: culture when it comes to cybersecurity.
Speaker 2: And we've got to remember of the frustrations that gena
Speaker 2: Romando Commas sectuary showed in particular of a trip to
Speaker 2: China and what was ultimately unfilled by China at the
Speaker 2: same time, just the Huawei phone that was suddenly presented,
Speaker 2: and everyone realizing this moment that perhaps some of the
Speaker 2: limitations on tech from US to China perhaps isn't doing
Speaker 2: the job that many had thought. I'm interested in the
Speaker 2: Threat Act and known as Storm zero five to five
Speaker 2: eight that seems to.
Speaker 3: Have been what's at play here.
Speaker 2: But how much should Microsoft have been able to prevent
Speaker 2: all of this and or how many other risks are
Speaker 2: the overcoming on a day to day basis. We've shouting
Speaker 2: out one particular failing, but how often are they achieving
Speaker 2: what they determined to do well.
Speaker 8: This is the big concern because we continue to see
Speaker 8: these types of breaches happening from Microsoft vulnerabilities and I
Speaker 8: have a former colleague at SISO who talks about the
Speaker 8: fact that we say vulnerabilities, but in fact their defects.
Speaker 8: When you prioritize adding features over security, this vulnerability of
Speaker 8: infrastructure only increases. And the challenge really this is a
Speaker 8: national security risk because Microsoft is ubiquitous across the federal government.
Speaker 8: It is one of the largest, if not the largest
Speaker 8: technical technology company in the world. But importantly, the US
Speaker 8: federal government has its essential services underpinned by micro Microsoft technology,
Speaker 8: and importantly, these are the services that support national security.
Speaker 8: So when there are vulnerabilities in the Microsoft system, that
Speaker 8: translates onto our national security safety.
Speaker 3: I think matchwas than adas well.
Speaker 8: I think what was interesting about this report is early
Speaker 8: on when the investigation initiated, Microsoft said let's make this
Speaker 8: a cloud service provider investigation, and the report did that,
Speaker 8: and it talked about the other companies, Amazon, Google, Oracle
Speaker 8: all having better security practices. But I think the key
Speaker 8: piece here is this isn't necessarily a commercial competitiveness issue
Speaker 8: other than government looking at options. But in the very
Speaker 8: near term this is a national security issue because we've
Speaker 8: got to be paying attention to the resilience and the
Speaker 8: safety and security are of our infrastructure, which is underpinned
Speaker 8: by technology that's created in the private sector. And I
Speaker 8: think one of the most telling pieces was the last October,
Speaker 8: the directors of intelligence from the Five Eyes, which are
Speaker 8: the countries New Zealand, Australia, Canada, the UK, and the
Speaker 8: US came together in Silicon Valley in an unpressed, dented
Speaker 8: meeting to meet with the CEOs of those technology companies
Speaker 8: to say, we have a real threat from China and
Speaker 8: you may not have built your company as a national
Speaker 8: security company, but your technology is now part of the
Speaker 8: national security of this country.
Speaker 2: Kessentad, it's so great to get your expertise across this.
Speaker 2: Thank you for well reminding us why it is a little
Speaker 2: a crucial President of Wandras, we thank you.
Speaker 9: Apple has another new next big thing under exploration home robots.
Speaker 9: The company has teams within its AI in hardware engineering
Speaker 9: organizations exploring the feasibility of bringing robotics driven devices to market.
Speaker 9: The company is testing a tabletop device that uses a
Speaker 9: robotic arm to move around an iPad display. For instance,
Speaker 9: if a user is on a FaceTime call, the screen
Speaker 9: can move to mimic the head movements like a nod
Speaker 9: or the turn of ahead as the person on the
Speaker 9: other end of the call. The more interesting product under
Speaker 9: consideration is a home robot similar to the Amazon astro
Speaker 9: that can follow a user around their home. Some ideas
Speaker 9: for that include video conferencing, as well as a pie
Speaker 9: in the sky ambition for the robot to be able
Speaker 9: to conduct household chores, such as cleaning dishes before they
Speaker 9: go in a dishwasher. Any release is probably many years away.
Speaker 9: If it happens at all. I'm Mark German, this is Bloomberg.
Speaker 2: Meanwhile, let's get to check in on these markets, because
Speaker 2: overall we are seeing equity markets managing to drift higher,
Speaker 2: and it's that one hundred and tenth of percent. We're
Speaker 2: coming off of our highs, though, and that might be
Speaker 2: in the face of borrowing costs that continue to rise.
Speaker 2: On the bomb market, we're seeing two year yields up
Speaker 2: another three basis points, let's call it four point seventy seven.
Speaker 2: We're also seeing the ten year yield up at the
Speaker 2: highest in November of last year. Why, we're worried about
Speaker 2: inflationary pressure, and we'll be getting yet more data later
Speaker 2: in the week. On Wednesday, the CPI print many bracing
Speaker 2: for and what that means for the Federal Reserve Bitcoin though,
Speaker 2: I mean shaping off any concerns with the bond market
Speaker 2: a risk asset up another three point three percent, again
Speaker 2: off of recent highs. But we're seventy one thousand, six
Speaker 2: hundred and sixty eight managing to rally through the weekend.
Speaker 2: Move on to some of the individual names that we've
Speaker 2: been keeping a close eye on, and well, TSMC has
Speaker 2: got to be a key name if you're trading the
Speaker 2: American depositary receipts.
Speaker 3: That is, we're higher on the day.
Speaker 2: Why eleven point six billion dollars coming in grants and
Speaker 2: loans for this particular chip maker to be building yet
Speaker 2: further fab units, a third one in Phoenix, Arizona. All
Speaker 2: of about the supply chain here in the United States.
Speaker 2: ASML could be a key winner in this particular area
Speaker 2: as well. Bloomberg Intelligence out with a great note saying
Speaker 2: like ASML chip equipment maker based over in the Netherlands
Speaker 2: could well be doing well from the chips act over
Speaker 2: here in the United States.
Speaker 3: We're up a percentage.
Speaker 2: Point and Tesla best performer on the NASA one hundred today.
Speaker 2: We're up more than five percent. Now, all of this
Speaker 2: as we see perhaps a focus more reorientating on robotaxis
Speaker 2: tesa CEO Elon Musk saying that the ev maker will
Speaker 2: unveil its a long promise Robotaxi on August the eighth,
Speaker 2: exactly four.
Speaker 3: Months from now.
Speaker 2: That that's years after first hinting at plans for a
Speaker 2: dedicated robotaxi back in twenty nineteen. Shares at Hazer were,
Speaker 2: as we see, rallying on this news after the announcement,
Speaker 2: even as the company has recently been struggling with a
Speaker 2: week sales competition from cheap Chinese electric vehicles. Plenty of
Speaker 2: concerns that have pushed this share lower throughout the course of.
Speaker 3: Twenty twenty four.
Speaker 2: But let's just switch gears and look at what else
Speaker 2: Elil Musk has been focused on of late, because of
Speaker 2: course X is one of them, and the blue verification
Speaker 2: check mark on X. It's been reserved of course to
Speaker 2: paid subscribers since must overhauld the social platform up until now,
Speaker 2: because Mask recently decided to grant the status marker for
Speaker 2: free to those with enough followers, which is roughly what
Speaker 2: it was like previously, but because of what it has
Speaker 2: become some qualifying newsers now sound a little embarrassed to
Speaker 2: have a blue check mark back, and they want their
Speaker 2: followers to know that they are not paying for it,
Speaker 2: or please to how welcome Bluembergs Astin Card to the show,
Speaker 2: who's just been writing about this in the daily newsletter
Speaker 2: and Austin just give us some of the anecdotal evidence
Speaker 2: that people are a bit worried about looking as it
Speaker 2: they pay for blue check mark.
Speaker 10: You know, in recent days, we've seen a lot of
Speaker 10: these very high profile users who were not paying Twitter,
Speaker 10: and in fact had their blue check mark revoked by
Speaker 10: you on eighteen months ago, suddenly seeing that verification status
Speaker 10: appear in their profiles again. And you see a lot
Speaker 10: of them tweeting saying number one, I did not pay
Speaker 10: for this and number two I want to turn it off.
Speaker 10: You see, there is an option within the settings menu.
Speaker 10: So you saw some like the high profile producer of
Speaker 10: The Wire, David Simon, he was very much complaining saying
Speaker 10: that he was not paying for this blue check mark,
Speaker 10: that he would never pay for it. He does not
Speaker 10: support Elon. And I think what this signals is that
Speaker 10: the blue check mark has gone from being a status
Speaker 10: of verification to being something a little bit more meaningless,
Speaker 10: if not devoid of value, maybe overly politicized. It means
Speaker 10: something more than just this is your true identity and
Speaker 10: you are somewhat of nod. It's really had this sort
Speaker 10: of controversy installed embedded into that blue check mark since
Speaker 10: Elon took it over eighteen months ago and promised to
Speaker 10: get rid of this what he called a lords and
Speaker 10: peasant system of verification.
Speaker 2: Yeah, go back to therefore the change of heart for
Speaker 2: Elon Musk himself. What hasn't been working under the new system.
Speaker 10: So when he took it over about a year and
Speaker 10: a half ago, he felt the process was corrupt. It
Speaker 10: was essentially given out to celebrities, politicians, you know, other
Speaker 10: notable figures, brands, and he just felt the process was,
Speaker 10: you know, nonsensical as he described it. He felt it
Speaker 10: was unclear who could get it and who could not.
Speaker 10: So when he took over, he revoked it in mass
Speaker 10: for a lot of very famous people, which created a
Speaker 10: lot of chaos. And the way the system he replaced
Speaker 10: it with it required you to pay for a premium
Speaker 10: subscription at least eight dollars, maybe sixteen dollars a month
Speaker 10: and then you would go through a review process and
Speaker 10: get a blue check mark. The issue was all the
Speaker 10: people whose blue checks were removed did not sort of
Speaker 10: re engage with the platform. They saw it as a
Speaker 10: sign of protests. They'd created so much content, so much
Speaker 10: engagement on the platform, and suddenly, you know, someone like
Speaker 10: Lebron James, he would say, wait, I have to pay
Speaker 10: for my own blue check mark now. And then on
Speaker 10: the reverse end, you saw a lot of people who
Speaker 10: supported Elon suddenly rushing to buy this blue check mark,
Speaker 10: and it almost became a symbol of what whether you
Speaker 10: were supporting what Elon was doing with Twitter or perhaps
Speaker 10: his worldview his politics has approached a free speech and
Speaker 10: so it became overly politicized. And now again it really
Speaker 10: I'm not quite sure what a blue check mark means
Speaker 10: if you have it in your profile, does it mean
Speaker 10: you are who you say you are, or that you
Speaker 10: support Elon or you just like paying for Twitter.
Speaker 2: Let's just talk about Elon's commitment to free speech for
Speaker 2: a moment and the global aspect of it, Austin, because
Speaker 2: over in Brazil it looks as though there has been
Speaker 2: a push by certain well judges over there to want
Speaker 2: to clamp down on the use of Twitter and next
Speaker 2: and certain voices to be heard on the platform. Now
Speaker 2: in a masque is saying he's lifting certain restrictions in Brazil,
Speaker 2: basically defying court orders over there. Can you give us
Speaker 2: sort of ultimately what's brought us to this moment?
Speaker 10: Sure, he has defied a court order in the Central
Speaker 10: reactivated certain accounts that the court had ordered banned. It's
Speaker 10: still early in the details. We don't quite know what
Speaker 10: accounts have been reactivated. We don't know why they were
Speaker 10: ordered blocked. But a judge there is apparently opened an
Speaker 10: inquiry into the matter and they're looking into and forward.
Speaker 10: But I think what it boils down to before we
Speaker 10: know all the details of how this happened and what
Speaker 10: the nature of these accounts were. It really symbolizes Elon's
Speaker 10: so called free speech sort of purism. He sort of
Speaker 10: presented himself as this free speech advocate that will do
Speaker 10: anything to promote principles over profit, as he put it.
Speaker 10: When he sort of said on x that he was
Speaker 10: going to reactivate these accounts for the good of the
Speaker 10: free speech. He would even leave Brazil, shut down their office,
Speaker 10: sacrifice the revenue if need be, and that is definitely
Speaker 10: the brand that Elon tries to project. But we've also
Speaker 10: seen many sort of hypocritical instances of this, especially in
Speaker 10: the US where he's banned journalists, where he's essentially removed
Speaker 10: verification status one from the New York Times because he
Speaker 10: disagreed with some of the reporting, and then in other instances,
Speaker 10: you know, there was a famous instance where Elon, when
Speaker 10: people were protesting and trying to get AD supporters to
Speaker 10: block their supportive of Twitter, you know, he considered banning
Speaker 10: those users too, who are sort of trying to boycott
Speaker 10: the platform. And so we have this sort of tension
Speaker 10: point between Elon's values and an Ex's business model, which
Speaker 10: has been really struggling to generate revenue since Elon acquired it.
Speaker 10: So you're seeing that play out in Brazil, and it's
Speaker 10: a good question about why he's sort of standing up
Speaker 10: for these particular accounts and whether or not you will
Speaker 10: actually commit to that at the expense of Ex's revenue down.
Speaker 2: There, probably lose all revenue in Brazil and have to
Speaker 2: shut down our office there. As he posted himself, Austin Karr,
Speaker 2: thank you so much for bringing us up to speed
Speaker 2: and a great news that you had out this morning. Meanwhile,
Speaker 2: coming up, fight over diversity in corporate America continues as
Speaker 2: HISS DEI related causes and cases to keep piling up.
Speaker 3: We'll discuss all.
Speaker 2: Of this with hell Alice cofounder Elizabeth Gore next. Meanwhile,
Speaker 2: let's just keep a track on some globally traded stocks
Speaker 2: right now. Atos over in France, French ita company pretty
Speaker 2: in battle. To be honest, it's going to be presenting
Speaker 2: a debt restructuring plan today as the company's top shareholder
Speaker 2: one point seats to build, they say, coalition. They want
Speaker 2: to offer an alternative rescue plan for this particular name.
Speaker 3: It's been under pressure.
Speaker 2: Look at how the share price rallied over the course
Speaker 2: of the European training day.
Speaker 3: This is Blue med Technology.
Speaker 2: Hello Alice as a fintech startup offering grants, networking opportunities
Speaker 2: and access to finance for entrepreneurs from underrepresented groups in particular,
Speaker 2: it's just announced a new Series C funding round in
Speaker 2: our values the company at one hundred and thirty million dollars. Now,
Speaker 2: this is despite being on the front lines of a
Speaker 2: litigation war over diversity in corporate America. Six months ago,
Speaker 2: it was hit with a lawsuit by the conservative activist
Speaker 2: group America First Legal, which has lodged at least six
Speaker 2: other DEI related suits elsewhere. It claims a grant program
Speaker 2: by Hello Alice Co runs for black owned small businesses
Speaker 2: is discriminatory.
Speaker 3: Now, the startup has had.
Speaker 2: To spend six figures on fees for three law firms
Speaker 2: so far, and we're going to dive into this ongoing
Speaker 2: legal battle and indeed, well the ultimate growth of the
Speaker 2: business too. Hello Alice co founder and president Eizabeth.
Speaker 3: Gore is here with us.
Speaker 2: And this comes at a time where the DEI discussion
Speaker 2: pendulum has swung significantly and there is this view that
Speaker 2: people giving an allocating grants to people of color is
Speaker 2: in some way discriminating against white founders. Now, how has
Speaker 2: that been a distraction for the business or actually hasn't
Speaker 2: been a galvanizing force?
Speaker 5: You know it?
Speaker 11: I will just open with it's been a galminizing force.
Speaker 11: We just hit one point five million small businesses on
Speaker 11: the platform and we serve everyone at Hello Walie in
Speaker 11: with the five and a half million small businesses that
Speaker 11: are launching right now in this country is great time
Speaker 11: to be in fintech.
Speaker 5: We think, and we provide credit.
Speaker 11: And loans, grants, and we've done forty million in philanthropy
Speaker 11: and grants, and we're very proud that those have gone
Speaker 11: to women, people of color, US veterans, and white males.
Speaker 11: But we're capitalists at the end of the day. We
Speaker 11: want to make sure everyone are included in the small
Speaker 11: business ecosystem.
Speaker 5: It's critical.
Speaker 3: How's any of your use a base.
Speaker 2: Any prospective clients ever brought this up and I said, look,
Speaker 2: the fact that you'll giving grants to minorities, I feel discriminating.
Speaker 6: No.
Speaker 11: In fact, when we announced that we were being sued,
Speaker 11: we've had hundreds of thousands of letters of support, emails,
Speaker 11: people coming out. We're based in Houston, Texas, and we've
Speaker 11: got our vets coming out in support of African Americans.
Speaker 11: We have women's coming out and support of men. The
Speaker 11: small business community, particularly after COVID has really galvanized. They're
Speaker 11: growing now. Capital is tight right now. I will give
Speaker 11: everyone that, but they're really a savvy community that they
Speaker 11: have to have each other. If you look at Main Street,
Speaker 11: all those shops are working together to scale everything we
Speaker 11: need in this country. So that support is there from everyone.
Speaker 11: We have never heard a complain about it ever.
Speaker 2: And so when you're fundraising out there looking for a
Speaker 2: Series C, how much you're having to talk to potential
Speaker 2: invest is about the use of the money for a
Speaker 2: business case, or indeed for a legal case. Is any
Speaker 2: point not having to be commingled.
Speaker 11: Well, sure, I mean there was a lot of tension
Speaker 11: when the case first came out. There was concern about
Speaker 11: the quote legitimacy of our business, and I'm here to
Speaker 11: say that we are now one of the fastest platforms
Speaker 11: for financial technology, offering credit and.
Speaker 5: Loans to small businesses.
Speaker 11: We're about to be profitable, which is really exciting for
Speaker 11: a fintech. But you have to disclose lawsuits a lawsuit,
Speaker 11: and that's why we think that these are very distracting.
Speaker 11: We think they're a waste of money. Everything we've done
Speaker 11: is perfectly legal, and we want to make money for
Speaker 11: our investors. We want to make money for our small
Speaker 11: business owners. And I'm really happy to say despite all this,
Speaker 11: we have significantly grown. It took investors a minute to
Speaker 11: step back be like, WHOA, what is this?
Speaker 5: What is this going to impact me?
Speaker 11: And they're capitalists at the end of the day, and
Speaker 11: our business is growing, We are making money. Our small
Speaker 11: businesses are so no matter what, they came back in
Speaker 11: and funded us and we disclosed our Series C.
Speaker 5: So we're pretty stoked.
Speaker 2: So you remain committed to the philanthropic in depths on
Speaker 2: the bronze absolutely, What do you remain committed to in
Speaker 2: terms of your own technology?
Speaker 3: What are you doing and building now?
Speaker 11: Well, what's really exciting is the evolution of AI. My
Speaker 11: co founder Cohen Rods has really been on the forefront
Speaker 11: of that for a decade and now that it is
Speaker 11: getting i would say cheaper to access great data, it
Speaker 11: allows us with our we have a proprietary Business Health
Speaker 11: Score that score small businesses financial health from zero to
Speaker 11: one hundred and gets them ready for that next step
Speaker 11: of funding. So that Business Health Score is now being
Speaker 11: used not just by us, but everyone from Wells Fargo
Speaker 11: to Chase. So it's a great time for our business
Speaker 11: and we're continuing to say that we are here for
Speaker 11: small business.
Speaker 5: We're going nowhere come back as well.
Speaker 2: The legal dispute continues. We thank her for her time.
Speaker 2: Hello Alice, co founder president Elizabeth Gore. Tens of millions
Speaker 2: of Americans they're gearing up to witness the solar eclipse today,
Speaker 2: when the Sun will become almost entirely coven by the moon,
Speaker 2: so first time in almost a century that the western
Speaker 2: and northern parts of New York State will experience a
Speaker 2: total eclipse. And though the entire event will last for
Speaker 2: several hours, the main spectacle when day turns tonight, is
Speaker 2: expected to last only about a four minute period, and
Speaker 2: it will still be going to cost the US thirty
Speaker 2: gigawatts of solar energy, the output of roughly thirty nuclear reactors.
Speaker 3: Meanwhile, Let's Shift.
Speaker 2: Gears movie producer David Ellison is in negotiations to take
Speaker 2: charge of Paramount. He and his backers have agreed to
Speaker 2: pay a little more than two billion dollars to Sharry
Speaker 2: Redstone's National Amusements and the family company that controls Paramount.
Speaker 3: We want to break all of this down.
Speaker 2: Someone's been writing about it significantly like Chet partner Rich Greenfield,
Speaker 2: and Sharry Redstone likes this offer from Ellison, thinks that
Speaker 2: he can bring about new growth for the business in
Speaker 2: its entirety, not sell off assets to immediately.
Speaker 3: Rich. Do you like this deal?
Speaker 12: Look, this is first of all, we haven't seen exactly
Speaker 12: what the deal looks like and what all of the
Speaker 12: different pieces are. But I think if you're the you know,
Speaker 12: National Amusements, which is effectively Caroline the Redstone family, they
Speaker 12: want an owner that is going to love the asset
Speaker 12: take care of the asset in much the way the
Speaker 12: Redstone family has taken care of the Paramount Studio for decades.
Speaker 12: And I think that's one of the big attractions here
Speaker 12: is you know, merging, because again.
Speaker 6: What this transaction actually is, it's not a sale.
Speaker 12: You know, National Amusements is selling their stake in to Skuidance,
Speaker 12: but it appears the rest of Skydances being folded in,
Speaker 12: So essentially it's Paramount buying Skydance and Skydance taking over
Speaker 12: and having control of overall Paramount.
Speaker 6: But this is not a sale.
Speaker 12: There was you know, it does not seem that National
Speaker 12: Amusements wants to sell the entirety of Paramount to private
Speaker 12: equity and see the company broken up into pieces or
Speaker 12: sold for parts. That doesn't seem to be something they
Speaker 12: want to Remember, what I think a lot of investors
Speaker 12: forget is this is a controlled company.
Speaker 6: So just because.
Speaker 12: Public shareholders want something does not mean the company has
Speaker 12: to proceed down that path. That is the danger of
Speaker 12: a controlled company when you're investing, and if you don't
Speaker 12: like it, don't invest in controlled companies.
Speaker 2: Because ultimately you might end up with a slightly dilutive
Speaker 2: deal that leaves you slightly poorer. Ultimately, though, could what
Speaker 2: is the narrative that now needs to be built by
Speaker 2: Allison or anyone else the current board membership of Paramount
Speaker 2: say this will in the long term still reap you benefits.
Speaker 12: Well, Again, if you're Troll shareholder doesn't want to sell
Speaker 12: the entire company, then you really have essentially three choices.
Speaker 12: If you're sitting as the Paramount board, you can do
Speaker 12: nothing right and you literally just operate status quo. I
Speaker 12: think the board recognizes current strategy isn't working. Paramount plus bleeding,
Speaker 12: you know, a billion two billion dollars not a meaningful
Speaker 12: player in the streaming wars. So I don't believe they
Speaker 12: want to move forward with the current strategy.
Speaker 6: Now that they could.
Speaker 12: Fire management, totally, pivot strategy, follow more of the arms
Speaker 12: dealer of content strategy that Sony has pursued.
Speaker 6: Doesn't feel like that's something.
Speaker 12: They really feel comfortable doing, nor do they know exactly
Speaker 12: who they would bring in and then the third piece
Speaker 12: is do a transaction that, while at least in the
Speaker 12: near term diluted to public company shareholders, at least gives
Speaker 12: long term you know, there's a long term pitch to
Speaker 12: the board that I guess makes sense in terms of
Speaker 12: how they're going to invest build Paramount Plus into something bigger,
Speaker 12: use more technology. And I think it's that whole idea
Speaker 12: that the board is obviously dealing with. And if you
Speaker 12: have only you know, if it's really only do nothing
Speaker 12: or do a transaction that's diluted, you can understand why
Speaker 12: they might like the diluted transaction because the status quo
Speaker 12: is not working for Paramount and the company is in
Speaker 12: more and more trouble. And I think, you know, the
Speaker 12: only reason the stock is above ten dollars a share
Speaker 12: was the hope of a transaction, ideally a sale to
Speaker 12: a third party. I think now the question is, is you know,
Speaker 12: how cheap will Skidance end up with this asset? Because
Speaker 12: I think investors are finally realizing today that the sale to.
Speaker 6: A third party isn't happening.
Speaker 2: Yeah, I mean that has been passed over Apollo Global
Speaker 2: Management selling off person specific assets or indeed, I mean
Speaker 2: Warner Brothers seem to have been dead on a rival.
Speaker 3: Rich.
Speaker 2: I'm interested in the technology element you just articulated because
Speaker 2: as Devid Allison has some prower notably his own father
Speaker 2: of course, with Oracle having founded it, but he is
Speaker 2: someone who wants to lean into tech.
Speaker 3: What could technology bring paramount?
Speaker 12: I mean, look, look look at what Skydance has done
Speaker 12: on the animation side. I mean they've been you know,
Speaker 12: they went out and hired the creator or the key
Speaker 12: elements of Pixar Films, John Lassiter. So John Lassiter doesn't
Speaker 12: work for Disney anymore. He left Disney many years ago.
Speaker 12: He now has one thousand person animation business, and so
Speaker 12: that obviously there's a lot of technology that goes into animation.
Speaker 12: John Lassiter's now at Skiddance and they've just you know,
Speaker 12: recently announced that their slate of films is moving from
Speaker 12: Apple TV Plus over to Netflix, and so their first
Speaker 12: major release that John's had full control over comes out
Speaker 12: at the end of this year.
Speaker 6: Obviously they think they have the next Frozen.
Speaker 12: But so you have some really exciting developments on the
Speaker 12: Skydance side that our content sort of infused with technology
Speaker 12: that creates long term opportunity. And again, I think if
Speaker 12: you're sitting at the Paramount board, you're in a tough situation.
Speaker 6: Stock is down dramatically.
Speaker 12: I mean, you look at any you know you've got
Speaker 12: the year to data, but if you look over the
Speaker 12: last several years.
Speaker 6: This has not been a good stock.
Speaker 12: The management team has made you what appears to be
Speaker 12: critical mistakes by entering the streaming wars believing they could,
Speaker 12: you know, compete with the netflixes and the Disneys. They
Speaker 12: clearly can't. And so now the question is what do
Speaker 12: you do. Do you just start shutting things down, do
Speaker 12: you fire everyone, or do you look for a strategic
Speaker 12: merger that, even if it's not great in the short
Speaker 12: term financially, gives long term growth potential or at least
Speaker 12: a story.
Speaker 6: That the board can get comfort with.
Speaker 12: And my guess is the board is getting comfortable with
Speaker 12: that story being the best alternative.
Speaker 2: That story still being written as we stan Rich Greenfield
Speaker 2: come back on it soon. We hope of like shed
Speaker 2: great to have some time with you today. Meanwhile, that
Speaker 2: does it for this edition of Bluebog Technology. You do
Speaker 2: not want to forget to check out our podcast so
Speaker 2: much to be digesting you find it on the terminal,
Speaker 2: as well as online on Apple or Spotify and iHeart.
Speaker 2: If you're based here in North America, have fun viewing
Speaker 2: NA Eclipse.
Speaker 3: Stay safe with your eyes. This is pretty big technology