WEBVTT - Court Blocks Trump Global Tariffs as Nvidia Lift Markets 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.360 --> 0:00:32.400 No one better than Anastasia Amroso, chief investment strategist at ICAP, 0:00:32.680 --> 0:00:37.600 who was trumpeting large cap growth participate when it was 0:00:37.640 --> 0:00:42.360 a very lonely call. Let's recapitulate right now, I'm hearing 0:00:42.400 --> 0:00:45.760 people come over to the Amoroso side. Is it still 0:00:45.880 --> 0:00:48.320 large cap growth in tech? Look? 0:00:48.360 --> 0:00:50.519 I think so. I think back in March we were 0:00:50.520 --> 0:00:53.160 talking about the sell off being temporary, and of course 0:00:53.240 --> 0:00:56.040 you know you were now in late May and here 0:00:56.040 --> 0:00:58.080 we are. The SAP is up, and actually we talked 0:00:58.080 --> 0:01:00.880 about software, and software is up. AI software in particular 0:01:00.960 --> 0:01:03.160 is up about twelve percent for the year. So yes, 0:01:03.240 --> 0:01:05.920 I think the reasons are still plentiful to continue to 0:01:05.959 --> 0:01:08.280 stick with stocks. And you know, Tom, one of the 0:01:08.319 --> 0:01:10.039 things you have to do is you'll have to look 0:01:10.040 --> 0:01:13.400 at the economy. And while the sentiment around the economy 0:01:13.400 --> 0:01:16.679 fell apart, the hard economic data never did so. As 0:01:16.720 --> 0:01:19.080 a result, we're still looking at two point three percent 0:01:19.160 --> 0:01:22.280 GDP growth this quarter when everybody was worried about the 0:01:22.280 --> 0:01:25.160 tariff impact. So that's the first thing. The second thing 0:01:25.240 --> 0:01:28.200 is the determination you just heard from Peter Navarro to 0:01:28.440 --> 0:01:32.240 cut those deals and continue to negotiate is absolutely there. 0:01:32.280 --> 0:01:34.560 So as long as that's the drum beat, then I 0:01:34.560 --> 0:01:37.120 think we have to discard any sort of data that 0:01:37.160 --> 0:01:39.640 goes against that. And then the last thing I would say, 0:01:39.680 --> 0:01:43.200 tom you know, tomorrow we get the core PC inflation report, 0:01:43.240 --> 0:01:46.560 which is projected to be about two and a half percent, 0:01:47.040 --> 0:01:49.640 and whether it's oil prices that are lower, whether it's 0:01:49.720 --> 0:01:52.240 wages that are lower, all of that is supportive. So 0:01:52.680 --> 0:01:55.640 I still think investors are not tapped out. It's not 0:01:55.880 --> 0:01:59.000 max bullish by any means. So I think we add here. 0:01:58.920 --> 0:02:01.280 I have been brought up the three point ex trillion 0:02:01.680 --> 0:02:02.880 of cash Paul out there. 0:02:03.000 --> 0:02:05.280 Yep, Yes, it's always been out there. I mean earlier 0:02:05.280 --> 0:02:09.080 this year it was out of the US, out of cyclicals, 0:02:09.120 --> 0:02:12.120 out of tech. Now it seems to be if I 0:02:12.120 --> 0:02:13.480 look at the S and P five hundred, if I 0:02:13.480 --> 0:02:16.519 look at nastacy, it seems to be that that trade's 0:02:16.560 --> 0:02:19.720 getting reverse ship hereople coming investments, coming back to the US, 0:02:19.840 --> 0:02:22.840 back into cyclicals, back into tech. Was it just a 0:02:23.880 --> 0:02:24.720 what was that? 0:02:24.760 --> 0:02:26.760 Oh, there's a lot of discussion around that. And first 0:02:26.760 --> 0:02:28.640 of all, the month of May has all been about 0:02:28.639 --> 0:02:31.480 these star reversals back into the US tech and back 0:02:31.520 --> 0:02:34.360 into the US and back into cyclicals. But if you 0:02:34.400 --> 0:02:36.720 actually look at the performance here to date, it's the 0:02:36.800 --> 0:02:41.000 defensive sectors like utilities, for example, that lead the SMP. 0:02:41.240 --> 0:02:45.200 They're up about five or six percent. The semiconductors, for example, 0:02:45.240 --> 0:02:48.560 are down about five to six percent. So I don't 0:02:48.600 --> 0:02:52.840 think it's actually too late for this rotation trade. And look, 0:02:52.840 --> 0:02:56.600 we were never in the camp of the US exceptionalism 0:02:56.760 --> 0:02:59.520 being over, because what's not over, for example, is the 0:02:59.520 --> 0:03:02.400 fact that we have one of the most constructive tax 0:03:02.480 --> 0:03:06.040 policies relative to our developed market peers. The fact that 0:03:06.080 --> 0:03:08.000 the corporate tax rate in the US is twenty one 0:03:08.040 --> 0:03:12.200 percent and with some write offs, maybe is the effective 0:03:12.200 --> 0:03:14.960 one is even eighteen percent. That is a very constructive 0:03:15.040 --> 0:03:17.919 environment to do business in the United States, and obviously 0:03:17.960 --> 0:03:20.880 that's what the administration is trying to foster through terror 0:03:21.000 --> 0:03:21.799 policy as well. 0:03:22.320 --> 0:03:24.480 Do we have to bring the evaluation discussion back on 0:03:24.480 --> 0:03:26.400 the table because boy, when the market's sold off, a 0:03:26.440 --> 0:03:28.600 lot of folks are saying, wait, eighteen times earnings, I'm 0:03:28.600 --> 0:03:29.760 going to go in and buy this thing. But now 0:03:29.760 --> 0:03:32.200 we're back, you know above twenty times, How do you 0:03:32.240 --> 0:03:34.639 think about earnings? Because there still may be some earnings risk. 0:03:34.520 --> 0:03:37.840 In this market, right, So a few weeks ago we 0:03:37.880 --> 0:03:39.920 sort of had when we didn't know what is likely 0:03:39.960 --> 0:03:42.080 to happen with terrorists, we sort of had this binary risk. 0:03:42.120 --> 0:03:44.520 We either have to price in a recession and therefore 0:03:44.600 --> 0:03:47.560 recession or earnings, which could have taken us well, it 0:03:47.600 --> 0:03:49.600 has taken us as low as five thousand, but could 0:03:49.600 --> 0:03:51.800 have taken us lower if we also had to assign 0:03:51.800 --> 0:03:54.440 a recession in multiple. Now we don't have to assign 0:03:54.440 --> 0:03:56.560 a recession in multiple, and we actually have to focus 0:03:56.600 --> 0:03:58.960 on the earnings not only this year but next year, 0:03:59.000 --> 0:04:02.000 which are expected to be around three hundred and seven dollars. 0:04:02.240 --> 0:04:04.800 So if you apply the existing multiple to that, you 0:04:04.840 --> 0:04:07.800 actually do get north of six thousand on the S 0:04:07.840 --> 0:04:10.200 and P five hundred. And that's why to Tom's point, 0:04:10.280 --> 0:04:12.840 I say, large cap stocks are certainly worth staying with. 0:04:13.120 --> 0:04:15.960 What does free cash flow look like? In use of cash? 0:04:16.080 --> 0:04:19.680 I mean back when you were lonely and correct. The 0:04:19.760 --> 0:04:22.640 answer is the free cash flow came in and I'm 0:04:22.680 --> 0:04:24.680 hearing a lot of fancy Well, it's not going to 0:04:24.720 --> 0:04:27.680 be this first second derivative, Da da da da da. 0:04:27.760 --> 0:04:31.560 Do you see sustained free cash flow by the market leaders? 0:04:32.720 --> 0:04:35.120 I mean, look, I do, and the use of free 0:04:35.120 --> 0:04:37.800 cash flow I think certainly would benefit the share repurchases 0:04:37.960 --> 0:04:41.400 and buybacks, and Tom, that's what we're seeing in the market. 0:04:41.440 --> 0:04:45.480 We actually have some of the record authorizations for corporate 0:04:45.520 --> 0:04:48.000 buybacks and that is such a strong presence in the 0:04:48.040 --> 0:04:50.599 market as well, which is why I say market participants 0:04:50.600 --> 0:04:53.800 are not tapped out. It's individual investors, it's hedge funds, 0:04:53.839 --> 0:04:57.880 it's CTAs, but it's also corporate is buying back those shares. Look, 0:04:58.000 --> 0:05:01.640 the beauty of the setup, Tom, is a corporate margins 0:05:01.760 --> 0:05:05.400 are in your highs and so there's a lot of 0:05:05.960 --> 0:05:09.520 room to absorb the potential negative impact of tariffs. 0:05:09.800 --> 0:05:13.159 Just quickly here, how lonely do you feel now? Is 0:05:13.200 --> 0:05:16.400 everybody in the AMRO support I think it's sort of 0:05:16.400 --> 0:05:19.200 a pretty lonely call. There's a lot of fear out there, right, 0:05:19.400 --> 0:05:19.560 you know. 0:05:19.839 --> 0:05:21.840 I still think there's a degree of fear out there. 0:05:21.839 --> 0:05:24.120 But I'll just quote these stats you know that you know, 0:05:24.200 --> 0:05:27.800 back in April you had about sixty six percent of 0:05:27.839 --> 0:05:30.680 investors that were bearish. That is not the number today. 0:05:30.680 --> 0:05:34.080 It's probably closer to thirty percent now, couple. It's a 0:05:34.120 --> 0:05:36.840 big reversal. A couple of weeks ago you probably had 0:05:36.880 --> 0:05:40.440 only twenty percent of investors that were bullish. Today that's 0:05:40.480 --> 0:05:43.599 about thirty seven percent, But it's not fifty It's not 0:05:43.680 --> 0:05:45.520 half of the investors that we're in the bullish camp 0:05:45.600 --> 0:05:47.719 to start the year. So I think we need a 0:05:47.720 --> 0:05:48.680 few more to join the party. 0:05:48.720 --> 0:05:50.480 Don't be a stranger. Come back again to sure of 0:05:50.600 --> 0:05:53.920 visits today. Anastasia am Aroso with that capital, She's been 0:05:53.960 --> 0:05:56.960 courageous about long in the market for years. 0:06:02.440 --> 0:06:06.040 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:06:06.120 --> 0:06:09.240 weekday afternoons from seven to ten am Eastern Listen on 0:06:09.360 --> 0:06:13.000 Applecarplay and Android Auto with the Bloomberg Business app, or 0:06:13.160 --> 0:06:15.159 watch us live on YouTube. 0:06:15.000 --> 0:06:19.599 Now joining US d ives in videos not Cisco right. 0:06:20.560 --> 0:06:23.240 It's almost an insult to in video when you say 0:06:23.240 --> 0:06:26.400 look because the reality is that it's a fourth Industrial 0:06:26.480 --> 0:06:29.719 revolution and it's being led by godfather of AI, Jensen 0:06:29.760 --> 0:06:32.039 and video. There's only one chip in the world, few 0:06:32.160 --> 0:06:35.279 on this and that's why I believe four trillion and 0:06:35.320 --> 0:06:37.680 eventually five trillion is where we're going to see for in. 0:06:37.760 --> 0:06:41.640 Okay, in the ives perspectives on this page forty two 0:06:41.839 --> 0:06:46.240 risk factors. What's the risk factor for the certitude this 0:06:46.240 --> 0:06:47.520 thing's going to work out? 0:06:47.720 --> 0:06:50.440 Look, I mean when you think about China, and obviously 0:06:50.480 --> 0:06:54.000 that's all factored in here. I mean, anything that gets 0:06:54.000 --> 0:06:57.200 a little positive in terms of moves on trade and 0:06:57.240 --> 0:07:00.560 tariffs between US and China is ultimately that that to 0:07:00.640 --> 0:07:02.560 me right now, the biggest risk is just trying to 0:07:02.600 --> 0:07:05.400 and I think Jensen called it out shout across about 0:07:05.680 --> 0:07:10.480 Trump administration. You're essentially giving away the China business because 0:07:10.520 --> 0:07:13.480 of the AH twenty to Huawei, and that's the biggest risk. 0:07:13.720 --> 0:07:16.200 But tom it just comes down to, like it is 0:07:16.440 --> 0:07:19.320 Jensen and Nvidia's world. Everyone else is paying rent when 0:07:19.360 --> 0:07:20.080 it comes to AI. 0:07:20.400 --> 0:07:22.160 So what was the biggest takeaway from the earnings? 0:07:22.240 --> 0:07:22.560 Last night? 0:07:22.640 --> 0:07:25.200 It stocks up five six percent this morning, what's the 0:07:25.200 --> 0:07:26.200 street taken away from it? 0:07:26.240 --> 0:07:30.240 Was a staggering quarter in a bullish way relative to 0:07:30.280 --> 0:07:33.480 the demand. I believe right now, demands that Truman supply 0:07:33.520 --> 0:07:34.080 eight to one. 0:07:34.480 --> 0:07:38.440 You got SOPs supplying supply eight to one. 0:07:38.520 --> 0:07:39.040 Eight to one. 0:07:39.200 --> 0:07:43.080 Wow, So what where does this company go? What does 0:07:43.200 --> 0:07:46.480 Nvidia do now to kind of take advantage of that 0:07:46.520 --> 0:07:47.320 demand out there? 0:07:47.520 --> 0:07:52.400 It's when you think about autonomous robotics physical AI. Eventually 0:07:52.480 --> 0:07:56.040 keen with a robot, you know, in his in his palace. 0:07:56.160 --> 0:07:57.800 You've been talking to Mikey. 0:07:58.040 --> 0:08:02.800 Look, this is the only way it's fueled is by Nvidia. 0:08:03.040 --> 0:08:06.760 So to me, now, the AI revolution coming to Middle 0:08:06.840 --> 0:08:10.600 East sovereigns they want to be online. 0:08:10.640 --> 0:08:13.960 It's on a unit basis. They're selling these things, right, 0:08:14.560 --> 0:08:17.360 do you have a linear I mean, I got seventy 0:08:17.400 --> 0:08:20.640 seven percent up free cash flow, but these numbers we've 0:08:20.640 --> 0:08:24.880 never seen this. How do you extrapolate the unit growth 0:08:25.080 --> 0:08:28.960 into the future. Forget about price, forget about tech boys 0:08:29.240 --> 0:08:31.280 with their fancy shoes and you going out to all 0:08:31.280 --> 0:08:34.840 the conferences you go to on a unit basis? Is 0:08:34.840 --> 0:08:36.319 it a linear extrapolation? 0:08:37.160 --> 0:08:39.960 Look, it's it's unprecedent in terms of what we've seen. 0:08:40.160 --> 0:08:43.600 But to give granted, but if you look, it's almost 0:08:43.720 --> 0:08:47.480 it's linear. But to the point that right now you 0:08:47.559 --> 0:08:51.439 only have three percent of enterprises in the US that 0:08:51.480 --> 0:08:54.160 have actually even gone down the AI path. So when 0:08:54.200 --> 0:08:57.200 you think about the demand trajectory and where we ultimately 0:08:57.200 --> 0:08:59.280 see this playing out, I mean you will be on 0:08:59.320 --> 0:09:02.080 a trajector to ten dollars today. 0:09:02.120 --> 0:09:05.160 Paul knows it. Cold pract and gamble. What in God's 0:09:05.280 --> 0:09:09.000 name is shamp vellow ballsom shampoo. What are they gonna 0:09:09.040 --> 0:09:10.480 do with AI? 0:09:11.800 --> 0:09:16.320 They're gonna look at marketing penetration and customers. They're gonna 0:09:16.320 --> 0:09:19.120 look at all their data, probably seventy percent of it 0:09:19.160 --> 0:09:22.959 that they basically they have not analyzed, and they're gonna 0:09:23.000 --> 0:09:26.720 come up with eight, ten, fifteen use cases for how 0:09:26.800 --> 0:09:30.280 AI agents could be deployed. Which is bullish from Microsoft, 0:09:30.520 --> 0:09:34.000 bullish from MESSI of AI pound tier, bullish ultimately for 0:09:34.080 --> 0:09:35.160 the rest of the food chain. 0:09:35.360 --> 0:09:37.320 Well, I looked at the chart yesterday. I mean the 0:09:37.440 --> 0:09:40.880 quiet story at Q two is the moonshot in Microsoft 0:09:40.960 --> 0:09:43.120 maybe record highs this morning, yep, yep. 0:09:43.360 --> 0:09:46.640 So Nvidia expec's revenue about forty five million in forty 0:09:46.640 --> 0:09:49.319 five billion in the second fiscal quarter despite new export 0:09:49.360 --> 0:09:53.199 restrictions costing about eight billion. That's a headwind. 0:09:53.679 --> 0:09:56.319 Okay, let's just talk Apple, And there's why the stocks 0:09:56.400 --> 0:10:00.000 up Apples to Apples Street, which is say April second, 0:10:00.360 --> 0:10:04.480 you know libration, they didn't happen streets at forty eight billion, yep, okay, 0:10:04.520 --> 0:10:08.480 Apples Apples, it would have been fifty three a five 0:10:08.720 --> 0:10:11.760 billion piece. So Paul, that to me, it's when but 0:10:11.880 --> 0:10:15.679 that speaks apples to apples, and everyone recognizes, I mean 0:10:15.760 --> 0:10:18.960 you are you're looking at something that's really been unpressed 0:10:18.960 --> 0:10:21.640 and I had relative to what we're seeing with them. 0:10:21.720 --> 0:10:23.160 Can I on it? 0:10:23.280 --> 0:10:25.960 Can my chip guys do a workaround whatever the US 0:10:26.000 --> 0:10:26.720 restrictions are? 0:10:26.840 --> 0:10:30.040 Well, that's that the market's basically reading through this saying 0:10:30.080 --> 0:10:32.200 at one point you're gonna have to come to the table. 0:10:32.600 --> 0:10:35.240 Part of negotiations. When you get chips on the table, 0:10:35.480 --> 0:10:38.440 it's in video, it's Apple. When you think about trum administration, 0:10:38.600 --> 0:10:41.800 come to the table. And and that's something where there 0:10:41.840 --> 0:10:45.440 could be some work around eight billion that they've given away, 0:10:45.800 --> 0:10:47.640 maybe half of that they get back. 0:10:47.800 --> 0:10:51.360 Okay, Apple. Unfortunately the chart doesn't look like Microsoft. I 0:10:51.360 --> 0:10:54.800 got Apple right now down twenty two percent from the peak. 0:10:55.360 --> 0:10:57.720 We don't have time for the Why how does Tim 0:10:57.800 --> 0:10:58.880 Cook turn it around? 0:10:59.480 --> 0:11:02.480 I mean he this is continues to be a hall 0:11:02.520 --> 0:11:04.040 of fame moment in terms of how he's now the 0:11:04.080 --> 0:11:04.760 get moment. 0:11:04.800 --> 0:11:07.800 Come on, Paul told me to buy this thing at 0:11:07.800 --> 0:11:10.520 the beginning of the year. I'm down twenty, but not 0:11:10.559 --> 0:11:11.400 a hall of fame moment. 0:11:11.480 --> 0:11:13.840 It's a hall of fame moment relative to the China 0:11:13.920 --> 0:11:17.040 tariffs and getting around in ultimately India being the life raft. 0:11:17.080 --> 0:11:20.320 You're gonna have sixty five seventy percent of assembly coming 0:11:20.320 --> 0:11:23.760 out of India. And I think, look, no company is 0:11:23.800 --> 0:11:25.920 more caught in the storm when it comes tariffs than 0:11:26.000 --> 0:11:29.520 Cook and Cooper. Tina will be at WWDC. It's the 0:11:29.559 --> 0:11:32.680 start of that broader AI strategy. I first said that 0:11:32.840 --> 0:11:38.720 last year, No and Tom. If you take out tariffs, 0:11:39.360 --> 0:11:41.840 this is a stock that's forty to fifty dollars higher. 0:11:42.200 --> 0:11:45.720 So my view is that Cook is ten percent politician, 0:11:46.200 --> 0:11:49.480 nineteen percent CEO. He'll navigate around this. And I think 0:11:49.520 --> 0:11:52.400 we city are six months from now. The name that 0:11:52.600 --> 0:11:55.040 I think is way miss priced is Apple. 0:11:56.120 --> 0:11:58.280 Elon's going back to work. It seems like, what do 0:11:58.320 --> 0:12:00.280 you expect it in the next six six months until. 0:12:00.280 --> 0:12:02.679 I mean the dark chapter is over right, and and 0:12:02.720 --> 0:12:05.720 I think it's bullet because now the autonomous and robotics 0:12:05.720 --> 0:12:08.360 feature is here. And ultimately, look this, it was a 0:12:08.360 --> 0:12:11.839 fork in the road moment he bet on Tasla, And 0:12:11.920 --> 0:12:13.959 now I think, even though there is still some brand 0:12:14.000 --> 0:12:17.440 damage that remains, we weave the path through to a 0:12:17.480 --> 0:12:19.800 two trillion dollar mark out for Tasla is now on 0:12:19.840 --> 0:12:20.280 the table. 0:12:20.520 --> 0:12:25.120 Lisa, if your daughter in her prom, if her date 0:12:25.240 --> 0:12:29.000 shows up in a tuxedo, that's that pink. 0:12:29.080 --> 0:12:29.840 That's the trend. 0:12:29.840 --> 0:12:31.480 Now that's what the kids are doing. 0:12:31.520 --> 0:12:34.240 The kids are doing. The kids going to show up 0:12:34.280 --> 0:12:36.400 in tuxedo with. 0:12:36.360 --> 0:12:40.480 Like no everything like bananas, pineapples, like whatever on this ser. 0:12:42.080 --> 0:12:42.640 Toxedo. 0:12:43.720 --> 0:12:46.720 Because I keep thinking, I keep waiting for the keen 0:12:47.080 --> 0:12:50.240 pink boats tie. We know, I think it's I think 0:12:50.280 --> 0:12:54.280 with AI it could be coming with. 0:12:55.640 --> 0:12:58.040 Today they said ives was here and I went with pink. 0:12:58.040 --> 0:12:59.520 But I think you look I did. 0:13:00.080 --> 0:13:02.439 It's phenomenal in the pink bow tie. I'm just I'm 0:13:02.480 --> 0:13:03.160 just saying. 0:13:03.440 --> 0:13:09.719 You know, I just give my charity yesterday you did 0:13:09.760 --> 0:13:11.920 what Yeah my tux seedo that had I had worn. 0:13:11.800 --> 0:13:12.680 In twenty years. 0:13:12.720 --> 0:13:14.280 Okay, that's why. 0:13:14.440 --> 0:13:18.440 Yeah, the difference, Paul, Paul, you would still get into 0:13:18.480 --> 0:13:21.400 the tex exactly my tuxedo from twenty years ago. 0:13:21.640 --> 0:13:26.680 It happened single best buy Apple, single best buye Here 0:13:26.800 --> 0:13:31.320 to me, it's Tesla, given the given the autonomous path, 0:13:31.400 --> 0:13:34.520 and must recommitted that continues to be front and center. 0:13:34.640 --> 0:13:37.440 You're pro. I'm an amateur. I don't buy it. I 0:13:37.600 --> 0:13:39.400 just can't get there, Paul, can you get there? 0:13:39.920 --> 0:13:41.600 I can't bet against Elon in this stock. 0:13:41.640 --> 0:13:42.200 It's just been. 0:13:42.920 --> 0:13:43.480 It's just been. 0:13:43.559 --> 0:13:46.600 It's been amazing story. And if he's back, if he's 0:13:46.600 --> 0:13:48.360 really back, that's good for that He's back. 0:13:48.480 --> 0:13:52.360 That's the way we rolled. Dan's Thank you so much. 0:13:52.679 --> 0:13:56.560 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:13:56.600 --> 0:13:59.479 starting at seven am Eastern on Apple Corplay. 0:13:59.120 --> 0:14:01.520 And Android Auto with the Bloomberg Business App. 0:14:01.640 --> 0:14:04.640 You can also listen live on Amazon Alexa from our 0:14:04.720 --> 0:14:09.199 flagship New York station, Just say Alexa, play Bloomberg eleven thirty. 0:14:09.360 --> 0:14:11.440 It is the most important interview of the day, folks, 0:14:11.960 --> 0:14:16.240 Riveting America is with Andrew Gilbert joining us. Now he's 0:14:16.320 --> 0:14:21.640 with ECP, but forget about that, far far more. Andrew 0:14:21.680 --> 0:14:27.120 Gilbert has a massive cred out of stern On Data Centers. Yep, 0:14:27.400 --> 0:14:31.600 you need to be neuutilities. I have seen the collective's 0:14:31.760 --> 0:14:35.960 amount of hot air from people that didn't take thermodynamics 0:14:36.080 --> 0:14:39.920 now is off the chart. Cut to the chase. Is 0:14:40.080 --> 0:14:44.760 retail Electric America going to pay for Microsoft or in 0:14:44.920 --> 0:14:47.400 Video's data center electric bill? 0:14:47.760 --> 0:14:48.800 Well, first, thanks for having me on. 0:14:48.920 --> 0:14:51.640 Happy to be here in really exciting time in our 0:14:51.720 --> 0:14:54.920 industry for nuts for twenty five years, no growth, and 0:14:55.000 --> 0:14:59.600 all of a sudden, we're on TV here after Nvidia earnings. 0:15:00.040 --> 0:15:03.000 It's better than me, so it works. Are we going 0:15:03.080 --> 0:15:05.240 to pay for nvidious data center? 0:15:05.480 --> 0:15:05.680 Yeah? 0:15:05.880 --> 0:15:07.680 So across across it's a great question. 0:15:07.760 --> 0:15:10.680 Across the country, regulators are trying to figure out how 0:15:10.720 --> 0:15:13.040 to make those companies pay for it, How to make Microsoft, 0:15:13.080 --> 0:15:13.960 Amazon pay for it. 0:15:14.480 --> 0:15:16.920 Confidence they will, they will, and. 0:15:16.960 --> 0:15:18.680 I think they're already finding a better way to do 0:15:18.760 --> 0:15:21.880 that in competitive markets. So regulated utilities want you and 0:15:21.920 --> 0:15:24.240 I to pay it on our content bill, But competitive 0:15:24.280 --> 0:15:29.160 markets it's different. Companies like ours invest in competitive generation 0:15:29.520 --> 0:15:31.560 and we take the risk. And I think that's the 0:15:31.600 --> 0:15:34.280 big difference between regulated areas like the southeast of the 0:15:34.320 --> 0:15:37.760 country and competitive markets like the Northeast and Texas. 0:15:38.280 --> 0:15:41.840 So how do we power all these data centers. What's 0:15:41.880 --> 0:15:44.960 the what's the path forward? Because I keep seeing Nvidia 0:15:45.000 --> 0:15:47.200 and other companies from Microsoft and that we're building, We're building, 0:15:47.240 --> 0:15:49.680 we're building, we're building. You've got to power this stuff. 0:15:49.680 --> 0:15:51.320 I mean, I watch landman, I know how the oil 0:15:51.360 --> 0:15:52.280 and gams industry works. 0:15:52.280 --> 0:15:52.880 Oh, here we go. 0:15:53.200 --> 0:15:53.600 Talk to us. 0:15:53.600 --> 0:15:55.560 How we're going to power this stuff with everything? 0:15:55.960 --> 0:15:56.200 Okay? 0:15:56.480 --> 0:15:58.560 This this is an industry that really again hasn't had 0:15:58.680 --> 0:16:00.960 much demand growth, all of a sudden has an explosion 0:16:01.000 --> 0:16:02.680 of it, and so we're going to need electricity from 0:16:02.720 --> 0:16:05.080 all sources. Gas is going to have to be a 0:16:05.120 --> 0:16:07.680 big component of it. Renewables as well, and that stuff 0:16:07.720 --> 0:16:12.560 faces challenges with with tariffs and protectionist policies, with tax 0:16:12.640 --> 0:16:15.160 credit risk on the renewable side. On the gas side, 0:16:15.160 --> 0:16:18.000 it's just industry that for a while was sort of 0:16:18.040 --> 0:16:21.920 adapting to almost no growth. So companies like ge Vernova 0:16:22.640 --> 0:16:25.040 and Siemens are ramping up production capacity, but it's not 0:16:25.160 --> 0:16:26.600 there yet, so it's going to take time. 0:16:27.400 --> 0:16:30.560 Is it a public private partnership here? What's the regulatory 0:16:30.600 --> 0:16:35.320 environment that you guys in on the financial side. 0:16:35.200 --> 0:16:35.680 Need to see? 0:16:37.280 --> 0:16:39.080 Uncertainty has been I think used a lot in the 0:16:39.120 --> 0:16:41.920 show and many shows recently. We need policy certainty. The 0:16:42.000 --> 0:16:45.560 industry is ready to make investment the investments needed the industry. 0:16:45.600 --> 0:16:48.560 What is the industry? Is it just the power industry? 0:16:49.200 --> 0:16:49.720 Is it old? 0:16:49.920 --> 0:16:50.880 Is it exceon Mobile? 0:16:51.000 --> 0:16:52.600 Is electric? 0:16:53.440 --> 0:16:58.640 It's competitive generators like Constellation, Vistra Energy Talent companies like 0:16:58.720 --> 0:17:00.920 that are the companies that going to move more quickly 0:17:01.000 --> 0:17:04.400 than regulated utilities. But regular utilities, the dominions, the southerns, 0:17:04.440 --> 0:17:05.400 they will be part of this too. 0:17:05.720 --> 0:17:08.480 Ge Vernova GV, I really don't know what it is. 0:17:08.560 --> 0:17:11.200 All I know is mister Colp's genius. I got a 0:17:11.320 --> 0:17:15.879 moonshot one fifty to four eighty five. Is that the 0:17:15.960 --> 0:17:19.119 future of your business, whether it's private you know, like 0:17:19.240 --> 0:17:24.680 your shop like ECP or public utilities boring Grammar, stock dominion. 0:17:24.960 --> 0:17:27.679 I need to divo it an increase. Is this total 0:17:27.760 --> 0:17:29.760 return of ge Fornova the future? 0:17:30.480 --> 0:17:34.360 It's all about the shortage of gas turbines. That's what's 0:17:34.440 --> 0:17:37.320 driving gev's performance and that's what we're seeing. 0:17:37.400 --> 0:17:40.640 Yeah, but guess turbines aren't spinning windmules going around. Don't 0:17:40.640 --> 0:17:45.240 give me this renewable energy. Song and dance is traditional energy. 0:17:45.720 --> 0:17:49.720 Dare I say coal going to power Microsoft's need for 0:17:49.800 --> 0:17:51.160 the fourteenth data center. 0:17:51.480 --> 0:17:54.040 Colon not Cole will survive a bit longer, but it's 0:17:54.080 --> 0:17:57.600 declining and that's not going to change. Gas has really changed. 0:17:57.920 --> 0:18:00.840 Gas has been the biggest kind of placement of coal, 0:18:01.119 --> 0:18:04.000 and that's going to accelerate because data centers need twenty 0:18:04.040 --> 0:18:06.680 four to seven electricity. Wind in solar don't provide that, 0:18:07.200 --> 0:18:09.280 but wind in solar are cheap and that they can 0:18:09.320 --> 0:18:12.080 be constructed quickly. So we need all of it to 0:18:12.200 --> 0:18:14.840 meet this challenge. You can't do it with one feel source. 0:18:15.119 --> 0:18:15.440 See that. 0:18:15.920 --> 0:18:17.120 That's what I've understood. 0:18:17.119 --> 0:18:17.800 You got to have it all. 0:18:18.040 --> 0:18:21.320 Talk to us about nuclear I like the modular nuclear things. 0:18:21.400 --> 0:18:23.320 Pop that baby right next to a data center. Let 0:18:23.359 --> 0:18:24.920 it power it is that realistic? 0:18:25.520 --> 0:18:27.560 Well, if you're willing to pay I don't know, seven 0:18:27.680 --> 0:18:31.800 times the price of gas, maybe really and we think 0:18:31.920 --> 0:18:34.040 it will be a factor that cost will come down 0:18:34.119 --> 0:18:36.480 over time, but it's not ready two years from now. 0:18:37.160 --> 0:18:38.439 It's probably ten years from now. 0:18:39.000 --> 0:18:42.560 Man, I thought that was a cool, Well, this is fascining. 0:18:42.640 --> 0:18:44.320 He's gonna be with us for the next four hours. 0:18:44.680 --> 0:18:48.400 Andrew Gilbert with us. He's partner at ECP. We've been 0:18:48.480 --> 0:18:50.879 dying to do this. Palls in the meeting at three am. 0:18:51.200 --> 0:18:53.200 When are we going to do data centers? We're doing 0:18:53.240 --> 0:18:57.600 it right now. Are the tech companies open or are 0:18:57.640 --> 0:19:01.600 they opaque about their plan? It's like they're like, you know, 0:19:01.720 --> 0:19:03.600 we have to keep our image jump. If you know, 0:19:03.720 --> 0:19:06.560 Cooper Tino, they're out there wearing sneakers and you know, 0:19:07.040 --> 0:19:09.520 you know they're Lulu Lemon and all that. Are they 0:19:09.680 --> 0:19:13.840 Are they transparent about their electrical demand needs? 0:19:14.440 --> 0:19:16.200 Well, what's we mentioned uncertainty. 0:19:16.240 --> 0:19:18.560 What's certain is the top five or six companies are 0:19:18.600 --> 0:19:20.240 going to spend four hundred million dollars a year on 0:19:20.320 --> 0:19:22.840 this stuff. And that's good and that's going to drive 0:19:22.920 --> 0:19:24.200 electricity demand growth. 0:19:24.080 --> 0:19:25.040 Yes, per year. 0:19:26.480 --> 0:19:30.200 On the on the opacity, sure, it's hard to get 0:19:30.240 --> 0:19:33.600 projects connected. So if you're a meta and you have 0:19:33.720 --> 0:19:37.120 a two gigawatt need, you're going to apply for projects 0:19:37.280 --> 0:19:39.840 in different parts of each market and hope that one 0:19:39.880 --> 0:19:42.640 of them kind of gets service, gets connected. So you've 0:19:42.640 --> 0:19:44.600