Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast, with Caroline Hide in New York
Speaker 1: and Eva Low in Sent Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: The US government will not take a stake in TikTok,
Speaker 3: but a deal with US investors is close, with Oracle
Speaker 3: powering the tech as the cloud computing company shuffles its CEOs,
Speaker 3: plus T.
Speaker 4: Mobile announcers and changing its leadership too. We sit down
Speaker 4: with the CEO, Mike Siebert and his successor, sereny Go Polan,
Speaker 4: and the.
Speaker 3: Trump administration plans to raise the H one B application
Speaker 3: fee to one hundred thousand dollars. We'll discuss the implications
Speaker 3: for workers in the tech industry, but for.
Speaker 4: Now, we look at the broader market said, and we
Speaker 4: turn a tide. We actually push back into the greens,
Speaker 4: a new record high for announced that one hundred and
Speaker 4: twenty seventh record hi for the S and P five hundred.
Speaker 4: Even though we started today in the red, so sentiment
Speaker 4: whipsawing little as we look ahead to federal reserves speak
Speaker 4: this week, inflation data as well, but the sentiment is
Speaker 4: sourd and crypto We're going to get into that a
Speaker 4: little bit more in the show progresses.
Speaker 5: We're down two percent on Bitcoin, even more on e
Speaker 5: What are you looking at?
Speaker 3: Okay, I'm going to Oracle as our big mover and
Speaker 3: our top story being TikTok.
Speaker 2: We're up three percent in the session, but.
Speaker 3: As you can see over the course of last week
Speaker 3: and this morning session, a lot of movement in Oracle
Speaker 3: that's pushed towards record highs. We now have a better
Speaker 3: understanding from the White House on the proposed technology structure
Speaker 3: for a TikTok deal in the US and the investors
Speaker 3: behind it, and it is Oracle at the harder that.
Speaker 3: We also learned this morning that Oracle is going to
Speaker 3: have two new co CEOs and then just a little
Speaker 3: bit of carrow. We're going to get more details on that.
Speaker 3: Let's start with TikTok. More details are coming out on
Speaker 3: the deal taking shape to sell TikTok to a consortium
Speaker 3: of American investors. US officials say they're confident China has
Speaker 3: approved the deal, under which Oracle would recreate and then
Speaker 3: provide security for a new US version of TikTok's algorithm.
Speaker 2: Bloombers.
Speaker 3: Kat Wagner who covers TikTok for US joints. The more
Speaker 3: there have been a lot of headlines this morning. What
Speaker 3: do we need to know about the status of TikTok
Speaker 3: in the United States?
Speaker 6: Well, I think you pointed out the algorithm has been
Speaker 6: a key sort of sticking point in this entire process
Speaker 6: because under US law, byte Dance, the owner of TikTok,
Speaker 6: is not allowed to have any say in the algorithm
Speaker 6: or the technology of this new US version, and Chinese
Speaker 6: law says you can't export this valuable technology. So it
Speaker 6: seems that they figured out some type of workaround where Oracle,
Speaker 6: as you mentioned, in this group of US investors will
Speaker 6: license the algorithm from Byteedance for a short time while
Speaker 6: they essentially recreate it and make it a brand new version,
Speaker 6: a brand new algorithm that's US trained, in US controlled,
Speaker 6: and then that will be what powers this new US
Speaker 6: version of TikTok. But again, this is all sort of
Speaker 6: a very unique, one of a kind deal, and so
Speaker 6: so while the framework has been announced, we are still
Speaker 6: waiting on formal approvals of this deal from leaders in Beijing.
Speaker 4: Yeah, and President Trump saying that she has approved the
Speaker 4: TikTok deal. They just have to get it signed, Kirt,
Speaker 4: There's still so many more questions. Indeed, who are the
Speaker 4: US participants, Who are the people who are going to
Speaker 4: control There are new names being thrown in the ring
Speaker 4: by the President of the course of the weekend.
Speaker 6: Yeah, so we know about Oracle of course, as being
Speaker 6: sort of the most notable name in this consortium. Silver
Speaker 6: Lake Partners was another that was I believe unveiled today.
Speaker 6: We had previously reported that andreesent Horowitz, the venture capital firm,
Speaker 6: we have reported at Bloomberg that they are going to
Speaker 6: be involved, But it sounds like it might still be
Speaker 6: sort of taking shape a little bit here. And you know, Carolina,
Speaker 6: as we mentioned this, just because the President says, hey,
Speaker 6: we have a deal and it will be signed. This
Speaker 6: has been such a contentious issue, contentious deal over many
Speaker 6: many years at this point that I think until everyone
Speaker 6: truly signs on the dotted line, we have to assume
Speaker 6: this is still being sort of negotiated and worked out
Speaker 6: in real time. So it seems we're the closest we've
Speaker 6: ever been. But again, until that deal is formally formally signed,
Speaker 6: I think we have to assume things are still moving
Speaker 6: a little bit.
Speaker 4: Bluemos, Kat Wagner, we thank you for the latest. Let's
Speaker 4: stick with one of the key players in the TikTok story,
Speaker 4: and it's Oracle, because the company has also just announced
Speaker 4: that its promoted Claim mcgork Mike Cecilia to the roles
Speaker 4: of co CEOs, replacing Saffrakatz, who has led the company
Speaker 4: since twenty fourteen and moves onto a board role. Let's
Speaker 4: bring in Bloomberg's Brody Ford, who covers Oracle, and it
Speaker 4: is a big change at the top.
Speaker 2: It is right.
Speaker 7: Saffra Katz has been one of the faces of Oracle
Speaker 7: for about a decade now, and folks familiar with Oracle's
Speaker 7: cloud business, which has become so important. Well, no, Claim
Speaker 7: mcgor k has led that unit for a while. The
Speaker 7: fact that he is being elevated in this way maybe
Speaker 7: isn't a shocker. The timing is they were both promoted
Speaker 7: Clay and Mike to president in June. Now all of
Speaker 7: a sudden they're becoming CEOs and so it's been a
Speaker 7: busy couple of months at Oracle.
Speaker 3: If you speak to anyone that's involved in this massive
Speaker 3: AI infrastructure build out right now, Clay's name comes up
Speaker 3: quite a lot. I was interested in reading your story
Speaker 3: that they are co CEOs, but the comp is different
Speaker 3: between the two of them.
Speaker 2: Can you just explain that a bit, Bradie, Right.
Speaker 7: They're co CEOs, they have the same title, but one
Speaker 7: of them is going to make one hundred and fifty
Speaker 7: million more in stock awards, and so that doesn't exactly
Speaker 7: sound equal to me.
Speaker 8: Right.
Speaker 7: What we know about Oracle right now is that the
Speaker 7: cloud infrastructure business is set to become their largest business
Speaker 7: by an incredible margin, and so the person who leads
Speaker 7: that unit is about to make significantly more money. Folks
Speaker 7: inside the company describe the dynamic to me as Clay
Speaker 7: is a kind of run through a brick wall to
Speaker 7: get something done engineering leader, whereas Mike Cecilia is more
Speaker 7: of the adult in the room. Any Ways, it mirrors
Speaker 7: a dynamic that Larry Ellison and Saffracats have had for years.
Speaker 4: It's interesting that Clay has got a board level as well,
Speaker 4: whereas and has for time, whereas perhaps Mike hasn't brody.
Speaker 4: It's notable that Suffracatz is still going to be there,
Speaker 4: and you also put the context in your story that
Speaker 4: she wasn't always totally behind the pivot towards data center
Speaker 4: is the pivot towards cloud offering.
Speaker 7: Absolutely. She was in the earlier days of cloud a
Speaker 7: little skeptical, right. I mean, she came up in the
Speaker 7: era where they were selling databases on prem for you know,
Speaker 7: margins that are some of the highest you can get
Speaker 7: on any product, and then comes data center infrastructure, where
Speaker 7: you're making pretty low gross margins and putting up billions
Speaker 7: at the forefront. She was a little anxious about this,
Speaker 7: and so as Oracle makes that their main business, it's
Speaker 7: not a shocker to me that we see a changing
Speaker 7: of the guard.
Speaker 2: Brady, real quick.
Speaker 3: You broke the story Friday that Oracles netted a deal
Speaker 3: with Meta, and I think, as you put it on air,
Speaker 3: Larry Ellison can't stop winning, right.
Speaker 7: Well, we all know that Oracle had this massive deal
Speaker 7: with open Ai, and the worry was that are they
Speaker 7: going to be a one trick pony? Are they going
Speaker 7: to have really bad customer concentration. We broke on Friday
Speaker 7: that they have another twenty billion deal with Meta seemingly
Speaker 7: coming down the pipeline, and so it shows that Oracle
Speaker 7: is seriously being taken as a provider of this kind
Speaker 7: of AI infrastructure.
Speaker 4: And a quick note that I'm now saying Mike Cecilia
Speaker 4: on the board as well as Clay, so both taking
Speaker 4: exciting roles.
Speaker 5: We really appreciate it.
Speaker 3: Ed Yeah, management Mayhem Monday, a lot of fun coming up.
Speaker 3: T Mobile announces a change in leadership as well with
Speaker 3: Mike see if it set to depart the CEO role.
Speaker 3: We speak with Mike and the successor, Shrini Gopalan, that's
Speaker 3: coming up next.
Speaker 2: You do not want to miss this conversation. This is
Speaker 2: bloombag Tech.
Speaker 4: T Mobile has announced that Mike's SAE it is set
Speaker 4: to transition away from as well as CEO well to
Speaker 4: stem a newly created vice chair management position set to
Speaker 4: take over as CEO November. The first is Strenie Goplan,
Speaker 4: Tmobile's current COO, and please to say they welcome us
Speaker 4: here in the studio both for Bloomberg's radio and TV audiences.
Speaker 4: Might I start with you, why is now the right
Speaker 4: time for you to hand over the reins in this way?
Speaker 9: Because Serenie's ready. You know, T mobile does it differently.
Speaker 9: We believe in thoughtful succession. I recruited Sereni to the
Speaker 9: COO position almost a year ago, and he has killed it,
Speaker 9: and he has an incredibly inspiring vision for the future.
Speaker 10: And I also wanted to pick a moment when the company.
Speaker 9: Is firing on all cylinders, because I think you should
Speaker 9: do succession amidst success. And so we picked our moment
Speaker 9: because Serenie's ready. He's the person to lead us into
Speaker 9: the future. And the company has put wind in his
Speaker 9: sales so that the team can continue to deliver outsize
Speaker 9: success going forward.
Speaker 4: And SERENI, Okay, the vision, the exciting vision for the future.
Speaker 4: How much is that about five or how much is
Speaker 4: that about the the real expertise you have in a
Speaker 4: more mature market having built that.
Speaker 5: With dewicha telecom.
Speaker 11: Look, when I look back up my career over the
Speaker 11: last thirty years, it feels like I've been preparing for
Speaker 11: this day acause what I've done over the last thirty
Speaker 11: years is really developed some real expertise at driving technology
Speaker 11: driven transformation, whether that's digital data, AI, fiber and networks.
Speaker 11: And that's really what the next stage of growth at
Speaker 11: T Mobile is going to be. It's going to be
Speaker 11: about bringing together this incredible culture, brand, everything that Mike's built,
Speaker 11: the great value we stand for together with amazing technology,
Speaker 11: making it easy for customers to do stuff, giving them
Speaker 11: a great experience, and America's best network. So there are
Speaker 11: no trade offs. You get all of that together at
Speaker 11: the same time.
Speaker 3: At T Mobile, Shaney, I'll start with you if I may.
Speaker 3: You know, in any life cycle of a company, there
Speaker 3: comes a point where it's just more mature, right, there's
Speaker 3: this corporate s curve, And so I think it's a
Speaker 3: really sensible place to start by asking you what you're
Speaker 3: going to do differently from Mike, given that the company
Speaker 3: is in a different stage to what it was over
Speaker 3: the period that might let it look.
Speaker 11: At T Mobile, we don't believe in kind of sitting
Speaker 11: on our hands and kind of waiting to see how
Speaker 11: the industry evolves. We define the industry. We define how
Speaker 11: this goes forward. Mike and the team have already been
Speaker 11: talking a lot about the transformation we want to drive
Speaker 11: about bringing America's best network together with great value, not
Speaker 11: just that taking the technology we have available today across AI,
Speaker 11: across our digital footprint, and building the best experience for
Speaker 11: T Mobile customers. So what you should expect is a
Speaker 11: lot of continuation of changing the industry for the good
Speaker 11: of the customer, and that means a continual transformation. So
Speaker 11: this is not a business that likes sort of sitting
Speaker 11: steady and kind of watching the dividends and growth come in.
Speaker 11: We're there to change the life of our customers, to
Speaker 11: change this industry for the better, and you should expect
Speaker 11: to see a lot more of that.
Speaker 2: Mike.
Speaker 3: When I was reading up on a shrine ahead of
Speaker 3: our conversation at Apple a couple of weeks ago, I
Speaker 3: didn't know that this was going to happen. But you know,
Speaker 3: there's a lot of focuses on his time in Europe.
Speaker 3: How much was that a big factor for you, because
Speaker 3: again it's a different market there in Europe to hear
Speaker 3: in the United States.
Speaker 9: Well, what was a factor for me was just what
Speaker 9: kind of an executive he is. Streeney is tenacious, he
Speaker 9: is hard charging, he is competitive, he's customer loving, and
Speaker 9: he attracts talent and he's got a vision for the
Speaker 9: future of our company that's exciting. So I've known this
Speaker 9: for years because we've been friends for a long time,
Speaker 9: we've been co workers on the board of directors of
Speaker 9: T Mobile. I've seen how he thinks, and so a
Speaker 9: year ago I convinced him to give all that europe
Speaker 9: stuff up and come to the US as our chief
Speaker 9: operating officer, very much with this day in mind, because
Speaker 9: I knew he was the right person to lead the
Speaker 9: company into the future.
Speaker 4: You've been bold, For example, Mike, I think of you
Speaker 4: being the first one to strike that deal with Starling,
Speaker 4: to think about director device satellite communication going forward.
Speaker 5: Just how is that partnership given you a competitive edge?
Speaker 5: Are you seeing people come on board because of the
Speaker 5: changes you made?
Speaker 8: Well?
Speaker 9: T Mobiles an innovator, you know, not just direct to sell.
Speaker 9: With Starlink, we created the home broadband five G category,
Speaker 9: which millions of people benefit from nationwide. We continue, as
Speaker 9: Srina was saying, to redefine what it means to compete
Speaker 9: in this category and then watch while everybody follows. That's
Speaker 9: why we're the world's most successful telecommunications company. So look
Speaker 9: on the on the T satellite. I mean, it's just
Speaker 9: been fantastic. Our dream when I announced that with Elon
Speaker 9: back in twenty twenty two, was to end dead zones,
Speaker 9: the end of dead zones, and today T Mobile customers
Speaker 9: can connect to six hundred satellites, the only one that
Speaker 9: connects your phone automatically if you fall off a terrestrial network,
Speaker 9: but soony for.
Speaker 4: Example, on first one or to do list might be
Speaker 4: the boost mobile is going to have potential offering because
Speaker 4: of the new spectrum that Elon Then's got with Starlink.
Speaker 4: How do you can consider the future evolution of direct
Speaker 4: to consumer satellite.
Speaker 11: When we start off with this vision of putting an
Speaker 11: end to dead zones, right, that's what we were going for.
Speaker 11: We're delighted that Starlink has now acquired more spectrum makes
Speaker 11: the service even better. Together, what we want to do
Speaker 11: is live true to that mission of putting an end
Speaker 11: to dead zones. As far as the competitive world is concerned,
Speaker 11: we love competition. We love switching. I mean we've always
Speaker 11: sweed as said this, the more jumpalls the better because
Speaker 11: there's only one place that you can get the best network,
Speaker 11: best value, and best experience. So we love competition. Anything
Speaker 11: that stimulates even more switching is a good thing.
Speaker 2: Shiny.
Speaker 3: A lot of questions that we get from the audience director,
Speaker 3: you are about fiber and so I would summarize T
Speaker 3: mobile strategy today little tiny pieces of M and A.
Speaker 3: How are you going to approach that going forward? You're
Speaker 3: just going to build this out yourself.
Speaker 11: Look, when we approach a new business, right, we approach
Speaker 11: it with a mix of conviction and humility. We're convinced
Speaker 11: that our brand, the distribution we bring, what we stand for,
Speaker 11: our culture of kind of smashing through customer pain points
Speaker 11: and really attacking incumbents is equally applicable to fiber as
Speaker 11: it was to fixed swiless. We're also humble enough to
Speaker 11: realize that we don't have a set of capabilities like
Speaker 11: local zoning and permitting, and we partner for that. And
Speaker 11: that's the logic for the JVS. The vision for fiber
Speaker 11: is not small. I think we've clearly showed our hand.
Speaker 11: We like being first to fiber, we like being a
Speaker 11: pure play fiber player, and we will continue to scale
Speaker 11: that business. On the acquisition questions, we'll see what's available.
Speaker 11: We'll take a hard nose look allocate capital well. But
Speaker 11: we do like a pure play fiber business and we
Speaker 11: think there's a lot of scale possible for that.
Speaker 9: And ED just remember that we're the leading broadband growth
Speaker 9: company in America even before the fiber pieces that you're
Speaker 9: now asking about, because five G broadband has become a
Speaker 9: phenomenon and overall, T Mobile has led broadband growth in
Speaker 9: this company, in this country for thirteen quarters in a row.
Speaker 11: And in a SMA matter of a few years. We're
Speaker 11: now three years, We're now the fifth largest is Spen
Speaker 11: country from a standing star.
Speaker 3: Hey gents, you make a good double act, but we're
Speaker 3: short on time. So Mike, I'm going to ask my
Speaker 3: final question to you. You're still in the role till November,
Speaker 3: first critical period of.
Speaker 2: The year for handset sales.
Speaker 3: What's the data telling you early about iPhone seventeen. What
Speaker 3: is going to do for T Mobile the behaviors of
Speaker 3: your existing in new customers.
Speaker 9: Well, it's only been three days, but we're killing it.
Speaker 9: You know, last year we had an all time record
Speaker 9: new iPhone introduction. This year we're beating that by double digits,
Speaker 9: and not just in terms of activating phones for our customers,
Speaker 9: but in terms of switchers, switchers to T Mobile who
Speaker 9: are coming at the moment that they get a new
Speaker 9: iPhone also up double digits this this this weekend. And
Speaker 9: so you know, we've had a great launch, and you know,
Speaker 9: a new phone is a great time for Americans to
Speaker 9: ask themselves do they have the right provider switches.
Speaker 3: What was the call that Shriney made when we spoke
Speaker 3: at Apple a couple of weeks ago, Mike Siebert, Tim
Speaker 3: Moo's outgoing CEO, Shriny Gopalan incoming.
Speaker 2: Just terrific conversation. Thank you to you.
Speaker 4: Both stock markets push higher, but let's focus on crypto
Speaker 4: because we're actually seeing a draw down significantly. We've seen
Speaker 4: about one and a half billion dollars in bullish wages.
Speaker 4: Those bullish bets have iniquidated on Monday, particularly across Eve,
Speaker 4: we saw it falling the hardest, nearly half a billion
Speaker 4: dollars worth of leverage a long positions. We understand pulled
Speaker 4: out of that second largest token, But is this a
Speaker 4: sign of just the changing of the guard. Are we
Speaker 4: questioning some of those theories around digital asset treasuries in particular?
Speaker 5: Now a we just taking some money off the table.
Speaker 3: Edd Let's get more on the broader markets, particularly on tech.
Speaker 3: Eric Bailey, wealth manager at Stewart Partners, and I find
Speaker 3: what Caroline was outlining there really interesting because right now
Speaker 3: you can either pick out that data set, you can
Speaker 3: say that equity markets continue to push records or hold
Speaker 3: at records. Do you have a summary of what the
Speaker 3: sentiment in the market is right now.
Speaker 12: Eric, Yeah, thanks having me. Clearly, the risk trade is on.
Speaker 12: Investors are taking risk and we've really seen this since
Speaker 12: I would say late July where the growth indexes took
Speaker 12: over value. Right we had that drop in April and
Speaker 12: value was kind of leading the markets, and that's really
Speaker 12: shifted and you've seen growth equity perform extremely well. And
Speaker 12: that's day to day. It keeps going higher. So you
Speaker 12: have the Russell one thousand growth indexes up I think
Speaker 12: over seventeen percent right now. You're to date and of
Speaker 12: late with the news and after earnings, growth is clearly
Speaker 12: you know where investors want to be. They're comfortable taking
Speaker 12: risk right now.
Speaker 3: Apple is up four percent in this session and the
Speaker 3: reason that that's notable is that it actually believe it
Speaker 3: or not most of the way through September. Takes it
Speaker 3: into positive territory for twenty twenty five. We talked a
Speaker 3: lot in the middle of the year about the contribution
Speaker 3: of the mag seven names to the market overall, but
Speaker 3: as a moment, time to do that at this part
Speaker 3: of the year.
Speaker 2: What do you make of it?
Speaker 12: Yeah, it's impressive, right, you mentioned Apple, I mean that
Speaker 12: stock not long ago was really you know, investors were
Speaker 12: checked out, analysts were negative, people were questioning Apple what
Speaker 12: they were doing. And now, as you said, it's positive
Speaker 12: on the ear just an incredible move. And the MAG
Speaker 12: seven even Tesla I name, that is still down for
Speaker 12: the year, but it's had a very big move here
Speaker 12: the last several weeks. And so the MAG seven is
Speaker 12: clearly leading to markets right now. You're seeing that day after.
Speaker 5: Day, Eric, Eric, should you stay committed to that?
Speaker 13: Then?
Speaker 4: Just the trend has been relentlessly high since April, but
Speaker 4: the valuation story just gets harder and harder to swallow.
Speaker 12: I agree.
Speaker 8: Yeah.
Speaker 12: As a financial advisor and I have lots of positions
Speaker 12: in these names, it is concerning because the valuations are
Speaker 12: just so high, and you ask, can this momentum continue?
Speaker 12: Our investors is going to continue to buy these names?
Speaker 12: And yeah, I mean, you don't see any science that's
Speaker 12: going to weaken. The trends are so powerfully on the upside.
Speaker 12: So I think you hold them. But clearly, you know,
Speaker 12: new money going in, I would be cautious because these
Speaker 12: valuations are so.
Speaker 4: High, and so you perhaps diversify, you don't re up
Speaker 4: your bets. If they've been winning of late, but his
Speaker 4: earning is going to be the tell? Is it going
Speaker 4: to be geopolitics that the tell what ultimately makes us
Speaker 4: question how valuable some of these companies are.
Speaker 12: Yeah, we'll see. I mean right now, our earnings after
Speaker 12: the second quarters certainly are leading the these names, and
Speaker 12: some of the big announcements right with Oracle, which you
Speaker 12: guys have been talking about all day, clearly tremendous momentum
Speaker 12: with the announcements they've made in AI, and so I
Speaker 12: do think it's earnings that's going to lead them higher.
Speaker 12: As for investors, yeah, I think you got to you
Speaker 12: hold your positions, but you look and see how overweight
Speaker 12: or how how much you know, how large a position
Speaker 12: do I have in these names? And they are you comfortable,
Speaker 12: you know, having this bigger risk risk position in your portfolio.
Speaker 3: In the context of corporate earnings and tech. You know,
Speaker 3: the signal from certain names is that kind of soft
Speaker 3: data set or hard data set even that the people
Speaker 3: are looking for.
Speaker 2: I'm putting you on the.
Speaker 3: Spot, but we get Micron in the next thirty six hours.
Speaker 3: You know, they might tell us something big picture about
Speaker 3: the direction of travel for AI infrastructure is that still
Speaker 3: like the watch item for a lot of desks.
Speaker 12: Well, I think the broader, the whole sector of semiconductors,
Speaker 12: which Micron is in, overall us performed well. You have
Speaker 12: seen certain names get hit, but overall the group I
Speaker 12: track the SMAH index, it's done very well. And so yeah,
Speaker 12: Micron is certainly going to be important. And I know
Speaker 12: there was some positive analyst calls I want to say
Speaker 12: today on Micron. So yeah, that's a big name and
Speaker 12: that could shield the market to go higher if they
Speaker 12: have a good result.
Speaker 3: Well, so we in the course of this conversation we've
Speaker 3: said how remarkable this is, the timing of it, the
Speaker 3: sentiment in the market. Give us the Eric Bailey prediction
Speaker 3: for what happens in the balance of twenty twenty five.
Speaker 12: You know, I've been calling for a little bit of
Speaker 12: a pullback and I've been wrong. I expected that at
Speaker 12: the at these valuations we would see some of some
Speaker 12: kind of correction, you know, since that April drop, we
Speaker 12: have just been on a chair. So I do expect
Speaker 12: the markets to get a bumpier, but I don't see
Speaker 12: it being a long term trend. I think any correction,
Speaker 12: buyers will step in and we're going to continue on
Speaker 12: this run. It's going to take a lot to get
Speaker 12: this market to get negative.
Speaker 4: I think Bailey from Stuart Partners, appreciate your time today
Speaker 4: and the push forward.
Speaker 2: Welcome back to Bloomberg Tech.
Speaker 3: We're thinking very much about the news story on one
Speaker 3: hundred thousand dollars H one V application fees and in
Speaker 3: the market, I'm looking at Infosis. These are the US
Speaker 3: listed shares of Infos, the Indian technology company. Up modestly
Speaker 3: in this Monday session, but a big drop Friday when
Speaker 3: Bloomberg first reported that one hundred thousand dollars figure. There's
Speaker 3: a lot of emphasis on the IT and outsourcing names
Speaker 3: out there. There was big downward pressure in Indian listed
Speaker 3: technology names overnight. There's also a big scramble for American
Speaker 3: technology companies to understand how this impacts their ability to
Speaker 3: hire and what it means for existing H one B
Speaker 3: visa holders. For more on the state of H one
Speaker 3: B visas and immigration in the US, he banner ericson
Speaker 3: Immigration Group Partner joins us now. The confusion was when
Speaker 3: this first was confirmed Friday, there wasn't clarity on whether
Speaker 3: it applied to new applicants H one B or existing
Speaker 3: as well. Then over the weekend, the White House clarified
Speaker 3: that it was just new applicants.
Speaker 2: But can we just.
Speaker 3: Start by you reflecting on your weekend, the discussions you've
Speaker 3: had with clients in the technology sector, how you've managed
Speaker 3: this process.
Speaker 14: Certainly so you're absolutely right. Initially there was not clarification
Speaker 14: as to whether or not the one hundred thousand dollars
Speaker 14: fee would apply to existing H ONEB visa holders or
Speaker 14: new applicants. There was also confusion about whether or not
Speaker 14: this was a one time fee versus a continuous annual fee,
Speaker 14: And what essentially happened for the first twenty four hours
Speaker 14: following the proclamation was pretty close to chaos. We had
Speaker 14: several clients who are very well known tech companies who
Speaker 14: either contacted H one B employees who happened to be
Speaker 14: outside of the United States at the time the proclamation
Speaker 14: came out, asking them to try their best to come
Speaker 14: back before the one hundred thousand dollars fee took effect.
Speaker 14: And then also we had a lot of companies, not
Speaker 14: just the companies that we work with, but very well
Speaker 14: known companies in the market tell their employees to wait
Speaker 14: before engaging in any international travel until we know more.
Speaker 14: There was also instances of international flights that were getting
Speaker 14: ready to take off where several passengers requested to deplane
Speaker 14: specifically because they wanted to avoid their companies being charged
Speaker 14: one hundred thousand dollars fee if they attempted to re
Speaker 14: enter after international trip. So, like I said, the first
Speaker 14: twenty four hours were extremely confusing, and we did the
Speaker 14: best that we could to provide the guidance to that
Speaker 14: the companies need in order to communicate to their employees
Speaker 14: with what very little we knew.
Speaker 3: HEBA one hundred thousand dollars is the fee from this
Speaker 3: point on? What is the strategy for America's biggest technology
Speaker 3: companies and also smaller startups? Do you think that it's
Speaker 3: a manageable fee and what is the kind of process
Speaker 3: from here? Do they just slow down hiring in the
Speaker 3: H one B category?
Speaker 14: One hundred thousand dollars fee for an H ONEB visa
Speaker 14: petition is not manageable at all for startups, for small businesses,
Speaker 14: even for mid sized businesses. I think that this is
Speaker 14: going to make it extremely difficult, if not nearly impossible,
Speaker 14: for startups, small businesses or mid sized businesses to hire
Speaker 14: the talent that they need in order to be able
Speaker 14: to compete on a global scale. For larger tech companies
Speaker 14: that have more resources, I think that the ability to
Speaker 14: manage a fee of this amount is not going to
Speaker 14: be as difficult as it is for startups. But I
Speaker 14: want everyone to remember that a lot of these extremely
Speaker 14: successful international companies were once themselves startups, and so any
Speaker 14: policy that makes it harder for American startups or small
Speaker 14: businesses to innovate is going to impact our competitiveness down
Speaker 14: the line.
Speaker 4: What's been extraordinary for many has been just seeing where
Speaker 4: the outsize impact has had who it's had upon, and
Speaker 4: in particular, it's people coming from India, it's people coming
Speaker 4: from China.
Speaker 5: Heber.
Speaker 4: The argument coming from the administration is that H one
Speaker 4: B visa process wasn't being used as it should be.
Speaker 5: Have you let any evidence of that?
Speaker 14: I have no evidence of that. I think that there
Speaker 14: are quite a few checks and balances built into the
Speaker 14: H and B process as it stands today, and that's
Speaker 14: actually inclusive of several levels of scrutiny as well as
Speaker 14: extensive background checks, and there is prima facia evidence basically,
Speaker 14: in other words, preliminary evidence that has to be submitted
Speaker 14: along with the initial application for an H one B
Speaker 14: visa in order for that application to be successful in
Speaker 14: the first place. And so I haven't seen any evidence
Speaker 14: of misuse. I think that it's a really critical tool
Speaker 14: for our companies, both tech and in various other industries
Speaker 14: in order for them to stay competitive. I also think
Speaker 14: it's important to point out that people normally associate the
Speaker 14: H one B visa with tech companies, which is very true,
Speaker 14: but there's a variety of different industries that rely on
Speaker 14: the H one B visa, including research institutions, universities, and healthcare.
Speaker 14: And so this has the potential to really impact a
Speaker 14: lot of different American institutions, assuming that this goes forward
Speaker 14: and is not paused by litigation.
Speaker 4: Now, we did see that there was an update coming
Speaker 4: from the Administration that potentially doctors would have a carve
Speaker 4: out from one hundred thousand.
Speaker 5: Dollars in terms of a fee hibber.
Speaker 4: But let's go back to California, the state that's most
Speaker 4: impacted according to our data, and indeed Texas, New York,
Speaker 4: New Jersey the companies that are based there, and then
Speaker 4: we look at the as you say, the industries, professors, scientists,
Speaker 4: technology services, manufacturing, information. These companies, what do they do.
Speaker 4: Do they hire outside of the US to be able
Speaker 4: to make up for the talent shortfall while the training
Speaker 4: goes on in the US, or is there any idea
Speaker 4: that there is enough talent here to satisfy the needs.
Speaker 14: That's one of the concerns resulting from this fee. The
Speaker 14: concern is that a lot of companies would choose to
Speaker 14: either pause hiring, in particular international hiring, but also may
Speaker 14: choose to shift their operations abroad, and that is going
Speaker 14: to have downstream effects for the company as well as
Speaker 14: US workers that work for the company. So that's one
Speaker 14: of the concerns. The other concern, as you mentioned, is
Speaker 14: that there's a variety of different companies that rely on
Speaker 14: the H one B visa, and so there is language
Speaker 14: in the proclamation that cars out exceptions for an individual
Speaker 14: who the government deems is in the national interest of
Speaker 14: the US. However, what we still need to understand is
Speaker 14: the way in which these arguments requesting a national interest
Speaker 14: exception are actually going to be treated and adjudicated. As
Speaker 14: it stands now, the evidentiary standards for successfully making that
Speaker 14: argument are actually quite high. So I don't think that
Speaker 14: the language that cars out an exception is going to
Speaker 14: help any of the concerns that the industry has.
Speaker 3: Heber Bloomberg's reported at length that the expectation is immediate
Speaker 3: legal challenges to this executive order, and they note in
Speaker 3: that reporting that Congress has traditionally set in a legislative
Speaker 3: or qualified way fees and other associated costs. Could you
Speaker 3: just explain where you stand today, where the precedent is
Speaker 3: to challenge this and any action that you might take
Speaker 3: on behalf of clients to challenge it.
Speaker 14: I think that anybody who's getting ready to make a
Speaker 14: legal challenge to this is going to incorporate a few
Speaker 14: key grounds in their argument. One is that it is
Speaker 14: the responsibility of Congress to make immigration laws set immigration fees. Also,
Speaker 14: the President is basing this proclamation on a law that
Speaker 14: does grant the President brought authority in terms of restricting
Speaker 14: entry of foreign nationals into the United States if there
Speaker 14: is a national security concern or if that individual's entry
Speaker 14: to the US is somehow detrimental to the US.
Speaker 10: However, there has to be.
Speaker 14: Some substantive factual evidence in support of that, which I
Speaker 14: would imagine folks who seek to challenge this proclamation will argue.
Speaker 2: Does not exist.
Speaker 14: And so those are the grounds that I'm going to
Speaker 14: be watching out for in terms of the upcoming legal challenges.
Speaker 14: One thing that I do want to note, however, is
Speaker 14: that the recent Supreme Court decision and Trump versus Cossa,
Speaker 14: made it very difficult for a single federal judge to
Speaker 14: issue a nationwide injunction pausing some sort of presidential action
Speaker 14: from taking effect. And so one thing I know that
Speaker 14: I'm going to be watching out for is basically whether
Speaker 14: or not somebody chooses to file a class action lawsuit,
Speaker 14: how broad that class is defined, and whether or not
Speaker 14: a federal judge certifies it.
Speaker 4: Hey Manver, incredibly busy. We really thank you for your
Speaker 4: time today. Ericson Immigration Group Now interesting me. Our CEO
Speaker 4: Kathy Wood weighed in on the issue of H one
Speaker 4: B visas and the fees, saying the changes are part
Speaker 4: of a negotiating process, actually predicts that it will actually
Speaker 4: end up being loosened. Just take a listen to what
Speaker 4: you said the TV earlier.
Speaker 13: This is part of President Trump's negotiating process, and I
Speaker 13: think he's negotiating quite intensively. Right now with India. I
Speaker 13: think India would be have the biggest impact here in
Speaker 13: terms of, you know, workers in the United States.
Speaker 10: So I think this is a little.
Speaker 13: Bit like tariffs, and it's going to capture all the
Speaker 13: headlines and it's going to really take the oxygen out
Speaker 13: of the room because there's a lot of really good
Speaker 13: fundamental activity happening in the United States relating.
Speaker 15: To policy, well, a lot of that, a lot of
Speaker 15: the innovation, a lot of that Silicon Valley kind of
Speaker 15: goodness really comes from the talent and the labor pool.
Speaker 15: We've been talking about this for quite some time in
Speaker 15: terms of how do you train your engineers. You train
Speaker 15: Americans to do a lot of what Silicon Valley depends
Speaker 15: on foreign workers to do. Does this impact innovation in
Speaker 15: Silicon Valley and doesn't impact megacap stocks tech companies that
Speaker 15: are dependent on this.
Speaker 13: Well, from what we know of this administration, they ultimately
Speaker 13: want to keep students who have been educated in the
Speaker 13: US foreign students that have been educated in the US
Speaker 13: in the US.
Speaker 2: So really do us.
Speaker 13: Think this is part of the negotiation with India and
Speaker 13: UH and that when all is said and done, we're
Speaker 13: probably going to loosen up the H one visa visa program.
Speaker 15: But in the short term, is that going to have
Speaker 15: an impact on tech companies.
Speaker 13: I think what it's going to do is force tech
Speaker 13: companies to do what they're already doing and that has
Speaker 13: become more efficient. And the other thing to note is, uh,
Speaker 13: you know, coding is changing dramatically. The number of coding
Speaker 13: jobs and openings has dropped dramatically. Because of AI, all
Speaker 13: of us can become coders. This is natural language programming.
Speaker 13: Generative AI is prompting chat GBT to get your programs going.
Speaker 13: We can all do that. That's simplifying it. But I
Speaker 13: do think it gives you a sense of the kind
Speaker 13: of productivity that possibilities that are possible, that that will
Speaker 13: impact these tech companies longer term.
Speaker 3: Posy Cappy with their with Bloomberg's Kritty Gupta. Okay, coming up,
Speaker 3: the maker of the Aura ring is set to become
Speaker 3: a eleven billion dollar company with a new Series E
Speaker 3: financing round. We're going to speak to the CEO about
Speaker 3: how the company plans to use that new funding and
Speaker 3: a lot more that's next.
Speaker 2: This is Bloomberg Tech.
Speaker 3: Aura, the maker of the popular Aura health and fitness
Speaker 3: Ring is closing in on a roughly eleven billion dollar valuation,
Speaker 3: doubling its valuation from last November. That's according to Bloomberg Reporting.
Speaker 3: Citing Bloomberg sources, the company is saying it's sold over
Speaker 3: five and a half million fitness rings in total and
Speaker 3: is on track to double its revenue this year. Or
Speaker 3: A CEO, Tom Hale, joins us here in San Francisco.
Speaker 3: Let's get this out the way. Bloomberg's reported a large
Speaker 3: round eleven billion dollar valuation, a big raise.
Speaker 2: Any comment please.
Speaker 16: Well, you know you read the same reports that I do.
Speaker 16: Congratulations on getting a school, but no, I don't have
Speaker 16: any comments on rumors as of yet. But interesting to
Speaker 16: see that that that news is starting to trickle.
Speaker 3: Out and you appreciate why we have to ask. The
Speaker 3: main point is that Aura has some momentum, so you
Speaker 3: actually have shared some not just financial metrics, but operational metrics, right,
Speaker 3: I would call it the installed base of customers has grown.
Speaker 3: Just explain what that data signals to you, Tom, Yeah.
Speaker 16: Well, we have shipped five point five million rings in
Speaker 16: the history of the company, but half of those have
Speaker 16: come in the last twelve months. So as we've doubled
Speaker 16: our business. We've doubled the number of people have rings
Speaker 16: just in the last twelve months alone, and we think
Speaker 16: actually that's showing up in our revenue. Obviously, five hundred
Speaker 16: million last year was what we reported. I think this
Speaker 16: year we're going to do a billion dollars in revenue.
Speaker 16: And if we think in twenty twenty six, we're probably
Speaker 16: going to sell our ten millionth ring.
Speaker 4: Tom Between Ed and I, we try to divide and
Speaker 4: conquer and all the wearables and use them. And I'm
Speaker 4: the orering user in the house, So full disclosure. And look,
Speaker 4: we have seen real iterations and changes to the way
Speaker 4: in which some of the data is helping the AI
Speaker 4: agents is something that I'm really noticing the glue host
Speaker 4: monitoring as well. How are you evolving to insually you
Speaker 4: get a bigger demographic.
Speaker 16: Well, you know, one of our core demographics is women,
Speaker 16: and we've been expanding the value that we deliver for women.
Speaker 16: I mean this last year we introduce pregnancy insights, menopause features,
Speaker 16: and we've been continually to push on this idea of
Speaker 16: the fertile window, which is helping women or couples conceive.
Speaker 16: So that's one way, but as you think about the
Speaker 16: areas of expansion for us, you know, we think about
Speaker 16: metabolic because the one thing that you do more often
Speaker 16: than sleep that affects your health is eat, and so
Speaker 16: if we can help you build healthy habits around eating,
Speaker 16: that's hugely powerful.
Speaker 10: In addition, we're continue to expand in fitness.
Speaker 16: We're looking very much at the ways that sleep and
Speaker 16: can be played to interact with other parts of your
Speaker 16: help to give you a holistic picture of your health.
Speaker 16: And then this fall, of course a very exciting time
Speaker 16: of year. Lots of exciting new things will be coming
Speaker 16: down the pipe.
Speaker 4: What's been so interesting is also who you've been selling to,
Speaker 4: whether it's corporates or also institutions I'm thinking of the
Speaker 4: US military or as large as business custom We understand
Speaker 4: tens of thousands of serve as members using the rings.
Speaker 4: You're doing fatigue tracking and doing research. But you also
Speaker 4: got sort of caught in a pr firestorm, shall I say,
Speaker 4: is suddenly there was a lot of well people would say, misinformation,
Speaker 4: fate news around how you've had to integrate with impalenteersone
Speaker 4: use of.
Speaker 5: Fed start and what did you learn from that experience?
Speaker 2: Tom?
Speaker 5: You had to get on TikTok yourself.
Speaker 16: Yeah, yes, I think the truth is is that when
Speaker 16: your customers are upset, you absolutely need to listen to them.
Speaker 16: So we take the concerns that were raised incredibly seriously.
Speaker 16: Privacy is a third rail, especially for women, and so
Speaker 16: we took that incredibly seriously. I took to TikTok myself
Speaker 16: to address our customers directly. But let me address the misinformation. Basically,
Speaker 16: there is no scenario under which the consumer system and
Speaker 16: the consumer data would be shared with anyone at Palenteer
Speaker 16: or anyone in the government.
Speaker 10: So that's just not a thing. They are two separate systems.
Speaker 16: And of course the most important thing is that privacy
Speaker 16: is like the most important thing that we do. We're
Speaker 16: focused on your health, and so delivering your health means
Speaker 16: protecting the precious and private information that's so sensitive, and
Speaker 16: so that's just a core thing. It's a commitment. We
Speaker 16: will never never sell your data and we will never
Speaker 16: share your data without your consent. If you want to
Speaker 16: share your data to be part of a scientific study,
Speaker 16: we will absolutely enable that, and we'll give you the
Speaker 16: tools and the power to control it.
Speaker 3: So we've done so much on this program this year
Speaker 3: on the electronics supply chain, you know, even on the
Speaker 3: innovation side, miniaturization of electronics. But I think it's fair
Speaker 3: to ask you how you're exposed to supply chain outside
Speaker 3: of the United States, anything you've done to respond to
Speaker 3: the policies of this administration in that respect.
Speaker 16: You know, President Trump said he was going to raise
Speaker 16: the tariff, so we took him at his word. We
Speaker 16: were well prepared and we manage that quite effectively. We
Speaker 16: don't manufacture in China. In fact, we opened up a
Speaker 16: factory in the US in Mexico to help us manufacture
Speaker 16: and meet that demand, and that turned out to be
Speaker 16: a very foresightful decision. We also manufacture in Eastern Europe,
Speaker 16: and now we'll be opening up a factory in the
Speaker 16: United States in Fort Worth, and that actually will be
Speaker 16: there to service our customers who are in the military.
Speaker 10: There'll be special security.
Speaker 16: And very stringent standards around the data that goes onto
Speaker 16: the ring itself. So it's actually quite an exciting time
Speaker 16: for us from a manufacturing standpoint because we've avoided most
Speaker 16: of the fracasts around tak TARFFS.
Speaker 3: And I have to ask you about some of the
Speaker 3: news of the day in talent.
Speaker 2: H one BBS is what we've discussed.
Speaker 3: But with that footprint in the US you're building, what's
Speaker 3: that look like for you in hiring competitively on engineering
Speaker 3: in particular.
Speaker 10: Yeah, we are investing hugely in the United States.
Speaker 16: In fact, we have about one thousand employees at AURA
Speaker 16: now and over sixty percent of them are actually in
Speaker 16: the US, so we have we're less exposed to that
Speaker 16: kind of H one B risk. And since many of
Speaker 16: our technical talent comes from Finland as well, but they
Speaker 16: reside in Finland, it's less of a concern. That being said,
Speaker 16: I think it's really important maybe for the entire tech
Speaker 16: industry to really look at this and make sure that
Speaker 16: we're solving this problem. I kind of subscribe to Kathy's point.
Speaker 16: I actually think I think we're going to see something
Speaker 16: where this is really a negotiating standard.
Speaker 10: I'm not sure it's going.
Speaker 4: To hold fascinating or a CEO Tom Hale come back soon.
Speaker 4: We appreciate it's time now for talking tech and first up.
Speaker 4: Morgan Stanley upgraded ASML to an overweight rating, joining the
Speaker 4: likes of EBS and Research.
Speaker 5: And Bullish on the stock, so shares of the company.
Speaker 4: Have rallied thirty three percent from a September the second
Speaker 4: low and the recent surge has propelled ASML to become
Speaker 4: the biggest listed company in Europe evaluation of three hundred
Speaker 4: seventy nine billion dollars plus shares of Samsung. They also
Speaker 4: jumped after reports say it has one approval from Nvidia
Speaker 4: for the use of its advanced memory chips.
Speaker 5: Now the breakthrough by.
Speaker 4: The Korean tech giant clears components for use in AI
Speaker 4: accelerators that are essential to training AI models and would
Speaker 4: allow Samsung to compete with Skhinex and Ali Baba is
Speaker 4: hoping to lure established brands away from Amazon to its
Speaker 4: own Ali Express e commerce site. Now calling to sources,
Speaker 4: Ali Express is rolling out a new initiative to boost
Speaker 4: customers and sales, promising lowing Shivig fees and offering to
Speaker 4: take a lower cut of sales than Amazon.
Speaker 2: Ed Yeah, stick with Amazon.
Speaker 3: Amazon and three executive face off in court today against
Speaker 3: the Federal Trade Commission Regulator alleges Amazon makes it easy
Speaker 3: to enroll in its prime service and unduly difficult to
Speaker 3: cancel in violation of customer protection laws. Let's get to
Speaker 3: Bloomberg's Amazon reporter Spenser Sofa, You and I have discussed
Speaker 3: this issue over the last few years. What do we
Speaker 3: need to know about this case and the arguments Amazon's
Speaker 3: going to try and make to defeat it.
Speaker 8: Well, Amazon's looking at potentially finds well into the billions
Speaker 8: of dollars around this, so it has to take this seriously.
Speaker 8: You're looking at fines of fifty three thousand dollars per violation,
Speaker 8: you know, over tens of millions of Prime subscribers, so
Speaker 8: it's a rather big deal. The Federal Trade Commission is
Speaker 8: arguing that Amazon's just made it complicated and deliberately difficult
Speaker 8: for people to cancel Prime if they don't want it,
Speaker 8: And now the Amazon is trying to argue, well, you know,
Speaker 8: there's all kinds of ways that people can cancel and
Speaker 8: all kinds of different flows, and they're really trying to
Speaker 8: make it look like there's a very large number of
Speaker 8: ways people can cancel to try to minimize its exposure
Speaker 8: to this, to any potential any potential violations. Jury selection
Speaker 8: is supposed to start today, Trials expected to drag into October,
Speaker 8: and you know, it is kind of a test case
Speaker 8: around subscriptions and how easy it is to sign up
Speaker 8: for things on your phone when you're on the move,
Speaker 8: and how hard it is to cancel Spenser.
Speaker 4: Briefly, the FTC is also looking at such advertising practices
Speaker 4: of Amazon. More broadly, they are in the eye of
Speaker 4: the storm when it comes to regulators a bit.
Speaker 8: Yeah, it's it's an interesting phenomenon because a lot of
Speaker 8: this stuff is kind of holdover from the previous administration,
Speaker 8: and there's been a lot of questions about how Trump's
Speaker 8: FTC will will carry on some of these things. But
Speaker 8: Amazons still feel on the heat, still looking at fresh
Speaker 8: allegations on the advertising front and how it sets pricing
Speaker 8: on these on these automated auctions around search advertising that
Speaker 8: you see on the site. And now there's also the
Speaker 8: consumer protection claim, so they're not out of the woods yet,
Speaker 8: even though the administration.
Speaker 4: Has changed Meg'spenser Sofa, setting us straight ahead of that
Speaker 4: unfolding litigation that does it. In this edition of Bloomberg
Speaker 4: Tech though, and we've got to check out the podcast.
Speaker 2: Yeah, a big way to start that. We check out
Speaker 2: the pod.
Speaker 3: You know where to find it on all the Bloomberg
Speaker 3: platforms and online, Apple, Spotify and iHeart Buckle up.
Speaker 2: So only Monday. This is Bloomberg Tech