WEBVTT - Arm’s Reduced IPO and Huawei's New Phone 0:00:01.440 --> 0:00:05.080 From Marhard where Innovation of Money and Power Collie in 0:00:05.200 --> 0:00:10.080 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hide 0:00:10.160 --> 0:00:11.559 and Ed Ludlow. 0:00:25.000 --> 0:00:27.240 And Caroline Heide of Bloomberg's Weld headquarters in New. 0:00:27.160 --> 0:00:30.720 York and Amed Ludlow in San Francisco. This is Bloomberg 0:00:30.760 --> 0:00:31.800 Technology coming up. 0:00:31.960 --> 0:00:35.760 ARM kicks off its IPO roadshow seeking nearly five million dollars, 0:00:35.800 --> 0:00:38.760 but will break down why the offering could be significantly 0:00:39.080 --> 0:00:40.920 smaller than previously targeted. 0:00:41.960 --> 0:00:45.040 Plus will take a look inside Huawei's new phone, which 0:00:45.040 --> 0:00:49.120 holds the most advanced chip made in China yet. This 0:00:49.200 --> 0:00:51.600 is the country seats sarras of forty billion dollar fund 0:00:51.840 --> 0:00:56.560 to bankroll investments in domestic chip making and research, and. 0:00:56.440 --> 0:01:00.000 How digital regulation in the EU is impacting America's techture. 0:01:00.720 --> 0:01:03.720 Mid the forthcoming Digital Markets Act or bring you the 0:01:03.760 --> 0:01:05.680 details of what is going to be unveiled in terms 0:01:05.680 --> 0:01:08.399 of those gatekeepers as soon as tomorrow. But first that's 0:01:08.480 --> 0:01:10.120 check in on these markets and some of the big 0:01:10.200 --> 0:01:12.360 US players not managing to lift the Nasdaq all that 0:01:12.440 --> 0:01:14.320 much today. We're actually down, my bad a tenth of 0:01:14.319 --> 0:01:16.800 a percent. Look, it's the back to school feeling but 0:01:16.840 --> 0:01:19.800 we're also getting our reality check on what is a 0:01:19.840 --> 0:01:22.040 macro picture that is pretty ugly over in China is 0:01:22.040 --> 0:01:23.199 pretty ugly over in Europe. 0:01:23.240 --> 0:01:24.400 When you look at the PMI. 0:01:24.160 --> 0:01:26.560 Data, the tenure yield just rising after of course a 0:01:26.640 --> 0:01:28.959 day of rest and play that we had on Monday. 0:01:28.959 --> 0:01:31.520 In the US trading action, we're maybe perhaps you picking 0:01:31.560 --> 0:01:33.360 up a little bit as we see more investment grade 0:01:33.400 --> 0:01:35.280 bonds coming to the market. Of course that back to 0:01:35.280 --> 0:01:36.559 school feeling means we're. 0:01:36.440 --> 0:01:38.000 Going to get a ton of issuance. 0:01:38.080 --> 0:01:39.920 I'm looking at the Bloomberg Dollar Index, so this is 0:01:39.959 --> 0:01:41.720 really the asset class to be watching at the moment. 0:01:41.800 --> 0:01:44.320 Dollar pressured higher at the moment. Is this just trying 0:01:44.360 --> 0:01:47.760 to find some sort of well, more safety in the 0:01:47.800 --> 0:01:50.279 current macro picture. Is this also that the Federal Reserve 0:01:50.400 --> 0:01:52.640 is going to be keeping higher rates for longer visa 0:01:52.680 --> 0:01:54.480 vi the rest of the world when the US economy 0:01:54.520 --> 0:01:57.200 just manages to navigate a downturn for the rest of 0:01:57.200 --> 0:01:59.280 the world. We look at what's happening in terms of bitcoin. Therefore, 0:01:59.280 --> 0:02:01.920 on the lower side, when you see the dollar outperform, 0:02:02.080 --> 0:02:04.440 we just found that about a third of a overall 0:02:04.440 --> 0:02:06.360 twenty five hundred is where we traded. 0:02:06.400 --> 0:02:08.560 But get into minittigritty the individual movers. 0:02:08.800 --> 0:02:10.640 Yeah, you and I were talking this morning about how 0:02:10.680 --> 0:02:12.960 there's not that much action in the technology sector. 0:02:12.960 --> 0:02:14.040 There are a few individual names. 0:02:14.080 --> 0:02:17.040 Airbnb up six point seven percent best performer on the 0:02:17.160 --> 0:02:19.640 Nazda one hundred, hy news that it's going to be 0:02:19.639 --> 0:02:22.160 included in the s and P five hundred. That driving 0:02:22.160 --> 0:02:24.760 that single name. How we tease Huawei, We're going to 0:02:24.800 --> 0:02:28.440 bring you something fascinating, an official tear down of the 0:02:28.480 --> 0:02:31.200 Mate sixty pro. One mover to the downside is the 0:02:31.200 --> 0:02:34.720 ADRs of Jaomi. The theory being that if Huawei gains 0:02:34.800 --> 0:02:37.799 market share in the domestic smartphone market, itlbeit at Shaomi's 0:02:37.840 --> 0:02:40.680 expense in Nvidia a little bit lower. Moving to the downside, 0:02:40.680 --> 0:02:42.680 we're gonna have a really interesting conversation you and I 0:02:42.800 --> 0:02:46.200 Caroline about in Nvidia's valuation and one voice who says 0:02:46.400 --> 0:02:49.560 it's getting a little bit extreme and overdone. The main 0:02:49.639 --> 0:02:52.280 story I would say in Tuesday's morning, remember we're coming 0:02:52.320 --> 0:02:54.880 off long weekend, is arms IPO. We got that F 0:02:54.960 --> 0:02:58.000 one filing, and here are the numbers on the low end, 0:02:58.040 --> 0:03:00.000 forty seven dollars a share. At the high end fifth 0:03:00.000 --> 0:03:02.920 fey one dollars a share, raising four point eight seven 0:03:03.000 --> 0:03:06.400 billion dollars in terms of proceeds from an IPO. This 0:03:06.560 --> 0:03:09.840 is the early stages, but these are much lower numbers 0:03:10.080 --> 0:03:12.519 than have been reported out there. Let's bring in Bloomberg's 0:03:12.760 --> 0:03:15.959 Leanna Baker, who leads our deals coverage out of New York, 0:03:16.000 --> 0:03:18.240 and Leanna walk us through the numbers and what we've 0:03:18.320 --> 0:03:20.880 learned in this kind of opening foray of the road 0:03:20.880 --> 0:03:21.360 show week. 0:03:22.080 --> 0:03:24.560 The numbers, as you mentioned, came in a little below 0:03:24.720 --> 0:03:28.520 what had earlier been reported. ARM had been looking to raise. 0:03:28.600 --> 0:03:31.080 At one point we had reported eight to ten billion. 0:03:31.200 --> 0:03:33.720 That has been scaled back a bit. You mentioned that 0:03:33.919 --> 0:03:35.960 we could still see it go up. The road show 0:03:36.040 --> 0:03:38.520 is just starting. There could be great demand, for all 0:03:38.600 --> 0:03:40.440 we know, for these shares, and we could see them 0:03:40.720 --> 0:03:44.440 raise the range. That's definitely possible. That said, SoftBank has 0:03:44.520 --> 0:03:46.920 kind of scaled back the amount that they want to sell. 0:03:47.120 --> 0:03:50.720 Nasayoshi Sowne, the CEO and founder of SoftBank, is very 0:03:50.720 --> 0:03:53.440 bullish on ARM. He doesn't want to get rid of 0:03:53.520 --> 0:03:56.720 the whole thing. They're only selling ten percent in the IPO, 0:03:56.800 --> 0:03:59.640 so that's one of the reasons why the company is 0:03:59.680 --> 0:04:01.960 not looking to raise as much as they had thought, 0:04:02.040 --> 0:04:03.960 and because they're not looking to raise as much, the 0:04:04.040 --> 0:04:07.240 valuation is a little lower. It's still a behemoth though. 0:04:07.280 --> 0:04:09.920 This is a company according to the filing that'll be 0:04:10.000 --> 0:04:13.120 valued at close to fifty five billion, So it's definitely 0:04:13.400 --> 0:04:15.240 sort of the first big elephant out of the gate 0:04:15.320 --> 0:04:17.839 to get the IPO markets moving again. 0:04:18.000 --> 0:04:21.640 Yeah. Boy, we are excited on it, so to perhaps some. 0:04:21.560 --> 0:04:23.800 Of the m zoned customers that are coming in as 0:04:23.839 --> 0:04:27.160 integraled investors in the IPO. But if there are going 0:04:27.200 --> 0:04:29.680 to be any flies in the ointment, what are they? 0:04:29.800 --> 0:04:31.600 What are all the questions on the road show going 0:04:31.640 --> 0:04:32.119 to be about. 0:04:32.720 --> 0:04:36.160 There's definitely questions about arms path forward. They've changed their 0:04:36.160 --> 0:04:38.240 business model a bit. They're trying to get into the 0:04:38.279 --> 0:04:41.559 more lucrative data center and computing, not a fully away 0:04:41.560 --> 0:04:44.640 from mobile mobiles. Their roots, and they're ubiquitous with all 0:04:44.680 --> 0:04:47.440 their customers, many of whom you mentioned are participating in 0:04:47.440 --> 0:04:50.240 the IPO, like Apple and AMD and others. But will 0:04:50.279 --> 0:04:53.000 the company be able to fully change its business model 0:04:53.000 --> 0:04:56.400 to spark growth. That's the question investors will want to see, 0:04:56.440 --> 0:04:58.560 especially the ones who had invested when I got taken 0:04:58.600 --> 0:05:00.839 private in twenty sixteen, will they be back and what's 0:05:00.880 --> 0:05:01.640 the path forward? 0:05:02.240 --> 0:05:04.480 We got someone to talk about those key questions with 0:05:04.560 --> 0:05:09.320 Leanna Baker. Great setup, She's got some busy weeks coming up. Meanwhile, 0:05:09.400 --> 0:05:12.240 let's extend this conversation. Piever goes with us unless they 0:05:12.320 --> 0:05:15.440 wrote new Street research, and it feels to me, Pierre, 0:05:15.680 --> 0:05:18.679 A key question on everyone's lips is exposure to China, 0:05:18.760 --> 0:05:20.960 particularly when we have the macro data coming in thick 0:05:21.000 --> 0:05:21.400 and fast. 0:05:21.400 --> 0:05:22.560 That's on the weaker side. 0:05:24.760 --> 0:05:28.360 Yes, you know, as a rule of sum, the semiconical 0:05:28.400 --> 0:05:31.680 industries exposed twenty to twenty five percent to domestic China. 0:05:32.920 --> 0:05:36.080 And guess what ARM that is really almost everywhere it's 0:05:36.080 --> 0:05:38.440 only going to judge is exposed about the same to China. 0:05:38.560 --> 0:05:40.480 So twenty twenty five percenter provenues. 0:05:41.440 --> 0:05:43.680 People talk a lot about it because the setup is 0:05:43.760 --> 0:05:47.400 very specific for Armed. They have like a subsidiary in 0:05:47.480 --> 0:05:50.520 China as they've gun control and that's their only Chinese client. 0:05:50.640 --> 0:05:53.080 So all companies in China who want to use ARM 0:05:53.640 --> 0:05:58.200 technology license that technology is their It have a copyright 0:05:59.560 --> 0:06:02.600 license on their on their instructions set have to go 0:06:02.720 --> 0:06:06.920 through this local ARM company. It has created some difficulties 0:06:06.920 --> 0:06:09.240 in the past because there is lack of control, lack 0:06:09.320 --> 0:06:14.240 of you know, auditing of the company, but it's it's 0:06:14.279 --> 0:06:16.320 relatively minor and in my view, at the end of 0:06:16.320 --> 0:06:19.560 the day, as long as China wants to use them 0:06:19.680 --> 0:06:23.480 and needs ARM, ARMS business in China is going to 0:06:23.560 --> 0:06:25.880 do good. But of course, you know, you know what 0:06:26.000 --> 0:06:28.640 the situation is, China wants to grow more independent from 0:06:28.640 --> 0:06:31.680 the West and that's going to be a headwind for 0:06:31.960 --> 0:06:37.400 ARM in my view, very slow, very non very limitted 0:06:37.440 --> 0:06:40.080 impact from how you think about the valuation of the 0:06:40.120 --> 0:06:40.800 business today. 0:06:40.960 --> 0:06:43.839 Okay, so tell us how you're thinking about the valuation. 0:06:44.000 --> 0:06:46.560 What sort of number are you looking at? What vindicates it? 0:06:47.680 --> 0:06:52.000 Yeah, so it is an interesting business, but they span 0:06:52.120 --> 0:06:54.080 out of money on reception and development. They come up 0:06:54.120 --> 0:06:58.640 with great architectures. That's also a standard. The whole industry 0:06:58.680 --> 0:07:00.960 is using it. So that's really the takes everybody wants 0:07:00.960 --> 0:07:04.400 to use and then clients pay a license fee to 0:07:04.640 --> 0:07:07.920 ARM to get the right to start working on their 0:07:07.960 --> 0:07:12.000 IP and then they pay royalties once they produce chips 0:07:12.040 --> 0:07:15.520 that contain ARMS technology, and so this royalty is really 0:07:15.520 --> 0:07:19.640 to me today they are not all profits because ARM 0:07:19.720 --> 0:07:22.920 has been very investing in their operations to build this 0:07:23.040 --> 0:07:26.880 base of IP, but going forward, royalties are pure profits. 0:07:27.000 --> 0:07:28.680 So I like to look up ARM and that's what 0:07:28.760 --> 0:07:29.560 I've been doing. 0:07:29.600 --> 0:07:33.640 You know, when the stock was listed for twenty and 0:07:33.680 --> 0:07:37.640 sixteen as multiple royalties, you see that over time. It's 0:07:37.640 --> 0:07:40.040 a very relevant metric that is stable. It reflects very 0:07:40.080 --> 0:07:43.920 well as the gross outlook of the company, and it 0:07:44.000 --> 0:07:47.320 has historically, like just before the acquisition by Stops Bank, 0:07:47.320 --> 0:07:50.000 it was trading on six terms higher than the SUCKS 0:07:50.360 --> 0:07:52.480 And so that's the kind of valuation I'm looking at today. 0:07:52.640 --> 0:07:56.000 So I'm looking at twenty twenty twenty seven. 0:07:56.880 --> 0:08:03.040 Revenues for ARM as we modeled them, and I look 0:08:03.080 --> 0:08:05.480 at twenty seven times that, So that gives me like 0:08:05.480 --> 0:08:09.960 an eighty two billion dollar valuation in as you enter 0:08:10.000 --> 0:08:11.080 into twenty twenty six. 0:08:11.120 --> 0:08:12.800 So I find the valuation. 0:08:12.840 --> 0:08:17.040 Range today fifty to fifty four billion, very very attractive. 0:08:17.080 --> 0:08:20.640 It gives you like an opportunity to see you know, 0:08:21.880 --> 0:08:24.920 twenty percent pounds of return on up to twenty percent 0:08:24.920 --> 0:08:25.920 pound in return. 0:08:25.720 --> 0:08:30.080 On the name between now and the beginning of twenty twenty. 0:08:29.800 --> 0:08:33.520 Six, twenty twenty six. It's interesting because I'm fascinated by 0:08:33.559 --> 0:08:36.320 the mechanics of this. You write in your notes that 0:08:36.400 --> 0:08:39.800 the range forty seven to fifty one dollars is attractive 0:08:39.840 --> 0:08:44.480 to investors new investors taking advantage of the IPO. But 0:08:44.720 --> 0:08:47.240 all told, soft bank is going to hold on to 0:08:47.400 --> 0:08:48.760 ninety percent of this company. 0:08:49.360 --> 0:08:57.600 Why well, because you know so two reasons. The first one, 0:08:57.840 --> 0:09:01.680 so bank c is in the name, probably even more websites. 0:09:01.720 --> 0:09:05.240 And I see the MASSA is very very goodish on 0:09:06.280 --> 0:09:07.040 Armed future. 0:09:07.160 --> 0:09:10.439 So for soft. 0:09:10.280 --> 0:09:13.360 Burd it's not a matter of getting rid of ARM 0:09:13.480 --> 0:09:15.079 of like making a profit on ARM. 0:09:15.120 --> 0:09:17.840 It's more a matter of, you know, after five years. 0:09:17.679 --> 0:09:20.800 As a private company, the company has tried a lot 0:09:20.840 --> 0:09:23.480 of things, have made a lot of investments, some of 0:09:23.520 --> 0:09:26.760 them have worked well, some of them have worked less well. 0:09:27.280 --> 0:09:29.959 And now Armies at a point in time where becoming 0:09:29.960 --> 0:09:32.240 a listed company again makes a lot of sense of 0:09:32.320 --> 0:09:36.280 the company in terms of, you know, being successful, attracting talent, 0:09:37.360 --> 0:09:42.720 creating the right you know, like government setup and management 0:09:42.760 --> 0:09:44.680 set up. Being a listed company brings a lot of 0:09:44.760 --> 0:09:46.600 advantages to ARM and I think it's a very good 0:09:46.640 --> 0:09:49.800 timing to do that. And then for soft Bang there 0:09:49.800 --> 0:09:54.520 it is not in my understanding to exist, but more 0:09:54.600 --> 0:09:58.280 to have ARM as an additional very liquid asset and 0:09:58.320 --> 0:10:03.120 an asset on which seven can leverage to actually raise 0:10:03.160 --> 0:10:04.760 money for further investments. 0:10:05.920 --> 0:10:07.960 So that's really the way I think about it. 0:10:08.040 --> 0:10:11.160 So I don't expect, yes, you know something, to to 0:10:11.920 --> 0:10:15.000 lower their share, to lower their their stake in ARM 0:10:15.080 --> 0:10:15.800 an soon. 0:10:17.040 --> 0:10:17.240 Yeah. 0:10:17.480 --> 0:10:20.240 The great fun of a traditional I PO is that 0:10:20.880 --> 0:10:23.400 it gives the company an opportunity to tell a story 0:10:23.400 --> 0:10:26.360 about themselves right to the world. And the story that 0:10:26.520 --> 0:10:29.560 ARM wants to tell is that they are relevant for AI. 0:10:29.920 --> 0:10:32.040 They are going to do great with all of the 0:10:32.160 --> 0:10:34.120 R and D and CAPEX going into AI. Do you 0:10:34.160 --> 0:10:36.239 buy that story? 0:10:36.880 --> 0:10:40.240 Yes, yes I do, but you have to be very 0:10:40.280 --> 0:10:43.520 different understand its way. I like to quantify that as 0:10:43.520 --> 0:10:45.959 a very like an AI diversification. 0:10:46.720 --> 0:10:49.520 Yes, almost everything that is going to grow. 0:10:49.440 --> 0:10:52.040 ARMS revenues right into revenues as like fire, is going 0:10:52.040 --> 0:10:54.600 to be related to AI. So from that perspective, I 0:10:54.640 --> 0:10:58.760 do agree with your statements. But interestingly, all the AI 0:10:59.240 --> 0:11:03.040 ARM is going to get exposed to is not like 0:11:03.200 --> 0:11:06.640 the AI clusters that receiving world out today, like the 0:11:06.760 --> 0:11:08.359 NDDR or TPU. 0:11:08.040 --> 0:11:09.880 Based AI clusters. 0:11:09.920 --> 0:11:12.560 In that part of AI ARM as actually very very 0:11:12.640 --> 0:11:16.320 little is any exposure. But in your mobile phone you 0:11:16.400 --> 0:11:20.240 need larger ships, you need ships with better IP so 0:11:20.280 --> 0:11:22.800 that the chip can better deal with AI models and 0:11:22.920 --> 0:11:26.160 with all these services that are built on AI, and 0:11:26.480 --> 0:11:28.600 ARM is actually bringing to the market a lot of 0:11:28.640 --> 0:11:32.319 innovation that is very relevant to that, and in particular, 0:11:33.080 --> 0:11:37.720 the number one driver of pricing power for ARM other 0:11:37.760 --> 0:11:39.840 the next five years is the road out of their 0:11:39.960 --> 0:11:42.040 V nine you take to us, so that's a nice 0:11:42.559 --> 0:11:46.520 iteration of their instruction set. And the number one innovation 0:11:46.679 --> 0:11:49.199 that is v NI brings to the market is actually 0:11:50.160 --> 0:11:55.600 AI specific instructions. So the next generation of ARM ship 0:11:55.679 --> 0:11:58.920 are going to do much better job dealing with AI 0:11:59.040 --> 0:12:01.040 workloads from that aspect. 0:12:01.120 --> 0:12:03.120 To you, it's really it's really an AI. 0:12:03.000 --> 0:12:07.679 List, but totally uncorrelated to what's happening today, like it's 0:12:07.720 --> 0:12:10.320 a crazy and crazy spending on AI glister because in 0:12:10.360 --> 0:12:14.720 the GPU in an AI accelerator is between a minimal 0:12:14.760 --> 0:12:16.440 contributor and another contributor. 0:12:16.720 --> 0:12:20.240 Yes, Pierre feragu Ana list over at New Street Research, 0:12:20.360 --> 0:12:23.880 joining us Caro straight after publishing his reaction note to 0:12:23.960 --> 0:12:24.800 that F one firing. 0:12:24.920 --> 0:12:26.800 Just great timing having you on the show. Thank you 0:12:26.880 --> 0:12:27.280 so much. 0:12:43.160 --> 0:12:45.960 You're looking at Huawei's Mate sixty pro going through a 0:12:45.960 --> 0:12:49.480 tear down by Tech Insights, Bloomberg News ask the research 0:12:49.559 --> 0:12:53.840 firm to lift the lid on China's latest domestic smartphone. 0:12:54.040 --> 0:12:57.600 What we learned that is an advanced seven animeter chip 0:12:57.760 --> 0:13:01.720 was made by China's top chip maker, Smick or Semi 0:13:01.760 --> 0:13:07.040 Manufacturing International Corp. It makes a sign that there's some 0:13:07.080 --> 0:13:11.120 early progress in Beijing's push to beat out US technology 0:13:11.200 --> 0:13:14.400 export curves. Joining me here on set is Bloomberg's Ian King. 0:13:14.760 --> 0:13:19.160 The speculation and the rumor was that it was five nanometer. 0:13:19.679 --> 0:13:20.080 It's not. 0:13:20.440 --> 0:13:24.520 It's seven nanometer SMIC or Smick made. Tell us what 0:13:24.559 --> 0:13:25.520 we know from that teardown. 0:13:25.679 --> 0:13:28.679 Yeah, you've got to remember, like three is better than five, 0:13:28.760 --> 0:13:31.600 which is better than seven. Three would be sort of 0:13:31.640 --> 0:13:35.079 the state of the art in terms of manufacturing capabilities 0:13:35.080 --> 0:13:38.040 that somebody like Apple would try to be accessing it 0:13:38.040 --> 0:13:40.640 at this point. So seven sounds like a long way behind, 0:13:40.679 --> 0:13:44.040 maybe two three years behind, but you can still do 0:13:44.120 --> 0:13:48.200 a lot with that level of manufacturing technology. Underpinning this though, 0:13:48.320 --> 0:13:51.880 is should they actually be doing this? Is this representating 0:13:52.040 --> 0:13:54.440 a circumvention of what the US is trying to do, 0:13:54.720 --> 0:13:58.280 which is to get one way away from access to technology. 0:13:58.320 --> 0:14:00.920 And to that point, Caroline, we should we should say 0:14:00.920 --> 0:14:03.960 that Bloomberg went to the US Commerce Department and asked 0:14:04.360 --> 0:14:07.200 if this seven nanometer tech is caught within the bounds 0:14:07.240 --> 0:14:10.480 of curves and I don't believe the US Commerce Department replied. 0:14:10.280 --> 0:14:12.400 Yeah, thus far it does, shine O. THEO were really 0:14:12.440 --> 0:14:15.480 a question mark. And what has been the US spearheading 0:14:15.520 --> 0:14:19.360 this in of a global clampdown on basically China's access 0:14:19.360 --> 0:14:21.360 to this sort of technology. Do you think it does 0:14:21.520 --> 0:14:22.480 ring question marks? 0:14:23.400 --> 0:14:23.480 Now? 0:14:23.880 --> 0:14:26.880 There are absolutely questions. To be fair to Commerce, though 0:14:27.320 --> 0:14:30.680 they're not going to comment about individual actions that they 0:14:30.800 --> 0:14:33.440 take against a specific company. That's kind of their policy. 0:14:33.800 --> 0:14:35.440 So we tend to sort of find that out when 0:14:35.440 --> 0:14:39.160 it gets announced. And they have actually sort of when 0:14:39.240 --> 0:14:41.640 these stories crop up, they have taken action. So we'll 0:14:41.680 --> 0:14:45.000 see what happens there. There's definitely known as on them 0:14:45.080 --> 0:14:47.520 to take some action, but we wouldn't expect them to 0:14:47.560 --> 0:14:48.560 talk about it right now. 0:14:48.680 --> 0:14:53.680 We did learn about where China's at in its technology competence, 0:14:53.840 --> 0:14:57.560 right you know, there's this idea that it's seven nanometer, 0:14:58.160 --> 0:15:01.400 but they sold out of the handset very quickly, and 0:15:01.400 --> 0:15:04.480 that indicates to us, even though it's two generations removed 0:15:04.480 --> 0:15:07.360 from the cutting edge, that they're not making seven nanimeter 0:15:07.440 --> 0:15:08.960 at volume yet or at scale. 0:15:09.120 --> 0:15:11.040 Yeah, I mean, this is a conversation that we had 0:15:11.120 --> 0:15:13.840 last week. Remember, you can make a few of these 0:15:13.880 --> 0:15:16.320 things on the bench, right, that's great, well done, you're 0:15:16.360 --> 0:15:18.880 good at the technology. But the real art is to 0:15:18.920 --> 0:15:22.160 make millions, tens of millions, hundreds of millions of these things. 0:15:22.960 --> 0:15:24.760 We really need to see whether they can do that 0:15:24.880 --> 0:15:27.800 or not, and do that on an economic basis. If 0:15:27.840 --> 0:15:30.920 they can, then this is definitely you know, a red 0:15:30.920 --> 0:15:33.760 flag warning, symbols, whatever you want to describe it with. 0:15:34.160 --> 0:15:36.640 If they can't, then maybe this is a symbolic thing, 0:15:37.120 --> 0:15:39.240 just to poke. The Secretary of Commerce from the US, 0:15:39.320 --> 0:15:40.560 who was in China last. 0:15:40.320 --> 0:15:43.600 Week in some great reports, for example the Jeffreyes tream 0:15:43.640 --> 0:15:46.920 puning out you know the myths and the facts about 0:15:46.920 --> 0:15:51.080 this particular Mate sixty. I'm interested more broadly on the 0:15:51.120 --> 0:15:55.040 impact on competition though. What has been reality is the 0:15:55.080 --> 0:15:58.640 share price reaction from Shaomi in does this pook war 0:15:58.720 --> 0:16:01.920 We back on the map, even if only in China. 0:16:02.040 --> 0:16:04.680 Well, you have to remember that they basically got out 0:16:04.680 --> 0:16:08.680 of the handset business. They essentially spun it off because 0:16:08.960 --> 0:16:12.080 they were in such a difficult position because of these sanctions. 0:16:12.960 --> 0:16:16.680 This as a symbolic thing, as something to market around. 0:16:17.360 --> 0:16:20.120 It's absolutely sensational. Look at the attention it's getting. We're 0:16:20.120 --> 0:16:22.560 talking about it on the other side of the world, right, 0:16:22.640 --> 0:16:26.000 So yes, of course it really helps. But again we'll 0:16:26.040 --> 0:16:28.800 need to see that volume, as Ed and I just discussed, 0:16:28.960 --> 0:16:29.880 we'll need to see that. 0:16:29.920 --> 0:16:34.000 Volume absolutely brilliant throughout inking. Thank you so much getting 0:16:34.080 --> 0:16:36.200 us up to speed on the tear down. Meanwhile, let's 0:16:36.200 --> 0:16:38.480 get a tear down on what we're likely to be 0:16:38.560 --> 0:16:41.760 hearing from the EU set to unveil it's Gateclimper's list 0:16:41.920 --> 0:16:45.400 tomorrow under the Ease Forthcoming Digital Markets Act. Of course, 0:16:45.480 --> 0:16:48.960 we've been long anticipating which platforms are currently going to 0:16:48.960 --> 0:16:53.680 be at risk too much stricter regulations. Guest likely these 0:16:53.720 --> 0:16:56.000 big players from New York, from San Francisco. This is 0:16:56.000 --> 0:17:09.119 Bluebot technology time now for talking tech. First up advertising 0:17:09.160 --> 0:17:11.520 sales at X of course, formerly known as Twitter, they're 0:17:11.560 --> 0:17:14.639 down from sixty percent. Neil Musk is pointing the blame 0:17:14.680 --> 0:17:17.399 at the Anti Defamation League now Musk is actually accusing 0:17:17.400 --> 0:17:19.640 that they're not for profits is having a personal vendetta 0:17:19.720 --> 0:17:22.600 against him since he purchased the platform. The ADL has 0:17:22.640 --> 0:17:25.639 previously reported that harassment and extremist content on the platform 0:17:25.760 --> 0:17:29.320 has spiked since Musk's takeover. Meanwhile, let's turn our attention 0:17:29.400 --> 0:17:31.400 to Sam Altman, who is now the first person to. 0:17:31.359 --> 0:17:33.080 Get an Indonesian Golden Visa. 0:17:33.080 --> 0:17:35.720 It's the new visa that allows foreigners to make substantial 0:17:35.760 --> 0:17:38.560 investments in the country to remain for between five and 0:17:38.600 --> 0:17:41.000 ten years. It's part of a new initiative to boost 0:17:41.040 --> 0:17:44.760 economic development in the region. And Plus, TikTok is hiring 0:17:45.000 --> 0:17:49.040 UK security firm NCC Group to help audit well it's data. 0:17:49.160 --> 0:17:51.800 It's controls, the protections in Europe in particular. It's all 0:17:51.800 --> 0:17:53.399 part of what is called Project Clover. 0:17:53.840 --> 0:17:55.920 It's similar to a program right here in the US 0:17:55.960 --> 0:17:59.520 to reassure Europeans that the Chinese government can't access their data. 0:17:59.560 --> 0:18:02.439 TikTok currently runs a data center in Dublin and is 0:18:02.440 --> 0:18:05.080 building another one in Ireland and indeed in Norway too. 0:18:06.160 --> 0:18:07.520 Yeah, let's stick in that region. 0:18:07.600 --> 0:18:10.880 Big Tech is bracing for the European Union's biggest ever 0:18:10.920 --> 0:18:14.919 clamped down on anti competitive practices, which may provoke a 0:18:14.960 --> 0:18:18.159 new wave of legal battles between regulators and here in 0:18:18.240 --> 0:18:21.280 Silicon Valley. The announcement on which tech platforms are to 0:18:21.280 --> 0:18:25.000 be targeted under the EUS Digital Markets Act is due tomorrow. 0:18:25.280 --> 0:18:28.240 For more, let's bring in Bloombergs Gillian Deutsch who joins 0:18:28.320 --> 0:18:31.600 us out in Brussels. Caroline and I are so used 0:18:31.600 --> 0:18:35.359 to covering the kind of antitrust case, you know, the 0:18:35.400 --> 0:18:37.639 battle that played out in court. Now the story in 0:18:37.680 --> 0:18:43.080 the EU is moving to legislation and rule making. Explain 0:18:43.119 --> 0:18:44.040 what's about to happen. 0:18:45.240 --> 0:18:48.320 Yeah, So tomorrow is a big day for the European Commission. 0:18:48.640 --> 0:18:50.800 This is when they come out and say which companies, 0:18:50.840 --> 0:18:54.200 major tech companies are considered gatekeepers and those are companies 0:18:54.240 --> 0:18:57.200 that are considered dominant in their space. And then they're 0:18:57.200 --> 0:18:58.960 going to lay out which of those products from those 0:18:58.960 --> 0:19:02.480 companies are considered core platform services and those are the 0:19:02.480 --> 0:19:04.800 products that these companies are going to have to redesign 0:19:05.160 --> 0:19:07.560 to comply with a whole bunch of new rules set 0:19:07.560 --> 0:19:09.679 by the europe Commission. And to your point ed, I mean, 0:19:09.680 --> 0:19:11.399 I want to back up a little bit. We've seen 0:19:11.760 --> 0:19:14.120 lots of these anti trust cases from the European Commission 0:19:14.200 --> 0:19:17.280 for years now, for almost over a decade. And really 0:19:17.359 --> 0:19:19.240 what the EUOPEA Conussion's trying to do is say, okay, 0:19:19.320 --> 0:19:22.240 these cases have often dragged out on the ports for years. 0:19:22.359 --> 0:19:25.320 They have often been unsuccessful as well. So instead of 0:19:25.400 --> 0:19:28.280 dragging companies to port after they've done something they deem 0:19:28.520 --> 0:19:30.160 anti competitive, the Commission saying. 0:19:30.040 --> 0:19:32.000 Let's set out those rules. 0:19:31.840 --> 0:19:33.639 From the get go, and so I'm really going to 0:19:33.640 --> 0:19:36.880 see some of those big rules come to fruition tomorrow. 0:19:37.600 --> 0:19:39.720 Of course, this sort of follows off from the Digital 0:19:39.760 --> 0:19:42.720 Services Act now it's the Digital Markets Acts, and it 0:19:42.760 --> 0:19:46.719 always ends up to be signs that are either instilled 0:19:46.840 --> 0:19:48.159 or indeed warned about. 0:19:48.560 --> 0:19:50.240 Is that really what the stick is here? 0:19:50.280 --> 0:19:52.840 Are there any carrots that persuade the big companies to 0:19:53.000 --> 0:19:53.719 fall in line? 0:19:54.680 --> 0:19:56.200 Well, I do think one carrot as well, do you 0:19:56.240 --> 0:19:58.720 want to operate on one of the biggest markets? And 0:19:58.840 --> 0:20:01.840 so we actually have seen some companies say actually maybe 0:20:01.880 --> 0:20:04.080 not because there's not and how there's too much regulation. 0:20:04.480 --> 0:20:06.840 And one prominent example is that Meta actually has not 0:20:06.960 --> 0:20:10.000 rolled out threads in your Opean Union. We've seen it 0:20:10.040 --> 0:20:12.040 across the channel in the UK and obviously in the 0:20:12.160 --> 0:20:14.760 United States, but we don't have it here because what 0:20:14.800 --> 0:20:17.360 what Meta says is that we don't know how these 0:20:17.400 --> 0:20:19.440