WEBVTT - Musk Backlash and APEC Wraps Up 0:00:01.400 --> 0:00:05.720 From Marhart where Innovation, Money and Power Collie in Silicon 0:00:05.800 --> 0:00:06.680 Vallet NBN. 0:00:07.040 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed Loudlove. 0:00:24.560 --> 0:00:26.880 I'm Caroline Heide a Bloomberg's WORLDEA quarters in New York, 0:00:27.280 --> 0:00:29.040 and I'm Ed Ludlow in San Francisco. 0:00:29.120 --> 0:00:31.280 This is Bloomberg Technology coming up. 0:00:31.360 --> 0:00:34.680 The fallout continues for Elon Musk after the billionaire endorse 0:00:34.720 --> 0:00:37.840 an anti semitic post on his social media platform. Will 0:00:37.840 --> 0:00:40.680 discuss what it means for his businesses, and. 0:00:40.600 --> 0:00:44.640 We'll return to APEX as Chinese President Jijingping finishes his 0:00:44.680 --> 0:00:47.280 first visits in the US in six years on a 0:00:47.360 --> 0:00:49.440 high note, what does it mean for US? 0:00:49.560 --> 0:00:51.560 Kurds on technology to China? 0:00:51.840 --> 0:00:53.080 And then there has. 0:00:52.920 --> 0:00:57.080 Been some Tesla investors criticizing the Elon Musk post, of course, 0:00:57.200 --> 0:01:01.440 one that seemingly is endorsing anti Semitic views. More advertisers, though, 0:01:01.520 --> 0:01:04.319 are also fleeing his social media platform X. The European 0:01:04.360 --> 0:01:07.880 Commission joined IBM in announcing it will stop advertising on 0:01:08.080 --> 0:01:10.120 X after Musk agreed with a post that said the 0:01:10.160 --> 0:01:12.880 Jewish people hold a dialectical hatred. 0:01:12.680 --> 0:01:13.399 Of white people. 0:01:13.680 --> 0:01:13.800 Now. 0:01:13.880 --> 0:01:17.000 Musk responded by saying, you have said the actual truth. 0:01:17.800 --> 0:01:18.839 That was Thursday. 0:01:19.120 --> 0:01:22.520 Meanwhile, this Friday morning, the White House is addressing Elon 0:01:22.600 --> 0:01:26.480 musk comments saying, quote, we condemn this abhorrent promotion of 0:01:26.520 --> 0:01:30.399 antisemitic and racist hate in the strongest terms, which runs 0:01:30.440 --> 0:01:33.560 against our core values as Americans. Joining us now from 0:01:33.640 --> 0:01:37.000 DC Bloomberg's a Kayla Gardener, Kayla give us the rest 0:01:37.040 --> 0:01:39.520 of the detail on that White House response to Elon 0:01:39.600 --> 0:01:40.920 Musk and Elon Musk's post. 0:01:41.120 --> 0:01:44.119 Yeah, the White House has been pretty adamant about condemning 0:01:44.160 --> 0:01:47.760 antisemitism pretty much ever since the President took office. They 0:01:47.800 --> 0:01:51.360 have a national strategy to counter antisemitism, and this has 0:01:51.400 --> 0:01:53.800 been a major focus of the Second Gentleman, who was 0:01:53.840 --> 0:01:57.680 of course the first Jewish spouse of a Vice president. 0:01:58.000 --> 0:02:00.360 And as you mentioned, this comes on top of yukes 0:02:00.400 --> 0:02:03.760 from the European Commission from IBM, which both announced they 0:02:03.760 --> 0:02:06.800 would be pulling advertising from the platform. But I think 0:02:06.800 --> 0:02:09.160 the best way to think about this is a broader 0:02:09.200 --> 0:02:12.760 and much more complicated relationship between the President and Elon Musk. 0:02:13.000 --> 0:02:15.359 Elon Musk has been very critical of Biden. He says 0:02:15.360 --> 0:02:17.520 he will not support him. In twenty twenty four, he 0:02:17.600 --> 0:02:20.360 was also unhappy when Tesla was not invited to an 0:02:20.400 --> 0:02:24.280 event for EB companies earlier this year, and so that's 0:02:24.320 --> 0:02:26.520 definitely something to think about here. And at the same time, 0:02:26.680 --> 0:02:30.320 the government also has contracts with SpaceX. It also applauded 0:02:30.400 --> 0:02:33.680 Elon Musk's decision to open up their charging infrastructure to 0:02:33.840 --> 0:02:36.600 other companies. But I do think it was the timing 0:02:36.639 --> 0:02:39.519 of these comments, of course, amid the Israel Hamas War 0:02:39.600 --> 0:02:41.840 that ultimately caused the White House to put out these 0:02:41.840 --> 0:02:44.920 statements because there has been such an increase in incidents, 0:02:45.040 --> 0:02:47.880 particularly against the Jewish community, they felt as though this 0:02:48.080 --> 0:02:49.840 was the time to make such a condemnation. 0:02:50.400 --> 0:02:53.119 Okayla God, we thank you so much for that really 0:02:53.200 --> 0:02:56.920 important context coming from Washington. That's bringing more context coming 0:02:56.919 --> 0:02:59.480 from an investivase now. Kristin Hall is founder and CEO 0:02:59.520 --> 0:03:02.360 of NIA Capital. It's a social impact fund and it 0:03:02.400 --> 0:03:04.040 is about two hundred and eight to two thousand dollars 0:03:04.080 --> 0:03:07.280 of Tesla stock as of mid year. It's waged pressure 0:03:07.320 --> 0:03:11.880 campaigns against the company for years, including via shareholder resolutions. 0:03:12.200 --> 0:03:14.760 You put out a response to Mask's comments saying that 0:03:14.800 --> 0:03:19.000 you're appalled by Elomusk's recent post on x Kristin, talk 0:03:19.120 --> 0:03:24.640 us through what you think. Ultimately, the investor viewpoint is 0:03:24.639 --> 0:03:24.880 at the. 0:03:24.880 --> 0:03:27.600 Moment, oh, this is so complicated. Thank you for having 0:03:27.639 --> 0:03:31.680 me today. This is the most complicated CEO for investors 0:03:31.720 --> 0:03:34.240 to deal with, and yet it really doesn't need to be. 0:03:34.760 --> 0:03:39.320 We all are completely appalled by his statement, and we're 0:03:39.360 --> 0:03:42.520 really calling on the board to take some action. If 0:03:42.520 --> 0:03:46.120 you think about what Tesla's assets are, it's that brand 0:03:46.640 --> 0:03:49.240 and it's also its people. So we really count on 0:03:49.320 --> 0:03:52.520 Tesla to be innovative, and we really need them to 0:03:52.560 --> 0:03:57.120 be able to attract, recruit, hire, and retain top talent. 0:03:57.480 --> 0:03:59.520 And of course a statement like this is going to 0:03:59.560 --> 0:04:00.560 inhibit all of those. 0:04:00.960 --> 0:04:03.880 Kristin Ela Musk has said in the past and consistently 0:04:04.080 --> 0:04:08.760 he is absolutely pro free speech, and he's also said 0:04:09.120 --> 0:04:12.000 on more than one occasion he's against anti semitism of 0:04:12.040 --> 0:04:12.680 any kind. 0:04:13.760 --> 0:04:16.760 That's right, you hold a small volume of shares. 0:04:17.560 --> 0:04:20.200 My understanding is that that is basically just a function 0:04:20.279 --> 0:04:22.640 of being a social impact investor. There will be parts 0:04:22.680 --> 0:04:25.280 of our audience that say, why is Kristin on She 0:04:25.360 --> 0:04:26.599 holds hardly any stock. 0:04:27.279 --> 0:04:27.840 Well, so we. 0:04:27.920 --> 0:04:31.040 Actually held Tesla for many years in our core portfolios. 0:04:31.400 --> 0:04:34.960 We really were behind that battery play and of course 0:04:35.080 --> 0:04:39.080 the infrastructure across many of the products and services that 0:04:39.120 --> 0:04:43.039 Tesla is bringing for a just and innovative transition to 0:04:43.120 --> 0:04:46.960 a sustainable economy. So that thesis was really important to us, 0:04:47.000 --> 0:04:49.760 and we did hold Tesla in our core portfolios. And 0:04:49.839 --> 0:04:53.400 yet when it became really apparent that there was racial 0:04:53.400 --> 0:04:58.080 discrimination within the plants and across the firm, we became 0:04:58.120 --> 0:05:01.240 really cautious and there was lots of risk for us 0:05:01.320 --> 0:05:04.400 as an investor, and we pulled out. We did retain 0:05:04.480 --> 0:05:06.680 some shares on a small amount of shares, as you 0:05:06.720 --> 0:05:10.440 point out, so that we could keep our responsibility as 0:05:10.440 --> 0:05:13.640 investors to engage with this firm and to call them 0:05:14.080 --> 0:05:16.919 on what in their own code of ethics says to 0:05:17.000 --> 0:05:19.839 do the right thing. So Elon Musk is actually in 0:05:19.920 --> 0:05:22.280 violation of his own code of ethics right now, and 0:05:22.320 --> 0:05:23.760 that's why we're calling on the board. 0:05:24.560 --> 0:05:26.040 Christ and thank you for that explanation. 0:05:26.279 --> 0:05:28.800 I just think the audience wanted to understand the mechanics 0:05:29.040 --> 0:05:32.680 of how your firm is operating. The emphasis is on 0:05:32.760 --> 0:05:36.479 the absolute truth statement or posts that he made. He 0:05:36.520 --> 0:05:38.159 made a follow up post which I are going to 0:05:38.160 --> 0:05:41.039 bring up on the screen for our audience, where he 0:05:41.520 --> 0:05:45.000 says the adl unjustly attacks the majority of the West, 0:05:45.360 --> 0:05:48.480 despite the majority of the West supporting the Jewish people 0:05:48.520 --> 0:05:51.400 and Israel. This is because they cannot buy their own 0:05:51.440 --> 0:05:55.080 tenets criticize the minority groups who are their primary threat. 0:05:55.480 --> 0:05:58.280 It is not right and needs to stop. What do 0:05:58.320 --> 0:06:01.040 you think Elon Musk was trying to say in that post? 0:06:03.000 --> 0:06:05.839 Now, Elon Musk has been erratic, He's been volatile with 0:06:05.920 --> 0:06:10.000 this speech. We never actually know what he's trying to do. 0:06:10.400 --> 0:06:13.880 And while he is saying he's promoting free speech, hateful 0:06:13.880 --> 0:06:17.200 speech and hates speech has no place on X and 0:06:17.240 --> 0:06:20.400 it certainly doesn't have any place coming from a major 0:06:20.760 --> 0:06:21.800 CEO in our nation. 0:06:22.680 --> 0:06:27.279 It's interesting that certain key founders leaders, one who actually 0:06:27.279 --> 0:06:31.760 co founded now Meta, has called on perhaps roles within 0:06:31.800 --> 0:06:34.400 other companies that Elon Musk holls. Of course, he's not 0:06:34.440 --> 0:06:36.600 just the leader of Tesla, but he also is the 0:06:36.640 --> 0:06:39.800 owner and CTO of X, the platform with which he's 0:06:39.839 --> 0:06:45.200 currently putting out these views. And indeed, one particular key 0:06:45.400 --> 0:06:48.680 founder saying, Linda Yacarino, your turn to actually potentially even 0:06:48.720 --> 0:06:51.719 firer own CTO. Linda herself has been trying to point 0:06:51.720 --> 0:06:53.960 out that X's view has always been very clear that 0:06:54.000 --> 0:06:56.120 discrimination by everyone should. 0:06:55.920 --> 0:06:57.040 Stop across the board. 0:06:57.880 --> 0:07:01.000 What would you want to see for Elon, whether he 0:07:01.360 --> 0:07:05.000 be CTO chair of X, whether it be CEO of Tesla, 0:07:05.040 --> 0:07:07.520 whether it be his roles and the many other companies 0:07:07.520 --> 0:07:09.880 that he has. Are you calling for him to step down? 0:07:11.680 --> 0:07:14.000 So that isn't my place to call for that. I 0:07:14.120 --> 0:07:17.600 do want to see the board stepping in and taking action. 0:07:18.080 --> 0:07:20.800 And whether that means, you know, taking his cell phone away, 0:07:20.880 --> 0:07:24.280 that's one possibility. But what we really need to see 0:07:24.360 --> 0:07:28.400 is leadership, and we want to see him not only 0:07:28.440 --> 0:07:31.360 protecting his brand but growing it in a sustainable and 0:07:31.400 --> 0:07:32.280 inclusive way. 0:07:32.960 --> 0:07:33.200 You know. 0:07:33.240 --> 0:07:37.320 Again, we want to see employees, both current and future 0:07:37.760 --> 0:07:41.040 feel not only really comfortable but excited to join this 0:07:41.160 --> 0:07:43.760 and bring their top talent and expert and skills. And 0:07:43.760 --> 0:07:46.880 then also on the consumer side, there are so many 0:07:47.040 --> 0:07:49.640 consumers right now saying they're getting rid of their Tesla 0:07:49.680 --> 0:07:53.280 and they're certainly not considering purchasing anything new, and so 0:07:53.800 --> 0:07:56.840 with a prime business model at Tesla at any rate, 0:07:57.880 --> 0:08:00.880 we need to see as an investor that that CEO 0:08:01.040 --> 0:08:03.360 is really looking out for the business model, and that 0:08:03.480 --> 0:08:07.200 brand has so much to do, so there's I personally 0:08:07.200 --> 0:08:09.840 would like to see him step down. Whether that's possible, 0:08:09.840 --> 0:08:10.880 that's really up to the board. 0:08:11.400 --> 0:08:11.760 Christin. 0:08:11.920 --> 0:08:15.360 It's been interesting because this hasn't happened in a vacuum. 0:08:15.600 --> 0:08:18.560 In fact, we have seen him put out. 0:08:18.520 --> 0:08:22.200 Very controversial posts before, some which he has indeed retracted, 0:08:22.320 --> 0:08:25.400 and he's gone to say he's full pro free speech 0:08:25.640 --> 0:08:27.640 but against anti antisemitism in. 0:08:27.560 --> 0:08:30.440 All its forms. But he's almost been a bit like Teflon. 0:08:30.880 --> 0:08:34.240 Nothing has stuck, and Tesla nevertheless is up ninety percent 0:08:34.360 --> 0:08:36.280 year to date in terms of a share price, and 0:08:36.280 --> 0:08:38.959 people thus far perhaps haven't been pulling back on their 0:08:38.960 --> 0:08:41.760 Tesla purchases. It's been deemed more of a consumer weakness 0:08:41.800 --> 0:08:44.679 story than it has actually a pushback against Lil Musk. 0:08:45.200 --> 0:08:48.080 Can you really sort of drive that narrative together? 0:08:48.120 --> 0:08:49.960 Do you think this is the moment that we see 0:08:49.960 --> 0:08:51.120 a tipping point? 0:08:52.559 --> 0:08:54.199 You know, it's going to be interesting to see what 0:08:54.360 --> 0:08:57.960 we see as a tipping point, because with a regular company, 0:08:58.280 --> 0:09:03.560 an ordinary company with one of the richest billionaire CEOs, 0:09:04.080 --> 0:09:08.160 we would have seen other consequences much earlier. Elon Musk 0:09:08.400 --> 0:09:10.960 is in icon in the US and across the world, 0:09:11.120 --> 0:09:13.520 and he seems to be treated differently both by his 0:09:13.600 --> 0:09:18.720 board and by his van base, and that's problematic, I believe, 0:09:18.840 --> 0:09:22.359 for the kind of companies and the kind of corporations 0:09:22.360 --> 0:09:24.120 that we want to see grow in the US. 0:09:25.280 --> 0:09:29.280 We reiterate that Tesla has rebounded to positive territory, having 0:09:29.320 --> 0:09:31.240 been down as much as three percent in the session 0:09:31.920 --> 0:09:33.000 over a two day basis. 0:09:33.040 --> 0:09:34.680 Of course it's lower, but on the week. 0:09:34.520 --> 0:09:38.040 I think on track for a pretty sizable gain. There 0:09:38.080 --> 0:09:40.640 are many that took to X in support of Elon 0:09:40.720 --> 0:09:43.960 Musk who are both Tesla shareholders and vehicle owners. But 0:09:44.000 --> 0:09:46.280 there's one name that seems aligned with you, and that 0:09:46.400 --> 0:09:50.360 is Ross Gerber, a Tesla investor who says his clients 0:09:50.520 --> 0:09:51.440 his an asset manager. 0:09:51.440 --> 0:09:52.280 His clients are. 0:09:52.160 --> 0:09:55.720 Asking him to unwind their positions. They will no longer 0:09:55.760 --> 0:09:58.720 buy Tesla cars. My understanding is that you are doing 0:09:58.720 --> 0:10:01.360 a new initiative where you're right to the board of 0:10:01.400 --> 0:10:04.480 Tesla in the coming week. Have you spoken to Ross 0:10:04.480 --> 0:10:06.960 and who are you trying to bring in on the 0:10:07.000 --> 0:10:08.319 initiative that you're taking. 0:10:09.800 --> 0:10:13.240 Actually, that's really interesting, So we haven't spoken to Ross yet. 0:10:13.280 --> 0:10:13.800 I welcome that. 0:10:13.840 --> 0:10:16.320 I maybe he's available for a phone call this afternoon, 0:10:16.320 --> 0:10:19.120 that would be great. We are part of a coalition 0:10:19.240 --> 0:10:22.720 with Whistlestock Capital and many others who have written to 0:10:22.760 --> 0:10:24.840 the board, and we did that actually earlier this year. 0:10:24.880 --> 0:10:28.520 We put out a statement and a letter speaking about 0:10:28.559 --> 0:10:31.120 lots of different issues that we want to see the 0:10:31.160 --> 0:10:34.200 board take up, and sadly we have not had a response. 0:10:34.559 --> 0:10:37.720 And so we've been meeting as a group monthly to 0:10:37.800 --> 0:10:40.800 figure out how we can be engaged to really support 0:10:40.840 --> 0:10:44.319 this company to be its best. And we will resend 0:10:44.320 --> 0:10:47.280 that letter with a new cover letter with the additional 0:10:47.280 --> 0:10:50.160 grievances that have occurred since we sent the original letter, 0:10:50.200 --> 0:10:51.920 and that should go out in the next couple of weeks. 0:10:52.559 --> 0:10:55.200 Kristin, howe, let us know what the response, if any, is, 0:10:55.559 --> 0:10:57.680 and we thank you so much for articulating your point 0:10:57.679 --> 0:10:59.839 of view for Nia Impact Capital today. 0:11:00.360 --> 0:11:02.480 We thank you for your time. Meanwhile, coming up. 0:11:02.440 --> 0:11:05.000 That we're going to turn to the markets, because, as 0:11:05.000 --> 0:11:07.080 we've been saying, Tesla stock is up over the last 0:11:07.080 --> 0:11:09.840 five days, and indeed over the last month, tech stocks 0:11:09.880 --> 0:11:12.680 have really outperformed, and we're up two trillion dollars worth 0:11:12.679 --> 0:11:15.000 in terms of a risk rally in November, but could 0:11:15.000 --> 0:11:16.120 it be at a slowing point? 0:11:16.320 --> 0:11:17.160 And what are you looking at? 0:11:18.200 --> 0:11:20.960 I'm looking at shares of Applied Materials, the biggest US 0:11:21.080 --> 0:11:23.200 maker of chip making equipment. To see they're the stock 0:11:23.240 --> 0:11:26.960 down five point five percent, five point four percent. Reuter's 0:11:27.000 --> 0:11:31.040 reporting that a probe's been opened by the US into 0:11:31.240 --> 0:11:34.439 it breaching those US technology export curbs to China. 0:11:34.480 --> 0:11:36.880 We'll get the details next. This has Boombog. 0:11:36.520 --> 0:11:57.400 Technology technology stocks wavering today amid November's two trillion dollar rally. 0:11:57.440 --> 0:11:59.839 What can we expect going forward? There's a bit of 0:11:59.880 --> 0:12:03.000 a learning still to come and joining us now. Jonathan Curtis, 0:12:03.520 --> 0:12:07.200 Franklin Equity Group, Senior VP and Director of Portfolio Management. 0:12:07.240 --> 0:12:10.360 You're an investor who holds a number of the magnificent 0:12:10.440 --> 0:12:13.520 seven key semiconductor names and software names. It's in the 0:12:13.600 --> 0:12:17.160 chip space. I want to start Applied Materials. The report 0:12:17.200 --> 0:12:21.760 of that probe looking at whether they breached the US 0:12:21.960 --> 0:12:26.520 technology export curbs to China. You hold Applied Materials across 0:12:26.520 --> 0:12:27.720 different Franklin funds. 0:12:28.120 --> 0:12:30.400 Just to what did you make of that report? First? Jonathan? 0:12:31.520 --> 0:12:35.520 Yeah, Well, in fact, Applied Materials had actually disclosed back 0:12:35.559 --> 0:12:37.080 in October of twenty twenty two. 0:12:37.160 --> 0:12:40.840 I believe that they were under investigation. 0:12:41.600 --> 0:12:44.400 The incremental news that we got yesterday out of Reuter's 0:12:44.679 --> 0:12:49.720 was that the investigation had turned perhaps potentially criminal. I 0:12:49.720 --> 0:12:52.600 don't think comment the company is commentating on the specifics 0:12:52.600 --> 0:12:57.559 of that report. But importantly, Applied Materials is one of 0:12:57.600 --> 0:13:01.600 the world's leading semiconduction capital equipment companies. They're involved in 0:13:01.720 --> 0:13:04.679 really every part of the market with the exceptional lethography, 0:13:04.720 --> 0:13:06.640 They're a leading player in the space. 0:13:07.040 --> 0:13:07.960 They're very very. 0:13:07.880 --> 0:13:13.000 Essential for Western babs, FABS in Korea, FABS in Taiwan, 0:13:13.440 --> 0:13:16.760 and fabs in China. And while if they have made 0:13:16.800 --> 0:13:19.920 a mistake, or if somebody deeper down in the company 0:13:19.920 --> 0:13:22.040 made a mistake and allowed equipment to make its way 0:13:22.080 --> 0:13:26.600 over to a smith in China, then certainly that should 0:13:26.640 --> 0:13:28.680 be dealt with. But when I don't think that any 0:13:28.800 --> 0:13:33.200 sanctions that would be imposed would negatively impact the company's 0:13:33.200 --> 0:13:37.400 earnings power or they're certainly their mote, their critical supplier 0:13:37.800 --> 0:13:41.439 in the ecosystem and very very essential to keep operating. 0:13:43.080 --> 0:13:46.480 Johnath, thank you strapolate out the China risk to the 0:13:46.480 --> 0:13:48.520 industry more broadly. Right, if you think about how Nvidia 0:13:48.600 --> 0:13:51.600 is traded over the last seven days. Some of it's 0:13:51.600 --> 0:13:55.840 on reports of new gen China specific chips right trying 0:13:55.880 --> 0:14:01.880 to get product that complies with these curbs. Clearly there 0:14:01.960 --> 0:14:03.959 is a danger of being in breach of them. How 0:14:04.000 --> 0:14:05.719 as an investor do you navigate that? 0:14:06.760 --> 0:14:09.600 Yeah, well, so, certainly in China wants to be able 0:14:09.600 --> 0:14:13.319 to be a player on some of these leading edge chips. 0:14:13.320 --> 0:14:15.319 They want to be able to manufacture them. Certainly they 0:14:15.400 --> 0:14:16.080 want to have. 0:14:16.000 --> 0:14:19.320 Them for their own efforts in cloud computing, in military 0:14:19.360 --> 0:14:22.680 and artificial intelligence, and the US is trying to curb that. 0:14:24.000 --> 0:14:27.320 China is a very big market. Even if China is 0:14:27.360 --> 0:14:28.240 not able. 0:14:28.000 --> 0:14:31.760 To acquire the chips they want, they will certainly find 0:14:31.840 --> 0:14:34.840 other ways around being able to get get the most 0:14:34.920 --> 0:14:39.920 leading edge chips by manufacturing their own less powerful chips, 0:14:39.920 --> 0:14:43.560 but spending then more money on the equipment to build 0:14:43.600 --> 0:14:46.760 those less powerful chips and more money on the infrastructure 0:14:46.800 --> 0:14:49.560 to run those chips so they can match the compute 0:14:49.560 --> 0:14:53.440 capacity in the West. So, in an odd way, we 0:14:53.480 --> 0:14:56.000 actually think it is positive for the industry because it 0:14:56.120 --> 0:15:01.320 ultimately means that there's an overspend if you will happening 0:15:01.360 --> 0:15:06.080 in China to support matching the compute capacity requirements of China, 0:15:07.400 --> 0:15:09.760 but certainly we are paying close attention to it, you know, 0:15:09.920 --> 0:15:12.600 guard up applied Materials. At the beginning of our conversation, 0:15:13.360 --> 0:15:15.280 I think forty four percent of their revenue in the 0:15:15.280 --> 0:15:19.240 most recent quarter was from in fact China, So certainly 0:15:19.360 --> 0:15:22.480 China is a big consumer. The US is really trying 0:15:22.520 --> 0:15:27.800 to limit China's access to equipment and processes and chips 0:15:27.840 --> 0:15:31.760 at the leading edge. But China can make good progress 0:15:31.800 --> 0:15:35.800 and build a very successful industry on lagging edge nodes 0:15:36.320 --> 0:15:38.040 if they want it, and they'll just end up having 0:15:38.120 --> 0:15:42.080 to overspend to match the compute capacity available in the 0:15:42.120 --> 0:15:43.640 West for more advanced chips. 0:15:43.920 --> 0:15:47.240 Jonathan is interesting and mentions in video of course, and 0:15:47.280 --> 0:15:49.080 the way in which they're trying to build different types 0:15:49.080 --> 0:15:51.520 of chips to meet the current standards, and video course 0:15:51.560 --> 0:15:55.040 got its earnings coming up fast, and I'm interested in 0:15:55.080 --> 0:15:58.640 your perspective on ultimately how far these Magnificent seven have 0:15:58.840 --> 0:16:01.240 room yet to run. Is an idea I think is 0:16:01.280 --> 0:16:03.920 put out by Goldman Sachs that twenty twenty four you stay, 0:16:03.960 --> 0:16:06.080 you hold, you remain invested, and actually these might have 0:16:06.280 --> 0:16:08.160 sent seven is still going to be some of the 0:16:08.160 --> 0:16:10.400 companies that deliver into the next year as well. 0:16:10.440 --> 0:16:12.040 Do you abide by that with evaluations? 0:16:12.160 --> 0:16:15.880 Yeah, yeah, we're certainly quite positive on really the entire 0:16:16.400 --> 0:16:20.480 technology sector and artificial intelligence particular. The Magnificent Seven have 0:16:20.560 --> 0:16:24.400 done well because they are truly magnificent businesses, strong balance sheets, 0:16:24.480 --> 0:16:28.600 high levels of profitability, structural growers. But almost all of them, 0:16:28.640 --> 0:16:31.320 with the exception of one or two, have very strong 0:16:31.400 --> 0:16:36.480 AI talk tracks and opportunities. They have massive amounts of data, 0:16:36.520 --> 0:16:39.160 They can get more data, they can wrangle the compute 0:16:39.160 --> 0:16:41.680 to build these models, They have the talent to build 0:16:41.680 --> 0:16:44.600 these models, and then they have the pathways into which 0:16:44.680 --> 0:16:48.320 to deliver value from these models into their customers and 0:16:48.720 --> 0:16:51.480 charge for them. Some of these companies have the potential 0:16:51.760 --> 0:16:55.840 to double their overall businesses on the delivery of AI 0:16:55.920 --> 0:17:00.280 features into just a small number of their businesses. Is 0:17:00.440 --> 0:17:04.040 great potential that lies ahead for many of the Magnificent Seven. 0:17:04.119 --> 0:17:07.040 Now we own many of them, we happen to be 0:17:07.119 --> 0:17:10.640 underweight them. We see greater value down the market cap 0:17:10.760 --> 0:17:13.560 range companies that have some of those same characteristics as 0:17:13.600 --> 0:17:16.520 the Magnificent Seven, but that are trading it more compelling 0:17:17.000 --> 0:17:18.000 valuation levels. 0:17:18.119 --> 0:17:20.000 Can you just very quickly tell us some of the 0:17:20.080 --> 0:17:21.640 names therefore that are less obvious. 0:17:22.359 --> 0:17:25.560 Sure a company like a service now for instance, they 0:17:25.600 --> 0:17:28.680 have they can tick all those boxes that the Magnificent 0:17:28.880 --> 0:17:30.679 seven can in terms of being able to be a 0:17:30.680 --> 0:17:31.480 player in AI. 0:17:31.880 --> 0:17:34.160 But I think they're just a less well understood business. 0:17:34.320 --> 0:17:37.959 They have significant opportunities to raise prices and to deliver 0:17:38.040 --> 0:17:40.920 new value to their customers, to make their customers more efficient, 0:17:41.280 --> 0:17:42.520 all with generative AI. 0:17:42.840 --> 0:17:46.080 Jonathan Curtis, we thank you a Franklin Equity Group. 0:17:46.280 --> 0:17:55.600 Great to have you time now for talking tech. 0:17:55.600 --> 0:17:58.480 First up, Apple maybe falling behind in fact on his 0:17:58.520 --> 0:18:00.919 efforts to make a modem chip for the iPhone. 0:18:01.119 --> 0:18:03.199 Apple will likely misrolling. 0:18:02.640 --> 0:18:05.239 Out its own emonem for twenty twenty five due to 0:18:05.320 --> 0:18:07.720 the complex designs of Qualcom's chip. 0:18:08.080 --> 0:18:09.880 Mean While open AI, s Altmann. 0:18:09.560 --> 0:18:12.200 Believes we have yet to see the biggest risks in 0:18:12.320 --> 0:18:15.280 AI posers to US politics and policy. While he is 0:18:15.320 --> 0:18:18.440 hopeful that oftificial intelligence can help humanity in the longer term, 0:18:18.600 --> 0:18:21.359 Amann has called for government oversight of the technology in 0:18:21.400 --> 0:18:25.560 the near term. Plus, Amazon cunning hundreds of jobs in 0:18:25.600 --> 0:18:28.400 its voice activated Alexa division. Now, the company says it's 0:18:28.400 --> 0:18:31.840 shifting efforts to better focus on building capabilities powered by 0:18:32.080 --> 0:18:33.480 you guess it generator. 0:18:33.200 --> 0:18:34.080 AI ed. 0:18:35.880 --> 0:18:38.040 Back here in SF and the pitch, I says he 0:18:38.160 --> 0:18:41.520 expects China to be at the forefront of AI. The 0:18:41.520 --> 0:18:45.399 Alphabet CEO called China's work on the technology astounding to 0:18:45.480 --> 0:18:47.679 see during a conversation over at APEX. 0:18:47.720 --> 0:18:49.840 Have a listen. It's not going to be easy. 0:18:49.960 --> 0:18:56.240 But I would start from this premise that AI will proliferate. 0:18:56.520 --> 0:19:00.240 So this is not the inherent nature of software. AI 0:19:00.359 --> 0:19:04.760 advances will get out to in all countries, and so 0:19:04.920 --> 0:19:07.400 it is naturally the kind of technology. I don't think 0:19:07.400 --> 0:19:11.679 there's any unilateral safety to be had. We all have 0:19:11.760 --> 0:19:16.119 a shared incentive to solve for safety. You know, you 0:19:16.119 --> 0:19:20.280 could have AI go wrong in one country that will 0:19:20.280 --> 0:19:22.919 impact every other country. So in some ways, it's like 0:19:22.960 --> 0:19:25.280 climate change in the planet. We all share a planet. 0:19:25.840 --> 0:19:28.919 I think that's true for AI. So now that you 0:19:29.000 --> 0:19:31.439 know that will be true, I think you have to 0:19:31.480 --> 0:19:37.000 start building the frameworks globally to make progress. I've seen 0:19:37.119 --> 0:19:41.679 encouraging progress when the G seven happened in Hiroshima. I 0:19:41.680 --> 0:19:44.960 think it was a good start. You've seen more progress 0:19:45.080 --> 0:19:48.600 the Uki summit last week, the administration here. The White 0:19:48.640 --> 0:19:52.280 House has been leading the way as well, and I 0:19:52.320 --> 0:19:57.240 saw good encouraging announcements even yesterday for us in China 0:19:57.840 --> 0:20:09.080 to start having a dialogue on AI alf Let's CEO. 0:20:01.800 --> 0:20:13.600 So welcome back to Bloomberg Technology, Ed Ludlow here in 0:20:13.640 --> 0:20:15.000 San Francisco. 0:20:14.520 --> 0:20:15.720 In Caroline Hide in New York. 0:20:15.720 --> 0:20:18.240 There has of course been some weakness in Tesla's trading 0:20:18.320 --> 0:20:21.800 yesterday after of course, one has been seemingly an endorsement 0:20:21.800 --> 0:20:24.840 for some anti semitic posts post on x by the 0:20:24.880 --> 0:20:27.119 owner of x Any, the CEO of Tesla, which is 0:20:27.119 --> 0:20:27.720 Elon Musk. 0:20:27.800 --> 0:20:30.040 But a lot to still be dissecting across the board. 0:20:30.200 --> 0:20:33.080 D Yeah, that was the big story of the last 0:20:33.080 --> 0:20:35.919 twenty four hours. The other is Apex, which is wrapping 0:20:36.000 --> 0:20:39.000 up in San Francisco. It's a who's who of global 0:20:39.080 --> 0:20:42.600 power players in politics and technology. One of them, I'm 0:20:42.600 --> 0:20:45.440 delighted to say, joins me right now on set Bloomberg's 0:20:45.440 --> 0:20:47.880 Amory Horden. You make it to that party last night 0:20:47.920 --> 0:20:48.400 down the road. 0:20:48.640 --> 0:20:49.159 I did that. 0:20:49.320 --> 0:20:55.159 Now I'm in all seriousness. Everyone that matters in the 0:20:55.160 --> 0:20:57.879 world has been here. When you last joined us on 0:20:57.920 --> 0:21:00.840 the show, it was all about Biden. G what happened 0:21:00.880 --> 0:21:03.760 after that, particularly in the world of technology as well. 0:21:04.200 --> 0:21:06.800 Yeah, I think Biden and she really was the starting 0:21:06.840 --> 0:21:10.320 gun to this entire APEC summit. But then for Shijingping, 0:21:10.800 --> 0:21:13.560 as much as the Biden meeting was very important. Actually, 0:21:13.600 --> 0:21:15.440