WEBVTT - Nvidia Opens AI Ecosystem to Rivals, Apple’s AI Struggles 0:00:00.840 --> 0:00:05.080 From the heart of where innovation, money and power collide 0:00:05.360 --> 0:00:10.640 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.800 --> 0:00:13.360 Caroline Hyde and Ed Ludlow. 0:00:27.760 --> 0:00:30.760 Live from San Francisco. This is Bloomberg Technology coming up. 0:00:30.800 --> 0:00:35.559 Big Tech volatile after Moody's downgrades, America's credit rating, and 0:00:35.680 --> 0:00:39.320 Nvidia allowing customers to use rival chip makers in an 0:00:39.360 --> 0:00:44.120 effort to expand its AI ecosystem, And why Apple has 0:00:44.159 --> 0:00:47.600 been spending billions of dollars on AI and still hasn't 0:00:47.640 --> 0:00:51.479 managed to crack the code. This is what financial markets 0:00:51.520 --> 0:00:54.760 look like across major averages. We've paired some of the 0:00:54.800 --> 0:00:58.200 early declines in Monday's session, but the story broadly is 0:00:58.360 --> 0:01:01.240 tech is pulling us down and leading us lower, and 0:01:01.280 --> 0:01:04.520 that center is particularly on semiconductors. 0:01:03.840 --> 0:01:05.360 And AI infrastructure names. 0:01:05.400 --> 0:01:07.360 In terms of the single names that we're watching, you 0:01:07.440 --> 0:01:11.200 have stocks like Tesla under pressure, and Video has actually 0:01:11.280 --> 0:01:11.920 paid a lot. 0:01:11.840 --> 0:01:12.920 Of it's declined from the open. 0:01:12.959 --> 0:01:15.040 It was down two percent at one point in Video 0:01:15.120 --> 0:01:16.959 is at the heart of the news cycle and it's 0:01:16.959 --> 0:01:18.960 going to be at the heart of today's program as well. 0:01:19.080 --> 0:01:20.520 With a lot of news out of Taiwan. 0:01:20.600 --> 0:01:23.679 Let's get to the big picture on technology and financial markets. 0:01:23.680 --> 0:01:27.600 Here to break down the tech moves, Bloomberg's Ryan Vostelica, Ryan, 0:01:27.640 --> 0:01:28.200 what's going on? 0:01:29.319 --> 0:01:31.280 Hey, good morning, Thanks for having me. So there is 0:01:31.319 --> 0:01:34.160 a lot of uncertainty, a lot of volatility in the 0:01:34.240 --> 0:01:36.720 market today. You mentioned the Moody's downgrade. I think that 0:01:36.880 --> 0:01:39.880 just speaks to the level of political uncertainty. 0:01:39.959 --> 0:01:40.679 In particular. 0:01:40.720 --> 0:01:42.959 Of this, of course comes in the back of all 0:01:43.000 --> 0:01:45.360 the back and forth on tariffs in the trade war. 0:01:45.640 --> 0:01:48.120 There's just so much uncertainty in terms of policy, and 0:01:48.160 --> 0:01:50.480 the implications of this, I think are for a lot 0:01:50.480 --> 0:01:52.680 of people to just continue sort of selling the US 0:01:52.680 --> 0:01:55.920 look for defensive areas, look for safety. In that case, 0:01:55.960 --> 0:01:58.400 that means a lot of big tech names, especially since 0:01:58.440 --> 0:02:01.480 tech has been pretty over the past couple of weeks. 0:02:01.520 --> 0:02:03.320 So this could just be some profit taking, but I 0:02:03.360 --> 0:02:06.760 do think it underlines how uncertain people feel about the 0:02:06.840 --> 0:02:07.800 economic outlook. 0:02:08.600 --> 0:02:12.440 The mag seven have a sort of disproportionate impact to 0:02:12.520 --> 0:02:16.280 the index level, but it's AI, infrastructure and semiconductors where 0:02:16.320 --> 0:02:17.800 I see most weakness. 0:02:17.880 --> 0:02:19.280 Basically this Monday. Why is that? 0:02:20.680 --> 0:02:22.200 Yeah, So, I think you know, this is an area 0:02:22.240 --> 0:02:25.560 that is very much tied to the trade situation given 0:02:25.560 --> 0:02:27.240 to sort of the nature of the products that we're 0:02:27.240 --> 0:02:29.800 talking about here, there's still a lot of uncertainty about 0:02:30.520 --> 0:02:32.960 you know, chip restrictions and all these other kinds of things. 0:02:32.960 --> 0:02:34.480 And this also comes on the back of, you know, 0:02:34.480 --> 0:02:37.880 people still continue to want to see more return on 0:02:38.080 --> 0:02:41.080 all this AI related spending that is going on. There's 0:02:41.160 --> 0:02:43.200 just a lot of concerns maybe that you know, has 0:02:43.240 --> 0:02:46.400 there been sort of a bubble in AI infrastructure. So 0:02:46.440 --> 0:02:48.240 I think this is an area where because of these 0:02:48.240 --> 0:02:50.880 group has done so well because the outlook is so 0:02:51.080 --> 0:02:53.720 debated right now, it's just a very natural place for 0:02:53.760 --> 0:02:56.760 people to be taking profits, especially on any kind of 0:02:56.800 --> 0:02:59.359 sort of negative headline that you see cross the wire. 0:03:00.160 --> 0:03:03.160 Bloomboas round Vastelica with the market moves this Monday, thank you, 0:03:03.240 --> 0:03:06.440 let's get more on markets. Hillary Frisch, senior Research analysts 0:03:06.440 --> 0:03:09.919 for Software and IT services at Clearbridge Investments. 0:03:09.480 --> 0:03:10.000 Is with us. 0:03:10.600 --> 0:03:13.920 Last week, the tailwind was in all of the headlines 0:03:14.120 --> 0:03:17.440 about the billions and billions of dollars of AI infrastructure 0:03:17.480 --> 0:03:22.399 deals the United States and the Gulf Nations, Nvidia, super Micro, Dell. 0:03:22.800 --> 0:03:24.399 But that's the area of weakness. 0:03:24.440 --> 0:03:26.920 This Monday morning, is it just a little bit of 0:03:27.160 --> 0:03:30.320 a reality check on how soon some of that investment 0:03:30.360 --> 0:03:30.959 will be felt. 0:03:31.360 --> 0:03:32.440 It's a good question, ed. 0:03:32.600 --> 0:03:35.440 It may be a reality check, it may just also 0:03:35.480 --> 0:03:39.560 be profit ticking. And we went from overbought to severely 0:03:39.600 --> 0:03:43.000 oversold to overbought again within just about the span of 0:03:43.000 --> 0:03:46.560 a month. So the tech sector in general has had 0:03:46.600 --> 0:03:48.840 a very strong run recently, and we can talk more 0:03:48.880 --> 0:03:52.000 about why that's the case, but I think investors are 0:03:52.080 --> 0:03:54.640 just looking seeing, okay, we can take some profits at 0:03:54.640 --> 0:03:55.200 this point. 0:03:55.920 --> 0:03:59.040 Well, in part of why that's the case is earnings, right, 0:03:59.080 --> 0:04:02.080 I think we're still a little bit digesting what the 0:04:02.120 --> 0:04:06.200 net takeaways from the calendar first quarter earnings were. What 0:04:06.240 --> 0:04:08.000 were your main takeaways from that period? 0:04:08.240 --> 0:04:11.680 Sure, well, first of all, it was I think what 0:04:11.800 --> 0:04:15.560 was notable was just how resilient Q one results were. 0:04:16.080 --> 0:04:18.120 And it wasn't just in Q one, it was in 0:04:18.160 --> 0:04:21.839 the subsequent weeks through to the quarterly reports, and that 0:04:22.040 --> 0:04:25.719 encompassed a period of Teriff related headlines and uncertainties. So 0:04:25.800 --> 0:04:29.560 that was refreshing and encouraging. And it wasn't just AI 0:04:29.839 --> 0:04:32.839 or a series of AI proof of concepts at the 0:04:32.839 --> 0:04:35.320 expense of all else, which is largely what it felt 0:04:35.360 --> 0:04:39.599 like last year. It was AI strength plus real core 0:04:39.760 --> 0:04:43.680 business strength, and that was refreshing. Now we're coming up 0:04:43.760 --> 0:04:47.800 upon April quarter earnings reports, and I could imagine that 0:04:47.880 --> 0:04:49.760 some of those companies who would have had to close 0:04:49.800 --> 0:04:52.880 their quarters in the midst of tariff uncertainty might see 0:04:52.880 --> 0:04:56.039 some variability, might have seen some pausing and spend, but 0:04:56.200 --> 0:04:58.520 overall the underlying results are very encouraging. 0:04:59.320 --> 0:05:02.800 What I found super interesting about that earnings period. In technologies, 0:05:02.880 --> 0:05:06.120 you have like primary data and secondary data. The primary 0:05:06.200 --> 0:05:08.719 data like the commentary and what's in the earning statement, 0:05:09.160 --> 0:05:11.919 but some of the secondary data we were tracking, for example, 0:05:12.120 --> 0:05:16.120 in the AI infrastructure space, was leases, data center leases, 0:05:16.640 --> 0:05:19.159 and that caused all kinds of noise going into the 0:05:19.200 --> 0:05:23.120 prints and we had to decipher what it was that 0:05:23.279 --> 0:05:25.840 was the truth, you know, based on executive comments, How 0:05:25.839 --> 0:05:26.840 did you navigate that? 0:05:27.200 --> 0:05:30.159 Yes, set of data, tons of noise in the space. 0:05:30.240 --> 0:05:33.200 That was probably maximum noise that we've seen in a 0:05:33.279 --> 0:05:33.800 long time. 0:05:34.200 --> 0:05:35.280 But it's fascinating. 0:05:36.560 --> 0:05:41.680 Starting with the underlying demand trends, you saw hyperscale vendors 0:05:41.720 --> 0:05:44.640 reaffirming CAPEX plans. You saw some of them increase them. 0:05:44.880 --> 0:05:49.360 Microsoft in particular talked about rising near and long term 0:05:49.400 --> 0:05:53.200 demand signals, which could actually cause them to prolong their 0:05:53.240 --> 0:05:56.719 investment in long live assets, meaning land and buildings, which 0:05:56.720 --> 0:05:58.880 they've been engaging in our over the course of the 0:05:58.960 --> 0:06:01.800 last eighteen months. So how do we marry that up 0:06:01.839 --> 0:06:06.599 with data center lease cancelations. Well, it's interesting Microsoft in 0:06:06.640 --> 0:06:09.880 particular makes a lot of use of leases. They came 0:06:09.920 --> 0:06:14.040 from behind relative to the strong demand signals they're seen 0:06:14.680 --> 0:06:17.719 in getting that requisite capacity to be able to fulfill 0:06:17.800 --> 0:06:20.200 AI and other demand for the next five ten years, 0:06:20.640 --> 0:06:25.040 So they were building rapidly. Within that, they signed a 0:06:25.160 --> 0:06:29.160 ton of leases across the globe, which was a brilliant strategy, 0:06:29.200 --> 0:06:32.560 by the way, because it froze it froze some of 0:06:32.560 --> 0:06:35.520 those opportunities to competitors. And then within that, I think 0:06:35.560 --> 0:06:37.960 they decided that they didn't want to be the sole 0:06:38.040 --> 0:06:40.760 source of training for open AI. And also within that 0:06:41.040 --> 0:06:44.359 there were power constraints, and I think they realized that 0:06:44.640 --> 0:06:47.159 these leased facilities wouldn't be up and running until twenty 0:06:47.200 --> 0:06:49.760 seven to twenty twenty nine, and in that vein they 0:06:49.800 --> 0:06:52.600 could actually shift to some degree to own data centers 0:06:52.680 --> 0:06:55.479 as well as least data centers and you're seeing that 0:06:55.560 --> 0:06:58.680 kind of across the board. But in the end, some 0:06:58.720 --> 0:07:00.960 of the data center lease capacit we were hearing was 0:07:01.040 --> 0:07:04.080 five x what you were seeing signed on for by 0:07:04.200 --> 0:07:06.600 an Amazon, for instance, for the rest of the ecosystem. 0:07:06.640 --> 0:07:09.720 And last time I choked, Microsoft wasn't five x the 0:07:09.760 --> 0:07:13.640 size of an Amazon. So basically they were giving themselves optionality. 0:07:14.040 --> 0:07:16.640 And in retrospect, they're still building and they're still demand. 0:07:17.400 --> 0:07:20.280 And again a part of the higher capex reflects the 0:07:20.360 --> 0:07:23.080 higher cost of doing business because of the impact of 0:07:23.160 --> 0:07:27.280 tariffs to supply chain. I've been thinking a lot, as 0:07:27.280 --> 0:07:30.680 one does, about year to date performance of the hyperscalers. 0:07:30.800 --> 0:07:34.840 And it's interesting, right if you just say hyperscalers Microsoft, 0:07:35.000 --> 0:07:38.920 Amazon alphabet. Microsoft stock is up more than eight percent 0:07:39.040 --> 0:07:41.720 year to day. The other two names have been under pressure. 0:07:41.760 --> 0:07:47.000 We of course kickoff with Microsoft Build, but we also 0:07:47.040 --> 0:07:49.800 talked last week about some of the difficulty Microsoft has 0:07:49.920 --> 0:07:53.560 in reaching its own goals because of its relationship with 0:07:53.600 --> 0:07:57.400 open AI. This is something you've been thinking about as well. 0:07:57.680 --> 0:08:01.280 Yes, Well, first of all, with respect to relative to performance, 0:08:01.320 --> 0:08:04.560 I think you're almost seeing from a cloud perspective in 0:08:04.600 --> 0:08:06.960 the other two what we saw with Microsoft for the 0:08:07.040 --> 0:08:09.560 end of last year and early this year, which is 0:08:09.880 --> 0:08:13.040 that they're behind a getting capacity and that is constraining 0:08:13.120 --> 0:08:16.160 cloud growth. So it hasn't been a demand issue, it's 0:08:16.200 --> 0:08:19.880 been a supply issue. Second of all, Microsoft has been 0:08:20.000 --> 0:08:22.480 very tethered to open Ai. They've been diversifying, but the 0:08:22.520 --> 0:08:26.200 two are quite aligned. I'm not sure I view it 0:08:26.240 --> 0:08:28.360 at all in terms of their not being able to 0:08:28.480 --> 0:08:30.880 realize their goals. I think their goals are to focus 0:08:30.920 --> 0:08:35.880 on their own compute capabilities for their customers and to 0:08:35.920 --> 0:08:39.400 add in open ai and other LLLM vendors, but especially 0:08:39.440 --> 0:08:41.880 open Ai as part of that equation. I think it 0:08:41.920 --> 0:08:44.920 was a deliberate decision not to focus solely on training 0:08:44.960 --> 0:08:46.880 that would have crowded out a lot of the other 0:08:47.000 --> 0:08:50.960 exciting and high margin endeavors Microsoft can engage in an 0:08:51.000 --> 0:08:53.480 as core customer base, and in the meantime it's a 0:08:53.520 --> 0:08:58.400 highly symbiotic relationship. Microsoft's infrastructure was originally built in AI 0:08:58.559 --> 0:09:02.400 to around open Ai and the related infrastructure it has 0:09:02.400 --> 0:09:05.319 in finnabaum throughout it has some tremendous capabilities and I 0:09:05.360 --> 0:09:07.520 believe the two companies want to continue to work together. 0:09:08.480 --> 0:09:11.720 Hillary Frish, Senior Research Analystic Clearbridge Investments. 0:09:11.760 --> 0:09:12.800 Thank you for joining us. 0:09:13.240 --> 0:09:16.640 Now coming up, Video announces new AI products as the 0:09:16.640 --> 0:09:21.720 computing giants descend. On Compute's twenty twenty five, We'll go 0:09:21.800 --> 0:09:24.360 out to Taiwan next this Spoomberg Technology. 0:09:35.640 --> 0:09:38.880 We're outside the venue here where Jensen Wang just kicked 0:09:38.880 --> 0:09:41.439 off Kombu Techs for twenty twenty five. This is one 0:09:41.480 --> 0:09:44.360 of the biggest tech events in Asia and Jensen Wang, 0:09:44.400 --> 0:09:46.640 the founder and CEO of Nvidia, was on stage for 0:09:46.760 --> 0:09:50.160 ninety minutes at talking through his vision for AI and 0:09:50.200 --> 0:09:52.280 the products that are going to be needed to sustain it. 0:09:52.360 --> 0:09:57.960 Today we're announcing the Fox Kind Taiwan. The Taiwanese government 0:09:58.440 --> 0:10:05.040 and VideA. We're going to build the first giant AI supercomputer. 0:10:05.320 --> 0:10:09.040 The focus was on greater AI applications, so specifically the 0:10:09.040 --> 0:10:13.520 integration of AI into products like humanoid robots, also autonomous 0:10:13.600 --> 0:10:16.320 driving vehicles. On the product front, we did get an 0:10:16.400 --> 0:10:19.560 update on the next generation GB three hundred system that 0:10:19.720 --> 0:10:22.760 is expected to come in the third quarter of this year. Also, 0:10:22.880 --> 0:10:25.000 Nvideo is going to be offering a new version of 0:10:25.040 --> 0:10:29.000 the complete computers that it provides to its data center customers. 0:10:29.040 --> 0:10:30.720 Now what that means in a nutshell is that it's 0:10:30.760 --> 0:10:33.480 going to be opening its AI servers to chips from 0:10:33.520 --> 0:10:37.439 other companies. This is its names like Microsoft, Amazon, they 0:10:37.480 --> 0:10:38.880 try to design their own. 0:10:38.760 --> 0:10:40.400 Processors and accelerators. 0:10:40.720 --> 0:10:46.200 In Taipei, I'm Annabel Drawlers Bloomberg News for more. 0:10:46.040 --> 0:10:49.440 On computext and Nvidea's latest revealed Bloombozine. King joins us 0:10:49.440 --> 0:10:52.480 here in San Francisco. What we're talking about is envy 0:10:52.520 --> 0:10:55.199 link Fusion. You and I have sat through many briefings 0:10:55.520 --> 0:10:58.280 about envy link Fusion and read and written about a 0:10:58.280 --> 0:10:58.560 lot of it. 0:10:58.600 --> 0:11:00.400 But it's a high speed into connect. 0:11:00.440 --> 0:11:03.040 You can connect lots of GPUs and in this case 0:11:03.080 --> 0:11:04.080 also CPUs. 0:11:04.440 --> 0:11:06.800 The main point here is in Vidia is. 0:11:06.760 --> 0:11:11.079 Saying if you are a hyperscaler, perhaps with custom Silicon, 0:11:11.480 --> 0:11:15.080 then we can allow you into data centers where we dominate, 0:11:15.480 --> 0:11:18.280 and it kind of opens up this place where everyone 0:11:18.360 --> 0:11:21.439 is not only and solely reliant on one single name, 0:11:21.440 --> 0:11:22.160 which is in video. 0:11:22.760 --> 0:11:24.360 I think the other way to look at this would 0:11:24.400 --> 0:11:27.880 be it's a business decision, right if you have your 0:11:27.880 --> 0:11:32.920 biggest customers who are essentially creating rival efforts, rival efforts 0:11:32.920 --> 0:11:34.720 that may one day mean that they need less of 0:11:34.760 --> 0:11:37.920 you why not make it easier to actually work with 0:11:37.960 --> 0:11:40.000 you say hey, great, yeah you've got a great CPU, 0:11:40.000 --> 0:11:42.080 come work with us. Hey you've got a great GPU, 0:11:42.120 --> 0:11:44.360 Come work with us. This is a way to keep 0:11:44.440 --> 0:11:48.640 people in in Video's ecosystem and to stop them going elsewhere. 0:11:48.920 --> 0:11:49.640 That's the pitch. 0:11:49.960 --> 0:11:53.920 Computexts is a really big deal, and in VideA seems 0:11:53.960 --> 0:11:56.520 to have dominated it in more recent years. What else 0:11:56.520 --> 0:11:59.440 do we learn about things of substance that they're actually 0:11:59.480 --> 0:12:00.400 doing at all? 0:12:00.640 --> 0:12:03.680 Anything of substance, Well, computext wasn't a big deal up 0:12:03.720 --> 0:12:05.920 until in Video basically made it a big deal again 0:12:05.920 --> 0:12:08.400 when they started using it on this worldwide trip that 0:12:08.440 --> 0:12:08.760 they do. 0:12:09.200 --> 0:12:10.120 To keep the. 0:12:10.120 --> 0:12:13.439 Air momentum going as a show, it was definitely fading away. 0:12:13.480 --> 0:12:16.800 So they put a lot of updates of things out there, robotics, 0:12:18.240 --> 0:12:21.400 new servers, new designs for data centers, and basically just 0:12:21.440 --> 0:12:25.000 trying to keep the momentum of this massive AI infrastructure 0:12:25.000 --> 0:12:25.720 build out going. 0:12:26.080 --> 0:12:28.360 Is there anything else happening at computext that is not 0:12:28.640 --> 0:12:29.520 in Video related? 0:12:29.760 --> 0:12:33.679 Well, our old friend Christiano Amon actually appeared on stage 0:12:33.720 --> 0:12:38.320 with Qualcom right the Corecom CEO. As we reported a 0:12:38.360 --> 0:12:41.000 long time ago, they want to get into the data 0:12:41.040 --> 0:12:44.600 center with their technology. This is part of his diversification 0:12:44.760 --> 0:12:47.319 and if you can't beat them, join them. So he's 0:12:47.360 --> 0:12:50.480 there saying we'll work with in video as a step 0:12:50.520 --> 0:12:53.840 towards the data center strategy, and that is very pragmatic 0:12:53.880 --> 0:12:54.920 and we'll see how it works out. 0:12:55.000 --> 0:12:58.640 Okay, Bloombozie and King, who leads our coverage of semiconductors, 0:12:58.960 --> 0:13:00.640 Thank you very much. I want to stay on that 0:13:00.720 --> 0:13:04.440 news out of Computex in Taiwan and bringing Michelle Geider. 0:13:04.520 --> 0:13:07.040 She's the CEO of the Crash Institute for Tech Diplomacy 0:13:07.280 --> 0:13:10.920 at Purdue. She's also served as Assistant Secretary of State 0:13:10.960 --> 0:13:14.120 for Global Public Affairs under the first Trump administration between 0:13:14.120 --> 0:13:18.640 twenty eighteen and twenty twenty. For me away from the 0:13:18.679 --> 0:13:24.840 technology news, the absolute key piece of importance was Jensen 0:13:24.880 --> 0:13:28.200 one talking about his relationship with Taiwan and in Vidia's 0:13:28.320 --> 0:13:29.319 relationship with Taiwan. 0:13:29.679 --> 0:13:31.080 The basic plan is to. 0:13:30.960 --> 0:13:33.760 Build a supercomputer for Taiwan, but he was kind of 0:13:33.760 --> 0:13:35.920 at pains to point out that this is in partnership 0:13:35.960 --> 0:13:41.040 with TSMC and other leading names that are Taiwanese champions. 0:13:41.360 --> 0:13:43.800 Purely from a geopolitical perspective. 0:13:43.720 --> 0:13:46.840 How crucial was that or how high level was that 0:13:47.320 --> 0:13:48.880 for Jensen Wong to say such a thing. 0:13:50.440 --> 0:13:54.400 It's very important and in video with Jensen Wang at 0:13:54.400 --> 0:13:57.040 the Helm has been on quite the tech diplomacy tour, 0:13:57.120 --> 0:14:00.320 the chip diplomacy tour really over the past few in 0:14:00.320 --> 0:14:03.120 the past week, including in Taiwan, as you reference where 0:14:03.120 --> 0:14:05.640 they're talking about building a supercomputer. Taiwan is a very 0:14:05.640 --> 0:14:08.240 strategic partner and trusted partner of the United States. 0:14:08.240 --> 0:14:10.359 It's very important for our shared security. 0:14:11.080 --> 0:14:14.199 And that's right off the heels of some major deals 0:14:14.200 --> 0:14:17.560 announced in the Golf over the weekend and late last 0:14:17.600 --> 0:14:20.760 week with Saudi Arabia with a UAE who also want 0:14:20.760 --> 0:14:23.640 to be global capitals when it comes to artificial intelligence, 0:14:23.760 --> 0:14:26.200 and there's going to be more sharing of advanced chips there. 0:14:26.280 --> 0:14:29.160 So all of that is really important as the United 0:14:29.200 --> 0:14:34.200 States seeks to secure trusted partnerships with important partners across 0:14:34.200 --> 0:14:37.360 the globe when it comes to advance semiconductors. 0:14:39.000 --> 0:14:43.280 Michelle, those deals with Golf nations, how concerned are you 0:14:43.760 --> 0:14:46.920 that they can act as sort of backdoor indirect access 0:14:46.960 --> 0:14:49.320 for China to US technology. 0:14:50.960 --> 0:14:54.280 It's definitely a concern among some in the US government. 0:14:54.400 --> 0:14:57.760 Including in Congress. But I'll say the big picture is 0:14:57.800 --> 0:15:01.359 we have to do two things. One is maximum proliferation 0:15:01.680 --> 0:15:05.160 of American technology, including our semiconductors, because if it's not 0:15:05.240 --> 0:15:08.440 our technology, it's going to be our adversaries technology like China, 0:15:08.520 --> 0:15:11.480 So max proliferation is really important. At the same time, 0:15:11.520 --> 0:15:14.720 we also have to have maximum security controls to make 0:15:14.760 --> 0:15:18.240 sure that those technologies, including chips, don't get diverted toward 0:15:18.280 --> 0:15:19.520 adversaries like China. 0:15:19.600 --> 0:15:20.760 Those two things have to happen. 0:15:20.880 --> 0:15:24.440 It can be done, but it requires that companies and 0:15:24.640 --> 0:15:27.000 the US government and our allies by the way, work 0:15:27.080 --> 0:15:28.120 really closely together. 0:15:28.160 --> 0:15:30.000 And that's what tech diplomacy is all about. 0:15:30.120 --> 0:15:32.480 And I think you see the White House, the Commerce Department, 0:15:32.560 --> 0:15:35.280 as well as leaders in Congress with the new Chip 0:15:35.360 --> 0:15:38.640 Security Act making sure that those security controls are in place. 0:15:39.920 --> 0:15:43.240 Jensen Wong's text diplomacy, I think it is worth lingering 0:15:43.240 --> 0:15:49.520 on Taiwan is clearly important to Nvidia, and we remind 0:15:49.520 --> 0:15:53.040 ourselves that the mainstay of TSMC's lead edge fabrication is 0:15:53.040 --> 0:15:56.920 in Taiwan. But China is also important to Jensen one 0:15:57.040 --> 0:16:00.120 whether that market is closed to him or not, is 0:16:00.160 --> 0:16:01.360 he getting the balance right. 0:16:03.080 --> 0:16:05.680 Well, it's interesting that you mentioned that because on this 0:16:05.720 --> 0:16:08.800 tech diplomacy tour there were the deals announced in the 0:16:08.800 --> 0:16:11.240 golf there's the news in Taiwan today. But let's also 0:16:11.280 --> 0:16:14.240 not forget that he announced a new research center in 0:16:14.280 --> 0:16:17.080 Shanghai just a few days ago. And it's no coincidence 0:16:17.120 --> 0:16:18.800 that all of these things are happening in the same time. 0:16:18.840 --> 0:16:21.960 And look, he's got a global business to run. He 0:16:22.000 --> 0:16:24.680 definitely has multiple interests that he's trying to meet. But 0:16:24.800 --> 0:16:27.280 we have to make sure from the US national security 0:16:27.360 --> 0:16:31.360 standpoint is that all of that doesn't endanger American national 0:16:31.360 --> 0:16:34.360 security and give some of our most advanced technologies to China. 0:16:34.800 --> 0:16:37.640 So the role that he plays in working together with 0:16:37.720 --> 0:16:40.520 our government, we have to make sure that business objectives 0:16:40.800 --> 0:16:43.120 meet national security objectives. And it can be done, but 0:16:43.120 --> 0:16:44.400 we have to be working together in. 0:16:44.400 --> 0:16:45.040 Order to do it. 0:16:46.480 --> 0:16:50.080 In January of this year, Anderill's co founder Pamelucky told 0:16:50.080 --> 0:16:54.320 me point blank that they are preparing for scenario where 0:16:54.480 --> 0:16:58.280 China invades Taiwan at some point in the coming years. 0:16:58.600 --> 0:17:04.440 It is one severe come take that argument and extrapolate 0:17:04.520 --> 0:17:09.520 it out to ai infrastructure and semiconductive manufacturing and Taiwan's 0:17:09.760 --> 0:17:12.679 role in everything that we've just discussed. 0:17:13.880 --> 0:17:16.040 Well, it's a reason that we have to make sure 0:17:16.080 --> 0:17:19.760 Taiwan's resilience and the US resilience when it comes to 0:17:19.800 --> 0:17:24.239 these critical sectors like semiconductors is really strong, and so 0:17:24.359 --> 0:17:28.359 partnerships like with Nvidia TSMC is investing another one hundred 0:17:28.359 --> 0:17:30.520 billion dollars year in the United States to build out 0:17:30.520 --> 0:17:33.040 its FABS, to build out advanced packaging facilities. 0:17:33.240 --> 0:17:35.439 All of that has to scale so. 0:17:35.320 --> 0:17:38.160 That we have some more strategic partners and it's also 0:17:38.160 --> 0:17:40.879 with other allies like Japan, like Korea s Khiiniz is 0:17:40.920 --> 0:17:45.840 investing in an advanced manufacturing facility for semiconductors at Predue 0:17:45.840 --> 0:17:48.320 Research part where the CROC Institute is. All of that 0:17:48.359 --> 0:17:50.600 has to happen more deeply in its scale in order 0:17:50.640 --> 0:17:53.600 to make sure our shared resilience and security, because. 0:17:53.359 --> 0:17:55.240 We have to be prepared for a scenario like that. 0:17:55.600 --> 0:17:58.399 But rather than just try to slow China down, we 0:17:58.520 --> 0:18:01.080 have to make sure that we are turbot our own 0:18:01.119 --> 0:18:04.600 supply chains, our own resilience in our collaboration with our allies. 0:18:05.480 --> 0:18:08.360 Michelle Guided, CEO of the Cracked Institute for Tech Diplomacy 0:18:08.400 --> 0:18:18.200 at Purdue, Thank you very much. Okay, take a quick 0:18:18.240 --> 0:18:20.800 look at shares of Ali Barber and Apple. The New 0:18:20.880 --> 0:18:24.800 York Times reporting that the Trump administration has raised concerns 0:18:24.840 --> 0:18:27.679 over a potential AI deal between Apple and Ali Barba 0:18:27.880 --> 0:18:30.320 that would allow the Chinese firm to make it's AI 0:18:30.720 --> 0:18:32.680 available to use on iPhones in China. 0:18:32.720 --> 0:18:34.800 We will track that story as we go, and we 0:18:34.920 --> 0:18:35.639 stay on Apple. 0:18:36.160 --> 0:18:40.000 The tech giant promised a bold leap into AI, but 0:18:40.160 --> 0:18:43.880 instead Siri has been left stumbling and the company's AI 0:18:44.000 --> 0:18:46.879 ambitions are lagging behind rivals. It's the subject of the 0:18:46.960 --> 0:18:51.120 latest Bloomberg Big Take, and its author Mark German joins us. Now, 0:18:51.160 --> 0:18:54.760 this is a deeply reported piece about the people inside 0:18:54.800 --> 0:18:58.960 Apple working on AI, the rollout of Siri and Apple Intelligence. 0:18:59.040 --> 0:19:02.280 But if you could just summ arise the pace, how 0:19:02.320 --> 0:19:03.359 would you summarize it? 0:19:03.600 --> 0:19:05.720 I think the best way to summarize it is that 0:19:05.800 --> 0:19:09.120 Apple has a history of coming into emerging areas late. 0:19:09.280 --> 0:19:13.280 You saw that with tablets, smart watches and B three players, 0:19:13.400 --> 0:19:16.919 even smartphones. But they've come in and then they've destroyed 0:19:17.000 --> 0:19:20.040 or vanquished the competition. We've seen that with the iPod, 0:19:20.119 --> 0:19:21.280 the iPhone, the iPad, and. 0:19:21.200 --> 0:19:23.280 The Apple Watch with AI. 0:19:23.440 --> 0:19:27.399 Not only were they late compared to many of the competition, right, 0:19:27.640 --> 0:19:29.760 but they're not the best. In fact, it's fair to 0:19:29.800 --> 0:19:33.120 say all the big technology companies, they're behind more than 0:19:33.119 --> 0:19:39.280 anyone else. And there are philosophical issues, management issues, prioritization issues, 0:19:39.320 --> 0:19:44.199 financial issues, perhaps even innovation issues, and many questions that 0:19:44.280 --> 0:19:48.239 led to this point. Apple was caught off guard when 0:19:48.320 --> 0:19:51.280 chat GPT launched in twenty twenty two. There are questions 0:19:51.320 --> 0:19:54.760 about how a company of Apple scale and expertise could 0:19:54.760 --> 0:19:57.680 have not seen this coming. Then there are questions of 0:19:57.960 --> 0:20:01.080 how they released, with all their resources products that appeared 0:20:01.080 --> 0:20:03.440 so rush to market, And this story takes a deep 0:20:03.480 --> 0:20:05.560 look at the how and why about all of that. 0:20:06.520 --> 0:20:10.840 I remember, not necessarily twenty eleven specifically, but twenty eleven 0:20:10.840 --> 0:20:14.800 and twelve thirteen early editions of Syria and being like, Wow, Siri, 0:20:14.960 --> 0:20:18.240 what is this? This is astonishing, and then quickly it 0:20:18.320 --> 0:20:19.119 just fades away. 0:20:19.880 --> 0:20:22.160 At the heart of your reporting. 0:20:21.760 --> 0:20:25.200 Is the hiring of a key executive in twenty sixteen. 0:20:25.560 --> 0:20:28.280 Who is that person and why do you follow that 0:20:28.400 --> 0:20:30.080 executive's passage through Apple? 0:20:30.480 --> 0:20:31.680 Yes, John g Andrea. 0:20:31.760 --> 0:20:34.280 He was the head of search and AI at Google 0:20:34.520 --> 0:20:37.520 until Apple hired him in twenty eighteen, so about seven 0:20:37.600 --> 0:20:40.280 years ago. And he runs the show when it comes 0:20:40.280 --> 0:20:42.080 to AI, or at least he did run the show 0:20:42.119 --> 0:20:44.520 when it came to AI. For the last several years, 0:20:44.520 --> 0:20:47.120 he was in charge of SIRI, in charge of foundation 0:20:47.280 --> 0:20:53.440 models LMS, AI testing AI infrastructure teams designed to annotate 0:20:53.520 --> 0:20:56.600 in train data to determine how well llms and the 0:20:56.640 --> 0:21:00.159 different AI technologies are working. And him come right to 0:21:00.400 --> 0:21:02.840