WEBVTT - Tech Traders Shrug Off Maduro Ouster 0:00:02.520 --> 0:00:12.920 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:12.920 --> 0:00:16.760 from coast to coast with Caroline Hyde in New York 0:00:17.000 --> 0:00:20.160 and Eva Though in San Francisco. 0:00:22.079 --> 0:00:24.600 This is Bloomberg Tech coming up the AI trade warring 0:00:24.640 --> 0:00:27.159 back to kick off twenty twenty six Tech doogs in 0:00:27.200 --> 0:00:31.400 the Green. We analyze the optimism plus Tesla's China factory shipments. 0:00:31.440 --> 0:00:33.960 They rise in December, but still drop in twenty twenty five. 0:00:34.320 --> 0:00:37.280 What that says about global EV demand and what do 0:00:37.440 --> 0:00:40.480 expect from CES this year. We'll go live to Las 0:00:40.560 --> 0:00:43.600 Vegas to give you a preview of key conversations across 0:00:43.600 --> 0:00:48.920 our network. But first we digest what the markets are digesting. 0:00:49.320 --> 0:00:52.320 We are thinking about a very macro event, a geopolitical 0:00:52.320 --> 0:00:56.280 event that occurred this weekend, nocus Maduro and his wife, 0:00:56.320 --> 0:00:59.680 of course, being removed from Venezuela and being brought here 0:00:59.720 --> 0:01:04.000 to Me York following a series of airstrikes that hit 0:01:04.080 --> 0:01:08.680 Caracas early Saturday, and the market shakes off that geopolitical risk. 0:01:08.720 --> 0:01:10.160 Thus far, we're up more than a percentage point in 0:01:10.200 --> 0:01:12.600 the Nasdaq. We're looking more towards an AI trade. We 0:01:12.600 --> 0:01:14.520 go under the hood, though there is search for safety. 0:01:14.800 --> 0:01:17.479 You have seen seeing gold rebound. Remember it's sold off 0:01:17.520 --> 0:01:20.360 hard into the new year. Trade Bitcoin currently up to 0:01:20.360 --> 0:01:22.840 two point nine percent as we see not just digital 0:01:22.840 --> 0:01:24.920 gold on the higher side that's at ninety three thousand, 0:01:25.080 --> 0:01:27.640 but spot gold at two point seven percent higher. I'm 0:01:27.680 --> 0:01:30.240 looking at the US dollar currently trading flat, but we 0:01:30.360 --> 0:01:33.319 had seen significant moves in the US solar more broadly, 0:01:33.360 --> 0:01:35.280 and we want to go to that macro level event 0:01:35.400 --> 0:01:39.120 right now because Venezuelan president Nicolas Maduro and his wife, 0:01:39.440 --> 0:01:44.280 Celia Flores will face trial, that is, on narco terrorism 0:01:44.360 --> 0:01:47.640 charges in New York in the afternoon. Joining us now 0:01:47.680 --> 0:01:51.080 Blomberg Miles Miller, who stands by in Brooklyn right now, 0:01:51.400 --> 0:01:54.120 just talk to us about the imminence of the arrival 0:01:54.560 --> 0:01:56.320 of the ousted president. 0:02:00.760 --> 0:02:06.360 Yeah, they were taken by an armored Bearcat vehicle to 0:02:06.640 --> 0:02:10.480 a landing pad in Brooklyn, and then from there they 0:02:10.560 --> 0:02:15.720 flew across the harbor, past the Statue of Liberty to 0:02:15.960 --> 0:02:19.360 the Wall Street helipad and we're motorcated here. Of course. 0:02:19.440 --> 0:02:23.040 Nicholas Maduro and his wife are both here at federal 0:02:23.040 --> 0:02:25.640 court in Lower Manhattan this morning and they're facing narco 0:02:25.840 --> 0:02:31.280 terrorism charges Federal prosecutors alleged that Maduro intended to benefit 0:02:31.400 --> 0:02:36.040 terrorist organizations including park Eln, Sineloa, Cartel, trend To Agras, 0:02:36.080 --> 0:02:39.120 and the Zetas. And here's what prosecutors say happened from 0:02:39.160 --> 0:02:41.440 two thousand to two thousand and six while he was 0:02:41.680 --> 0:02:45.000 a member of the National Assembly. They say Maduro moved 0:02:45.040 --> 0:02:49.440 cocaine under the protection of the Venezuelan law enforcement And 0:02:49.520 --> 0:02:52.359 if that is not enough, they say that they were 0:02:52.400 --> 0:02:56.960 able to secure diplomatic passports for some of these drug 0:02:57.000 --> 0:03:01.120 traffickers to move drugs and money in and out of 0:03:01.240 --> 0:03:05.399 Venezuela from places like Columbia and Mexico. In one instance, 0:03:05.440 --> 0:03:09.080 we are told that they use a state oil plane, 0:03:09.120 --> 0:03:11.680 a plane for the state oil company, in order to 0:03:11.720 --> 0:03:14.520 facilitate the drugs moving in and out. It's not just 0:03:14.720 --> 0:03:17.359 Maduro and his wife who were charged in this. Their 0:03:17.440 --> 0:03:20.400 son is charged as well with being part of this 0:03:20.520 --> 0:03:24.720 drug conspiracy. If convicted, he faces the possibility of life 0:03:24.720 --> 0:03:27.640 in a supermax prison here in the United States. And 0:03:27.680 --> 0:03:30.200 we finally got some information about his legal team. We 0:03:30.240 --> 0:03:33.520 are learning that he's going to be represented by Barry Pollock. 0:03:33.840 --> 0:03:36.840 That's the same person who represented Julian assand as well 0:03:36.840 --> 0:03:41.240 as David Wilstrom, who represented the brother of Juan Orlando Hernandez, 0:03:41.280 --> 0:03:44.440 of course, the former president of Honduras who was charged 0:03:44.480 --> 0:03:46.760 right here in the southern district and was pardoned just 0:03:46.800 --> 0:03:48.640 a few weeks ago by President Trump. 0:03:49.320 --> 0:03:52.680 Miles, you standby in Brooklyn for us, But many wonder 0:03:53.400 --> 0:03:55.880 how this is being digested in Venezuela. What do we 0:03:55.920 --> 0:04:00.360 know about how Manduro is being deemed by Venezuelan leadership 0:04:00.440 --> 0:04:00.720 right now? 0:04:00.720 --> 0:04:06.960 And as people, Yeah, you know, we heard from the 0:04:07.040 --> 0:04:10.360 Vice president of Venezuela that you know, she did not 0:04:10.560 --> 0:04:14.080 necessarily agree what would happen there, and she, of course 0:04:14.200 --> 0:04:18.080 is being the person who is taking control of the country, 0:04:18.160 --> 0:04:20.359 and it's going to be an interesting time there to 0:04:20.400 --> 0:04:24.120 see just what she does, how much she'll allow the 0:04:24.200 --> 0:04:27.440 United States to say, run the state oil company to 0:04:27.600 --> 0:04:31.400 control the oil in Venezuela, and if she doesn't, what 0:04:31.480 --> 0:04:33.479 will happen to her. But it's not just what you're 0:04:33.480 --> 0:04:36.200 hearing on the streets of Venezuela, people who may be 0:04:36.360 --> 0:04:39.839 frustrated by what they saw. You've got folks on both 0:04:39.880 --> 0:04:43.599 sides here, protesting, folks who believe Maduro should still be 0:04:43.680 --> 0:04:46.159 in power and want him to be released at his 0:04:46.240 --> 0:04:48.760 court hearing, and those who say they fled to the 0:04:48.880 --> 0:04:54.920 United States because of Maduro's regime. You know, the President 0:04:55.000 --> 0:04:58.760 said just yesterday that the United States will run Venezuela. 0:04:58.880 --> 0:05:00.719 Didn't give too many details, but I think it will 0:05:00.720 --> 0:05:02.880 have a lot to do with the oil and the 0:05:02.880 --> 0:05:05.840 strategic oil reserves stare as well. 0:05:05.880 --> 0:05:08.839 Miles Mena, We so appreciate you, of course standing live 0:05:08.880 --> 0:05:11.240 outside and I correct myself, the Southern District of New 0:05:11.320 --> 0:05:13.880 York Court in Lower Manhattan. Will we were returning to 0:05:13.920 --> 0:05:18.000 you later. Meanwhile, US stocks sort of shrugged off these moves. 0:05:18.120 --> 0:05:21.120 The powered higher this morning as demand for tech shares 0:05:21.360 --> 0:05:24.480 remained strong even after the ousto of Venezuela's president, fan 0:05:24.560 --> 0:05:26.880 worries over geo political risk. Let's get you an invest 0:05:26.880 --> 0:05:28.960 to take. Anna Ruffin is here with us, founder and 0:05:29.000 --> 0:05:32.840 CEO of Grenadilla Advisory, So your advisory is necessary right now? Anna, 0:05:32.960 --> 0:05:34.479 is it right for the market to shape this off? 0:05:36.120 --> 0:05:36.720 Good morning. 0:05:37.240 --> 0:05:40.240 I don't think this has lot short term consequences for 0:05:40.279 --> 0:05:42.400 the markets, and I think there's a reason why it's 0:05:42.400 --> 0:05:45.120 shirking it off. It's not a short term trading event. 0:05:45.640 --> 0:05:48.599 I do think that there's a long term consequence of this. 0:05:49.480 --> 0:05:52.719 I know that energy companies are soaring because of this 0:05:52.839 --> 0:05:54.600 idea that they will be able to go in and 0:05:54.800 --> 0:05:57.200 extract some of that oil, But frankly, that's not a 0:05:57.240 --> 0:06:00.760 twenty twenty sixth story. The longer place here really is 0:06:00.800 --> 0:06:04.560 I think geopolitical think about where oil matters. Russia seller 0:06:04.640 --> 0:06:07.279 of oil, China is buyer of oil, and of course 0:06:07.320 --> 0:06:09.440 Middle East we all know that there's a lot of 0:06:09.440 --> 0:06:11.960 oil involved there. So if we think about where the 0:06:12.040 --> 0:06:15.240 conflicts are around the world and where, where and how 0:06:15.279 --> 0:06:18.000 the US is involved in those conflicts, I think this 0:06:18.160 --> 0:06:21.479 move in Venezuela is more of a chess game that's 0:06:21.520 --> 0:06:23.920 a longer run game, rather than a short term move. 0:06:24.200 --> 0:06:27.640 Well, boy, has the tech investment community been trying to 0:06:27.680 --> 0:06:30.800 dissect the chess game that is US China trade and 0:06:30.920 --> 0:06:33.760 tariff How does it affect that in twenty twenty six 0:06:33.800 --> 0:06:34.680 do you think, Hannah. 0:06:35.880 --> 0:06:38.479 Well, you know, throughout twenty twenty six we're supposed to 0:06:38.520 --> 0:06:43.480 be talking with China about tariffs, and at the center 0:06:43.520 --> 0:06:47.120 of those tariff and trade talks really is where earth minerals, AI, 0:06:47.200 --> 0:06:50.040 chips all of those things, right, And so if you're 0:06:50.240 --> 0:06:53.040 China and you're looking at the development over the weekend 0:06:53.360 --> 0:06:57.520 and you realize that in terms of natural resources, US 0:06:57.640 --> 0:07:00.280 has taken control over a lot of the oil that 0:07:00.400 --> 0:07:02.880 they will need as well. It sort of changes the 0:07:03.000 --> 0:07:05.440 game and who has the upper hand in some of 0:07:05.480 --> 0:07:08.760 these talks that we're expecting to be in twenty twenty six. 0:07:09.080 --> 0:07:12.040 So I think this puts, you know, strategically speaking, the 0:07:12.160 --> 0:07:14.480 US in a more powerful position in some of these 0:07:14.520 --> 0:07:17.360 trade talks. So it'll be interesting to see how this 0:07:17.440 --> 0:07:19.640 all pans out in terms of our earth minerals and 0:07:19.680 --> 0:07:23.000 of course China buying potentially and video chips as well. 0:07:23.240 --> 0:07:26.080 Okay, So strategically thinking for an investor right now, is 0:07:26.120 --> 0:07:28.960 it wise to be powering video higher, to be seeing 0:07:29.000 --> 0:07:31.960 Tesla rocketing up on the green today? More broadly, should 0:07:31.960 --> 0:07:34.120 the AI trade be back on for twenty twenty six? 0:07:36.000 --> 0:07:38.360 I think twenty twenty six is going to be a 0:07:38.480 --> 0:07:40.840 very interesting year for some of this trade that we've 0:07:40.880 --> 0:07:44.480 seen powering through the years. I think, first of all, 0:07:44.520 --> 0:07:46.960 there is this idea that a lot of IPOs will 0:07:46.960 --> 0:07:49.800 come into play in twenty twenty six. We will see 0:07:49.920 --> 0:07:52.200 how easy or difficult it is for a lot of 0:07:52.200 --> 0:07:55.800 these companies to fundraise, especially those that have really really 0:07:55.880 --> 0:07:58.720 high valuations, whether or not the investors really have the 0:07:58.800 --> 0:08:01.920 appetite for these things. And as for Nvidia and Tesla, 0:08:01.960 --> 0:08:05.320 they have other problems really. I mean, Nvidia has issues 0:08:05.360 --> 0:08:09.240 with TPUs coming online, and even though I do think 0:08:09.240 --> 0:08:11.640 that they have a lot of market share, still there 0:08:11.640 --> 0:08:14.720 are things to think about. For Tesla, there's also bid right, 0:08:15.000 --> 0:08:18.160 So it's not so much that it is about AI 0:08:18.320 --> 0:08:21.120 powering through. I think there's real competition out there that 0:08:21.160 --> 0:08:23.040 these companies need to be thinking about. 0:08:23.120 --> 0:08:25.440 So it's interesting. We're going to be hearing from Jensen 0:08:25.480 --> 0:08:28.800 Wang later today at CES from Nissa Sou of AMD. 0:08:29.320 --> 0:08:31.320 What do you think they can give to the market 0:08:31.440 --> 0:08:34.560 that backs up the market share, certainly even video at least. 0:08:35.960 --> 0:08:40.840 Yeah, I think clearer guidance is definitely helpful. 0:08:41.440 --> 0:08:43.080 I know that the Nvidia has. 0:08:43.000 --> 0:08:45.560 Certainly given a clearer guidance for twenty twenty six, and 0:08:45.600 --> 0:08:47.680 there seems to be a lot of demand. But they're 0:08:47.679 --> 0:08:49.480 going to have to answer to sort of the next 0:08:49.520 --> 0:08:52.520 best thing, right, So what's beyond the black Well chips, 0:08:52.679 --> 0:08:56.000 what's beyond the relationships with open ai and other big 0:08:56.040 --> 0:08:58.960 players out there. I think investors need to hear something 0:08:59.080 --> 0:09:03.160 new in terms of partnerships as well as technological advancement 0:09:03.200 --> 0:09:05.800 for a lot of this excitement to continue into twenty 0:09:05.800 --> 0:09:06.360 twenty six. 0:09:06.840 --> 0:09:10.760 Sona, where do you stand in optimism versus pessimism for 0:09:10.800 --> 0:09:13.360 twenty twenty six If at this moment there are still 0:09:13.400 --> 0:09:15.880 many more questions and perhaps the market isn't factoring in 0:09:15.960 --> 0:09:18.160 some of the risks. Should you be buying in at 0:09:18.160 --> 0:09:18.720 these levels? 0:09:20.000 --> 0:09:21.960 Well, you know, if you're already invested. 0:09:22.240 --> 0:09:24.880 I think there's room for markets to run, but not 0:09:24.960 --> 0:09:28.520 without any volatility here. I don't think the market is 0:09:28.600 --> 0:09:31.880 so excited that, you know, analysts looking at fifteen percent 0:09:32.040 --> 0:09:35.680 year over year growth in ESMP five hundred companies. That 0:09:35.800 --> 0:09:38.520 might be exciting on a fundamental level, and hopefully it 0:09:38.559 --> 0:09:40.760 broadens out to the rest of the sectors in the 0:09:40.960 --> 0:09:45.480 SMP five hundred index, But there are multiples that are very, 0:09:45.559 --> 0:09:49.440 very stretched right so, especially with this talks with China 0:09:49.480 --> 0:09:52.480 that not only impacts tech but also other areas of 0:09:52.520 --> 0:09:55.520 the economy. I think we're due for some volatility, but 0:09:56.000 --> 0:09:58.840 weather the volatility by having a robust portfolio, and that 0:09:58.960 --> 0:10:01.480 is always recommended by the advisor community. 0:10:01.679 --> 0:10:06.400 What's been really interesting is well the ongoing drive dispersion 0:10:06.480 --> 0:10:09.400 between software and hardware names. We saw that in particular 0:10:09.480 --> 0:10:11.840 on Friday, and our great producer Dan Katz has been 0:10:11.880 --> 0:10:14.560 pointing out just the disparity that they saw in software 0:10:14.559 --> 0:10:16.800 indices that fell some three percent on Friday, and then 0:10:16.840 --> 0:10:19.559 we rallied in when you're looking at a semiconductor in 0:10:19.600 --> 0:10:21.640 next in particular more than four percent. Is that going 0:10:21.720 --> 0:10:23.640 to continue? How much more support do we need for 0:10:23.679 --> 0:10:26.160 software to show that it can benefit from the AI trade? 0:10:27.520 --> 0:10:28.160 Yeah? 0:10:28.320 --> 0:10:30.560 I think twenty twenty six is still going to be 0:10:30.640 --> 0:10:34.880 a picks and shovels year building these things out, and 0:10:34.960 --> 0:10:37.560 the demand there is for it. That's not something that 0:10:37.600 --> 0:10:39.400 can be done in a year or two. I think 0:10:39.440 --> 0:10:42.400 this is a multiple year story. And certainly on the 0:10:42.440 --> 0:10:46.800 software side, there's a lot of experimentation still. And if 0:10:46.840 --> 0:10:49.559 you're a customer sort of subscribing to some of these 0:10:49.600 --> 0:10:51.880 things and dipping your toes in, there's no guarantee that 0:10:51.880 --> 0:10:54.080 that's going to be sticky. I mean, I think we're 0:10:54.080 --> 0:10:57.199 thinking about things like SaaS where if you have a 0:10:57.240 --> 0:11:00.640 subscription to something and you incorporate those software into your 0:11:00.720 --> 0:11:02.920 day to day, it becomes super sticky. 0:11:03.559 --> 0:11:04.439 I don't think that's. 0:11:04.280 --> 0:11:07.520 Necessarily where we are with the software on the AI side. 0:11:07.520 --> 0:11:10.280 I think people are experimenting, so until we can see 0:11:10.280 --> 0:11:14.680 some stickiness in real incorporation, in integration of those software 0:11:14.720 --> 0:11:17.960 into the day to day of the businesses, I would 0:11:17.960 --> 0:11:20.560 be a little bit skeptical as well. And I think 0:11:20.559 --> 0:11:22.720 that's what the markets are actually expressing. 0:11:23.320 --> 0:11:26.439 Fascinating love getting a little healthy dose of skepticism today 0:11:26.440 --> 0:11:30.160 for Manor Rathman, Fanta, CEO of Grenadilla Advisory, Stay Well 0:11:30.200 --> 0:11:32.959 Happy twenty twenty six. Now coming up, the arrest of 0:11:33.000 --> 0:11:36.920 Venezuela's Nicholas Maduura is being watched far beyond Latin America 0:11:37.080 --> 0:11:41.040 what it could mean for US resolve and China Taiwan relations. 0:11:41.120 --> 0:11:50.560 This is a glouemleg tech the arrest of Venezuela's Nicholas 0:11:50.600 --> 0:11:54.840 madua when it's reverberating well beyond Latin America, some in Taiwan, 0:11:54.960 --> 0:11:57.080 when they're already viewing the move as a signal of 0:11:57.200 --> 0:11:59.800 US resolve, but the American strike is also star and 0:11:59.800 --> 0:12:03.280 cons that is offered a template how Beijing could handle 0:12:03.320 --> 0:12:05.640 tensions with Taiwan. Here to break it down, as BLUEBGG 0:12:05.679 --> 0:12:08.760 senior Tech editor Mike Sheppard. You bring us the global 0:12:08.840 --> 0:12:12.320 geopolitical perspective from a tech inside here. Mike, what should 0:12:12.320 --> 0:12:16.640 we think for Taiwan and its well ability to continue 0:12:16.679 --> 0:12:18.559 in its current state vise of EA China. 0:12:19.720 --> 0:12:21.920 Well, there are different schools of thought, Cara that you 0:12:22.200 --> 0:12:26.080 mapped out right there. One is from inside China. There 0:12:26.120 --> 0:12:29.520 is the nationalist perspective that, look, this offers us a 0:12:29.640 --> 0:12:33.319 rogue map perhaps of how we could retake control of 0:12:33.360 --> 0:12:36.840 the self governed island of Taiwan, which officials in Beijing 0:12:37.040 --> 0:12:40.040 view as a rogue province as one that they should 0:12:40.080 --> 0:12:44.080 bring back into the fold. Meanwhile, in Taiwan and Taipei 0:12:44.160 --> 0:12:48.040 officials they're actually finding some encouragement from the US move 0:12:48.120 --> 0:12:51.640 in ven As will as perhaps a way of signaling 0:12:51.760 --> 0:12:55.960 deterrence against Beijing to try to do anything similar there. 0:12:56.080 --> 0:12:58.640 And they see it that way for two reasons. One, 0:12:58.920 --> 0:13:04.120 they find that the US has military superiority over China 0:13:04.160 --> 0:13:06.280 in this area. China would not be able to pull 0:13:06.320 --> 0:13:10.160 off the same kind of maneuver that the US just 0:13:10.360 --> 0:13:14.400 did on Saturday in Caracas now. And the other reason 0:13:14.559 --> 0:13:17.280 is that they see that this signals that Trump will 0:13:17.400 --> 0:13:23.040 exercise US military power when he sees American strategic interests 0:13:23.080 --> 0:13:25.920 at risk, and they certainly would be if China moved 0:13:25.960 --> 0:13:29.360 against Taiwan, which is a lynchpin in the global chip 0:13:29.440 --> 0:13:30.080 supply chain. 0:13:30.200 --> 0:13:34.280 Yeah, go that, Mike, the national security implications of Taiwan. 0:13:34.440 --> 0:13:36.280 Why is that so crucial to the administration. 0:13:37.880 --> 0:13:42.000 Well, they still see Taiwan as so essential to being 0:13:42.400 --> 0:13:46.400 able to support a wide range of industries, especially the 0:13:46.440 --> 0:13:49.040 growing one on which they have placed so many bets, 0:13:49.240 --> 0:13:52.600 and that is artificial intelligence. Taiwan, far and away right 0:13:52.640 --> 0:13:56.080 now is the world center of production of the most 0:13:56.160 --> 0:13:59.600 advanced AI chips. Even with all the investment in production 0:13:59.679 --> 0:14:03.080 that is planned for the US in coming years, much 0:14:03.080 --> 0:14:06.200 of that is not online yet and is really still 0:14:06.240 --> 0:14:09.640 being produced in Taiwan on the self governed island. So 0:14:09.760 --> 0:14:14.679 any disruption to that supply chain would be catastrophic, especially 0:14:14.720 --> 0:14:17.319 for political reasons. If we saw any sort of military 0:14:17.360 --> 0:14:20.760 action by Beijing against the island, it would be disruptive. 0:14:20.760 --> 0:14:24.320 And Caro, we remember during the pandemic just how problematic 0:14:24.720 --> 0:14:28.520 those dislocations in the supply chain were and how they 0:14:28.600 --> 0:14:31.840 rippled through so the automotive sective and others, And that 0:14:31.960 --> 0:14:35.160 of course was before the advent of artificial intelligence and 0:14:35.520 --> 0:14:39.040 chat GPT and the wide scale uptake that we're seeing 0:14:39.160 --> 0:14:43.800 across the economy of this revolutionary new technology and what 0:14:44.000 --> 0:14:47.400 that would mean if suddenly the world lost access to it. 0:14:47.640 --> 0:14:51.320 We would likely see the US respond, It's unclear whether militarily, 0:14:51.360 --> 0:14:55.120 but certainly with sanctions, together with other nations like Japan 0:14:55.320 --> 0:14:58.560 and Australia that have already mused about leaping to the 0:14:58.600 --> 0:15:03.240 island's defense in the event of Beijing trying to intervene militarily. 0:15:03.480 --> 0:15:06.680 And it's important to remember while Trump has remained vague 0:15:06.680 --> 0:15:09.440 about whether he would step in with US forces to 0:15:09.520 --> 0:15:13.560 defend the island, the administration just approved an eleven billion 0:15:13.600 --> 0:15:17.480 dollar package of arms to be sold to Taiwan, which 0:15:17.520 --> 0:15:19.840 is one of the largest and recent memory care. 0:15:19.920 --> 0:15:22.960 Always with the deep analysis, Mike Shepherd, thanks for breaking 0:15:22.960 --> 0:15:26.200 that down. Meanwhile, look this geopolitical anxiety that we speak of, 0:15:26.400 --> 0:15:28.200 so I have no impact on the AI trade in 0:15:28.240 --> 0:15:30.840 that part of the world. Look at tsmc shares climb 0:15:30.880 --> 0:15:33.080 by the most it's April, as the company rides a 0:15:33.120 --> 0:15:36.520 wave of optimism of artificial intelligence. Demand from About Tech 0:15:36.520 --> 0:15:39.240 Executive editor Peter Elstrom joins us for more and we've 0:15:39.440 --> 0:15:41.960 heard how in many ways, there's two ways you can 0:15:42.000 --> 0:15:46.920 interpret what this impact from Latin America means on Taiwan. 0:15:47.240 --> 0:15:49.720 But TSMC great growth, it seems. 0:15:51.200 --> 0:15:53.640 Yeah, as you were just talking about with Mike, Taiwan 0:15:53.760 --> 0:15:56.720 really is at the heart of the AI boom right 0:15:56.720 --> 0:15:59.040 now when it comes to the production, as we saw 0:15:59.040 --> 0:16:03.080 with TSMC, the show are up by about five percent today, 0:16:03.080 --> 0:16:06.040 we had Golden Sacks raise its price target for the stock. 0:16:06.520 --> 0:16:09.160 They boosted it by thirty five percent. It's really an 0:16:09.200 --> 0:16:13.000 extraordinary increase in what they expect you can see from 0:16:13.040 --> 0:16:16.120 that stock. TSMC has done very well by making the 0:16:16.200 --> 0:16:19.040 chips for Nvidia. It also produces chips for Apple and 0:16:19.080 --> 0:16:22.040 other customers here. But really at Vidia has given it 0:16:22.080 --> 0:16:25.160 a ton of momentum recently that's put the company on 0:16:25.240 --> 0:16:27.960 a tear. Its market cap is now about one point 0:16:28.000 --> 0:16:31.640 four trillion dollars, up quite sharply, and Golden Sacks is 0:16:31.720 --> 0:16:33.920 telling you that it could run another forty percent from 0:16:33.960 --> 0:16:36.560 where it is right now. So truly talking about TSMC 0:16:36.680 --> 0:16:39.360 becoming a two trillion dollar company if they can hit 0:16:39.400 --> 0:16:42.000 that price target. That would largely be based on the 0:16:42.040 --> 0:16:46.160 momentum behind Invidia's growth and some of their other customers 0:16:46.200 --> 0:16:47.040 like Apple. 0:16:46.880 --> 0:16:49.360 And Nvidia has been helping Hanhai as well with its numbers. 0:16:51.040 --> 0:16:54.080 That's right, yeah, exactly. So Hanahi reported there some of 0:16:54.120 --> 0:16:57.640 their financial details for the fourth quarter, their revenue is 0:16:57.720 --> 0:17:01.120 up twenty two percent. Hanahai makes a well mikes iPhones 0:17:01.160 --> 0:17:05.200 for Apple two, which was its very most important business 0:17:05.200 --> 0:17:07.000 for a long period of time. But it also makes 0:17:07.280 --> 0:17:11.639 servers that include those Nvidia chips, so it's feeding servers 0:17:11.840 --> 0:17:15.159 in hardware to the hyperscalers that are building these enormous 0:17:15.240 --> 0:17:18.080 data centers across the US and across the globe. Really, 0:17:18.320 --> 0:17:21.760 it has a tremendous amount of momentum because the big hyperscalers, 0:17:21.800 --> 0:17:25.600 including Microsoft and Google are boosting their spending by more 0:17:25.640 --> 0:17:30.000 than thirty percent this year to hundreds of billions of dollars, 0:17:30.520 --> 0:17:32.560 and that's giving a big tailwind to Hanhai. So we 0:17:32.600 --> 0:17:36.320 saw Honhai boost its revenue for the fourth quarter twenty 0:17:36.359 --> 0:17:38.640 two percent. It came in a couple billion dollars more 0:17:38.640 --> 0:17:41.240 than expected at eighty three billion dollars. So it has 0:17:41.280 --> 0:17:43.520 a lot of momentum here. It looks like that demand 0:17:43.560 --> 0:17:46.320 for AI gear is increasing at least for now. 0:17:46.680 --> 0:17:49.440 Yeah, and ded iPhone seventeen did well. As you mentioned, 0:17:49.480 --> 0:17:52.840 a key supplier, Fox Gone also known as Hanhi. But Viz, 0:17:53.280 --> 0:17:55.600 going back to the start of this conversation, this is 0:17:55.640 --> 0:18:00.000 as we see ongoing geopolitical anxiety around Taiwan, how much 0:18:00.359 --> 0:18:04.119 always seeing these names invest in America and continue to 0:18:04.160 --> 0:18:06.040 do so well. 0:18:06.080 --> 0:18:11.120 They are strategic acts assets definitely, as you're talking about 0:18:11.119 --> 0:18:14.720 with Mike, TSMC the most important chip maker in the 0:18:14.760 --> 0:18:17.639 world by a mile because of the advanced chips that 0:18:17.680 --> 0:18:21.680 it makes for companies like Nvidia, Apple, etc. Has been 0:18:21.680 --> 0:18:24.520 building facilities in the United States. It's putting a water 0:18:24.600 --> 0:18:27.360 resources there. It got some money from the Chips Act 0:18:27.440 --> 0:18:30.399 under the Biden administration, has continued to build out those chips. 0:18:30.520 --> 0:18:32.640 It is making a lot of progress there. It's able 0:18:32.640 --> 0:18:35.520 to build fabs there that are quite productive, but they're 0:18:35.520 --> 0:18:37.560 not nearly as advanced as what they can do in 0:18:37.600 --> 0:18:40.280 Taiwan at this point. And this is part of the 0:18:40.359 --> 0:18:44.200 justification by the Taiwanese government and also TSMC itself. They 0:18:44.240 --> 0:18:46.879 want to have their most important assets in Taiwan. Partly 0:18:46.880 --> 0:18:49.520 it's an economies of scale issue. They can travel to 0:18:49.560 --> 0:18:52.640 those factories much more easily. Have the engineers learned from 0:18:52.680 --> 0:18:54.919 each other within those factories. They want to keep that 0:18:55.000 --> 0:18:59.719 most advanced production there. It's also, frankly a defensive maneuver 0:18:59.800 --> 0:19:02.400 for the government that if the most important assets are there, 0:19:02.480 --> 0:19:05.840 they know that the Trump administration or whatever US government 0:19:05.920 --> 0:19:08.359 is in power, is more inclined to come and make 0:19:08.400 --> 0:19:09.440 sure that they're protected. 0:19:10.040 --> 0:19:19.600 Peter Elstrom the global perspective, we thank you Tesla's China 0:19:19.640 --> 0:19:22.720 factory shipments. They came in today and showed they dropped 0:19:22.720 --> 0:19:25.359 in twenty twenty five, but there was a last minute 0:19:25.400 --> 0:19:28.439 bump in December where they grew as though as the 0:19:28.440 --> 0:19:31.239 company struggles with a slowdown in global sales. Look all 0:19:31.280 --> 0:19:33.280 of this, as I just mentioned, a little over ninety 0:19:33.280 --> 0:19:36.359 seven thousand were in December, just the fourth month and 0:19:36.400 --> 0:19:39.680 twenty twenty five that saw an increase springing Bluemos Craddell 0:19:39.840 --> 0:19:42.359 on all of this is the author of Hyperdrive Newsletters. 0:19:42.359 --> 0:19:45.879 So to get the straight Tesla had decent numbers in 0:19:45.920 --> 0:19:48.160 December in terms of growth month a month and indeed 0:19:48.240 --> 0:19:50.600 year on year, but it's just woeful for the whole 0:19:50.640 --> 0:19:51.840 picture of twenty twenty five. 0:19:53.280 --> 0:19:55.840 Yeah, that's right, Caroline. I think you know, we look 0:19:55.880 --> 0:19:59.320 at the December number, and it's actually you know, resilient 0:19:59.720 --> 0:20:02.560 and not just one of the rare up months for 0:20:02.600 --> 0:20:05.560 the year, but off of a relatively big month a 0:20:06.000 --> 0:20:08.280 year earlier. And yet when you look at the sort 0:20:08.320 --> 0:20:10.960 of whole picture for this company, you know, they had 0:20:11.400 --> 0:20:14.120 shipments throughout the year that were much lower and sort 0:20:14.160 --> 0:20:17.440 of reflecting this idea that they have some demand issues. 0:20:17.480 --> 0:20:20.040 And of course when we look at their shipment data, 0:20:20.160 --> 0:20:23.760 it's both for the local market and for some export 0:20:23.760 --> 0:20:24.080 as well. 0:20:24.119 --> 0:20:25.040 So we'll get a better. 0:20:24.880 --> 0:20:27.560 Sense in the coming weeks just how the sort of 0:20:27.680 --> 0:20:28.640 retail sales work. 0:20:28.840 --> 0:20:30.920 I mean, it's a second consecutive annual drop when you're 0:20:30.920 --> 0:20:33.920 looking at China shipments. All of this comes in context 0:20:33.920 --> 0:20:37.520 that BYD is now the biggest EV player worldwide. You've 0:20:37.520 --> 0:20:40.600 also got other competition coming from x phonemakers who pivot 0:20:40.640 --> 0:20:41.159 into cars. 0:20:42.640 --> 0:20:46.399 Yeah, and China's market is increasingly cut throat. You've seen 0:20:46.800 --> 0:20:49.240 Beijing try to sort of you know, put some pressure 0:20:49.280 --> 0:20:52.200 on the industry to knock this off and kind of 0:20:52.440 --> 0:20:55.240 you know, get to a point where pricing is a 0:20:55.240 --> 0:20:58.720 little bit more rational, and yet we only continue to 0:20:58.760 --> 0:21:03.040 see manufacturers, you know, offer new and more aggressive discounts, 0:21:03.320 --> 0:21:05.720 and that's been something that Tesla has really struggled to 0:21:05.760 --> 0:21:09.040 contend with throughout last year and even dating back to 0:21:09.080 --> 0:21:10.399 I would say twenty twenty three. 0:21:10.600 --> 0:21:12.960 Briefly here in the US, that's competition from Lucid. 0:21:14.880 --> 0:21:18.200 Yeah, and Lucid I think like Rivian is still a 0:21:18.320 --> 0:21:21.680 long ways behind Tesla. I think both of these companies 0:21:22.000 --> 0:21:24.600 had ambitions to give Elon Musk more of a challenge, 0:21:24.600 --> 0:21:27.240 if we've not seen that materialize. I think we saw 0:21:27.720 --> 0:21:31.240 some relatively strong numbers for that company in the fourth quarter, 0:21:31.520 --> 0:21:33.360