Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hyde in New York
Speaker 1: and Eva Though in San Francisco.
Speaker 2: This is Bloomberg Tech coming up the AI trade warring
Speaker 2: back to kick off twenty twenty six Tech doogs in
Speaker 2: the Green. We analyze the optimism plus Tesla's China factory shipments.
Speaker 2: They rise in December, but still drop in twenty twenty five.
Speaker 2: What that says about global EV demand and what do
Speaker 2: expect from CES this year. We'll go live to Las
Speaker 2: Vegas to give you a preview of key conversations across
Speaker 2: our network. But first we digest what the markets are digesting.
Speaker 2: We are thinking about a very macro event, a geopolitical
Speaker 2: event that occurred this weekend, nocus Maduro and his wife,
Speaker 2: of course, being removed from Venezuela and being brought here
Speaker 2: to Me York following a series of airstrikes that hit
Speaker 2: Caracas early Saturday, and the market shakes off that geopolitical risk.
Speaker 2: Thus far, we're up more than a percentage point in
Speaker 2: the Nasdaq. We're looking more towards an AI trade. We
Speaker 2: go under the hood, though there is search for safety.
Speaker 2: You have seen seeing gold rebound. Remember it's sold off
Speaker 2: hard into the new year. Trade Bitcoin currently up to
Speaker 2: two point nine percent as we see not just digital
Speaker 2: gold on the higher side that's at ninety three thousand,
Speaker 2: but spot gold at two point seven percent higher. I'm
Speaker 2: looking at the US dollar currently trading flat, but we
Speaker 2: had seen significant moves in the US solar more broadly,
Speaker 2: and we want to go to that macro level event
Speaker 2: right now because Venezuelan president Nicolas Maduro and his wife,
Speaker 2: Celia Flores will face trial, that is, on narco terrorism
Speaker 2: charges in New York in the afternoon. Joining us now
Speaker 2: Blomberg Miles Miller, who stands by in Brooklyn right now,
Speaker 2: just talk to us about the imminence of the arrival
Speaker 2: of the ousted president.
Speaker 3: Yeah, they were taken by an armored Bearcat vehicle to
Speaker 3: a landing pad in Brooklyn, and then from there they
Speaker 3: flew across the harbor, past the Statue of Liberty to
Speaker 3: the Wall Street helipad and we're motorcated here. Of course.
Speaker 3: Nicholas Maduro and his wife are both here at federal
Speaker 3: court in Lower Manhattan this morning and they're facing narco
Speaker 3: terrorism charges Federal prosecutors alleged that Maduro intended to benefit
Speaker 3: terrorist organizations including park Eln, Sineloa, Cartel, trend To Agras,
Speaker 3: and the Zetas. And here's what prosecutors say happened from
Speaker 3: two thousand to two thousand and six while he was
Speaker 3: a member of the National Assembly. They say Maduro moved
Speaker 3: cocaine under the protection of the Venezuelan law enforcement And
Speaker 3: if that is not enough, they say that they were
Speaker 3: able to secure diplomatic passports for some of these drug
Speaker 3: traffickers to move drugs and money in and out of
Speaker 3: Venezuela from places like Columbia and Mexico. In one instance,
Speaker 3: we are told that they use a state oil plane,
Speaker 3: a plane for the state oil company, in order to
Speaker 3: facilitate the drugs moving in and out. It's not just
Speaker 3: Maduro and his wife who were charged in this. Their
Speaker 3: son is charged as well with being part of this
Speaker 3: drug conspiracy. If convicted, he faces the possibility of life
Speaker 3: in a supermax prison here in the United States. And
Speaker 3: we finally got some information about his legal team. We
Speaker 3: are learning that he's going to be represented by Barry Pollock.
Speaker 3: That's the same person who represented Julian assand as well
Speaker 3: as David Wilstrom, who represented the brother of Juan Orlando Hernandez,
Speaker 3: of course, the former president of Honduras who was charged
Speaker 3: right here in the southern district and was pardoned just
Speaker 3: a few weeks ago by President Trump.
Speaker 2: Miles, you standby in Brooklyn for us, But many wonder
Speaker 2: how this is being digested in Venezuela. What do we
Speaker 2: know about how Manduro is being deemed by Venezuelan leadership
Speaker 2: right now?
Speaker 3: And as people, Yeah, you know, we heard from the
Speaker 3: Vice president of Venezuela that you know, she did not
Speaker 3: necessarily agree what would happen there, and she, of course
Speaker 3: is being the person who is taking control of the country,
Speaker 3: and it's going to be an interesting time there to
Speaker 3: see just what she does, how much she'll allow the
Speaker 3: United States to say, run the state oil company to
Speaker 3: control the oil in Venezuela, and if she doesn't, what
Speaker 3: will happen to her. But it's not just what you're
Speaker 3: hearing on the streets of Venezuela, people who may be
Speaker 3: frustrated by what they saw. You've got folks on both
Speaker 3: sides here, protesting, folks who believe Maduro should still be
Speaker 3: in power and want him to be released at his
Speaker 3: court hearing, and those who say they fled to the
Speaker 3: United States because of Maduro's regime. You know, the President
Speaker 3: said just yesterday that the United States will run Venezuela.
Speaker 3: Didn't give too many details, but I think it will
Speaker 3: have a lot to do with the oil and the
Speaker 3: strategic oil reserves stare as well.
Speaker 2: Miles Mena, We so appreciate you, of course standing live
Speaker 2: outside and I correct myself, the Southern District of New
Speaker 2: York Court in Lower Manhattan. Will we were returning to
Speaker 2: you later. Meanwhile, US stocks sort of shrugged off these moves.
Speaker 2: The powered higher this morning as demand for tech shares
Speaker 2: remained strong even after the ousto of Venezuela's president, fan
Speaker 2: worries over geo political risk. Let's get you an invest
Speaker 2: to take. Anna Ruffin is here with us, founder and
Speaker 2: CEO of Grenadilla Advisory, So your advisory is necessary right now? Anna,
Speaker 2: is it right for the market to shape this off?
Speaker 4: Good morning.
Speaker 5: I don't think this has lot short term consequences for
Speaker 5: the markets, and I think there's a reason why it's
Speaker 5: shirking it off. It's not a short term trading event.
Speaker 5: I do think that there's a long term consequence of this.
Speaker 5: I know that energy companies are soaring because of this
Speaker 5: idea that they will be able to go in and
Speaker 5: extract some of that oil, But frankly, that's not a
Speaker 5: twenty twenty sixth story. The longer place here really is
Speaker 5: I think geopolitical think about where oil matters. Russia seller
Speaker 5: of oil, China is buyer of oil, and of course
Speaker 5: Middle East we all know that there's a lot of
Speaker 5: oil involved there. So if we think about where the
Speaker 5: conflicts are around the world and where, where and how
Speaker 5: the US is involved in those conflicts, I think this
Speaker 5: move in Venezuela is more of a chess game that's
Speaker 5: a longer run game, rather than a short term move.
Speaker 2: Well, boy, has the tech investment community been trying to
Speaker 2: dissect the chess game that is US China trade and
Speaker 2: tariff How does it affect that in twenty twenty six
Speaker 2: do you think, Hannah.
Speaker 5: Well, you know, throughout twenty twenty six we're supposed to
Speaker 5: be talking with China about tariffs, and at the center
Speaker 5: of those tariff and trade talks really is where earth minerals, AI,
Speaker 5: chips all of those things, right, And so if you're
Speaker 5: China and you're looking at the development over the weekend
Speaker 5: and you realize that in terms of natural resources, US
Speaker 5: has taken control over a lot of the oil that
Speaker 5: they will need as well. It sort of changes the
Speaker 5: game and who has the upper hand in some of
Speaker 5: these talks that we're expecting to be in twenty twenty six.
Speaker 5: So I think this puts, you know, strategically speaking, the
Speaker 5: US in a more powerful position in some of these
Speaker 5: trade talks. So it'll be interesting to see how this
Speaker 5: all pans out in terms of our earth minerals and
Speaker 5: of course China buying potentially and video chips as well.
Speaker 2: Okay, So strategically thinking for an investor right now, is
Speaker 2: it wise to be powering video higher, to be seeing
Speaker 2: Tesla rocketing up on the green today? More broadly, should
Speaker 2: the AI trade be back on for twenty twenty six?
Speaker 5: I think twenty twenty six is going to be a
Speaker 5: very interesting year for some of this trade that we've
Speaker 5: seen powering through the years. I think, first of all,
Speaker 5: there is this idea that a lot of IPOs will
Speaker 5: come into play in twenty twenty six. We will see
Speaker 5: how easy or difficult it is for a lot of
Speaker 5: these companies to fundraise, especially those that have really really
Speaker 5: high valuations, whether or not the investors really have the
Speaker 5: appetite for these things. And as for Nvidia and Tesla,
Speaker 5: they have other problems really. I mean, Nvidia has issues
Speaker 5: with TPUs coming online, and even though I do think
Speaker 5: that they have a lot of market share, still there
Speaker 5: are things to think about. For Tesla, there's also bid right,
Speaker 5: So it's not so much that it is about AI
Speaker 5: powering through. I think there's real competition out there that
Speaker 5: these companies need to be thinking about.
Speaker 2: So it's interesting. We're going to be hearing from Jensen
Speaker 2: Wang later today at CES from Nissa Sou of AMD.
Speaker 2: What do you think they can give to the market
Speaker 2: that backs up the market share, certainly even video at least.
Speaker 5: Yeah, I think clearer guidance is definitely helpful.
Speaker 4: I know that the Nvidia has.
Speaker 5: Certainly given a clearer guidance for twenty twenty six, and
Speaker 5: there seems to be a lot of demand. But they're
Speaker 5: going to have to answer to sort of the next
Speaker 5: best thing, right, So what's beyond the black Well chips,
Speaker 5: what's beyond the relationships with open ai and other big
Speaker 5: players out there. I think investors need to hear something
Speaker 5: new in terms of partnerships as well as technological advancement
Speaker 5: for a lot of this excitement to continue into twenty
Speaker 5: twenty six.
Speaker 2: Sona, where do you stand in optimism versus pessimism for
Speaker 2: twenty twenty six If at this moment there are still
Speaker 2: many more questions and perhaps the market isn't factoring in
Speaker 2: some of the risks. Should you be buying in at
Speaker 2: these levels?
Speaker 4: Well, you know, if you're already invested.
Speaker 5: I think there's room for markets to run, but not
Speaker 5: without any volatility here. I don't think the market is
Speaker 5: so excited that, you know, analysts looking at fifteen percent
Speaker 5: year over year growth in ESMP five hundred companies. That
Speaker 5: might be exciting on a fundamental level, and hopefully it
Speaker 5: broadens out to the rest of the sectors in the
Speaker 5: SMP five hundred index, But there are multiples that are very,
Speaker 5: very stretched right so, especially with this talks with China
Speaker 5: that not only impacts tech but also other areas of
Speaker 5: the economy. I think we're due for some volatility, but
Speaker 5: weather the volatility by having a robust portfolio, and that
Speaker 5: is always recommended by the advisor community.
Speaker 2: What's been really interesting is well the ongoing drive dispersion
Speaker 2: between software and hardware names. We saw that in particular
Speaker 2: on Friday, and our great producer Dan Katz has been
Speaker 2: pointing out just the disparity that they saw in software
Speaker 2: indices that fell some three percent on Friday, and then
Speaker 2: we rallied in when you're looking at a semiconductor in
Speaker 2: next in particular more than four percent. Is that going
Speaker 2: to continue? How much more support do we need for
Speaker 2: software to show that it can benefit from the AI trade?
Speaker 4: Yeah?
Speaker 5: I think twenty twenty six is still going to be
Speaker 5: a picks and shovels year building these things out, and
Speaker 5: the demand there is for it. That's not something that
Speaker 5: can be done in a year or two. I think
Speaker 5: this is a multiple year story. And certainly on the
Speaker 5: software side, there's a lot of experimentation still. And if
Speaker 5: you're a customer sort of subscribing to some of these
Speaker 5: things and dipping your toes in, there's no guarantee that
Speaker 5: that's going to be sticky. I mean, I think we're
Speaker 5: thinking about things like SaaS where if you have a
Speaker 5: subscription to something and you incorporate those software into your
Speaker 5: day to day, it becomes super sticky.
Speaker 4: I don't think that's.
Speaker 5: Necessarily where we are with the software on the AI side.
Speaker 5: I think people are experimenting, so until we can see
Speaker 5: some stickiness in real incorporation, in integration of those software
Speaker 5: into the day to day of the businesses, I would
Speaker 5: be a little bit skeptical as well. And I think
Speaker 5: that's what the markets are actually expressing.
Speaker 2: Fascinating love getting a little healthy dose of skepticism today
Speaker 2: for Manor Rathman, Fanta, CEO of Grenadilla Advisory, Stay Well
Speaker 2: Happy twenty twenty six. Now coming up, the arrest of
Speaker 2: Venezuela's Nicholas Maduura is being watched far beyond Latin America
Speaker 2: what it could mean for US resolve and China Taiwan relations.
Speaker 2: This is a glouemleg tech the arrest of Venezuela's Nicholas
Speaker 2: madua when it's reverberating well beyond Latin America, some in Taiwan,
Speaker 2: when they're already viewing the move as a signal of
Speaker 2: US resolve, but the American strike is also star and
Speaker 2: cons that is offered a template how Beijing could handle
Speaker 2: tensions with Taiwan. Here to break it down, as BLUEBGG
Speaker 2: senior Tech editor Mike Sheppard. You bring us the global
Speaker 2: geopolitical perspective from a tech inside here. Mike, what should
Speaker 2: we think for Taiwan and its well ability to continue
Speaker 2: in its current state vise of EA China.
Speaker 6: Well, there are different schools of thought, Cara that you
Speaker 6: mapped out right there. One is from inside China. There
Speaker 6: is the nationalist perspective that, look, this offers us a
Speaker 6: rogue map perhaps of how we could retake control of
Speaker 6: the self governed island of Taiwan, which officials in Beijing
Speaker 6: view as a rogue province as one that they should
Speaker 6: bring back into the fold. Meanwhile, in Taiwan and Taipei
Speaker 6: officials they're actually finding some encouragement from the US move
Speaker 6: in ven As will as perhaps a way of signaling
Speaker 6: deterrence against Beijing to try to do anything similar there.
Speaker 6: And they see it that way for two reasons. One,
Speaker 6: they find that the US has military superiority over China
Speaker 6: in this area. China would not be able to pull
Speaker 6: off the same kind of maneuver that the US just
Speaker 6: did on Saturday in Caracas now. And the other reason
Speaker 6: is that they see that this signals that Trump will
Speaker 6: exercise US military power when he sees American strategic interests
Speaker 6: at risk, and they certainly would be if China moved
Speaker 6: against Taiwan, which is a lynchpin in the global chip
Speaker 6: supply chain.
Speaker 2: Yeah, go that, Mike, the national security implications of Taiwan.
Speaker 2: Why is that so crucial to the administration.
Speaker 6: Well, they still see Taiwan as so essential to being
Speaker 6: able to support a wide range of industries, especially the
Speaker 6: growing one on which they have placed so many bets,
Speaker 6: and that is artificial intelligence. Taiwan, far and away right
Speaker 6: now is the world center of production of the most
Speaker 6: advanced AI chips. Even with all the investment in production
Speaker 6: that is planned for the US in coming years, much
Speaker 6: of that is not online yet and is really still
Speaker 6: being produced in Taiwan on the self governed island. So
Speaker 6: any disruption to that supply chain would be catastrophic, especially
Speaker 6: for political reasons. If we saw any sort of military
Speaker 6: action by Beijing against the island, it would be disruptive.
Speaker 6: And Caro, we remember during the pandemic just how problematic
Speaker 6: those dislocations in the supply chain were and how they
Speaker 6: rippled through so the automotive sective and others, And that
Speaker 6: of course was before the advent of artificial intelligence and
Speaker 6: chat GPT and the wide scale uptake that we're seeing
Speaker 6: across the economy of this revolutionary new technology and what
Speaker 6: that would mean if suddenly the world lost access to it.
Speaker 6: We would likely see the US respond, It's unclear whether militarily,
Speaker 6: but certainly with sanctions, together with other nations like Japan
Speaker 6: and Australia that have already mused about leaping to the
Speaker 6: island's defense in the event of Beijing trying to intervene militarily.
Speaker 6: And it's important to remember while Trump has remained vague
Speaker 6: about whether he would step in with US forces to
Speaker 6: defend the island, the administration just approved an eleven billion
Speaker 6: dollar package of arms to be sold to Taiwan, which
Speaker 6: is one of the largest and recent memory care.
Speaker 2: Always with the deep analysis, Mike Shepherd, thanks for breaking
Speaker 2: that down. Meanwhile, look this geopolitical anxiety that we speak of,
Speaker 2: so I have no impact on the AI trade in
Speaker 2: that part of the world. Look at tsmc shares climb
Speaker 2: by the most it's April, as the company rides a
Speaker 2: wave of optimism of artificial intelligence. Demand from About Tech
Speaker 2: Executive editor Peter Elstrom joins us for more and we've
Speaker 2: heard how in many ways, there's two ways you can
Speaker 2: interpret what this impact from Latin America means on Taiwan.
Speaker 2: But TSMC great growth, it seems.
Speaker 7: Yeah, as you were just talking about with Mike, Taiwan
Speaker 7: really is at the heart of the AI boom right
Speaker 7: now when it comes to the production, as we saw
Speaker 7: with TSMC, the show are up by about five percent today,
Speaker 7: we had Golden Sacks raise its price target for the stock.
Speaker 7: They boosted it by thirty five percent. It's really an
Speaker 7: extraordinary increase in what they expect you can see from
Speaker 7: that stock. TSMC has done very well by making the
Speaker 7: chips for Nvidia. It also produces chips for Apple and
Speaker 7: other customers here. But really at Vidia has given it
Speaker 7: a ton of momentum recently that's put the company on
Speaker 7: a tear. Its market cap is now about one point
Speaker 7: four trillion dollars, up quite sharply, and Golden Sacks is
Speaker 7: telling you that it could run another forty percent from
Speaker 7: where it is right now. So truly talking about TSMC
Speaker 7: becoming a two trillion dollar company if they can hit
Speaker 7: that price target. That would largely be based on the
Speaker 7: momentum behind Invidia's growth and some of their other customers
Speaker 7: like Apple.
Speaker 2: And Nvidia has been helping Hanhai as well with its numbers.
Speaker 7: That's right, yeah, exactly. So Hanahi reported there some of
Speaker 7: their financial details for the fourth quarter, their revenue is
Speaker 7: up twenty two percent. Hanahai makes a well mikes iPhones
Speaker 7: for Apple two, which was its very most important business
Speaker 7: for a long period of time. But it also makes
Speaker 7: servers that include those Nvidia chips, so it's feeding servers
Speaker 7: in hardware to the hyperscalers that are building these enormous
Speaker 7: data centers across the US and across the globe. Really,
Speaker 7: it has a tremendous amount of momentum because the big hyperscalers,
Speaker 7: including Microsoft and Google are boosting their spending by more
Speaker 7: than thirty percent this year to hundreds of billions of dollars,
Speaker 7: and that's giving a big tailwind to Hanhai. So we
Speaker 7: saw Honhai boost its revenue for the fourth quarter twenty
Speaker 7: two percent. It came in a couple billion dollars more
Speaker 7: than expected at eighty three billion dollars. So it has
Speaker 7: a lot of momentum here. It looks like that demand
Speaker 7: for AI gear is increasing at least for now.
Speaker 2: Yeah, and ded iPhone seventeen did well. As you mentioned,
Speaker 2: a key supplier, Fox Gone also known as Hanhi. But Viz,
Speaker 2: going back to the start of this conversation, this is
Speaker 2: as we see ongoing geopolitical anxiety around Taiwan, how much
Speaker 2: always seeing these names invest in America and continue to
Speaker 2: do so well.
Speaker 7: They are strategic acts assets definitely, as you're talking about
Speaker 7: with Mike, TSMC the most important chip maker in the
Speaker 7: world by a mile because of the advanced chips that
Speaker 7: it makes for companies like Nvidia, Apple, etc. Has been
Speaker 7: building facilities in the United States. It's putting a water
Speaker 7: resources there. It got some money from the Chips Act
Speaker 7: under the Biden administration, has continued to build out those chips.
Speaker 7: It is making a lot of progress there. It's able
Speaker 7: to build fabs there that are quite productive, but they're
Speaker 7: not nearly as advanced as what they can do in
Speaker 7: Taiwan at this point. And this is part of the
Speaker 7: justification by the Taiwanese government and also TSMC itself. They
Speaker 7: want to have their most important assets in Taiwan. Partly
Speaker 7: it's an economies of scale issue. They can travel to
Speaker 7: those factories much more easily. Have the engineers learned from
Speaker 7: each other within those factories. They want to keep that
Speaker 7: most advanced production there. It's also, frankly a defensive maneuver
Speaker 7: for the government that if the most important assets are there,
Speaker 7: they know that the Trump administration or whatever US government
Speaker 7: is in power, is more inclined to come and make
Speaker 7: sure that they're protected.
Speaker 2: Peter Elstrom the global perspective, we thank you Tesla's China
Speaker 2: factory shipments. They came in today and showed they dropped
Speaker 2: in twenty twenty five, but there was a last minute
Speaker 2: bump in December where they grew as though as the
Speaker 2: company struggles with a slowdown in global sales. Look all
Speaker 2: of this, as I just mentioned, a little over ninety
Speaker 2: seven thousand were in December, just the fourth month and
Speaker 2: twenty twenty five that saw an increase springing Bluemos Craddell
Speaker 2: on all of this is the author of Hyperdrive Newsletters.
Speaker 2: So to get the straight Tesla had decent numbers in
Speaker 2: December in terms of growth month a month and indeed
Speaker 2: year on year, but it's just woeful for the whole
Speaker 2: picture of twenty twenty five.
Speaker 8: Yeah, that's right, Caroline. I think you know, we look
Speaker 8: at the December number, and it's actually you know, resilient
Speaker 8: and not just one of the rare up months for
Speaker 8: the year, but off of a relatively big month a
Speaker 8: year earlier. And yet when you look at the sort
Speaker 8: of whole picture for this company, you know, they had
Speaker 8: shipments throughout the year that were much lower and sort
Speaker 8: of reflecting this idea that they have some demand issues.
Speaker 8: And of course when we look at their shipment data,
Speaker 8: it's both for the local market and for some export
Speaker 8: as well.
Speaker 4: So we'll get a better.
Speaker 8: Sense in the coming weeks just how the sort of
Speaker 8: retail sales work.
Speaker 2: I mean, it's a second consecutive annual drop when you're
Speaker 2: looking at China shipments. All of this comes in context
Speaker 2: that BYD is now the biggest EV player worldwide. You've
Speaker 2: also got other competition coming from x phonemakers who pivot
Speaker 2: into cars.
Speaker 8: Yeah, and China's market is increasingly cut throat. You've seen
Speaker 8: Beijing try to sort of you know, put some pressure
Speaker 8: on the industry to knock this off and kind of
Speaker 8: you know, get to a point where pricing is a
Speaker 8: little bit more rational, and yet we only continue to
Speaker 8: see manufacturers, you know, offer new and more aggressive discounts,
Speaker 8: and that's been something that Tesla has really struggled to
Speaker 8: contend with throughout last year and even dating back to
Speaker 8: I would say twenty twenty three.
Speaker 2: Briefly here in the US, that's competition from Lucid.
Speaker 8: Yeah, and Lucid I think like Rivian is still a
Speaker 8: long ways behind Tesla. I think both of these companies
Speaker 8: had ambitions to give Elon Musk more of a challenge,
Speaker 8: if we've not seen that materialize. I think we saw
Speaker 8: some relatively strong numbers for that company in the fourth quarter,
Speaker 8: and yet you would expect that when they were going
Speaker 8: from one model to two models. So you know, big
Speaker 8: things ahead for them this year as they tried to
Speaker 8: also bring out a new platform.
Speaker 2: Bloombg's Auto's editor or Zara as we like to call you, Creatudel.
Speaker 2: Great to have some time with you. Tune in tomorrow
Speaker 2: if we sit down with Lucid interim CEO Mark windhoff
Speaker 2: As live at CEES. Welcome back to bluembg Tech. We
Speaker 2: check in on these markets that shrug off some geopolitical anxiety,
Speaker 2: of course when gathering higher. In fact, on the nasdak
Speaker 2: as you see at one point one percent, you are
Speaker 2: seeing search for safety, though Bitcoin maybe up to two
Speaker 2: point eight percent. Gold climbs fresh again, and this is
Speaker 2: after the ouster of Venezuela's President, Nicholas Maduro, who is
Speaker 2: set to arrive at a Manhattan court imminently. Now we
Speaker 2: think about the geopolitical context, we also think about what
Speaker 2: the AI trade is up to at the start of
Speaker 2: twenty twenty six, and we're back on in video up
Speaker 2: sevent tens percent, AMD up six tens percent. We hear
Speaker 2: from both of these CEOs over in Las Vegas later
Speaker 2: today at CEES. So the market wanting to hear more
Speaker 2: transparency from these leaders. Paneteer shakes off some of the
Speaker 2: sell off that we saw on Friday. This software AI
Speaker 2: and FU software company is up more than four percent.
Speaker 2: It's one of the key gainers on the NAZAQ one
Speaker 2: hundred from one points perspective. So to is Alphabet, we're
Speaker 2: up five tens percent. As still insatiable demand for Google
Speaker 2: and indeed it's Gemini iterations, but also it's TPU innovations.
Speaker 2: Let's talk more about the AI trade. It's resiliency, Bloomberg's
Speaker 2: Tech Equity Report to common Rhinokey is Hey and you've
Speaker 2: been putting pent to pepe, but thinking all about how
Speaker 2: an AI bubble has been much tokedal Is it reality?
Speaker 2: Is it going to pop? What have we been hairing
Speaker 2: in terms of historical context?
Speaker 9: Yeah, so looking at this in historical context is really interesting.
Speaker 9: I think we know that there's going to be a
Speaker 9: fourth year of talking about AI driving the market. Are
Speaker 9: we in a bubble? And so when you look at
Speaker 9: some of the past equity bubbles, there are some differences
Speaker 9: that investors point out that are important. So, for example,
Speaker 9: the duration of this rally is longer than the average
Speaker 9: of the last ten equity bubbles. We're at three years,
Speaker 9: the average is about two and a half. But at
Speaker 9: the same time, the percentage gain is actually much lower.
Speaker 9: So we're up about one hundred and thirty percent on
Speaker 9: the Nasdaq over the last three years, and the average
Speaker 9: for the last ten equity bubbles has been more than
Speaker 9: two hundred and forty percent. So that kind of signals
Speaker 9: that we're not in the sort of blistering sort of
Speaker 9: upcycle upswing in the market that you usually see before
Speaker 9: a bubble pops.
Speaker 2: There are also some other key things.
Speaker 9: You know, investors are still watching really solid fundamentals from
Speaker 9: the big tech companies, and actually pessimism that we saw
Speaker 9: especially I think gain really over last year. You know,
Speaker 9: the investors really calling for ROI, you know, for seeing
Speaker 9: more like innovation from these companies. That's actually a good
Speaker 9: thing in terms of a market bubble, and it very
Speaker 9: much differs from the dot com era, where investors were
Speaker 9: so excited about the Internet and everything related to that,
Speaker 9: but they kind of overlooked, you know, valuations and some
Speaker 9: of the fundamentals of those companies.
Speaker 2: I felt like discerning was the word of December. Everyone
Speaker 2: was saying investors get more discerning. They were picking their
Speaker 2: winners among the AI trade, How are we set up
Speaker 2: posts set off of an oracle and those companies. They
Speaker 2: still did extraordinarily well for twenty twenty five, but some
Speaker 2: of that height did fizzle someone as companies and investors
Speaker 2: tried to understand the debtloads of these businesses.
Speaker 9: Yeah, and I think the other thing that we're seeing
Speaker 9: that's good is the broadening of this rally. So yes,
Speaker 9: people are picking their winners and their losers, but we're
Speaker 9: also not seeing the biggest gainers continue to have be
Speaker 9: sort of like astronognomical percent gains over the year. So
Speaker 9: in the MAG seven, for example, only two in Nvidia
Speaker 9: and Alphabet of like those were the only stocks that
Speaker 9: outperformed the S and P five hundred last year. And
Speaker 9: you know, the biggest performers are the biggest sort of
Speaker 9: percentage winners that we saw were other stocks like linked
Speaker 9: to AI, so the memory like the digital storage companies.
Speaker 9: So that also just shows that the rallies broadening out
Speaker 9: and that is generally more healthy for the market.
Speaker 2: A little bit of health to kick off this twenty
Speaker 2: twenty six common Ranicky, we appreciate it. I stick with
Speaker 2: the AI build out in particular how secure it is,
Speaker 2: questions growing around in particular power and infrastructure constraints as
Speaker 2: well Flex Central. It's one of the largest privately held
Speaker 2: data center operators in the United States. Fully two data
Speaker 2: centers cross eighteen markets here in the US. Ran Mallory
Speaker 2: as the CEO, please to say you join us now,
Speaker 2: and I want to get for our audience, really, Ron,
Speaker 2: how you define where you sit in the overall market
Speaker 2: because right now, from what I understand is you're a
Speaker 2: co location offering. So we've got well big hyperscaleer's got
Speaker 2: neoclouds and then we've got flec centraal.
Speaker 10: That's correct, and thanks for the opportunity to catch up
Speaker 10: this morning, Caroline. It's really about, you know, the type
Speaker 10: of infrastructure that you deploy out there. Flex Cential is
Speaker 10: taking a very pragmatic view on making sure we're able
Speaker 10: to address the wholesale infrastructure, so the one to twenty megawatts,
Speaker 10: but also making sure that we're able to address the
Speaker 10: multi tenant capabilities that are out there as well, because
Speaker 10: those are the companies that are going to be consuming
Speaker 10: the agentic AI capabilities that we're seeing to start to
Speaker 10: accelerate out there, so that the landscape is starting to
Speaker 10: separate a bit, and flex Cential thinks we've got a
Speaker 10: very strong position right down that fairway on that wholesale
Speaker 10: multi tenant collocation marketplace.
Speaker 2: Ryan, that sounds like you want to be diversified. You
Speaker 2: don't want to just have one particular buyer calling you
Speaker 2: up saying I will take one hundred megawatts from your
Speaker 2: future project. How are you hearing though from potential clients.
Speaker 2: Are they wanting you to be the sold right or
Speaker 2: you've been taken in entirety of their business in certain locations.
Speaker 10: Yeah, Caroline, you're spot on. We want to make sure
Speaker 10: that we're diversified in our customer base, and you know,
Speaker 10: the simple answer is yes. We have companies that come
Speaker 10: to us and say we want to make you know,
Speaker 10: we want to take one of your whole data centers
Speaker 10: and put all of our you know, GPU TPU xpus
Speaker 10: in those facilities. That's just not where we're going to play.
Speaker 10: We want to make sure this multi tenant ecosystem environment
Speaker 10: has a place out in the market, and our product
Speaker 10: set is just perfectly fit for that out there.
Speaker 2: Today, you talk about GPU, TPU XPU, what is the
Speaker 2: constraint right now? For all of twenty twenty five, it
Speaker 2: felt like the narrative was it's the chips, but actually
Speaker 2: then it became the power then, whereas warries about water.
Speaker 2: Where are you seeing some of the chap points.
Speaker 10: Yeah, I mean it's really threefold. We see land, power
Speaker 10: and supply chain, and supply chain being that of you know,
Speaker 10: the mechanical infrastructure that goes inside the data centers. And
Speaker 10: so you have to be very focused on all three.
Speaker 10: And you're not just planning for twenty six right now,
Speaker 10: you're planning for twenty eight through thirty because you know
Speaker 10: that this dynamic marketplace and the consumption models that are
Speaker 10: out there, we've got to be very focused on the
Speaker 10: long term gains and being able to provision this infrastructure
Speaker 10: to meet those requirements.
Speaker 2: So where does that infrastructure end up going. We keep
Speaker 2: talking about innovations, particularly in the inference side of things,
Speaker 2: and people have got anxiety about Nvidia's role going forward
Speaker 2: as once the models are trained that being used, is
Speaker 2: it still all about the GPU? Is AMD getting a
Speaker 2: look in what's your client's demand?
Speaker 10: Yeah, and so it really depends on what the end
Speaker 10: customer is trying to use the infrastructure for. You know,
Speaker 10: let's not forget that. Right now, we're shipping five CPUs
Speaker 10: for every GPU out there, and so this dynamic integration
Speaker 10: between the CPU world and the gp EU world is
Speaker 10: really starting to form. And that's where this agentic capability
Speaker 10: is being able to use multiple services is really starting
Speaker 10: to drive this demand growth. And you know, when people
Speaker 10: talk about AI bubbles there, I think we're still at
Speaker 10: the forefront of this AI consumption model To really start
Speaker 10: to put our hands around that, I think we've got
Speaker 10: a long runway to go.
Speaker 2: Long runway, what does that mean for your runway? Ryan,
Speaker 2: As we said, you're one of the biggest privately how operators.
Speaker 2: I assume you're not just going to call some clients,
Speaker 2: but from companies that want to own a bit of
Speaker 2: your real estate.
Speaker 10: Absolutely, and so we're looking at this in you know,
Speaker 10: five and ten year horizons, and so you know, we've
Speaker 10: got a firm path over the next five years for
Speaker 10: that land, for that power and supply chain. You know,
Speaker 10: we're buying out infrastructure to make sure that we're able
Speaker 10: to meet this growth trajectory out through you know, twenty
Speaker 10: thirty twenty thirty two. Once you get out past that,
Speaker 10: it's a little bit hard to predict what this infrastructure
Speaker 10: is going to look like. You know, we're firmly entrenched
Speaker 10: with you know, liquid to chip, liquid to rac or
Speaker 10: and immersion cooling inside the facilities to meet these higher
Speaker 10: density deployments. But you know, right now we're formally firmly
Speaker 10: focused on getting out to that twenty thirty to twenty
Speaker 10: thirty two deployment strategy.
Speaker 2: Roan Mallory come back, I hope for Essential CEO operating
Speaker 2: those data centers across the United States, a lot on
Speaker 2: the East Coast. Meanwhile, coming up what twenty twenty six
Speaker 2: has in store for AI regulation. We'll discuss that with
Speaker 2: Jessica Nujan, director of the Central of Technology and Innovation
Speaker 2: with the Competitive Enterprise Institute. This is b meg the
Speaker 2: AI trade. Well, if you're looking at stocks, it's on today.
Speaker 2: But one of the headwinds industry leaders keep on mentioning
Speaker 2: is AI regulation. One of President Trump's final executive orders
Speaker 2: of twenty twenty five, remember, was aimed at limiting state
Speaker 2: AI regulations, countering what it sees as a patchwork of
Speaker 2: local laws that industry leaders argue stifles growth. Discuss what
Speaker 2: twenty twenty six may bring in federal AI regulation. If any,
Speaker 2: Let's bringin Jessica Malusian. She is the director of the
Speaker 2: Center for Technology and Innovation with the Competitive Enterprises to
Speaker 2: you're a non partisan policy group, you are going to
Speaker 2: argue against heavy regulation to foster innovation. So I have
Speaker 2: a feeling you're not pro a patchwork approach. But will
Speaker 2: we ever get a federal approach or at least Congress
Speaker 2: being able to push forward one.
Speaker 11: Yeah, So I think the executive order that you mentioned
Speaker 11: earlier by President Trump was in one part, trying to
Speaker 11: get some of that done without congressional action. That's probably
Speaker 11: now going to be a very successful plan. But I
Speaker 11: think also part of it was trying to create some
Speaker 11: political pressure for Congress to take on this responsibility and
Speaker 11: act in place. As you described a patchwork of fifty
Speaker 11: state regulations, there were a thousand of them introduced or
Speaker 11: passed or considered just last year, and often their contradictory.
Speaker 4: Often they're heavy handed.
Speaker 11: Some of them might make sense, but not all of
Speaker 11: them do, and to ask USAI entrepreneurs to operate in
Speaker 11: that environment is very unrealistic.
Speaker 2: Well, what's interesting is even despite that executive order, many
Speaker 2: California law makers are still pushing ahead with some of
Speaker 2: their AI regulation. And then I think what other Senate
Speaker 2: Commerce Committee chair. For example, you've had Ted Cruz roll
Speaker 2: out a package of a related legislature. He's doing that
Speaker 2: back in September. You've had Marshall Blackburn looking to unveil
Speaker 2: more potential regulation that was announced in December. There's been
Speaker 2: Democrats in the House as well. Jessica, what is the
Speaker 2: most sensible.
Speaker 11: I think we'll start with what's the least sensible, which
Speaker 11: is that the default situation if Congress does nothing, is
Speaker 11: that you're going to have the most strict regulatory regimes.
Speaker 11: So think California, I think New York become the default
Speaker 11: setting for the entire country.
Speaker 4: Right as firms try to comply with this.
Speaker 11: The big ones might have the money to do that,
Speaker 11: but smaller guys are going to say, Okay, we're just
Speaker 11: going to comply with the most strict version. Hope that
Speaker 11: gets us through. So you know, that's not how any
Speaker 11: of this was designed to work. And what you need
Speaker 11: is people on the national stage. That's why we have
Speaker 11: the Commerce Clause, willing to butt heads even if they disagree.
Speaker 11: That's what hearings in regular order are for. So the
Speaker 11: Ted Cruises and the Marsha Blackburns should talk this out
Speaker 11: and figure out where we can get to some agreement
Speaker 11: on this. But this certainly is the purview of Congress
Speaker 11: and not just the most regulatory strict states or fifty
Speaker 11: different states.
Speaker 2: Now, in many ways, AISA David Sachs has been thinking
Speaker 2: about federal regulation from an administration perspective, but also they've
Speaker 2: been thinking about how some of the innovations in the
Speaker 2: US are enabled to be sent abroad. And we still
Speaker 2: think about what in Nvidia and its access to China,
Speaker 2: really looks like how much is that going to be
Speaker 2: dominating the agenda as well?
Speaker 11: From your perspective, I think chips are a part of it,
Speaker 11: But I think that you correctly identified the issue that
Speaker 11: loom's largest off this debate is that you know, this
Speaker 11: really isn't at questions so much as we are, in
Speaker 11: fact in a race with China for global AI dominance.
Speaker 4: That's just the reality.
Speaker 11: I think people who are looking at this on that
Speaker 11: scale understand that tying and arm behind to back with
Speaker 11: a bunch of state regulations for the US is not
Speaker 11: a great plan for winning. So I think all of
Speaker 11: those questions, whether it's chip restriction, exports or creating a
Speaker 11: regulatory regime as we see in the EU they have
Speaker 11: an AI regulatory regime that's bigger than their AI sector.
Speaker 11: We don't want to fall into that trap because this
Speaker 11: isn't just about benefits to US consumers, which there are
Speaker 11: many from AI and the health of our economy which
Speaker 11: is significant from AI, but it really is also making.
Speaker 4: Sure that as we go forward, the world is.
Speaker 11: Running on US AI, not Chinese AI. That's been our
Speaker 11: approach in a lot of technological times of innovation, but
Speaker 11: it's certainly never been more important than it is with
Speaker 11: artificial intelligence.
Speaker 2: Some of the angles with altufficient intelligence has been meant
Speaker 2: health and security of its users and consumers. This is
Speaker 2: something that we think time and time again has been
Speaker 2: affecting the social media outlook. There has been a void
Speaker 2: of federal regulation when it comes to the protection of
Speaker 2: users on social media. Over in Australia, you've seen quite
Speaker 2: drastic steps being taken by looking to and disallow anyone
Speaker 2: on younger than sixteen using companies meta with Instagram, with
Speaker 2: Facebook and the like. What do you make of what
Speaker 2: Australia's done and what we might do in the United States.
Speaker 11: Yeah, I mean Australia is certainly like the first mover
Speaker 11: in this right it's out on the tip of the sphere.
Speaker 11: I'm not sure it's going to be the silver bullet
Speaker 11: for everyone's mental health and all the things that make
Speaker 11: being a teenager difficult that they hope it is. But
Speaker 11: they're willing to run the experiment for us, and I'm
Speaker 11: sure that other countries are watching closely and there might
Speaker 11: be some copycatting there. I think that's a much steeper
Speaker 11: hill to climb.
Speaker 4: In the US.
Speaker 11: First of all, we have the First Amendment. That would
Speaker 11: be a challenge for all all like this. Kids don't
Speaker 11: have full rights as adults, but they have some rights.
Speaker 11: And also these social media companies have their own First
Speaker 11: Amendment rights to speech, so that also we have a
Speaker 11: Congress that it often struggles to get so called must
Speaker 11: pass legislation done. So I think it's two different environments.
Speaker 11: We'll all be watching how it goes in Australia. So
Speaker 11: far it's a lot of kids circumventing the rules with
Speaker 11: VPNs and other tactics. And the fact is too these
Speaker 11: social media companies that are targeted by the laws are
Speaker 11: born and bred in the US, so it's a little
Speaker 11: bit different politically as well. These are our companies and
Speaker 11: as we talk about all the time, these are creating
Speaker 11: a lot of wealth and value for consumers here and
Speaker 11: I think we think a little more carefully about how
Speaker 11: we treat them and what regulations and finds we subject
Speaker 11: them to than the rest of the world does.
Speaker 2: Jessica Illusion, director of the Center of Technology and Innovation
Speaker 2: with a Competitive Enterprises, thanks for joining us today. A
Speaker 2: Consumer Tech Conference CES kicks off in Las Vegas with
Speaker 2: all eyes on the power and the impact of AI.
Speaker 2: Let's get more on what we can expect. Buther Owan,
Speaker 2: Ned Ludlow, you're already there in Vegas. I'm following in
Speaker 2: hot pursuit. But then I mean, we're going to hear
Speaker 2: from Jensen Wang. It's all going to be about showing
Speaker 2: the innovation and market share is still there.
Speaker 12: Right, Yeah, it's called the Consumer Electronics Show. But the
Speaker 12: frank reality is you have the CEO of the world's
Speaker 12: biggest and most important company talking big picture about AI
Speaker 12: right in Video, calling this what's next in AI, and
Speaker 12: it's highly unlikely that they're going to kind of surprise
Speaker 12: the markets with some new product, but maybe some substantive
Speaker 12: updates on the product roadmap, right and Video has this
Speaker 12: commitment to releasing a new generation of GPU annually. So
Speaker 12: right now there's a big focus on Blackwell, but what
Speaker 12: comes next is vera Rubin and the Rubin generation. A
Speaker 12: year ago when we were here, it was also kind
Speaker 12: of the sidelines commentary from Jensen that ruled markets. Right
Speaker 12: as it stands, we have a real bottleneck with memory
Speaker 12: chips go. It was Jensen had to say about Samsung
Speaker 12: and their validation of Samsung's high Bandwick memory. This sent
Speaker 12: kind of markets into a tizzy. So the way that
Speaker 12: investors put this to me is like, it's the first
Speaker 12: proper business day of the year. Let's be honest, and
Speaker 12: you get Jensen one knot and there's likely to be
Speaker 12: some reaction to that.
Speaker 2: You get Lisa su Quino as well, and what do
Speaker 2: we hear from the other key player? And that's not
Speaker 2: consumer evidently, but is powering the consumer?
Speaker 12: You know a little different, right, you know, Lisa to
Speaker 12: an AMD will want to talk about how they are
Speaker 12: competitive in the in the AI accelerator market, and there's
Speaker 12: an opportunity for them to catch up with Nvidia, particularly
Speaker 12: in the inference phase. They have a role to play.
Speaker 12: But what we've seen with AMD historically is they still
Speaker 12: have a very big foothold in the PC market that's
Speaker 12: relevant to the consumer, relevant to developers. So with their
Speaker 12: rise in CPU, perhaps we hear some news around that.
Speaker 12: The big news for them a year ago was that
Speaker 12: they had their gear going into Dell for the first time.
Speaker 12: So it will be this mix of like, Okay, we're
Speaker 12: staying competitive in AI, but AMD is still there and
Speaker 12: there about in PC and also in gaming in videos.
Speaker 12: Let's focus on that it still operates in those markets too,
Speaker 12: of course.
Speaker 2: Yeah, it's origins all about your world of gaming. Team
Speaker 2: Blue Meg Tech's own ed Ludlow. We love it. Thank
Speaker 2: you for more on cees come right here tomorrow. On
Speaker 2: Bloomberg Tech. We're going to have some of the biggest
Speaker 2: names in the industry, including in video CEO Jensen Huang Zeeman,
Speaker 2: CEO Rollin Bush, AMDCO, Lisa Sue, and so many more.
Speaker 2: But of course we do all need to head back
Speaker 2: now to the Southern District of New York Court in
Speaker 2: New York, where Bloomberg's Miles Miller is standing by as
Speaker 2: we are moments away from Venezuelan president Nicholas Maduro and
Speaker 2: his wife Celia for US facing trial on narco terrorism charges.
Speaker 2: But ten minutes out.
Speaker 4: Miles, Yeah, that's right.
Speaker 3: They will go before Judge Alvin Hellerstein in about ten
Speaker 3: minutes time. Here, less than ten minutes now, they cleared
Speaker 3: the courthouse floor of everybody, swept the floor, and they'll
Speaker 3: bring them into the courtroom and then let people come in.
Speaker 3: This is such a widely watched case that they have
Speaker 3: several overflow courtrooms in this court. They are alleging that
Speaker 3: Nicholas Medoro and his wife ran a narco terrorism organization
Speaker 3: funded narco terrorists, using government planes to get drugs in
Speaker 3: and out of the country, in one case, using the
Speaker 3: state oil company's plane to fly twice monthly to Margarita
Speaker 3: Island to load up with drugs and then bring them
Speaker 3: to other parts of different countries, including to the United States,
Speaker 3: using government infrastructure to do corrupt acts. Those are the allegations.
Speaker 3: He will face that judge of twelve and it's likely
Speaker 3: that he'll enter that plea of not guilty. What is
Speaker 3: most shocking and very interesting in this case is that
Speaker 3: he's hired the same attorney that Julian Assange use, a
Speaker 3: high powered attorney from Washington to represent him in this case.
Speaker 3: But these are very very serious charges which carry the
Speaker 3: possibility of life in prison, the possibility that Nicholas Maduro
Speaker 3: after trial could go to a supermax prison for the
Speaker 3: rest of his life. There are people out here on
Speaker 3: both sides, supporters of his outside. He'll be able to
Speaker 3: hear them when he goes into the courthouse or goes
Speaker 3: into that courtroom here at five hundred Pearl Street in
Speaker 3: just about now five minutes time.
Speaker 2: Local protests, but global ripples, and we're seeing that. When
Speaker 2: we talk here on the Tech show about what this
Speaker 2: means for the future of China and Taiwan, we hear,
Speaker 2: of course of the Danish leader, Prime Minister Meta Fredericson
Speaker 2: on their own National TV network saying that if Donald
Speaker 2: Trump were to attack the Danish island of Brelan, that
Speaker 2: would mean the end of the NATO Alliance. How global
Speaker 2: is the mindset over there in Manhattan right now?
Speaker 3: Yeah, you see the global impact of this pretty clearly. Right.
Speaker 3: Our government, the US government is trying to go into
Speaker 3: Venezuela and take control right now of the oil so
Speaker 3: that China and Russia don't control the oil in Venezuela.
Speaker 3: And it's actually very interesting. You see people here who
Speaker 3: are protesting the Chinese Communist Party right here in Chinatown.
Speaker 3: So it's global, but it's also local too.
Speaker 2: Mas Miller, we thank you so much for coverage throughout
Speaker 2: the hour and throughout the rest of the day right
Speaker 2: here on the Boombag network. Meanwhile, that does it for
Speaker 2: this edition of Bloomberg Tech. Do not forget to check
Speaker 2: out on podcast. You can find it on the terminal.
Speaker 2: So I was online on Apple, Spotify and iHeart from
Speaker 2: New York. This is bloombag tech.