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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive

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Speaker 1: from coast to coast with Caroline Hyde in New York

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Speaker 1: and Eva though in San Francisco.

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Speaker 2: This is Bloomberg Tech coming up. The weight is it over?

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Speaker 3: TikTok says it's signed agreements for the new US joint venture.

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Speaker 3: Plus who better to talk about the new TikTok era

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Speaker 3: than former CEO Kevin Meyer.

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Speaker 2: He joins us at the top of the hour and.

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Speaker 3: The latest reports on Opening Eyes potential valuation the Wall

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Speaker 3: Street Journal giving in an eight hundred and thirty billion.

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Speaker 2: Dollar price tech. But first we go to our top story.

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Speaker 3: The details are they there for a proposed TikTok deal.

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Speaker 2: Grimos kirt Wagner, who covers social.

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Speaker 3: Media, can talk us through the intricacies because we understand

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Speaker 3: that still byte Dance will be playing a role, but

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Speaker 3: a less than twenty percent role.

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Speaker 4: That's right, so byte Dance will have an ownership stake

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Speaker 4: in this in this new US entity. We previously reported

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Speaker 4: as well that you know byite Dance will be the

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Speaker 4: licensing its content algorithm to this new US TikTok that

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Speaker 4: they would then use that licensed algorithm to build a

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Speaker 4: new one based on US user data. But you know,

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Speaker 4: the law, Caroline is pretty clear, which is that byte

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Speaker 4: Dance is not supposed to have any operational role in

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Speaker 4: this new US TikTok. And so this has sort of

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Speaker 4: been the complaint all along is that is Byteedance's involvement,

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Speaker 4: even if it's a small ownership stake or as a

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Speaker 4: licensing partner on the algorithm, is that considered too much.

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Speaker 4: I don't know if anyone is actually going to push

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Speaker 4: back and try and you know, fight this. No one

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Speaker 4: has to date, but those who are following the letter

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Speaker 4: of the law do have questions about whether this actually

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Speaker 4: follows the letter of the law.

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Speaker 3: And also the players involve ka Oracle, which seems to

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Speaker 3: be everywhere at the moment, is playing an outsize role

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Speaker 3: with a fifteen percent holding, but they are of a

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Speaker 3: private equity involvement.

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Speaker 2: There's Middle East an involvement, there.

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Speaker 4: Is, and Oracle gets all the headlines because you know,

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Speaker 4: it's the large American tech company. It's also going to

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Speaker 4: have an outsized role in terms of sort of securing

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Speaker 4: that US data. You may recall that there was a

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Speaker 4: similar arrangement agreed upon a few years ago called the

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Speaker 4: Project Texas that was supposed to have Oracle at the

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Speaker 4: center of protecting this. What's interesting about that is that

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Speaker 4: at that time the arrangement with Oracle was not considered

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Speaker 4: to be a solution. Regulators in the US did not

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Speaker 4: feel that it went far enough to actually protect US data.

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Speaker 4: Now they're sort of pitching the same framework as they

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Speaker 4: did a few years ago, and again the question is

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Speaker 4: is anybody going to step up and actually push back

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Speaker 4: on this? But as you mentioned, there's several different parties involved.

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Speaker 4: Everyone is even ORCLE owns only fifteen percent of this,

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Speaker 4: so there will be a lot of sort of hands

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Speaker 4: in the pot.

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Speaker 3: Here Brumbo's Kat Wagner, we thank you, extraordinary story, a

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Speaker 3: developing story. Let's talk about what we can expect from

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Speaker 3: a US majority owned TikTok. None other than Kevin Maher

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Speaker 3: here's co CEO of Candle Media. You're also with a

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Speaker 3: former top CEO. You're the COO of Byte Dance as well.

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Speaker 3: And it blows my mind to think that it was

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Speaker 3: August twenty twenty when you resigned because you couldn't see

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Speaker 3: a par forward of managing TikTok globally. Five years later,

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Speaker 3: here we are Kevin, what do you make of this

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Speaker 3: potential deal?

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Speaker 5: Well, here we are, thanks for having me.

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Speaker 6: I really appreciate it. Look, I think Kurt did a

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Speaker 6: good job of describing the deal. I think it works operationally.

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Speaker 6: I think having a company like Oracle, a very trusted

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Speaker 6: company run by Larry Elson, who was a trustworthy figure

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Speaker 6: obviously being in the center in charge of looking after

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Speaker 6: and securing the US data, that's crucial. And I think

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Speaker 6: they're licensing the algorithm from China, so Biteance will still

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Speaker 6: own the code. But I do think this license will

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Speaker 6: take another instance of the algorithm, all the code put

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Speaker 6: on Oracle service and then trained on the US data

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Speaker 6: that Oracle alone.

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Speaker 5: Has access to.

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Speaker 6: So I think it's going to end up having a

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Speaker 6: vastly different feed and sort of content rhythm then you'll

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Speaker 6: see around the world. So I think that that will work.

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Speaker 6: And I think that byte Dance will you know, it

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Speaker 6: is now below twenty percent ownership, in nineteen point nine

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Speaker 6: percent ownership. That's a substantial difference from status quo. And

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Speaker 6: I do think that by Dance has an operation role

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Speaker 6: commercializing TikTok, selling ads, making sure e commerce works, and

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Speaker 6: all the other commercialization factors but really it will be

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Speaker 6: run by a US board and be a separate US company.

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Speaker 3: It works, It works, but the proof is in the

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Speaker 3: putting as to whether the algorithm is powerful. How do

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Speaker 3: you see, as someone who's in charge of content development

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Speaker 3: wanting to get your content out there in a marketing capacity,

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Speaker 3: do you have confidence there will be as good without

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Speaker 3: bytedoance as heavily involved.

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Speaker 5: Well, I think it probably will be.

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Speaker 6: There's a lot of intricacies and a lot of AI

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Speaker 6: as the word of the day, in that code, and

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Speaker 6: I think that code base being kept intact is crucial.

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Speaker 6: I think had they tried to recreate a new algorithm

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Speaker 6: from scratch because of security concerns, that would have been

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Speaker 6: exceedingly difficult. That has taken years and years and thousands

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Speaker 6: of engineers in China to develop as a very sophisticated

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Speaker 6: AI recommendation engine.

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Speaker 5: So the fact that they all access to that it.

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Speaker 6: Will remain interoperable with all the other TikTok instances around

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Speaker 6: the world, I think that matters quite a bit. And

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Speaker 6: I think just retraining that same code base, that same

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Speaker 6: algorithm with US data should provide a very robust solution.

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Speaker 5: I think it will be seamless.

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Speaker 2: Really interesting.

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Speaker 3: That interoperability because as someone who can see the power

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Speaker 3: of TikTok, because you are able to get global content,

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Speaker 3: not just US focused content.

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Speaker 2: Is that really going to work?

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Speaker 3: Is that something that you think will It's still remain

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Speaker 3: a global business even though you're having this US part

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Speaker 3: hived off.

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Speaker 6: It has to it has to remain global. I think

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Speaker 6: a social media platform, and I would call it TikTok

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Speaker 6: more social entertainment actually than social media, that has to

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Speaker 6: be global. If it were to be siphoned off and

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Speaker 6: cording off from the rest of the world and having

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Speaker 6: a US only presence, I think that would be a

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Speaker 6: big detriment to US users.

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Speaker 5: As I understand it. That's not the case.

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Speaker 6: It is interoperable, and I think from a user perspective,

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Speaker 6: be seamlessly accessing content from around the world and vice versa.

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Speaker 6: Just the recommendation that will be US based only.

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Speaker 3: I mean, you just think about the entertainment element. I mean,

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Speaker 3: TikTok had its first red carbon moment yesterday doing awards.

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Speaker 3: I mean, this really is trying to be a juggernaut

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Speaker 3: of the way you and I consume our content going forward.

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Speaker 2: Just from the national security.

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Speaker 3: Perspective, How do you think that has been silenced in

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Speaker 3: terms of criticism because many fail that perhaps bite out

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Speaker 3: still has a bit too much involvement, particularly if it

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Speaker 3: gets some profits as well well.

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Speaker 6: I think Byedan's deriving profits there do that. I mean

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Speaker 6: they built this entire ecosystem, this entire code base, the technology,

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Speaker 6: the app. They paid a lot of money in marketing

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Speaker 6: to get that app downloaded on hundreds of millions of

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Speaker 6: billions frankly of devices around the world. They've earned that

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Speaker 6: right to have a participation and profits, and I think

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Speaker 6: it's structured in such a way that's very fair. And

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Speaker 6: I do think that from a national security perspective, again,

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Speaker 6: having that data walled off may ensure that our potential

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Speaker 6: eversars outside of the US cannot access the algorithm. Again,

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Speaker 6: how that algorithm recommends content content moderation policies and the

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Speaker 6: actual data underneath it that drives the training of that algorithm,

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Speaker 6: The fact that that is controlled by Oracle. It is

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Speaker 6: like Project Texas, but I think Project Texas would have

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Speaker 6: worked as well. So I think this is going to

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Speaker 6: solve the whatever legitimate national security concerns that were now solved.

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Speaker 3: The consumer has kind of cared less and less since

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Speaker 3: the first ruling. Since that first under the Biden administration,

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Speaker 3: desire to block us well to block TikTok, or at

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Speaker 3: least separating them from by Dance. Initially people were really

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Speaker 3: worried about the national security element, and now it seems

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Speaker 3: that has faded. Do you think consumers are going to

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Speaker 3: be interested in what they're now presented in terms of

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Speaker 3: the algorithm. It's so interesting, I now get a stem

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Speaker 3: element in TikTok. They've already tried to confront that feeling

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Speaker 3: that we're being dumb down versus perhaps what they're being

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Speaker 3: served by the competition in China.

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Speaker 6: Yeah, I look, I think I think it's all just

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Speaker 6: pretty good news. I think that Americans will be well

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Speaker 6: served by having another voice, another platform. I think Americans

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Speaker 6: speaking to Americans on this platform and Americans speaking to

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Speaker 6: the world in the world back to us.

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Speaker 5: It is healthy. It's a healthy dialogue to have.

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Speaker 6: I think that if it's done in a way that

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Speaker 6: is protecting our interests, that's protecting our security, I think

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Speaker 6: that's very good news for consumers here, and I think

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Speaker 6: they'll be well served. So I think it's correct that

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Speaker 6: consumers should have now put this in the back of

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Speaker 6: their mind a little bit. This seems like a permanent solution.

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Speaker 6: The only element of doubt here and risk is that

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Speaker 6: China hasn't come out and explicitly the Chinese government hasn't

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Speaker 6: blessed the deal yet. I'd be a little concerned about that.

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Speaker 6: You know, back five years ago we almost had to

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Speaker 6: deal with Oracle you may recall, and the Chinese government

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Speaker 6: put an end to it. It looks like, by all

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Speaker 6: accounts in the Chinese media, the right words of being

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Speaker 6: said today and then in the last few days about

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Speaker 6: the deal looks good. Looks like China will approve it.

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Speaker 6: Little of flying the ointment, but again, wouldn't be too

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Speaker 6: concerned about it.

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Speaker 5: Looks like it's going to happen.

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Speaker 3: You're at the very cutting edge of where media is

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Speaker 3: moving to. You're sort of the lead architect behind Disney

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Speaker 3: Plus and how it was on failed. You're now thinking

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Speaker 3: about new areas of brands, and you're helping Coco mel

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Speaker 3: and get everywhere.

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Speaker 2: In a cameo from.

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Speaker 3: Kids, for example, what is TikTok in terms of its competition?

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Speaker 3: Because we're also considering a totally different media landscape. We're

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Speaker 3: thinking about whether a Netflix owning Warner Brothers would be

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Speaker 3: the real competition?

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Speaker 2: Is YouTube is the real competition? TikTok? How do you

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Speaker 2: see this evolution right now?

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Speaker 6: Well, there's a lot going on in the media business.

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Speaker 6: Now it's going to it looks a lot different than

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Speaker 6: it did even five years ago. There's young people and

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Speaker 6: even you know, people my age, and across the demographic spectrum.

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Speaker 6: People are watching more short form entertainment. That's something that

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Speaker 6: TikTok actually in the beginning, YouTube, you know, pioneered short

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Speaker 6: form entertainment.

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Speaker 5: It became a full screen.

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Speaker 6: Vertical when with vertical phones when TikTok came along, and

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Speaker 6: now YouTube is doing that with shorts. I think there's

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Speaker 6: is a sea change in how people consume content, where

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Speaker 6: the influence comes from. I mean, if you look at

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Speaker 6: today the landscape and what's more central to the culture.

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Speaker 6: Is it Hollywood, is a TikTok? Is it YouTube? The

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Speaker 6: answer is it's a mix of all of the above.

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Speaker 6: And as usage patterns continue to evolve, I think there's

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Speaker 6: some challenges for Hollywood to catch up. My company, Candle

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Speaker 6: Media owned, We own a company called Moonbug, and you

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Speaker 6: mentioned cocomelon Cocomelon is centered on IP derived from YouTube.

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Speaker 6: It's on the YouTube ecosystem. We're on shorts, we're on

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Speaker 6: the traditional YouTube, you know video, and we have over

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Speaker 6: two hundred million subscribers to that one English language channel,

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Speaker 6: and we've been the biggest show on Netflix.

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Speaker 5: So I think there is taking.

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Speaker 6: Advantage of all the different platforms that people interact with,

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Speaker 6: you know, streaming page, streaming services, advertising for the streaming services.

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Speaker 6: The atrical windows wearing a Cocomelan movie come out in

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Speaker 6: twenty twenty seven, and YouTube and TikTok at the center

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Speaker 6: of that IP generation machine. That's the future of media,

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Speaker 6: and media companies that are really at the cutting edge

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Speaker 6: are really looking YouTube, TikTok short form video alongside the

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Speaker 6: long form traditional storytelling that has been their bread and

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Speaker 6: butter for decades.

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Speaker 3: Do you have any anxiety for Hollywood for IP for

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Speaker 3: content creation? If indeed Netflix does take ownership a Warner

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Speaker 3: Brothers Discovery, if Paramount does for that example, indeed, what

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Speaker 3: it means for your old alma mater, which is.

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Speaker 5: Disney, Well, Disney's in a great position.

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Speaker 6: Disney has the IP of the franchises they have that

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Speaker 6: the brands that matter Disney, Star Wars, Marble, Pixar, Disney's

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Speaker 6: in a pretty unassailable position. Put them aside for a second.

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Speaker 6: What Hollywood needs is a healthy ecosystem. They need studios

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Speaker 6: that have another revenue to cover their costs, that are profitable,

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Speaker 6: and that are in a position to compete against these

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Speaker 6: mths like TikTok, like YouTube and Google. So a combination

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Speaker 6: there between Warner Brothers and one of Netflix or Paramount

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Speaker 6: is crucial. I think to maintain the health and the

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Speaker 6: profitability that ecosystems, it's better to have fewer competitors that

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Speaker 6: are more financially viable and can buy more product and

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Speaker 6: support a high production value than having a more buyers,

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Speaker 6: one more buyer being Warner Brothers being independently in a

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Speaker 6: reacer financial position.

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Speaker 5: So I think that a combination is good.

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Speaker 6: And even though Netflix won the first round, don't count

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Speaker 6: out the Ellisons. They're incredibly smart and aggressive. Don't count

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Speaker 6: out don't count out Jerry Cardinal at Redbird. These guys

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Speaker 6: are very serious. I think they're going to come back

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Speaker 6: with a higher bid.

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Speaker 5: And when they.

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Speaker 6: Approach, and remember shareholders still haven't spoken yet, I think

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Speaker 6: the likelihood of hear is that Marner Brothers ends up

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Speaker 6: with Paramount, and I think it's ultimately it is they

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Speaker 6: cost some jobs. Obviously in Hollywood, there's no getting around that,

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Speaker 6: but ultimately good for creators.

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Speaker 3: I think one we might have to have you back

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Speaker 3: very soon as all of these stories unfold. Kevin Mayer,

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Speaker 3: What a joy to have you on Kindle Media co CEO,

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Speaker 3: former TikTok CEO and CEO of byde Dance. Now let's

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Speaker 3: get back to these markets that are in risk on

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Speaker 3: mode as we head towards the very shortened week next

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Speaker 3: week ahead of the holidays, and aslack is up one

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Speaker 3: point two percent. In fact, stocks arising even as traders

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Speaker 3: face the expiration of a record pile of options. Today,

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Speaker 3: we're seeing Bitcoin up three point three percent. We're also

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Speaker 3: looking at key names such as Oracle. We're up seven

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Speaker 3: percent as that TikTok deal is it near the closing?

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Speaker 3: What does it mean for Oracle's business model as its

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Speaker 3: cloud partner the subroomberg Tech.

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Speaker 2: Take a look at Oracle shares.

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Speaker 3: They're doing strongly today and everywhere you turn this week,

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Speaker 3: Oracle has dominated the headlines from anxiety around data center timetables,

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Speaker 3: data center leases along with mounting debt piles, ability to

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Speaker 3: raise financing for the Michigan project, not to mention Larry

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Speaker 3: Ellison's other potential bet some Warner Brothers, Discovery and now TikTok.

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Speaker 3: How is Oracle benefiting from this sale? How is it

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Speaker 3: affording all of it? Let's go to mannixing briefly is

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Speaker 3: global headed tech research, glue, meg intelligence.

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Speaker 2: So why is the TikTok deal good? Why is all

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Speaker 2: of this good for Oracle or not?

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Speaker 7: Well, right now, I think the concerns around Oracle stem

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Speaker 7: from the fact that they can finance that infrastructure build out.

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Speaker 7: But I think the TikTok news and just this Michigan

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Speaker 7: sort of build out happening is another sign that, you know,

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Speaker 7: things are moving incrementally, and they have given a revenue

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Speaker 7: guidance for the next four years. Even if you don't

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Speaker 7: believe there are RPO number you have, you know, intermedate bogies,

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Speaker 7: thirty two billion in is revenue for next year, you know,

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Speaker 7: seventy three billion the year after and for that they

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Speaker 7: have to build out infrastructure. Without that, that revenue won't

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Speaker 7: gonna come to fruition. So from that perspective, you know

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Speaker 7: these incremental steps are positive, and you know if the

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Speaker 7: fact that they can build out data center in Michigan,

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Speaker 7: to my mind, is another step towards you know, realizing

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Speaker 7: that thirty two billion in revenue next year.

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Speaker 3: I hope you're around next week because I have a

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Speaker 3: feeling Oracle will also be on our minds. Then mandate

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Speaker 3: Seeing and Blue meg Intelligence. Thanks so much for all

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Speaker 3: of your coverage this week in your analysis. Let's get

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Speaker 3: more on the market's moves today. Sephanie Ali Algez with

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Speaker 3: US Global Market Strategies the JP Morgan. So we end

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Speaker 3: the week on a high, but wow, have we been

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Speaker 3: riddled with AI doubts?

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Speaker 2: Where has your mind been app Yeah, it.

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Speaker 8: Has been a really interesting tape in recent weeks and months.

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Speaker 8: I mean the debate around AI, the return on investment

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Speaker 8: around AI, around the quality of the balance sheets, the

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Speaker 8: war on the model front right between chat GBT and

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Speaker 8: Google's Gemini, and I think moving forward, markets are realizing

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Speaker 8: this is going to be less of a competition on

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Speaker 8: just the innovation, although the innovation is really important, but

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Speaker 8: also on balance sheets and you know, the show me

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Speaker 8: the money. This kind of desire for markets to really

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Speaker 8: see companies with AI tied cash generation, which is a

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Speaker 8: tricky environment to be in because if you want to

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Speaker 8: see growth from AI but cash, you might need to

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Speaker 8: actually let go of some cash in the near term

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Speaker 8: right to invest in some of these infrastructure buildouts to

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Speaker 8: ultimately get the growth that we're looking for.

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Speaker 3: I mean, investor is being asked to be patient. The

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Speaker 3: word I've heard time in ten again this week is discerning.

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Speaker 3: Is that what you feel people are starting? It's not

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Speaker 3: all boats arising, We're picking.

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Speaker 2: On winners, yes, right exactly.

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Speaker 8: It's we had three years of AI providing this really

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Speaker 8: powerful tide, lifting a lot of boats, and this year

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Speaker 8: we've seen a lot more discernment right amongst these names.

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Speaker 2: We think that that can continue. Now.

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Speaker 8: It doesn't mean that AI isn't still this kind of

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Speaker 8: rising tide, but we're now seeing the different markets here,

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Speaker 8: the markets around models, the markets around cloud services, markets

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Speaker 8: around infrastructure, and now we want to see who are

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Speaker 8: going to be the leaders, Who are they going to

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Speaker 8: be the companies that actually capture the best economics in

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Speaker 8: each of these markets. So it's not necessarily zero sum,

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Speaker 8: but now competition is really ratcheting higher and balance sheets

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Speaker 8: are starting to fray A little bit. Right, we're tapping

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Speaker 8: into debt market, so companies are also seeing greater differentiation

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Speaker 8: amongst themselves.

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Speaker 2: That way, you are a cross perspective.

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Speaker 3: Should people be owning the debt of these big companies

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Speaker 3: cool propons as well as equity exposure?

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Speaker 8: I mean, I guess it depends on what you're looking for.

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Speaker 8: You know, I think the Fed is lowering interest rates,

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Speaker 8: and you know, if you see interest rates move lower

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Speaker 8: more broadly, like, there is going to be demand for this,

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Speaker 8: this debt issuance, and we're expecting a lot of that.

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Speaker 8: There's also five hundred billion dollars in dry powder and

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Speaker 8: private credit, right, so I don't doubt that this capital

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Speaker 8: we'll find.

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Speaker 2: You know, at home.

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Speaker 8: But I think the question for investors is to just

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Speaker 8: make sure that you have some diversification to this seam

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Speaker 8: in your portfolio. Because as extraordinary and transformative as AI

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Speaker 8: is going to be, the last few weeks have reminded

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Speaker 8: us that it's going to be choppy along the way.

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Speaker 8: There can be surprises and knowns, So you want to

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Speaker 8: make sure your portfolio is built to withstand those choppier

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Speaker 8: waters while still benefiting from the secular opportunity that remains.

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Speaker 3: What almost have been the theme of twenty twenty five

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Speaker 3: is how dominant the private sector, private sector names have

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Speaker 3: been on your maybe overexposure in your public portfolio. I

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Speaker 3: think of a nameline open AI. We think of SpaceX

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Speaker 3: and its valuation, open ai potentially being eight hundred and

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Speaker 3: thirty billion, just to pit the post on SpaceX's eight

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Speaker 3: hundred billion dollar valuation. How much are you seeing your

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Speaker 3: clients wanting more exposure to the private markets and how

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Speaker 3: is that going to translate to public in twenty twenty six.

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Speaker 8: So key, and it's such a big difference from what

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Speaker 8: we saw in the Internet era, right when all of

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Speaker 8: these AI or sorry Internet startups were just going public

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Speaker 8: on day one, and today you have these AI native

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Speaker 8: companies reaching scale that we've never seen before in private markets.

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Speaker 8: And of course there are the big model developers, but

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Speaker 8: what's been actually most interesting for me has been seeing

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Speaker 8: the explosion in AI applications. If you think about out

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Speaker 8: who are the companies that are really at the center

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Speaker 8: of end user demand, selling to consumers, selling to businesses,

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Speaker 8: it's these more niche AI applications and they are growing

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Speaker 8: at scales that we've never seen before. Right the average

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Speaker 8: AI startup reaching one hundred million dollars in under twelve

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Speaker 8: months on average at take and startups about roughly.

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Speaker 2: Ten years to achieve.

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Speaker 8: You had Patrick McGoldrick here yesterday from our firm talking

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Speaker 8: about this dynamic. So absolutely like if you want some

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Speaker 8: of that growth exposure, you're going to need a look

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Speaker 8: in private markets. In our long term capital market assumptions,

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Speaker 8: we actually see that the long term return expectation in

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Speaker 8: private equity at ten point two versus large cap public

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Speaker 8: equities in the US six point seven. A big reason

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Speaker 8: for that is starting valuations in public equity markets. In

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Speaker 8: private markets you have that issue too, So selectivity is

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Speaker 8: going to be really really important. But we still think

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Speaker 8: there's a lot of opportunity.

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Speaker 3: What about opportunities for IPOs next year and those who

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Speaker 3: haven't golled the private exposure getting it when it goes public.

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Speaker 8: Yeah, that's going to be really interesting because some of

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Speaker 8: these companies like open ai and SpaceX, at their private

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Speaker 8: market valuation, they would already be top fifteen companies in

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Speaker 8: the S and P five hundred, so they're not even

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Speaker 8: public yet. And when they do go public, investors, you know,

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Speaker 8: we're going to see what the demand is at that time.

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Speaker 8: But you're going to be getting into a company that

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Speaker 8: already looks kind of like a megacab, you know. And

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Speaker 8: I think these companies are then going to have to

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Speaker 8: stand against public market scrutiny like the scoreboard that these

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Speaker 8: companies actually have to really attest to. So it'll be

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Speaker 8: really interesting. I think if we get these IPOs next year,

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Speaker 8: it'll be a really powerful, really like referendum on the

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Speaker 8: AI ecosystem, which is an opportunity and a risk for

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Speaker 8: the broader space next year.

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Speaker 3: Regulators we understand in China have yet to say whether

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Speaker 3: they'll approve the proposed sale and new structure for byte

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Speaker 3: Dance owned TikTok and decision required for the deal to

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Speaker 3: more forward. Now, the fate of TikTok has become a

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Speaker 3: key issue in the US China relations under the Trump administration,

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Speaker 3: putting meg Technology Editorim Washington, Michael Sheppard, you're joining us.

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Speaker 3: You can help remind us actually what isn't agreed to yet?

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Speaker 3: Because the market is pricing in a deal with new

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Speaker 3: US ownership and control and less than twenty percent held

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Speaker 3: by byteedowance of US TikTok. But what haven't we heard yet.

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Speaker 9: Well, the loose end really is, you said, Caro, is

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Speaker 9: Chinese government approval, and we may never really hear a

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Speaker 9: full throat of blessing from Beijing for this transaction, and

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Speaker 9: the way we might ordinarily expect. We have heard from

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Speaker 9: the White House very clearly. We all remember September twenty fifth,

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Speaker 9: President Donald Trump very publicly signed the declaration the order

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Speaker 9: setting in motion the deal that was actually inked yesterday,

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Speaker 9: and announced it an internal memo to TikTok employees by

439
00:21:41,040 --> 00:21:44,640
Speaker 9: company CEO Shao Chu. Now, the interesting thing, Caro, when

440
00:21:44,680 --> 00:21:47,360
Speaker 9: you think about it, is that these are serious players.

441
00:21:47,400 --> 00:21:50,040
Speaker 9: When you think about Oracle, when you think about shaou Chu,

442
00:21:50,080 --> 00:21:52,360
Speaker 9: when you think about Silver Lake and MGX, the other

443
00:21:52,560 --> 00:21:56,600
Speaker 9: three main new investors here preparing to take a significant

444
00:21:56,680 --> 00:22:00,240
Speaker 9: chunk together, they would control about forty five percent of

445
00:22:00,280 --> 00:22:04,879
Speaker 9: the new US entity. They would not likely proceed unless

446
00:22:04,880 --> 00:22:07,359
Speaker 9: they had a very good sense that China was willing

447
00:22:07,400 --> 00:22:10,560
Speaker 9: to go along. Putting that pen to paper is a

448
00:22:10,680 --> 00:22:14,320
Speaker 9: significant step forward than actually just talking about it, which

449
00:22:14,359 --> 00:22:16,639
Speaker 9: is the stage we were at when we last heard

450
00:22:16,960 --> 00:22:18,679
Speaker 9: back in September, with Trumps signing.

451
00:22:19,280 --> 00:22:22,920
Speaker 3: Mike remind us, though, what else is really at State

452
00:22:23,000 --> 00:22:25,240
Speaker 3: care between US and China, and Video is involved. We

453
00:22:25,240 --> 00:22:27,280
Speaker 3: think about the chip war, the tech war more broadly,

454
00:22:27,560 --> 00:22:31,560
Speaker 3: but also this week has been particularly concerning considering what's

455
00:22:31,600 --> 00:22:33,359
Speaker 3: happening in terms of arms deals with Taiwan.

456
00:22:33,520 --> 00:22:34,000
Speaker 2: Can you just.

457
00:22:33,960 --> 00:22:36,600
Speaker 3: Remind us really where the relationship lies at this moment.

458
00:22:37,200 --> 00:22:39,760
Speaker 9: Well, there are all sorts of cross currents happening here

459
00:22:39,840 --> 00:22:42,280
Speaker 9: right now. You brought the Taiwan sale, and of course

460
00:22:42,320 --> 00:22:46,480
Speaker 9: that envelops an industry that we cover so closely, chips,

461
00:22:46,560 --> 00:22:49,240
Speaker 9: given that so many the lion's share of the advanced

462
00:22:49,280 --> 00:22:52,920
Speaker 9: AI chips are actually produced on the self governing island.

463
00:22:53,119 --> 00:22:55,440
Speaker 9: But the cross currents are so many you talked about

464
00:22:55,520 --> 00:22:59,200
Speaker 9: in Nvidia and the pending approval that President Donald Trump,

465
00:22:59,240 --> 00:23:03,840
Speaker 9: at least verbally on his truth social allowed the sales

466
00:23:03,840 --> 00:23:08,359
Speaker 9: of in Video's h two hundred chips to China. Jameson Greer,

467
00:23:08,560 --> 00:23:11,480
Speaker 9: the US trade representative, sat on Bloomberg TV this morning

468
00:23:11,520 --> 00:23:13,760
Speaker 9: that he sees that as separate. He sees it as

469
00:23:13,760 --> 00:23:18,199
Speaker 9: a separate issue within the China relationship. Perhaps TikTok in

470
00:23:18,240 --> 00:23:21,320
Speaker 9: a way is too. US officials have brought up export

471
00:23:21,400 --> 00:23:25,520
Speaker 9: controls and TikTok in their conversations with the Chinese, But

472
00:23:25,560 --> 00:23:28,199
Speaker 9: the question is are they able to break them away

473
00:23:28,240 --> 00:23:31,960
Speaker 9: from all the other questions surrounding things like rare earths

474
00:23:32,320 --> 00:23:35,640
Speaker 9: and also the tariffs that the Trump administration has been

475
00:23:35,720 --> 00:23:39,439
Speaker 9: threatening against Chinese goods. So how much separation do we

476
00:23:39,480 --> 00:23:42,440
Speaker 9: see all in all of that, and are we going

477
00:23:42,480 --> 00:23:46,720
Speaker 9: to see China offer something in return or the US

478
00:23:46,840 --> 00:23:50,240
Speaker 9: vice versa? Is the H two hundred perhaps the olive

479
00:23:50,320 --> 00:23:53,160
Speaker 9: branch that was needed to get China over the line

480
00:23:53,240 --> 00:23:53,920
Speaker 9: on TikTok.

481
00:23:54,040 --> 00:23:54,639
Speaker 5: We don't know.

482
00:23:54,720 --> 00:23:57,159
Speaker 9: We're still trying to find out more about all of

483
00:23:57,160 --> 00:23:59,760
Speaker 9: what went down, but we are looking ahead already to

484
00:24:00,119 --> 00:24:02,760
Speaker 9: your AD twenty second and that is when the deal

485
00:24:02,880 --> 00:24:03,840
Speaker 9: is scheduled to close.

486
00:24:03,880 --> 00:24:08,080
Speaker 3: By Bloomberg's Mike Shepherd, a complete wrap from Washington.

487
00:24:08,119 --> 00:24:08,680
Speaker 2: We thank you.

488
00:24:09,000 --> 00:24:11,480
Speaker 3: Let's talk about TikTok ownership and how it is just

489
00:24:11,560 --> 00:24:14,480
Speaker 3: one of several points of tech friction between Washington and Beijing.

490
00:24:14,480 --> 00:24:17,680
Speaker 3: As Mike was outlining, Amy Webbs, your Future Today Strategy

491
00:24:17,720 --> 00:24:20,080
Speaker 3: Group says the US trying to race to develop and

492
00:24:20,119 --> 00:24:22,760
Speaker 3: control technology is set to define the future of AI,

493
00:24:23,119 --> 00:24:26,280
Speaker 3: of chips, of quantum, she joins us. Now, Amy, how

494
00:24:26,280 --> 00:24:29,560
Speaker 3: does TikTok and a potential agreement play into the relationship.

495
00:24:29,560 --> 00:24:31,440
Speaker 2: Do you think I'm positive for that?

496
00:24:33,480 --> 00:24:36,879
Speaker 10: Well, positive in terms of calming some of the concerns

497
00:24:36,880 --> 00:24:39,600
Speaker 10: that the Trump administration had. You know, I would imagine

498
00:24:39,640 --> 00:24:42,640
Speaker 10: that a lot of people didn't have Oracle on their

499
00:24:42,680 --> 00:24:45,280
Speaker 10: binging go card is the biggest tech disruptor in twenty

500
00:24:45,359 --> 00:24:49,040
Speaker 10: twenty five. But that's where we are, and that's because

501
00:24:49,080 --> 00:24:51,199
Speaker 10: Oracle is a bit of a mixed bag. It's not

502
00:24:51,280 --> 00:24:54,720
Speaker 10: on the forefront of innovation in critical technologies. This is

503
00:24:54,760 --> 00:24:56,960
Speaker 10: a company that moves slowly. But at the end of

504
00:24:56,960 --> 00:25:01,560
Speaker 10: the day, yep. But at the end of the day,

505
00:25:01,960 --> 00:25:04,960
Speaker 10: business is just about relationships. And Larry Ellison as a

506
00:25:04,960 --> 00:25:08,119
Speaker 10: friend of Donald Trump, and if we think about China

507
00:25:08,160 --> 00:25:12,119
Speaker 10: going forward, China is all about relationships and how that's

508
00:25:12,160 --> 00:25:15,760
Speaker 10: going to impact matches, the development of the artificial intelligence instant,

509
00:25:15,880 --> 00:25:20,000
Speaker 10: so many other critical technologies that are now fully intertwined

510
00:25:20,040 --> 00:25:21,080
Speaker 10: with business.

511
00:25:21,280 --> 00:25:24,919
Speaker 3: Okay, I mean, so potentially it's a positive in the relationship,

512
00:25:24,960 --> 00:25:28,840
Speaker 3: the diplomatic relationship between US and China. But what more

513
00:25:28,920 --> 00:25:31,840
Speaker 3: broadly will dictate in twenty twenty six we keep on

514
00:25:31,960 --> 00:25:35,080
Speaker 3: talking about this undercurrent of a race really and in

515
00:25:35,119 --> 00:25:37,000
Speaker 3: one way, we have an olive branch for TikTok and

516
00:25:37,040 --> 00:25:40,680
Speaker 3: another we have still a desire to restrict very integral

517
00:25:40,720 --> 00:25:42,960
Speaker 3: technologies going to China and China and building up his

518
00:25:43,119 --> 00:25:46,880
Speaker 3: own chip supply chain and resilience away from the United States.

519
00:25:47,240 --> 00:25:51,320
Speaker 10: Who's winning, right, So again, I think at the moment,

520
00:25:51,440 --> 00:25:53,960
Speaker 10: China's winning, which is a controversial view, but let me

521
00:25:54,000 --> 00:25:56,480
Speaker 10: tell you why I think this way. China has spent

522
00:25:57,440 --> 00:26:01,880
Speaker 10: years investing in infrastructure. The United States has really had

523
00:26:01,920 --> 00:26:05,840
Speaker 10: sort of a free wheeling innovation focus and the challenges.

524
00:26:05,960 --> 00:26:08,920
Speaker 10: We've got a handful of companies that are making through

525
00:26:09,000 --> 00:26:11,880
Speaker 10: roads in their innovation and different technologies, but we don't

526
00:26:11,880 --> 00:26:14,560
Speaker 10: have the physical infrastructure to support a lot of that,

527
00:26:14,880 --> 00:26:17,040
Speaker 10: which is why you hear so much about data centers

528
00:26:17,080 --> 00:26:20,040
Speaker 10: and energy consumption. China has been at the forefront of

529
00:26:20,119 --> 00:26:25,520
Speaker 10: totally transforming what energy transfer looks like. In March, the

530
00:26:25,560 --> 00:26:29,359
Speaker 10: CCP will have its meeting on China's annual five year Plan.

531
00:26:30,000 --> 00:26:32,760
Speaker 10: AI is the centerpiece of that, and there is a

532
00:26:32,880 --> 00:26:36,840
Speaker 10: very clearly outlined every five year look at how that

533
00:26:37,080 --> 00:26:39,960
Speaker 10: entire country is going to transform. We just don't have

534
00:26:40,080 --> 00:26:42,120
Speaker 10: that point of view in the United States. So again,

535
00:26:42,640 --> 00:26:45,879
Speaker 10: this is I think the TikTok thing is partially about competition,

536
00:26:46,000 --> 00:26:48,159
Speaker 10: but it also signals a challenge that we have in

537
00:26:48,160 --> 00:26:50,960
Speaker 10: the US going forward. We have to have some type

538
00:26:50,960 --> 00:26:54,440
Speaker 10: of coordinated effort if we're going to remain competitive, not

539
00:26:54,520 --> 00:26:56,359
Speaker 10: just from a business point of view, but when we

540
00:26:56,359 --> 00:27:00,920
Speaker 10: think about our national and international competitiveness, whether that comes

541
00:27:00,960 --> 00:27:04,520
Speaker 10: to talent or security or even geopolitics.

542
00:27:05,080 --> 00:27:07,600
Speaker 3: Yeah, remind us what's at stake, because we all like

543
00:27:07,680 --> 00:27:09,600
Speaker 3: to talk about a race, but many of us forget

544
00:27:09,640 --> 00:27:12,520
Speaker 3: what the winning of it really means and why many

545
00:27:12,560 --> 00:27:15,640
Speaker 3: in Washington and more broadly in Silicon Valley and everywhere

546
00:27:15,280 --> 00:27:18,480
Speaker 3: are worried about China leading when it comes to artificial

547
00:27:18,520 --> 00:27:20,440
Speaker 3: general intelligence, or even superintelligence.

548
00:27:21,600 --> 00:27:24,879
Speaker 10: So some of this has to do with the chipsets themselves,

549
00:27:24,920 --> 00:27:29,600
Speaker 10: the technology itself, and where China has made some of

550
00:27:29,600 --> 00:27:32,240
Speaker 10: those inroads. So we sort of moved beyond the point

551
00:27:32,320 --> 00:27:36,040
Speaker 10: where data is all that matter. Hardware matters very much

552
00:27:36,160 --> 00:27:40,600
Speaker 10: going forward because that has implications for everything from pharmaceuticals

553
00:27:40,640 --> 00:27:45,040
Speaker 10: to robotics. You know, it cuts across every industry, and

554
00:27:45,080 --> 00:27:46,720
Speaker 10: at the moment we are at a bit of a

555
00:27:46,760 --> 00:27:51,480
Speaker 10: disadvantage because China has pushed very far ahead in the

556
00:27:51,520 --> 00:27:54,960
Speaker 10: future of telecommunications and the hardware needed for that where

557
00:27:55,000 --> 00:27:59,040
Speaker 10: they are deploying throughout Africa. You know, all of this

558
00:27:59,119 --> 00:28:02,240
Speaker 10: is happening at a critical moment where the United States

559
00:28:02,280 --> 00:28:06,240
Speaker 10: is retreating from a global stage. You know, that just

560
00:28:06,280 --> 00:28:10,800
Speaker 10: sets us up for some significant challenges going forward, especially

561
00:28:10,840 --> 00:28:13,879
Speaker 10: because technology is now part and parcel of everything that

562
00:28:13,920 --> 00:28:14,240
Speaker 10: we do.

563
00:28:14,600 --> 00:28:16,640
Speaker 3: And we haven't even mentioned why we're trying to see

564
00:28:16,680 --> 00:28:19,320
Speaker 3: twenty twenty nine go for quantum for example, how much

565
00:28:19,359 --> 00:28:20,520
Speaker 3: is that going to be something we talk about in

566
00:28:20,520 --> 00:28:21,280
Speaker 3: twenty twenty six.

567
00:28:22,400 --> 00:28:25,520
Speaker 10: Well, there have been some significant breakthroughs already in twenty

568
00:28:25,560 --> 00:28:29,240
Speaker 10: twenty five, and you know that's come from sort of

569
00:28:29,280 --> 00:28:32,040
Speaker 10: the usual suspects. So Google had some pretty big breakthroughs,

570
00:28:32,080 --> 00:28:35,359
Speaker 10: as did Microsoft. And effectively, what this means is we're

571
00:28:35,440 --> 00:28:40,120
Speaker 10: moving from theory into actual use cases in practice. So

572
00:28:40,120 --> 00:28:42,000
Speaker 10: it does mean everybody's going to have a quantum computer

573
00:28:42,120 --> 00:28:45,560
Speaker 10: next year. It does mean that the application becomes more accessible.

574
00:28:45,880 --> 00:28:49,520
Speaker 10: But here too, we don't see a national perspective the

575
00:28:49,560 --> 00:28:52,880
Speaker 10: way that we do in China. You know, we just

576
00:28:52,960 --> 00:28:57,280
Speaker 10: have to start marshaling our resources in a cohesive direction. Again,

577
00:28:57,560 --> 00:29:01,040
Speaker 10: not such that it is state dictated, but so that

578
00:29:01,480 --> 00:29:04,960
Speaker 10: we have policy certainty, we have investment structures in place,

579
00:29:05,240 --> 00:29:07,400
Speaker 10: and we are all able to row the boat of

580
00:29:07,440 --> 00:29:09,920
Speaker 10: technology forward together well.

581
00:29:09,800 --> 00:29:13,880
Speaker 3: Said Amy Webb, CEO of Future Future Today Strategy Groups.

582
00:29:13,880 --> 00:29:16,240
Speaker 3: Wonderful to have some time with you, Thank you very much. Indeed,

583
00:29:16,520 --> 00:29:18,920
Speaker 3: open ai is aiming to raise as much as one

584
00:29:19,000 --> 00:29:21,920
Speaker 3: hundred billion dollars to pay for ambitious growth plans. Now

585
00:29:21,960 --> 00:29:24,680
Speaker 3: that's according to the Wall Street Journal. The chatchypt maker

586
00:29:24,760 --> 00:29:27,240
Speaker 3: is in early fundraising talks that couldn't value the company

587
00:29:27,600 --> 00:29:30,080
Speaker 3: as much as eight hundred and thirty billion dollars. It

588
00:29:30,080 --> 00:29:31,880
Speaker 3: needs a huge amount of capital, of course to build

589
00:29:31,880 --> 00:29:35,000
Speaker 3: as AI models and stay competitive, but exuberants of AI

590
00:29:35,440 --> 00:29:37,960
Speaker 3: is waning a little and public companies in the space

591
00:29:38,200 --> 00:29:41,400
Speaker 3: seen investors pull back and show some anxiety around the

592
00:29:41,400 --> 00:29:45,040
Speaker 3: infrastructure build out. But otherwise we're looking at productivity and

593
00:29:45,080 --> 00:29:47,760
Speaker 3: deployment of open AI's chatchibt and the company is looking

594
00:29:47,760 --> 00:29:51,120
Speaker 3: to win over the next generations. Workers are becoming they

595
00:29:51,160 --> 00:29:54,440
Speaker 3: go to AI tool a choice in college now. According

596
00:29:54,480 --> 00:29:57,280
Speaker 3: to purchase orders reviewed by Bloomberg, the company has sold

597
00:29:57,280 --> 00:30:00,920
Speaker 3: more than seven hundred thousand chatchybet licenses too, about thirty

598
00:30:00,920 --> 00:30:04,200
Speaker 3: five public universities for use by students and faculty. It's

599
00:30:04,240 --> 00:30:07,120
Speaker 3: far more rivals like Microsoft need to tell us more,

600
00:30:07,120 --> 00:30:10,400
Speaker 3: as bluembgs Liam Knox who covers higher education, and I

601
00:30:10,440 --> 00:30:13,080
Speaker 3: mean remind me it was only about a year or

602
00:30:13,080 --> 00:30:16,440
Speaker 3: so ago that we saw this deep anxiety and concern

603
00:30:16,520 --> 00:30:20,000
Speaker 3: coming from faculty members from the future of education about

604
00:30:20,040 --> 00:30:20,960
Speaker 3: the deployment of AI.

605
00:30:22,120 --> 00:30:26,240
Speaker 11: Absolutely, there's been a lot of consternation among professors among

606
00:30:26,360 --> 00:30:29,760
Speaker 11: educators about the effects of AI in the classroom, obviously

607
00:30:29,920 --> 00:30:34,280
Speaker 11: about its use for things like you know, cheating and plagiarism,

608
00:30:34,320 --> 00:30:39,320
Speaker 11: but also just its effect on learning outcomes for students.

609
00:30:39,360 --> 00:30:43,640
Speaker 11: Since then, obviously it's kind of become an ubiquitous part

610
00:30:43,680 --> 00:30:47,080
Speaker 11: of most classrooms, and so a lot has changed in

611
00:30:47,080 --> 00:30:48,040
Speaker 11: the past couple of years.

612
00:30:48,200 --> 00:30:51,480
Speaker 2: Okay, so why is open ai wanting to really lean

613
00:30:51,520 --> 00:30:52,000
Speaker 2: in here?

614
00:30:53,280 --> 00:30:56,960
Speaker 11: Well, there's a kind of tried and true, you know

615
00:30:57,040 --> 00:30:59,280
Speaker 11: strategy in the tech world.

616
00:30:59,560 --> 00:31:01,080
Speaker 5: Google had had.

617
00:31:01,480 --> 00:31:04,200
Speaker 11: A similar strategy around its chromebooks and its suite of

618
00:31:04,240 --> 00:31:08,840
Speaker 11: applications years ago when it offered free chromebooks and classes.

619
00:31:09,160 --> 00:31:11,600
Speaker 11: Open ai is really hoping to make inroads with what

620
00:31:11,640 --> 00:31:15,840
Speaker 11: they see as as their future customer base to put

621
00:31:15,920 --> 00:31:19,680
Speaker 11: their Chatchipeta and AI tools at the center of kind

622
00:31:19,680 --> 00:31:25,520
Speaker 11: of workforce preparation and skills training, and colleges are you

623
00:31:25,560 --> 00:31:31,520
Speaker 11: know there. It's already been used by students on Massa colleges,

624
00:31:31,560 --> 00:31:33,320
Speaker 11: so it's kind of an obvious place to start.

625
00:31:33,480 --> 00:31:36,880
Speaker 3: Fascinating story open aiing's college deals, seizing early lead in education.

626
00:31:36,960 --> 00:31:37,320
Speaker 2: Go read it.

627
00:31:37,360 --> 00:31:40,160
Speaker 3: Bloom Meggs, Liam Knox, thank you, And let's talk about

628
00:31:40,160 --> 00:31:43,680
Speaker 3: the fintech billionaire and SpaceX astronaut Jared Issacman, who's finally

629
00:31:43,680 --> 00:31:46,200
Speaker 3: been confirmed as the next head of NASA. He's worked

630
00:31:46,200 --> 00:31:48,880
Speaker 3: with Blue meg Tech's own Ed Ludlow about US plans

631
00:31:48,920 --> 00:31:49,720
Speaker 3: to return to the Moon.

632
00:31:51,400 --> 00:31:54,200
Speaker 12: This goes beyond just a recommitment to the Artemis program.

633
00:31:54,240 --> 00:31:56,520
Speaker 12: This is the next big leap. You know, We're not

634
00:31:56,720 --> 00:31:59,000
Speaker 12: just going back to the Moon under this space policy.

635
00:31:59,040 --> 00:32:01,320
Speaker 12: We're declaring we're going back and we're going to establish

636
00:32:01,320 --> 00:32:04,640
Speaker 12: the infrastructure. I mean, who doesn't what's space loving fan

637
00:32:04,680 --> 00:32:06,680
Speaker 12: out there doesn't want to see a lunar base. And

638
00:32:06,720 --> 00:32:09,160
Speaker 12: then we're going to invest in the technology that's going

639
00:32:09,200 --> 00:32:13,160
Speaker 12: to enable you know, frequent, long duration missions to Mars

640
00:32:13,160 --> 00:32:16,280
Speaker 12: and beyond, whether that be through nuclear propulsion or nuclear

641
00:32:16,280 --> 00:32:19,160
Speaker 12: surface power, which which obviously has a number of useful

642
00:32:19,200 --> 00:32:22,120
Speaker 12: applications be at the Moon or Mars. So it's an

643
00:32:22,120 --> 00:32:26,400
Speaker 12: exciting day. It's absolutely extraordinary national space policy and one

644
00:32:26,400 --> 00:32:28,760
Speaker 12: that I'm not surprised to see. Frankly, it was under

645
00:32:28,760 --> 00:32:32,800
Speaker 12: President Trump's first term that we returned American spaceflight capability

646
00:32:32,840 --> 00:32:35,120
Speaker 12: to the United States after a ten year hiatus. It's

647
00:32:35,120 --> 00:32:38,040
Speaker 12: when he kicked off the Artemis program, and now you know,

648
00:32:38,120 --> 00:32:39,640
Speaker 12: we're taking it to the next level.

649
00:32:41,600 --> 00:32:46,040
Speaker 13: Administrator Isaacman jared. The question I get most for you

650
00:32:46,640 --> 00:32:49,720
Speaker 13: right now, in response to everything that's happened in the

651
00:32:49,760 --> 00:32:54,560
Speaker 13: last few weeks, is how is NASA still relevant right

652
00:32:54,640 --> 00:32:58,880
Speaker 13: in a world where the private sector is dominating activity,

653
00:32:59,320 --> 00:33:01,000
Speaker 13: it's dominant innovation.

654
00:33:01,560 --> 00:33:03,120
Speaker 5: What is your answer to that question?

655
00:33:03,880 --> 00:33:07,920
Speaker 12: Well, you know, that seems to be a common misconception.

656
00:33:07,960 --> 00:33:10,760
Speaker 12: I mean, you go back to the nineteen sixties and

657
00:33:11,000 --> 00:33:13,640
Speaker 12: NASA didn't go at it alone. I mean we had

658
00:33:13,720 --> 00:33:17,920
Speaker 12: McDonald Douglas, we had Boeing, we had Northrope. These were

659
00:33:17,960 --> 00:33:21,719
Speaker 12: all critical, critical vendors and contractors that helped us achieve

660
00:33:21,760 --> 00:33:24,320
Speaker 12: the near impossible of sending American astronauts to the Moon

661
00:33:24,360 --> 00:33:27,520
Speaker 12: and bring them back safely to night to Earth. I

662
00:33:27,560 --> 00:33:30,520
Speaker 12: mean some of these companies still exist and play a

663
00:33:30,560 --> 00:33:32,480
Speaker 12: huge part in the Artemis program. And then of course

664
00:33:32,480 --> 00:33:35,840
Speaker 12: there are some new companies, you know, like SpaceX, who's

665
00:33:35,880 --> 00:33:39,600
Speaker 12: given us rapid reusability their vehicles in Blue Origin and Stoke.

666
00:33:39,960 --> 00:33:41,880
Speaker 12: But it's the same thing. NASA is leading in the

667
00:33:41,920 --> 00:33:44,680
Speaker 12: ultimate high ground of space. And let's focus a little

668
00:33:44,680 --> 00:33:45,680
Speaker 12: bit more on science too.

669
00:33:45,760 --> 00:33:45,960
Speaker 8: In that.

670
00:33:46,120 --> 00:33:48,200
Speaker 12: I mean, there are as much as I would love

671
00:33:48,240 --> 00:33:52,160
Speaker 12: to see private companies and academic institutions building you know,

672
00:33:52,520 --> 00:33:56,960
Speaker 12: Hubble Telescopes in James Webb Space Telescope and putting rovers

673
00:33:57,000 --> 00:34:01,240
Speaker 12: on the Moon, that is squarely in the responsibility of NASA.

674
00:34:02,080 --> 00:34:05,160
Speaker 3: Our own Ede Lalu is speaking with the new NASA administrator,

675
00:34:05,480 --> 00:34:06,240
Speaker 3: Jared Isaacman.

676
00:34:07,120 --> 00:34:09,839
Speaker 2: Now, next up, we're going to be talking all things

677
00:34:09,880 --> 00:34:10,680
Speaker 2: twenty twenty six.

678
00:34:10,760 --> 00:34:13,279
Speaker 3: Look ahead. Where are you in the world of tech?

679
00:34:13,320 --> 00:34:15,680
Speaker 3: Tiffany Wade joining us in Columbia, thread Needle. This is

680
00:34:15,680 --> 00:34:30,360
Speaker 3: Blumberg Tech. Welcome back to Bloomberg Tech. We check in

681
00:34:30,400 --> 00:34:32,520
Speaker 3: on these markets. The higher on the day, the higher

682
00:34:32,520 --> 00:34:34,920
Speaker 3: on the week. There on the year, we're up by

683
00:34:34,920 --> 00:34:37,880
Speaker 3: twenty percent. Lest you forget some of the recent volatility.

684
00:34:38,200 --> 00:34:40,440
Speaker 3: It has been a banner twenty twenty five. What about

685
00:34:40,440 --> 00:34:43,880
Speaker 3: twenty twenty six? What's what the outlook opportunities? Risks pleased

686
00:34:43,880 --> 00:34:45,719
Speaker 3: to say, Tiffany Wadeer is with our senior portfolio manager

687
00:34:45,760 --> 00:34:48,480
Speaker 3: at Columbia thread Needle Investments. You've got a call se

688
00:34:48,480 --> 00:34:50,680
Speaker 3: one hundred and fifteen billion dollars an assets under management.

689
00:34:51,200 --> 00:34:52,719
Speaker 3: How much is tech going to still be leading the

690
00:34:52,840 --> 00:34:53,879
Speaker 3: charge in next year?

691
00:34:54,160 --> 00:34:56,120
Speaker 14: I think tech it's going to be good again next year.

692
00:34:56,360 --> 00:34:58,239
Speaker 14: I honestly think they set up for twenty twenty six

693
00:34:58,280 --> 00:35:02,520
Speaker 14: looks quite similar to this this last year. We'll see

694
00:35:02,560 --> 00:35:06,320
Speaker 14: another year of FED raid cutting. In general, the economy

695
00:35:06,320 --> 00:35:08,879
Speaker 14: looks pretty strong. Labor is a watch item for next year,

696
00:35:08,880 --> 00:35:10,960
Speaker 14: but you know labor has been weakening for the most

697
00:35:11,000 --> 00:35:13,520
Speaker 14: part of this year as well. And then we'll also

698
00:35:13,520 --> 00:35:16,200
Speaker 14: see fiscal stimulus next year, and that'll come from existing

699
00:35:16,200 --> 00:35:19,439
Speaker 14: stimulus continuing such as the IRA but also the tax bill.

700
00:35:19,800 --> 00:35:21,719
Speaker 14: And then AI is going to be a tailwind next year.

701
00:35:21,760 --> 00:35:23,279
Speaker 14: So I think it sets up well for tech and

702
00:35:23,320 --> 00:35:23,960
Speaker 14: growth generally.

703
00:35:24,080 --> 00:35:26,359
Speaker 3: What needs to be proven now in twenty twenty six,

704
00:35:26,440 --> 00:35:28,600
Speaker 3: because I feel like twenty twenty five we've all needed

705
00:35:28,600 --> 00:35:31,040
Speaker 3: to understand the infrastructure needs, and then we've questioned the

706
00:35:31,080 --> 00:35:33,759
Speaker 3: ability to afford all of them. But twenty twenty six,

707
00:35:33,760 --> 00:35:36,160
Speaker 3: we're starting to see real needs to show signs of

708
00:35:36,200 --> 00:35:37,840
Speaker 3: productivity and actual growth here.

709
00:35:38,280 --> 00:35:38,520
Speaker 2: Yeah.

710
00:35:38,640 --> 00:35:40,279
Speaker 14: Yeah, I think we're just starting to see the use

711
00:35:40,320 --> 00:35:42,279
Speaker 14: cases build for AI, and we're starting to see it

712
00:35:42,320 --> 00:35:43,120
Speaker 14: across the economy.

713
00:35:43,160 --> 00:35:43,279
Speaker 8: Right.

714
00:35:43,320 --> 00:35:45,520
Speaker 14: Certainly tech is one of the early adopters for AI,

715
00:35:45,840 --> 00:35:48,320
Speaker 14: but we're seeing it across the consumer space, across financials

716
00:35:48,320 --> 00:35:50,200
Speaker 14: as well. And I think as that continues to build,

717
00:35:50,600 --> 00:35:53,200
Speaker 14: that continues to you know, increase the use cases and

718
00:35:53,239 --> 00:35:56,240
Speaker 14: the proof that AI is going to be ubiquitous across

719
00:35:56,239 --> 00:35:58,719
Speaker 14: the economy. But also I think, you know, similar to

720
00:35:58,880 --> 00:36:00,600
Speaker 14: a bit of the concerns we had earlier this year,

721
00:36:00,600 --> 00:36:03,120
Speaker 14: we need to see that companies still continue to invest

722
00:36:03,120 --> 00:36:05,480
Speaker 14: in AI and they still see the returns from that

723
00:36:05,560 --> 00:36:07,600
Speaker 14: being beneficial to continue the spending.

724
00:36:07,640 --> 00:36:09,560
Speaker 3: Have you done much analysis and what that actually means

725
00:36:09,560 --> 00:36:12,240
Speaker 3: for the labor outlook, because we've had how Mark saying

726
00:36:12,280 --> 00:36:14,600
Speaker 3: this is sort of a disaster basically for the labor market.

727
00:36:14,719 --> 00:36:15,600
Speaker 2: All of this AI for.

728
00:36:15,760 --> 00:36:18,839
Speaker 3: Focus, but we've had perhaps what people call AI washing

729
00:36:18,880 --> 00:36:21,200
Speaker 3: and people liking to blame job cuts on AI, but

730
00:36:21,239 --> 00:36:23,080
Speaker 3: we're trying to actually discern how much it really is.

731
00:36:23,600 --> 00:36:25,640
Speaker 14: Yeah, I think it's hard to say right now how

732
00:36:25,680 --> 00:36:27,400
Speaker 14: much of the job cuts so far have been related

733
00:36:27,400 --> 00:36:30,359
Speaker 14: to AI. There's some surveys, certainly that suggests that some

734
00:36:30,400 --> 00:36:32,520
Speaker 14: of the AI some of the job cuts have been.

735
00:36:32,400 --> 00:36:33,800
Speaker 2: Specifically related to AI.

736
00:36:34,400 --> 00:36:36,440
Speaker 14: I do think there will probably be a period of

737
00:36:36,480 --> 00:36:40,200
Speaker 14: digestion in the workforce. It's hard to say over in

738
00:36:40,200 --> 00:36:42,160
Speaker 14: the near term what the displacement is going to be.

739
00:36:42,239 --> 00:36:43,040
Speaker 2: Over the long term.

740
00:36:43,080 --> 00:36:46,000
Speaker 14: I imagine, like many sorts of technology innovations we've have

741
00:36:46,120 --> 00:36:48,520
Speaker 14: over time, that this will probably be in a positive

742
00:36:48,520 --> 00:36:49,520
Speaker 14: over a longer period of time.

743
00:36:49,960 --> 00:36:52,640
Speaker 3: So you're looking at your portfolio aligning it for twenty

744
00:36:52,680 --> 00:36:54,880
Speaker 3: twenty six. Is it going to be the same winners.

745
00:36:55,120 --> 00:36:58,240
Speaker 3: Is it going to be the infrastructure play the in videos,

746
00:36:58,320 --> 00:37:00,799
Speaker 3: the chip makers, or is them mile more of a

747
00:37:00,800 --> 00:37:03,400
Speaker 3: shift for your mindset of getting into where the productivity

748
00:37:03,400 --> 00:37:05,160
Speaker 3: actually happens, where the applications happen.

749
00:37:05,600 --> 00:37:08,520
Speaker 14: Yeah, I think we're very positive on the infrastructure spending

750
00:37:08,560 --> 00:37:11,520
Speaker 14: as well, more so on the hyperscalers and some of

751
00:37:11,520 --> 00:37:13,520
Speaker 14: the electrical equipment names that are involved in sort of

752
00:37:13,560 --> 00:37:16,440
Speaker 14: the physical infrastructure spending, and then also some of the

753
00:37:16,480 --> 00:37:19,799
Speaker 14: companies that are involved in helping to make AI scalable.

754
00:37:19,880 --> 00:37:24,800
Speaker 14: So thinking of technology companies that enable the usage, the deployment,

755
00:37:24,880 --> 00:37:27,040
Speaker 14: the security around AI. So I think that's where we

756
00:37:27,080 --> 00:37:27,640
Speaker 14: might see.

757
00:37:27,440 --> 00:37:31,280
Speaker 2: Something like a Palan Networks, also.

758
00:37:31,640 --> 00:37:34,680
Speaker 14: A Mango dB something like that. So the companies that

759
00:37:34,719 --> 00:37:38,480
Speaker 14: allow AI to be scalable, that allow companies to clean.

760
00:37:38,280 --> 00:37:39,800
Speaker 2: Up their data to get it ready for AI.

761
00:37:39,960 --> 00:37:41,360
Speaker 14: So that's something that we've heard from a lot of

762
00:37:41,360 --> 00:37:43,879
Speaker 14: companies is that the process of getting your data cleaned

763
00:37:43,960 --> 00:37:46,080
Speaker 14: up and ready to be put into AI is very

764
00:37:46,080 --> 00:37:48,560
Speaker 14: difficult and something that a lot of companies are working on.

765
00:37:48,920 --> 00:37:51,440
Speaker 14: I don't know that the productivity benefits. I think that's

766
00:37:51,440 --> 00:37:53,360
Speaker 14: something that's probably still a little farther out, but it

767
00:37:53,400 --> 00:37:55,720
Speaker 14: will be very widespread when it happens.

768
00:37:56,000 --> 00:38:00,920
Speaker 3: What about the end of year concerns around of financing,

769
00:38:01,040 --> 00:38:03,560
Speaker 3: about exposure to open AI and whether or not it

770
00:38:03,560 --> 00:38:05,360
Speaker 3: can hit the revenue run rate that it's going to

771
00:38:05,719 --> 00:38:09,040
Speaker 3: and indeed odd desire to be even more discerning really

772
00:38:09,080 --> 00:38:10,280
Speaker 3: about specific names.

773
00:38:10,719 --> 00:38:12,400
Speaker 2: Yeah, I actually think that the.

774
00:38:13,880 --> 00:38:15,880
Speaker 14: You know, the market being discerning about these names is

775
00:38:15,880 --> 00:38:17,960
Speaker 14: a good indication that we're not sort of in a

776
00:38:17,960 --> 00:38:20,080
Speaker 14: bubble territory right now. Right if we think about what

777
00:38:20,160 --> 00:38:22,880
Speaker 14: happened back in the late nineties and two thousands, we

778
00:38:22,880 --> 00:38:25,120
Speaker 14: were not concerned about whether or not companies were generating

779
00:38:25,160 --> 00:38:27,360
Speaker 14: fee cash flow, what the returns were on their investments.

780
00:38:27,400 --> 00:38:29,200
Speaker 14: The fact that we're concerned about these, I think means

781
00:38:29,239 --> 00:38:31,160
Speaker 14: that the market is pretty healthy in the way it's

782
00:38:31,200 --> 00:38:34,080
Speaker 14: thinking about investing in AI. And also, I think over

783
00:38:34,120 --> 00:38:36,040
Speaker 14: the next couple of years, if you look at sort

784
00:38:36,080 --> 00:38:40,480
Speaker 14: of the Hyperscaler group in general, the amount of capex

785
00:38:40,480 --> 00:38:43,760
Speaker 14: that's expected to be spent on AI infrastructure and broadly

786
00:38:43,800 --> 00:38:47,040
Speaker 14: on AI, they're free cash flow dwarfs that by several times,

787
00:38:47,080 --> 00:38:49,319
Speaker 14: So I think that there's plenty of you know, of

788
00:38:49,360 --> 00:38:51,960
Speaker 14: return and cash flow available to keep the spending going.

789
00:38:52,280 --> 00:38:53,960
Speaker 3: We've been talking a lot about the impact of the

790
00:38:53,960 --> 00:38:57,320
Speaker 3: private markets. Are you expecting that they will become public

791
00:38:57,400 --> 00:39:00,000
Speaker 3: next year? And how have your own client's been navigating

792
00:39:00,160 --> 00:39:01,719
Speaker 3: exposure to big private companies.

793
00:39:02,080 --> 00:39:03,799
Speaker 14: Yeah, it's possible that we will see a number of

794
00:39:03,800 --> 00:39:05,920
Speaker 14: these companies come public next year. I think that's going

795
00:39:05,960 --> 00:39:09,240
Speaker 14: to be very interesting, especially for large cap investors. Certainly,

796
00:39:09,239 --> 00:39:11,919
Speaker 14: it's going to pack the indexes because these will most

797
00:39:11,960 --> 00:39:14,800
Speaker 14: certainly be included in a number of the indexes, possibly

798
00:39:14,840 --> 00:39:18,760
Speaker 14: in size, which we'll have implications for large gap investors

799
00:39:18,800 --> 00:39:21,680
Speaker 14: who may need to hold some of these names. And

800
00:39:21,760 --> 00:39:23,399
Speaker 14: you know, we'll see where the funding comes from out

801
00:39:23,400 --> 00:39:24,759
Speaker 14: of other parts of the economy.

802
00:39:25,200 --> 00:39:27,440
Speaker 3: So we've got less than thirty seconds left. Do you

803
00:39:27,480 --> 00:39:31,160
Speaker 3: want more diversification globally or across different companies as well?

804
00:39:31,239 --> 00:39:34,480
Speaker 14: Right now, I think we're still very comfortable the US.

805
00:39:35,080 --> 00:39:36,640
Speaker 14: You know, I think growth in the US still looks

806
00:39:36,680 --> 00:39:39,239
Speaker 14: much better than lots of other parts of the of

807
00:39:39,280 --> 00:39:41,880
Speaker 14: the globe. Certainly corporate earnings growth does as well as

808
00:39:41,920 --> 00:39:43,840
Speaker 14: GDP growth. So I think we're still very comfortable with

809
00:39:43,880 --> 00:39:45,759
Speaker 14: the US. And then again, you know, we still think

810
00:39:45,800 --> 00:39:48,759
Speaker 14: the tech and other names related to AI infrastructure look

811
00:39:48,880 --> 00:39:52,000
Speaker 14: very appealing for next year, as well as consumer spending

812
00:39:52,000 --> 00:39:54,600
Speaker 14: on the back of some of that stimulus. Stimulus we'll

813
00:39:54,600 --> 00:39:55,440
Speaker 14: see early next.

814
00:39:55,360 --> 00:39:58,560
Speaker 3: Year come back any next year, we hope, Tiffany Wade,

815
00:39:58,560 --> 00:40:00,960
Speaker 3: We wish a very happy holidays, your portfolio manager over

816
00:40:00,960 --> 00:40:03,680
Speaker 3: at Columbia Thread Needle Investments. Are That does it for

817
00:40:03,719 --> 00:40:05,560
Speaker 3: this edition of Bloomberg Tech. Don't forget to check out

818
00:40:05,560 --> 00:40:07,640
Speaker 3: the podcast. Find it on the terminal, as well as

819
00:40:07,640 --> 00:40:09,400
Speaker 3: online on Apple, Spotify, and iHeart.

820
00:40:09,560 --> 00:40:12,200
Speaker 2: Have yourself a wonderful weekend. I'll see you back, same place,

821
00:40:12,400 --> 00:40:14,399
Speaker 2: same time on Monday. This is Bloomberg Tech