Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: live from Coast to Coast with Caroline Hyde in New
Speaker 1: York and Vla Lowe in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. President Trump says he
Speaker 2: has identified a buyer for the US operations of TikTok.
Speaker 3: Plus Canada withdraws its digital services tax that could have
Speaker 3: cost Big Tech billions in a.
Speaker 4: Move to restart trade talks for the.
Speaker 2: US and Apple's Hollywood Bett takes the lead with f
Speaker 2: one movie taking in fifty five point six million dollars
Speaker 2: in the US and Canadian box office.
Speaker 3: There's a lot going on ed that also might be
Speaker 3: involving Oracle in the future. President Trump says that they
Speaker 3: have a buyer for TikTok's US operations, but he stopped
Speaker 3: short of naming the bidder, saying on other networks that
Speaker 3: the transaction would need China approval. For more bluebags, Mike
Speaker 3: Shepherd joins us for more and there is an articulation
Speaker 3: that we've got a buyer. But the big if is
Speaker 3: what China does with this information.
Speaker 5: Well, that's right, Caro, China has a huge stake in this,
Speaker 5: and they really will have the final say, given that
Speaker 5: byte Dance, the parent of TikTok is based in Beijing
Speaker 5: and also happens to oversee some of what the Chinese
Speaker 5: government would consider sensitive technology, the kind that would need
Speaker 5: government approval to engineer any kind of final sale, even
Speaker 5: if the company were to retain control over the algorithm.
Speaker 5: Our reporting back in April indicated that the deal that
Speaker 5: had been taking shape at the White House, involving Byte Dance,
Speaker 5: TikTok Us officials, and a number of prospective buyers in
Speaker 5: this consortium, it would have left the algorithm in China's hands.
Speaker 5: But even with that, with trade tension surging between Washington
Speaker 5: and Beijing, it became two difficult to get this deal
Speaker 5: further along to get Beijing's approval.
Speaker 2: At the time, Mike, we're currently in this kind of
Speaker 2: extension period, the latest extension to get a deal done.
Speaker 2: So that's where it stands. But what's our sense of
Speaker 2: who that this mysterious victorious bidda might be.
Speaker 5: Well, it really is appearing to be based on some
Speaker 5: reporting this morning, that we're getting in and it all
Speaker 5: still taking shape. But our sense is that it is
Speaker 5: essentially the same consortium that had been working on that
Speaker 5: we had reported on back in April. And this includes
Speaker 5: Oracle Corp, which already does quite a bit of back
Speaker 5: end business for TikTok here in the US through Project Texas.
Speaker 5: And then it would also include venture capital firm and
Speaker 5: recent Horowitz and Blackstone and some other investors in byte Dance,
Speaker 5: the US based investors in byte Dance perhaps, and the
Speaker 5: idea would be to dilute Byteedance's steak in the US
Speaker 5: operations of TikTok down below a threshold that is specified
Speaker 5: in the twenty twenty four law that calls for it
Speaker 5: to be divested from Chinese ownership and also include the
Speaker 5: algorithm in the sale. And that algorithm ed is going
Speaker 5: to be what could emerge as a sticking point at
Speaker 5: least here in Washington if it is not transferred from
Speaker 5: Chinese control. That could be grounds for at least some
Speaker 5: objections at least in Congress. It's unclear though, whether those
Speaker 5: will materialize into anything significant enough to either halt the
Speaker 5: deal or force a shutdown as the law would specify.
Speaker 5: As you said, we do have more time to think
Speaker 5: about this. The President just signed an extension from June nineteenth,
Speaker 5: and that'll carry US into September. The other thing that
Speaker 5: Wall specified, though, Ed, is you'll recall there was only
Speaker 5: one extension allowed by the President and he's already on
Speaker 5: number three, so it's unclear how much further he'll be
Speaker 5: able to take.
Speaker 2: This head in both Michael Sheppard out of Washington, d C.
Speaker 2: Thank you very much. Let's talk a little bit more
Speaker 2: broadly about tech markets. Angelou Coull Covers Edward Join Senior
Speaker 2: Investment Strategies joins us now, saying that Caroline was talking
Speaker 2: about at the top of the show, believe it or not,
Speaker 2: it's the last day of the second quarter. We already
Speaker 2: arrived to the second half of what has been an
Speaker 2: intense year in the technology sector. The Nasdaq one hundred
Speaker 2: is like modestly higher right now in the session, but
Speaker 2: we continue to push consecutive record highs. What is the
Speaker 2: single catalyst for tech right now?
Speaker 6: Angelo, Yeah, as you said, certainly a lot has happened
Speaker 6: in the first half of the year, and maybe the
Speaker 6: fact that we are hitting all time highs, we see
Speaker 6: that as a validation of the positive momentum, not an
Speaker 6: indication or a signal of an imminet correction. Certainly, the
Speaker 6: decline the the risking in geopolitical trade tensions and the
Speaker 6: other tensions has helped. But at the same time, really
Speaker 6: what is undisputed is the strength in corporate profits, especially
Speaker 6: within tech. We are hitting all time highs, but it
Speaker 6: is the largest companies that are driving this. About six
Speaker 6: percent of the S and P five hundred has been
Speaker 6: hitting new heisers of the last Friday, so it hasn't
Speaker 6: yet been broad but at the same time that shouldn't
Speaker 6: really dilute the methods that we remain. In a bull
Speaker 6: market summer center. This is ahead, but corporate profits is
Speaker 6: what is driving this action.
Speaker 3: Corporate profits that sees growth actually start to accelerate out
Speaker 3: of the US angelo going forward the second half, is
Speaker 3: it going to be US exceptionalism or if we look
Speaker 3: at what Bloomberg Intelligence have just been writing great piece
Speaker 3: of analysis coming out of Gina and her team today
Speaker 3: saying the US is no longer settling the pace for
Speaker 3: global tech earnings.
Speaker 4: In fact that's going to Asia and Europe. What do
Speaker 4: you make of it?
Speaker 6: What is happening is the growth gap and the growth
Speaker 6: advantage that the US has had is narrowing, especially as
Speaker 6: we think about this year. Europe is accelerating from stagnation,
Speaker 6: while we are deccelerating from a very strong starting point.
Speaker 6: But at the same time, looking at the major in
Speaker 6: this is for international un developed large cup equities. It's
Speaker 6: been an erring of the gap invaluations, which still remains
Speaker 6: in large rather than an earnings story. So if we
Speaker 6: see some stabilization in the US dollar in the second half,
Speaker 6: based on the earnings still outperformance from US equities, we
Speaker 6: would expect potentially US tech and US assets more broadly
Speaker 6: to come back into favor.
Speaker 3: Okay, any area in particular, we've been all about hardware
Speaker 3: for the last couple of years.
Speaker 4: Software got its moment in the sun.
Speaker 3: But I'm interested is the eraror areas in particular that
Speaker 3: you like within the tech ecosystem of the US.
Speaker 6: I think the equal weighted index is also one way
Speaker 6: to go and participate in that likely broadening that is happening. Yes,
Speaker 6: and VIDA and semiconductors remain key at the center of
Speaker 6: the exciting secular tail winds that are ahead. But we
Speaker 6: are seeing last week the equal weighted technology S and
Speaker 6: B make new highs relative to the market, and that
Speaker 6: is an encouraging development. So remain broadly diversified software still
Speaker 6: likely favored, but that is the case for many other sectors,
Speaker 6: and we can talk about that as well well.
Speaker 2: And I kind of want to go back to the
Speaker 2: top news stories of the day, which largely center around trade,
Speaker 2: Canada and digital tax. We have heard and we will
Speaker 2: hear again very shortly from US Treasury Secretary Scott Besson.
Speaker 2: But the reason I bring that up is that in
Speaker 2: summary of the prior quarter, it was really trade that
Speaker 2: was driving us. I asked this difficult question to every
Speaker 2: markets participant that comes on the show, what happens next,
Speaker 2: particularly in tech.
Speaker 6: Yeah, trade that in the near term is still going
Speaker 6: to be front and center. We have the deadline that
Speaker 6: is coming up to line ninth, but that date it
Speaker 6: has been dereased a little bit. The administration has indicated
Speaker 6: that this could be extended. There's any potential agreements with
Speaker 6: major trading partners underway, and this can be unveiled over
Speaker 6: the coming days. But since the start of the year,
Speaker 6: we are seeing this expected and gradual pyvot towards more
Speaker 6: market friendly policies, tax cuts, regulations. So there could be
Speaker 6: some near term volatility and some potentially less friendly economic
Speaker 6: data that reflect a mindly stagflationary impact, but markets are
Speaker 6: going to be able to look through that as they
Speaker 6: Foction twenty twenty six.
Speaker 2: And going back to the micro to finish, I talked
Speaker 2: about those two deals at the top, Palenteer partnering with
Speaker 2: Accentia sales channel Oracle thirty billion dollars per year cloud client.
Speaker 2: Outside of those just being news stories that drive those
Speaker 2: single names higher, how much do you track those data
Speaker 2: sets for signals of how enduring an AI investment cycle
Speaker 2: is or how real any of this is in the
Speaker 2: AI context.
Speaker 6: These are important and no doubt the cycle of Israel.
Speaker 6: We see that in broader adoption and we see that
Speaker 6: in the results from the companies that are centered in
Speaker 6: this space. As we think about moving further away from
Speaker 6: the trade headwinds, that's going to be an ext major
Speaker 6: step some confidence for more deals to happen, and I
Speaker 6: think that is something that can be supportive of the
Speaker 6: market and the tech space in gener.
Speaker 3: For now, still very much things that we can tend with.
Speaker 3: On the day, Angelo Kukafas, we thank you so much
Speaker 3: of Edward Jones. Coming up those headwinds, we discuss Canada
Speaker 3: actually though withdrawing its digital services tax in order to
Speaker 3: restart US trade talks.
Speaker 4: More on that next peacibly bad tech.
Speaker 2: Republican Party leaders are rushing to overcome infighting in an
Speaker 2: effort to pass President Trump's Big, Beautiful bill, as Democrats
Speaker 2: launch an initiative to exploit those divisions more bloombos. Katie
Speaker 2: Lines joins us. Now, I don't think in my career,
Speaker 2: at least, I'm sure in yours you have tracked as
Speaker 2: closely the passage of the bill, the politics of it,
Speaker 2: and the content of it. What's the latest.
Speaker 7: Well, obviously this is a massive package, and it's been
Speaker 7: very complicated. The so called vote Rama Bean in the
Speaker 7: Senate this morning is expected to go all day into tonight,
Speaker 7: perhaps even into the early hours of tomorrow, as they
Speaker 7: vote on an unlimited number of amendments to this bill,
Speaker 7: including the likes of the one put forward by Senator
Speaker 7: Ron Johnson, who would like to see a phasing out
Speaker 7: of the expansion population of Medicaid under the Affordable Care
Speaker 7: Act of Susan Collins's amendment, but that would give more
Speaker 7: funding to rural hospitals in exchange for raising the tax
Speaker 7: rate on the country's highest earners, and of course Democrats
Speaker 7: are going to put hold a boatload of amendments to
Speaker 7: try to get Republicans on the record with things that
Speaker 7: may be politically unpopular, but all of it is aimed
Speaker 7: at trying to get the requisite votes needed to pass,
Speaker 7: knowing that John fu and the Senate Majority leader can
Speaker 7: only lose three and there's still about eight Republican holdouts
Speaker 7: who have not committed to voting yes on this legislation,
Speaker 7: including Tom Tillis, who said yesterday in a surprise announcement,
Speaker 7: not only would he not be voting for this package,
Speaker 7: but he's actually not seeking reelection in twenty twenty six.
Speaker 7: So the math is difficult, and math is actually one
Speaker 7: of the first things they tackled this morning is they
Speaker 7: voted to adopt the so called current policy baseline, which
Speaker 7: essentially fudges the accounting to say that the tax cuts
Speaker 7: don't cost four and a half trillion dollars in tax cuts,
Speaker 7: about three point eight of them three point eight trillion
Speaker 7: dollars are taken out as current policy because it's extending
Speaker 7: the twenty seventeen tax cuts. It's aimed at lowering the
Speaker 7: price tag, at least on paper, but that still may
Speaker 7: not be enough to appease fiscal conservatives, especially in the House,
Speaker 7: which of course has to revote on this package, assuming
Speaker 7: that it can get through the Senate. So this voter
Speaker 7: rama is really just step one in a number of
Speaker 7: remaining hurdles.
Speaker 3: Well, Katie, there were some maths that was very much
Speaker 3: an obsession of big tag that no longer has to
Speaker 3: be in anxiety. I'm talking about digital services taxes that
Speaker 3: were coming into full today phone Canada on American giants
Speaker 3: and now no more tolk.
Speaker 4: Us to it.
Speaker 7: Yeah. President Trump on Friday threatened Canada essentially saying that
Speaker 7: within a week they would be getting a new tariff
Speaker 7: rate and trade negotiations were going to end entirely over
Speaker 7: this digital services tax, which could cost American companies like
Speaker 7: Meta or Alphabet billions of dollars. Those first payments were
Speaker 7: expected to be due today, and tell Canada basically acquiesced
Speaker 7: to Trump's demands, deciding to rescind that digital services tax
Speaker 7: in the name of restarting trade negotiations, and they're now
Speaker 7: looking at trying to get a trade deal done by
Speaker 7: July twenty first. That of course is a little bit
Speaker 7: later than the deadline. Other countries are working with July ninth.
Speaker 7: Of course, that wider deadline that's coming up very quickly,
Speaker 7: and the digital services taxes for trading partners like the
Speaker 7: European Union for example, are still likely seen as sticking points.
Speaker 7: So while it's still been resolved between the US and
Speaker 7: Canada at least for now, that's something we can expect
Speaker 7: to come up in trade negotiations as they move forward
Speaker 7: in the coming days.
Speaker 3: Elsewhere bloom megs Kayleie lyines, thank you so much. In
Speaker 3: Washington and look US Treasury sectories, Scott Bessen joined Blue
Speaker 3: Meg Shanon just this morning to give some insight into
Speaker 3: current trade talks, saying we should expect a flurry of
Speaker 3: deals soon.
Speaker 4: Take a listen.
Speaker 8: So it's going to be a flurry going into the
Speaker 8: final week as the pressure increases.
Speaker 9: Well, can you tell us about what's coming out of
Speaker 9: those deals? Are they inked deals or are they negotiations
Speaker 9: for future deals?
Speaker 8: Well, what I can tell you is that the staff level,
Speaker 8: whether it's a Treasury at USTR, at commerce, people who've
Speaker 8: been around for twenty years are in amazement and they're
Speaker 8: saying these countries are coming with offers that they can't believe.
Speaker 8: So in terms of bringing down tariffs, non tariff trade barriers.
Speaker 8: We're leaving a side currency, the financing of the labor
Speaker 8: and capital in an advantageous way. All these countries are
Speaker 8: pulling back.
Speaker 9: So you've said that trade negotiations could be wrapped up
Speaker 9: by how should investors and nations impact It'd be thinking
Speaker 9: about that July ninth deadline and could that be pushed
Speaker 9: back to avoid going back to those April second tariff rates.
Speaker 8: Well, that's going to be able to President Trump. And
Speaker 8: I'm not going to tell any country. We have countries
Speaker 8: that are negotiating in good faith, but they should be
Speaker 8: aware that if we can't get across the line because
Speaker 8: they are being with calcitrant, then we could spring back
Speaker 8: to the April second levels. I hope that won't have
Speaker 8: to happen.
Speaker 2: That was US Treasury Secretary Scott Beston. Let's stay on
Speaker 2: the impact of tariffs and bring in Rachel Hoff, policy
Speaker 2: director at the Ronald Reagan Institute, who joins us on
Speaker 2: set here in San Francisco Trade in Tariffs. That the
Speaker 2: policy platform that the administration has explained to us in
Speaker 2: this program through Michael Kratzios is promote and protect in
Speaker 2: the context of the technology sector. But as we learn
Speaker 2: about the content of the deals, we're increasingly talking about
Speaker 2: which camp you're in impact how you feel about it.
Speaker 2: If you're a consumer, you feel one way about tariffs.
Speaker 2: If you're a technology company you may feel differently. What
Speaker 2: does your research tell you about where we will land
Speaker 2: in the sort of public conscience of how impactful these
Speaker 2: trade deals have been.
Speaker 4: Well, we have.
Speaker 10: Research at the Reagan Institute on kind of both of
Speaker 10: those camps.
Speaker 4: We have, particularly in the national.
Speaker 10: Security domain, a tech sector focused project that we have
Speaker 10: our National Security Innovation based program. And then in terms
Speaker 10: of consumers and more broadly the American people, we're just
Speaker 10: out last week with a new survey, a public opinion
Speaker 10: poll asking the American people what they think about a
Speaker 10: range of issues, including trade, in tariffs, and on tariffs
Speaker 10: in particular, Americans are supportive of tariffs on China, but
Speaker 10: not at the expense of higher prices. That that flips
Speaker 10: when you put it up against rising consumer prices.
Speaker 3: What's so interesting in your data and research, Rachel, is
Speaker 3: the anxiety that everyone has around technology theft with China.
Speaker 4: That's the number one concern, right.
Speaker 10: That's right, Americans are concerned about a number of issues
Speaker 10: with regard to China, from their military build up to
Speaker 10: their economic practices to human rights abuses. But your right, Caroline,
Speaker 10: Top on the list of Americans concerns about China is
Speaker 10: technology theft. Shortly behind that is Chinese advancements in AI
Speaker 10: and the prospect that they may actually advance more quickly
Speaker 10: than the US in terms of our artificial intelligence research
Speaker 10: and leadership. So the technology concerns that I know are
Speaker 10: of interest to your audience are really top on the
Speaker 10: mind of the American people as well when it comes
Speaker 10: to Beijing.
Speaker 2: At the global stage. There are many factors and considerations
Speaker 2: for American citizens. What Caroline just says really interesting tech theft,
Speaker 2: but absolutely at the top based on what I'm reading,
Speaker 2: is actually Iran and what's happening in the nuclear context.
Speaker 2: That's right.
Speaker 10: When we ask about geopolitical issues more broadly, from China
Speaker 10: to the war between Russia and Ukraine to tariffs, one
Speaker 10: geopolitical issue stands out above all others that the American
Speaker 10: people think matters to US security and prosperity, and that's
Speaker 10: preventing around from getting a nuclear weapon. Our poll was
Speaker 10: before the recent strikes, but we know that preventing around
Speaker 10: from nuclear from getting a nuclear weapon is of concern
Speaker 10: to eighty four percent of Americans. You don't get to
Speaker 10: eighty four percent without being there on a bipartisan basis.
Speaker 10: A majority of Democrats and a majority of Republicans want
Speaker 10: to prevent ran from getting a nuclear weapon.
Speaker 3: What seems to have been very holistically fold of on
Speaker 3: this show is how we therefore need to innovate when
Speaker 3: it comes to defense tech. Rachel, with this empowered, with
Speaker 3: the data that you bring and the research, what does
Speaker 3: colport in America go and do about it?
Speaker 10: You know, I think that's ultimately ultimately the question. And
Speaker 10: with tariffs, not just you know, not just looking at China,
Speaker 10: but you know, not all tariffs are created equal. Right
Speaker 10: when we look at tariffs on China, this broader conversation
Speaker 10: about strate strategic decoupling of our economies on a national
Speaker 10: security basis, that's different than tariffs on our allies and
Speaker 10: our friends. The American people understand that, and certainly corporate America,
Speaker 10: certainly the US tech sector understands that, and particularly with
Speaker 10: regard to the supply chain challenges that they face if
Speaker 10: we have sustained and long term tariffs against our allies
Speaker 10: and friends. That's going to hurt the American tech sector,
Speaker 10: and it's going to hurt our ability to modernize our
Speaker 10: military and develop the capabilities we need to meet the
Speaker 10: national security threats of tomorrow.
Speaker 3: Well, I'm sure that this sort of data is going
Speaker 3: to be very useful for policy making. You are the
Speaker 3: policy director at the Ronald Reagan Institute. We appreciate the
Speaker 3: time and the insights. Rachel Hope, thanks for joining.
Speaker 5: Now.
Speaker 3: Coming up, let's talk more about geopolitics Israel in Iran's
Speaker 3: recent will revealed a key risk for global shipping. Well
Speaker 3: on that next. In today's Big Take, This is Tech.
Speaker 3: The Iran Israel war highlighted critical flaws among the world's
Speaker 3: shipping giants, with many of the satellite navigation systems among
Speaker 3: ships and tankers being vulnerable to mass jamming as.
Speaker 4: They traversed vital waterways.
Speaker 3: Bloomberg's Jack Westles joins us now for more on today's
Speaker 3: Big Take.
Speaker 4: Jack set the scene.
Speaker 3: How integral is this sort of technology to shipping writ large.
Speaker 11: So shits do use satellite navigation systems to navigate nowadays.
Speaker 11: One of the most common ones is GPS. There's also
Speaker 11: Russian ones, it's called glonas and a couple of other
Speaker 11: ones as well. So it's really integral to how the
Speaker 11: shipping industry operates. And don't forget that the shipping industry
Speaker 11: is responsible for transporting more than eighty percent of world trade.
Speaker 2: Jack, I spent all morning reading and learning about jamming
Speaker 2: and spoofing. Explain the basic definitions and the data analysis
Speaker 2: you did on how that's happening and playing out in
Speaker 2: that region.
Speaker 11: Yeah, that's a great question because they're not quite the
Speaker 11: same thing. So jamming is essentially where so these are
Speaker 11: satellite navigation systems, so the ships are receiving signals. So
Speaker 11: jamming is when these signals are essentially overwhelmed, like imagine
Speaker 11: someone just shouting really loudly over the signal. Whereas, and
Speaker 11: you know, the ship system essentially gets confused. Whereas spoofing
Speaker 11: is when a fake signal is specifically fed to the ship,
Speaker 11: and that can be more insidious. You could really get
Speaker 11: a ship and slowly lure it off its path by
Speaker 11: feeding it a fake signal and potentially leading it into trouble.
Speaker 3: And where is the sort of trouble arising tend to
Speaker 3: be in the straight of wall moves is it more
Speaker 3: broad than that.
Speaker 11: Yeah, so we looked at a few hot spots. So yes,
Speaker 11: there's been lots in the Persian Gulf and the straight
Speaker 11: up wall Moos. Other hot spots include the Red Sea,
Speaker 11: the Black See, the Baltic Sea. Especially, there's a hotspot
Speaker 11: near Primorsk, which is a big oil terminal for Russia.
Speaker 11: So you notice that these are regions of geopolitical tension.
Speaker 11: You know, you've obviously got recent attacks by who Thi's
Speaker 11: in the Red Sea. You've obviously had Iran Israel in
Speaker 11: the Persian Gulf, and Russia's oil exports always subject to
Speaker 11: lots of sanctions. And you've obviously got the Russia Ukraine
Speaker 11: War as well.
Speaker 2: Bloombos Jack whistles with today's big take, Thank you very much.
Speaker 2: Now coming up, we'll dig into how the Supreme Court's
Speaker 2: ruling on birthright citizenship and other Trump immigration policies are
Speaker 2: impacting a key component of the tech workforce, that is
Speaker 2: the H one B visa holders. Really critical conversation for
Speaker 2: our audience coming up here next. This is Bloomberg Tech.
Speaker 2: Welcome back to Bloomberg Tech. Welcome to the final day
Speaker 2: of the second quarter, the final day of the first
Speaker 2: half of twenty twenty five, and the Nasdaq one hundred,
Speaker 2: it's that index always go to because as a high
Speaker 2: concentration of tech is once again pushing fresh record highs.
Speaker 2: Look at the chart at April that was post deep
Speaker 2: seek when there was a lot of volatility in markets,
Speaker 2: and we've really rebounded since then again pushing across many
Speaker 2: days consecutive record highs. Right now, as I read across
Speaker 2: the Bloomberg newsroom, it is trade and trade headlines that
Speaker 2: are driving markets for tech. But as we talked about
Speaker 2: earlier in the show, you look at names like Palenteer
Speaker 2: and Oracle, there are lots of deals, particularly in the
Speaker 2: AI context. They're giving us evidence that this spending on
Speaker 2: AI is playing into the story as well. Caro, what
Speaker 2: a chart it is to show to end the first
Speaker 2: half of twenty twenty five.
Speaker 3: What a ride, What a ride it has been from
Speaker 3: an asset perspective and.
Speaker 4: From political perspective.
Speaker 3: Let's just talk about how your musk has slammed the
Speaker 3: US Senates version of the President Trump's tax bill ed. Look,
Speaker 3: the TESLA CEO is warning that cuts to electric vehicle
Speaker 3: and other clean energy credits would be quote incredibly destructive
Speaker 3: to the country. He said the bill would actually destroy
Speaker 3: million of US jobs while subsidizing what he called industries
Speaker 3: of the past. That's bring in Bloomberg's Max Chafkin, who
Speaker 3: I'm sure was glued to some of these posts on Saturday.
Speaker 3: And is it making any dent Do you think from
Speaker 3: the political standpoint that.
Speaker 4: He wants it to?
Speaker 12: I mean, it doesn't seem to be.
Speaker 13: He's been railing about this, you know, from around the
Speaker 13: time when he and you know, Donald Trump had their spat,
Speaker 13: you know, their public spat, which which ended with social
Speaker 13: media insults, and seems to still be going on to
Speaker 13: some extent. That's been going on for weeks, and it
Speaker 13: hasn't seemed to slow this bill down. In fact, you know,
Speaker 13: we've seen versions of the bill where instead of sun
Speaker 13: setting these consumer tax credits which make it seventy five
Speaker 13: hundred dollars cheaper for consumers to buy an electric vehicle,
Speaker 13: sun setting those ninety days from passage rather than one
Speaker 13: hundred and eighty days, creating a situation where Tesla could
Speaker 13: be impacted.
Speaker 12: As early as the end of this year.
Speaker 13: This would be a real challenge for a company that
Speaker 13: has already struggled with demand, especially amid all the controversy
Speaker 13: caused by Elon musk support of Donald Trump.
Speaker 2: Max you pointed out on X something that we've talked
Speaker 2: about often on the show, which is the President was
Speaker 2: quite consistent on his approach to these kinds of incentives,
Speaker 2: But so was Elon Musk. You know, he kind of
Speaker 2: regularly said we'll do away with them because he felt
Speaker 2: that they, at least as I understand it, he felt
Speaker 2: it gave other legacy alto makes a leg up that
Speaker 2: Tesla just didn't need it need and now he's upset.
Speaker 2: Just just give us that backstory.
Speaker 13: Yeah, I mean, historically Musk's position has been we don't
Speaker 13: need the subsidies, and I think one of the reasons
Speaker 13: for that is that historically the subsidies were going to sunset.
Speaker 12: You know, this is before Joe Biden.
Speaker 13: We're supposed to sunset once an automaker hit a specific
Speaker 13: number that got take gotten rid of. But must continue
Speaker 13: to say he would rather have a level playing field,
Speaker 13: which sort of made sense because Tesla was the most
Speaker 13: profitable of the company selling electric vehicles, that is, its
Speaker 13: electric vehicles were most profitable. Now, the thing is, over
Speaker 13: the last year Tesla's financial position has changed to some extent. Right,
Speaker 13: We've been talking about these sales challenges, sales falling in China,
Speaker 13: in Europe and so on.
Speaker 12: Meanwhile, you have other.
Speaker 13: Electric vehicle makers becoming more competitive. That's creating pressure on
Speaker 13: the company's finances. And I think that's one thing that
Speaker 13: has changed besides the obvious, you know, blow up between
Speaker 13: Elon Musk and Donald Trump.
Speaker 4: But to be fair to you, a Muskit, perhaps one.
Speaker 3: Thing that also hasn't changed on his part is that
Speaker 3: he's railed against the deficit and debt. So how much
Speaker 3: do we know that this is the nuance that he's
Speaker 3: really angry about, or more broadly, his view that we
Speaker 3: need to rain in spending in America.
Speaker 13: Listen, I mean he's railing about the debt as well.
Speaker 13: While while he's tweeting about you know, these the US
Speaker 13: you know, hurting the clean energy industry or as he
Speaker 13: sees it, he's also saying that this bill is going
Speaker 13: to increase the debt and the deficit. Of course, Musk
Speaker 13: spent months trying to work on that with DOJE, and
Speaker 13: in certain ways I guess this bill he sees it
Speaker 13: as an affront to those efforts. You know, I think
Speaker 13: the EV policy and the clean energy policies are a
Speaker 13: big deal here, whether or not Musk specifically points to
Speaker 13: them or not, because they will affect the bottom line
Speaker 13: of the company that.
Speaker 12: You know is most important to his portfolio.
Speaker 2: Glommost Max Chafkin, a veel on ink team, Thank you
Speaker 2: very much. Tech companies are top employers of high skilled
Speaker 2: immigrants in the United States on H one B visas,
Speaker 2: but a recent ruling by the Supreme Court is raising
Speaker 2: questions about the legal status of children born to those
Speaker 2: visa holders. Here to talk about the impact on the
Speaker 2: tech sector, Hibbert Amber. She's a partner with ericson Immigration Group,
Speaker 2: and I think starting with the basics here is important.
Speaker 2: What happened with the Supreme Court ruling and what are
Speaker 2: the mechanics of what it means for H one B
Speaker 2: visas that we've just outlined.
Speaker 14: So the Supreme Court ruled that federalist judges cannot issue
Speaker 14: nationwide injunctions, and so this decision basically affects how legal
Speaker 14: challenges to President Trump's Birthright Citizenship Executive Order can actually proceed,
Speaker 14: and it's scheduled to go back into effect July twenty seven.
Speaker 14: So what this means is that if an H one
Speaker 14: B visa holder wants to insulate their baby from the
Speaker 14: effects of the executive order, they need to sue individually,
Speaker 14: or join a class action lawsuit, or live in a
Speaker 14: state that sues or successfully obtains an injunction. So essentially,
Speaker 14: the ruling opens the door to piecemeal enforcement of immigration policies,
Speaker 14: which will potentially lead to differing legal standards in different
Speaker 14: parts of the country. But coming back to your question
Speaker 14: about how it impacts tech companies, what this means is
Speaker 14: that there's a possibility that the babies of the employees
Speaker 14: of these tech companies will be treated differently depending on
Speaker 14: where the employee sues or where the employee lives, and
Speaker 14: that is going to create a whole new category of
Speaker 14: employee questions and policy considerations for the company that it
Speaker 14: has not had to grapple with in the past.
Speaker 2: We heard from US Attorney General Pambondi about this in
Speaker 2: Friday Show.
Speaker 12: Just listen to what she had to say.
Speaker 15: So birthright citizenship will be decided in October in the
Speaker 15: next session. However, it indirectly impacts us because, as you
Speaker 15: correctly pointed out, if there's a birthright citizenship case in Oregon,
Speaker 15: it will only affect the plaintiff in Oregon, not the
Speaker 15: entire country. So yes, it's indirectly, but that's pending litigation
Speaker 15: and we're waiting on that in the next term. We're
Speaker 15: very confident in the Supreme Court, but again it's pending
Speaker 15: litigation and that will directly be determined in October. But
Speaker 15: it indirectly impacts every case in this country, and we're
Speaker 15: thrilled with their decision today.
Speaker 2: Hibber, would you kindly in term for it and explain
Speaker 2: that the pending action in October that the Attorney General
Speaker 2: Bondie was talking about.
Speaker 14: So my understanding about what's happening in October is that
Speaker 14: there's going to be a decision in terms of like
Speaker 14: the merits of the Birthright Citizenship exist Excutive Order itself.
Speaker 14: So if you recall what happened on Friday, was the
Speaker 14: Supreme Court only ruled as it pertains to the judge's
Speaker 14: ability to issue a nationwide injunction. There has not been
Speaker 14: any sort of a decision on the constitutionality of the
Speaker 14: Birthright Citizenship Executive Order itself. So therein lies I think
Speaker 14: the issue because we're facing the next several months of
Speaker 14: different states having different standards and babies born in those
Speaker 14: states being treated differently. That is where the logistical, administrative,
Speaker 14: and possibly even bureaucratic challenges will arise, both for the
Speaker 14: high skilled H one B visa holders or high skilled
Speaker 14: immigrants in the country as well as the companies that
Speaker 14: employ them.
Speaker 3: Let's look at those companies again. Hib We've got a
Speaker 3: beautiful chart to shows how integral H one B visas,
Speaker 3: for example, are for certain US tech giants Amazon. This emphasis,
Speaker 3: of course, we will recognize, is dependent on H one
Speaker 3: B as well cognizant Google. This sort of perception of
Speaker 3: instability and immigration, what does it mean for US employees
Speaker 3: do you think?
Speaker 14: I think it's important to note that the tech companies
Speaker 14: in the United States do rely on high skilled immigrants
Speaker 14: from other countries, and part of the reason for their
Speaker 14: success and their ability to remain competitive on a global
Speaker 14: stage has been their ability to hire the best and
Speaker 14: the brightest. So if there are high skilled immigrants out
Speaker 14: there who have even the slightest perception of instability in
Speaker 14: the US immigration system, there's a chance that that might
Speaker 14: factor into their decision to accept an offer from a
Speaker 14: US company or accept an offer from a company in
Speaker 14: another country. So what the companies and folks in the
Speaker 14: United States really have to I think grapple with is
Speaker 14: whether they want those skills and that innovation to go
Speaker 14: elsewhere as opposed to the benefit of the US companies.
Speaker 3: Hibo, what are you advising in the era now? You
Speaker 3: must be filled in countless cools. And if there is
Speaker 3: an employee who's trying to learn someone who might eventually
Speaker 3: already be pregnant or thinking about it, going to have
Speaker 3: to sue on an individual basis?
Speaker 4: Do you think so?
Speaker 14: Individuals as it stands right now until something changes, unlessen
Speaker 14: until something changes. If an individual wants to insulate their
Speaker 14: future baby from being impacted by the Birthright Citizenship Executive Order,
Speaker 14: either they have to sue individually, or they have to
Speaker 14: join a class action, or they have to be in
Speaker 14: a state that sued on the merits of birthright citizenship,
Speaker 14: so that the individuals from that state are somehow insulated
Speaker 14: from the applicability of the executive order. So that is
Speaker 14: where I find some challenges to tech companies that actually
Speaker 14: employ a lot of these vise holders, because what I
Speaker 14: think is going to happen is companies are going to
Speaker 14: start to get questions that they've never really had to
Speaker 14: answer before. For example, what if the employee is scheduled
Speaker 14: to relocate to a different state but doesn't feel comfortable
Speaker 14: relocating to that state because they're concerned about whether or
Speaker 14: not their child will be considered a US citizen upon birth.
Speaker 14: Is the company now going to change something about the relocation.
Speaker 14: Are they going to extend some sort of reasonable comma.
Speaker 14: Are they going to stay away from the topic altogether?
Speaker 14: These are now the policy company policy considerations that I
Speaker 14: think a lot of tech companies are going to have
Speaker 14: to decide.
Speaker 4: HI about ANVA.
Speaker 3: Great to have you on Thank you partner with ericson
Speaker 3: Immigration group. Meanwhile, coming up, E Marketer principal analyst Youori
Speaker 3: Wormser joining us to discuss the firm's new forecast for
Speaker 3: the use of generative AI guests who are the fastest adopters.
Speaker 4: This is Broomberg tech. When it comes to using the latest.
Speaker 3: Technology, it's no surprise that younger generations do tend to
Speaker 3: adopt it faster than older ones. That seems to be
Speaker 3: the case in generative AI too. The latest forecast on
Speaker 3: gen AI use from e Marketer, well, it shows that
Speaker 3: those from gen Z are swiftly becoming the heaviest users.
Speaker 3: You're as Prince Bill analystic eMarketer. It joins us now.
Speaker 3: But what's notable as millennials had have been the line's
Speaker 3: share of who had adopted it fast across work and play.
Speaker 4: But gen Z are ramping up.
Speaker 12: That's right.
Speaker 16: I mean right now, as of the end of twenty
Speaker 16: twenty five one or twenty twenty five numbers are four.
Speaker 16: We're expecting about the same number of gen Z and
Speaker 16: millennials to be using generative AI tools. So a big
Speaker 16: ramp up from gen Z and in fact starting to
Speaker 16: be a ramp up from gen ALF two.
Speaker 2: You can think about this in the context of the population,
Speaker 2: or you can think about it in the context of
Speaker 2: Internet users. I think that data set is particularly fascinating
Speaker 2: because on your forecast it becomes the large body of
Speaker 2: people that are online.
Speaker 16: Yeah, I mean, that's true. So by the end of
Speaker 16: our forecast in twenty twenty nine, majority of people are
Speaker 16: going to be using generative AI tools. And when you
Speaker 16: specifically look at the younger generations, MILLENNIALSZ and gen AFA,
Speaker 16: gen Z's particularly will have over three quarters of that
Speaker 16: Internet population using generative AI tools, So just a huge
Speaker 16: ramp up to the point where three out of four
Speaker 16: younger users are going to be using these tools.
Speaker 2: What I find also interesting about your research is how
Speaker 2: granular it is. And so the reality right now is
Speaker 2: you have some tools that dominate the market Chat GPT, Gemini,
Speaker 2: Copilot Claude. I don't see grocking here necessarily, but is
Speaker 2: this a case that chat GPT is kind of now
Speaker 2: the dominant force.
Speaker 16: It is the dominant force. About three quarters of generative
Speaker 16: AI users right now use chat ChiPT, less than half
Speaker 16: used Gemini. What we're seeing right now, though, is that
Speaker 16: even as chat ChiPT increases its absolute number of users
Speaker 16: and to share of Internet users, a share of generative
Speaker 16: AI users is actually going down. And it's not as
Speaker 16: signed that it's losing its attraction to the general population.
Speaker 16: It just shows that there's a lot more competition than
Speaker 16: has been the case, particularly coming from Gemini, Google's Gemini,
Speaker 16: and to a lesser extent, some of the work programs
Speaker 16: with Microsoft Copilot.
Speaker 3: Yeah, you're go even more granular for us because many
Speaker 3: are using generative AI. Perhaps without asking to AI overviews
Speaker 3: has brought it into many people who would not deem
Speaker 3: themselves an early adopter's life, but they use Google and
Speaker 3: thus the four they're now using generative AI. How much
Speaker 3: is it just going to seep into our every day
Speaker 3: and you don't actually have to be setting out there
Speaker 3: downlading an individual app, whether that's the latest Meta AI
Speaker 3: or indeed whether it's chatchbt.
Speaker 16: It's a great point because our numbers are just people
Speaker 16: who consciously use these generative AI tools. So if you're
Speaker 16: using Google Search as almost all of us are, and
Speaker 16: are getting an AII overview, which almost all of us are,
Speaker 16: we're not even counting those numbers. These are people who
Speaker 16: are actively seeking out chat, GPT or Gemini or working
Speaker 16: with these tools of work and Microsoft AI. But you're
Speaker 16: absolutely right, it's absolutely pervasive in the background in things
Speaker 16: like shopping, chat, chatbots, AI overviews, customer service. So almost
Speaker 16: everyone at this point is touching generative AI at some point.
Speaker 3: And then what is the use case that you see
Speaker 3: is just winning out no matter what is gen z
Speaker 3: coming to this because of the research, because of ultimately
Speaker 3: how they study and work, or is it more in
Speaker 3: their play? Are we using generative AI more because we
Speaker 3: want to learn things about our world and how we
Speaker 3: interact with it.
Speaker 16: It's interesting because as a combination of all of those,
Speaker 16: the lead use cases search, which is around sixty four
Speaker 16: percent of our users, it's going to ramp up to
Speaker 16: about seventy five percent of generative AI users using search,
Speaker 16: which is almost lockstep in the number of users that
Speaker 16: are using it for work on things like coding or
Speaker 16: productivity tools, also going from sixty four to seventy three
Speaker 16: or seventy four percent. When you're looking at some more
Speaker 16: not even niche cases, but things like using it for
Speaker 16: text generation and image generation. You're seeing twenty thirty forty
Speaker 16: percent of JGPT users using that, so significant portions using
Speaker 16: those those productivity tools as well. One more is personal recommendations,
Speaker 16: which we're seeing at around forty percent, so people that's
Speaker 16: more like shopping type of tools.
Speaker 2: You're other desk lead for advertising, media and tech Emrketer.
Speaker 2: So I hope you're able to answer this. I've been
Speaker 2: thinking a lot about how with GROCK and with Meta AI,
Speaker 2: you have two generative AI technologies that are closely aligned
Speaker 2: to social media platforms. There's been reporting, of course that
Speaker 2: open AIS looked at the formul lation or acquisition of
Speaker 2: a social media platform. Do you have any sense of
Speaker 2: how important that is for fresh data, the user based
Speaker 2: commonality and things like that. How analogous a generative AI
Speaker 2: tool with a social media platform is.
Speaker 16: It's a fantastic question and it's a big advantage. So
Speaker 16: meta AI x X with Grog, they do have that
Speaker 16: that there's that conversational data that comes from people using
Speaker 16: the platform that's incredibly useful for now like training the models, uh,
Speaker 16: just in terms of language, but also training in terms
Speaker 16: of trends. Google has that to an extent as well
Speaker 16: with a search tool. But that data that comes from
Speaker 16: social media is incredibly important and will give them that
Speaker 16: that material, that data that will take to really improve
Speaker 16: their services.
Speaker 2: Uri Wems of Principle analysts that E Marketer just appreciate
Speaker 2: the answer to that final question and great conversation around.
Speaker 2: Thank you. Now, coming up, Apple's Hollywood breakthrough, how the
Speaker 2: tech giants lead at the box office with F one
Speaker 2: could be impacting its streaming strategy. This is Bloomberg Tech.
Speaker 2: Rowing to the top of the box office charts was
Speaker 2: Apple's F one film, the movie about Formula one car
Speaker 2: racing starring Brad Pitt, brought fifty five point six million
Speaker 2: dollars into US and Canadian theaters and one hundred and
Speaker 2: forty four million dollars worldwide. The movie's scene as a
Speaker 2: test of Apple's strategy to release its pictures in theaters
Speaker 2: before putting them on its Apple TV Plus streaming service, Caroline.
Speaker 3: Let's talk more Apple then, because it's smart watch and
Speaker 3: wearables business, there's lost a bit of steam. Bloembog's Mark
Speaker 3: German writes in his latest power on that Apple should
Speaker 3: seriously consider developing a smart ring to give its fitness
Speaker 3: tracking wearables push new momentum and widen its market.
Speaker 4: Let's discuss how Mark joins us for more.
Speaker 3: And it's kind of interesting Aura has stored in this
Speaker 3: march in terms of rings and wearables in that department.
Speaker 3: Why is Apple perhaps not got with that tactic thus far?
Speaker 17: Well, they're all in on the Apple Watch. Don't forget
Speaker 17: the Apple Watch. You have that big color display, you
Speaker 17: have the full ecosystem of accessories, you have an Apple marketplace.
Speaker 11: Right.
Speaker 17: It's a revenue driver through and through for Apple, and
Speaker 17: it fits very nicely into the ecosystem. A ring would
Speaker 17: be a bit different. You're not gonna have a screen,
Speaker 17: You're not gonna have applications. You're likely not gonna have
Speaker 17: an accessories or app's ecosystem, right. It will be cheaper,
Speaker 17: probably lower margin. So there are some fears from that
Speaker 17: standpoint potentially for Apple, but I do think it would
Speaker 17: freshen up the wearables market for them. I think it
Speaker 17: could make them even more competitive to help them grow
Speaker 17: market share. It would be a nice alternative to the
Speaker 17: Apple Watch for people who don't want something sort of
Speaker 17: bulky depending on the model you get on their wrists.
Speaker 17: It would be a big legged up for sleep tracking,
Speaker 17: something a bit more comfortable. You could wear it with
Speaker 17: any outfit, right the Apple Watch, Sometimes you don't want
Speaker 17: to wear it, maybe with a suit or a tuxedo.
Speaker 17: So I think it would be a nice alternative for
Speaker 17: the wall, and it should be Apple selling it versus someone.
Speaker 2: Else mark I'm an Apple Watch where other wearables are available.
Speaker 2: Obviously Away from the form factor though, like inside this thing,
Speaker 2: there is underlying technology that is analogous to a ring.
Speaker 2: What is Apple good at that they could transfer into
Speaker 2: that new form factor.
Speaker 17: Well miniaturization in manufacturing. They should theoretically be able to
Speaker 17: get more health sensors in a ring than any other company.
Speaker 17: Or a smaller startup has been able to do it. Samsung,
Speaker 17: of course, it's a behemoth like Apple has been able
Speaker 17: to do it. There's no reason why Apple would technically
Speaker 17: not be able to release a ring. Imagine having your
Speaker 17: door keys built into the ring, your car key, having
Speaker 17: your Apple pay in there, a microphone for Siri. There
Speaker 17: are all sorts of bells and whistles that Apple can
Speaker 17: put into a ring because of its ecosystem that the
Speaker 17: competition simply would be unable to. On top of that,
Speaker 17: the synchronization with the rest of the Apple universe, pairing
Speaker 17: fortional health metrics from your phone, from your watch, potentially
Speaker 17: your earbuds and glasses down the road. So I think
Speaker 17: it would be a good fit for the company, and
Speaker 17: I do expect them to get into the market at
Speaker 17: some point.
Speaker 2: Bloomberg's Mark German and just a reminder to everyone that
Speaker 2: tunes in for Bloomberg Tech power On. It's his weekly
Speaker 2: newsletter that you really want to subscribe to. That does
Speaker 2: it for this edition of Bloomberg Tech carra out in
Speaker 2: London for this week.
Speaker 3: Yeah, it is sunny here, Ed, I've got to say,
Speaker 3: but don't forget to get out the sun and check
Speaker 3: out our podcast every now and then.
Speaker 4: You can find it on the terminal as well as
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Speaker 3: And iHeart from San Francisco from London today, this is
Speaker 3: Bloomberg Tech