WEBVTT - China Hit with Chip Curbs, X and SpaceX Move to Texas 0:00:01.400 --> 0:00:02.120 From Mahart. 0:00:02.279 --> 0:00:06.680 We're Innovation, Money and Power Collie in Silicon Vallet NBN. 0:00:07.040 --> 0:00:10.440 This is Bloomberg Technology with Caroline Hyde. 0:00:10.160 --> 0:00:11.559 And Ed Ludlove. 0:00:24.960 --> 0:00:27.400 Live from New York and San Francisco. This is Bloomberg 0:00:27.440 --> 0:00:31.400 Technology coming up. The US in weighs tougher trade curbs 0:00:31.640 --> 0:00:34.360 on chips for China stocks, tumble. 0:00:34.880 --> 0:00:39.440 Plusy Lommask moves SpaceX and X to Texas, and. 0:00:39.400 --> 0:00:41.120 Will Jdvans be good for business? 0:00:41.159 --> 0:00:43.640 We'll discuss, but first let's check in on these markets 0:00:43.680 --> 0:00:45.760 because we are having the worst day for the NASAC 0:00:45.760 --> 0:00:48.640 and the Nasdaq one hundred since October of twenty twenty three. 0:00:48.840 --> 0:00:51.080 We are pulled lower, in particular on the chip stocks 0:00:51.080 --> 0:00:52.800 of by three point nine percent. 0:00:53.280 --> 0:00:55.120 The key is trade tensions. 0:00:55.200 --> 0:00:58.240 The key is the Biden administration wanting to be limiting 0:00:58.360 --> 0:01:01.280 sales of key AI technolog and chips to China. 0:01:01.320 --> 0:01:03.280 And Ed you have got the details on the micro. 0:01:03.920 --> 0:01:05.760 Yeah, there's two names I'm looking at in particular. They 0:01:05.760 --> 0:01:08.040 are global names. We're absolutely right that it's the chip 0:01:08.080 --> 0:01:10.480 stocks in the US that are really weighing on markets. 0:01:10.680 --> 0:01:14.280 Tokyo Electron down seven point five percent overnight in Japan, 0:01:14.560 --> 0:01:17.360 biggest drop since April of this year, ASML, the Dutch 0:01:17.440 --> 0:01:20.679 chip equipment maker, down ten point eight percent, on track 0:01:20.680 --> 0:01:23.520 for its biggest drop since March of twenty twenty. The 0:01:23.600 --> 0:01:27.720 story that Bloomberg's reporting is that US officials are considering 0:01:27.880 --> 0:01:31.880 tougher curves on the access of the technology made by 0:01:31.880 --> 0:01:36.520 those companies to China buy Chinese companies. Let's get into it, 0:01:36.600 --> 0:01:40.080 Bloombazi and King joins us in San Francisco. Sarah Jacob 0:01:40.319 --> 0:01:42.360 joins us out of ansen Ian. I'm going to start 0:01:42.360 --> 0:01:44.880 with you. We're talking about something called the Foreign Direct 0:01:44.920 --> 0:01:48.320 Product Rule FDPR. Sources tell us this is something that 0:01:48.440 --> 0:01:50.480 US officials are considering using. 0:01:50.600 --> 0:01:51.120 What is it? 0:01:51.440 --> 0:01:53.720 Yeah, I think it's the way to look at it. 0:01:53.760 --> 0:01:56.120 Is is kind of the nuclear option in terms of 0:01:56.320 --> 0:01:58.880 trade action that can be taken. It's basically saying that 0:01:59.320 --> 0:02:03.760 if something had even the tiniest scintilla of US technology 0:02:03.840 --> 0:02:07.720 or US input, then the US can exert control over it. 0:02:08.000 --> 0:02:11.880 And it's borne out of frustration with the impact that 0:02:11.919 --> 0:02:15.480 we've had with the with what's being perceived as a 0:02:15.960 --> 0:02:18.320 sort of lagging reaction by the allies in terms of 0:02:18.320 --> 0:02:20.640 getting on board with the US, and in terms of 0:02:20.680 --> 0:02:22.720 that effect undermining. 0:02:23.120 --> 0:02:26.880 Go to one of those allies now because ASML, Dutch 0:02:26.919 --> 0:02:30.680 company being hit hard. Their earnings were good, Sarah, but 0:02:30.800 --> 0:02:33.920 the impact on their Chinese sales likely to be tough. 0:02:37.000 --> 0:02:40.760 Yes, that's right. Actually a SML reported second quarter bookings 0:02:40.800 --> 0:02:43.919 that beat estimates, and it's been talking about, you know 0:02:44.000 --> 0:02:47.280 how this is being driven by the artificial intelligence boom 0:02:47.840 --> 0:02:50.679 as we know, ASML has a monopoly and making machines 0:02:50.720 --> 0:02:56.080 that you know, produce the most advanced semiconductors. And this 0:02:56.120 --> 0:02:58.919 is also being driven by demand for very high power 0:02:59.040 --> 0:03:03.079 chips that are needed for AI applications. But certainly people 0:03:03.160 --> 0:03:06.880 looked to how much China accounted for in terms of 0:03:07.200 --> 0:03:10.320 the company's sales, and China count for nearly half of 0:03:10.400 --> 0:03:14.560 asm 's second quarter sales, trumains ASML's biggest market, and 0:03:14.600 --> 0:03:18.320 those sort of a sort of increases. These increasing exports 0:03:18.360 --> 0:03:21.480 also sort of you know, show that risks are wrapping 0:03:21.560 --> 0:03:25.760 up and because of diplomatic tensions possibly between the US 0:03:25.800 --> 0:03:29.359 and the Dutch government to push for more export curbs. 0:03:29.440 --> 0:03:33.040 And this is a diplomatic issue, but also this is 0:03:33.120 --> 0:03:35.720 one that is going to be impacting US companies. We 0:03:35.760 --> 0:03:38.680 know Micron, for example, significant sales to China. Is this 0:03:39.120 --> 0:03:41.280 just signaling yet more is to come when it comes 0:03:41.280 --> 0:03:41.760 to revenue. 0:03:41.800 --> 0:03:46.720 Here, it's signaling I think frustration with the way that 0:03:46.800 --> 0:03:51.720 these curbs have been implemented and the impact that they've had, 0:03:51.720 --> 0:03:55.440 and a concern I think that the Chinese companies, these 0:03:55.640 --> 0:03:59.600 upstarts that were supposed to be held back perhaps haven't been. 0:04:00.520 --> 0:04:02.560 That's really what the tension is going on. And there's 0:04:02.600 --> 0:04:06.440 an exploration and a consideration of other measures and how 0:04:06.520 --> 0:04:11.680 we might exit increasing control. Fundamentally, we don't know what's 0:04:11.720 --> 0:04:15.680 going to happen. Obviously, this current administration is going towards 0:04:15.680 --> 0:04:18.040 the end of its term, so we'll see. 0:04:18.279 --> 0:04:20.880 And therein lies the point that's made in the Bloomberg 0:04:21.160 --> 0:04:23.800 reporting this moment in time, we're headed for a US 0:04:23.880 --> 0:04:28.760 presidential election. Earlier today, Bloomberg spoke to Virginia Governor Glenn Youngkin. 0:04:28.880 --> 0:04:29.920 Just listen to this real quick. 0:04:30.760 --> 0:04:33.640 China is not just a rival. They're trying to dominate 0:04:33.680 --> 0:04:35.040 the world, and they're trying to do it at the 0:04:35.080 --> 0:04:38.120 expense of the United States. We need to not only 0:04:38.640 --> 0:04:41.440 protect ourselves against China, but we need to fight back. 0:04:41.480 --> 0:04:44.799 And so the tariffs that President Trump imposed on China 0:04:44.839 --> 0:04:47.480 when he struck the first Chinese deal were critical in 0:04:47.680 --> 0:04:51.760 order to rebalance an unbalanced situation with China. 0:04:53.400 --> 0:04:56.560 The point raised by the Governor Sarah is that this 0:04:56.880 --> 0:04:59.960 approach by the Biden administration and officials might change depends 0:05:00.080 --> 0:05:03.400 on the outcome of the election later this year. In 0:05:03.440 --> 0:05:06.279 the context of China, what is it that the United 0:05:06.320 --> 0:05:08.880 States wants of its allies where you are in Amsterdam 0:05:09.080 --> 0:05:10.920 namingly the Dutch. 0:05:13.480 --> 0:05:16.960 Oh well, basically for what we're hearing, it's about, you know, 0:05:17.000 --> 0:05:20.280 extending those curves and potentially also looking at how they 0:05:20.320 --> 0:05:25.279 can limit the companies in particularly ASML's ability to service 0:05:25.320 --> 0:05:28.720 and you know, repair restricted gear that's already in China. 0:05:29.400 --> 0:05:31.159 As you know, also in the Netherlands we've had a 0:05:31.200 --> 0:05:33.800 new government and new cabinets in place. We haven't really 0:05:33.839 --> 0:05:37.480 heard from the new cabinet what their policy is going 0:05:37.480 --> 0:05:40.040 to be on this, but we'll have to wait and watch. 0:05:41.880 --> 0:05:46.480 And thank you Sarah Jacob of course in the Netherlands 0:05:46.480 --> 0:05:49.200 coming on on all things at ASML and ship equipment companies. 0:05:49.600 --> 0:05:51.680 I mean, let's just dwell on this for a moment, 0:05:51.720 --> 0:05:52.359 because I love the. 0:05:52.360 --> 0:05:55.240 Way that you bring in what the Governor Youngkin was 0:05:55.279 --> 0:05:58.000 saying about this is not something that can just be 0:05:58.040 --> 0:06:01.080 thought of as talking tough with Biden, knowing that the 0:06:01.120 --> 0:06:03.920 Trump administration likely to be pushing back on China hard. 0:06:04.320 --> 0:06:07.479 And indeed, there was this really important story out today 0:06:07.480 --> 0:06:11.440 on Business Week talking about how Taiwan is currently being 0:06:11.880 --> 0:06:14.640 something that needs to be considered more that actually had 0:06:14.640 --> 0:06:16.440 a big impact on certain US stocks today. 0:06:17.440 --> 0:06:17.640 Yeah. 0:06:17.839 --> 0:06:20.920 I mean, the point made by former President Donald Trump 0:06:20.920 --> 0:06:24.760 in an interviewer BusinessWeek is that if he was come 0:06:24.800 --> 0:06:29.120 to power, he would look at Taiwan, Taiwan paying for protection, 0:06:29.360 --> 0:06:31.280 and a lot of that has been extrapolated out were 0:06:31.279 --> 0:06:34.760 showing Intel and Global foundry shares there being the exceptions 0:06:34.800 --> 0:06:37.800 to today's trading and moving to the upside. And there 0:06:37.839 --> 0:06:40.000 are some notes out there that are saying this is 0:06:40.560 --> 0:06:44.080 toa the only alternative that if President Trump came to 0:06:44.160 --> 0:06:49.360 power in November and took office next year, then an 0:06:49.360 --> 0:06:52.520 action to be taken on TSMC well in the context 0:06:52.560 --> 0:06:55.520 of global manufacturing and semiconductors Intel would be the only 0:06:55.560 --> 0:06:58.520 alternative for investors to back that kind of move. I 0:06:58.560 --> 0:07:00.479 don't know what you make of that, that sort of 0:07:00.520 --> 0:07:02.840 direct correlation, but that seems to be what the market 0:07:02.920 --> 0:07:04.839 suggesting with its trading this morning. 0:07:05.000 --> 0:07:07.359 And look, the direct correlation is so clear. Let's just 0:07:07.360 --> 0:07:09.200 bring up the stock charts. Let's just show how much 0:07:09.200 --> 0:07:12.440 Global Foundriies is outperforming the rest of the market today. 0:07:12.960 --> 0:07:15.800 Every single chip company in the socks is down apart 0:07:15.800 --> 0:07:18.160 from when you're looking in Global Foundries up more than 0:07:18.600 --> 0:07:21.680 nine percent. It was eclipsing ten percent earlier in the trade. 0:07:21.720 --> 0:07:24.600 Intel up two point eight percent. But it is interesting 0:07:24.680 --> 0:07:27.360 to think about how much this onshoring narrative has been 0:07:27.400 --> 0:07:29.760 one that the Biden administration has also been pushing. Yet 0:07:29.760 --> 0:07:31.800 more money being handed out at the moment when it 0:07:31.840 --> 0:07:32.720 comes to the Chips Act. 0:07:33.880 --> 0:07:36.559 We have seen the Bloomberg reporting, We've been through the market. 0:07:36.600 --> 0:07:39.200 Set's get an investors reaction for more. We're joined by 0:07:39.560 --> 0:07:43.080 Kim Forrest, Boca Capital Partners founder and CIO. 0:07:43.200 --> 0:07:44.240 I think let's start with. 0:07:44.160 --> 0:07:47.880 That most recent point that you know. I think the 0:07:47.880 --> 0:07:52.120 market sees a more likely outcome that Trump becomes president 0:07:52.400 --> 0:07:55.000 and based on the BusinessWeek interview, he may look at 0:07:55.000 --> 0:07:58.360 Taiwan TSMC, may be impact and that may benefit the 0:07:58.400 --> 0:08:00.920 foundry or fab business of Intel. Oh, how would you 0:08:00.960 --> 0:08:03.200 assess that and play that, Kim. 0:08:03.440 --> 0:08:07.560 Well, I think you know, with the Biden administration getting tougher, 0:08:08.320 --> 0:08:10.520 I'm thinking this is a toss up. This is an 0:08:10.560 --> 0:08:13.920 issue for the next four years, regardless of who comes 0:08:13.920 --> 0:08:18.120 into power. And I think that on shoring not just 0:08:18.160 --> 0:08:21.360 in the US but also over in other parts of 0:08:21.360 --> 0:08:24.160 the world like the EU, I think that is more 0:08:24.360 --> 0:08:28.360 of a longer term goal because we all kind of 0:08:28.400 --> 0:08:32.480 see the error in our ways of having one geography 0:08:33.160 --> 0:08:36.600 and even let's forget about that, it is in a 0:08:36.840 --> 0:08:41.120 very seismically active area and they get a lot of 0:08:41.280 --> 0:08:47.600 you know, disruption because of earthquakes, and it's near, you know, 0:08:47.920 --> 0:08:52.800 a rising China. It's sixty eight miles from mainland China, 0:08:53.040 --> 0:08:57.319 so you know there's threats there. But just the basics 0:08:57.360 --> 0:09:00.880 of having one place where all of the chin that 0:09:00.960 --> 0:09:06.839 are the highest technology are made is really kind of ridiculous. 0:09:06.960 --> 0:09:11.040 I just as a risk remediator in my business, I 0:09:11.200 --> 0:09:13.200 don't see how we got here, but here we are. 0:09:13.600 --> 0:09:13.920 Okay. 0:09:13.920 --> 0:09:16.280 So has that been changing the way in which you 0:09:16.360 --> 0:09:19.280 think people should be investing in these names? TSMC has 0:09:19.360 --> 0:09:21.559 been making the most of the Chips Act here in 0:09:21.600 --> 0:09:24.200 the United States, has been trying to expand. Admittedly, there's 0:09:24.200 --> 0:09:26.800 been hiccups and expansion struggles when you think of Arizona. 0:09:27.320 --> 0:09:30.680 But these are companies that are looking to on shore 0:09:30.760 --> 0:09:32.839 to be closer to where their client base is. How 0:09:32.880 --> 0:09:35.800 much should it be knocking the capitalization. I'm looking at TSMC, 0:09:35.840 --> 0:09:38.720 the depository receipts having their worst day since October twenty 0:09:38.760 --> 0:09:39.440 twenty two today. 0:09:39.520 --> 0:09:42.920 Kim, Sure, well, I think they're trying to move in 0:09:42.960 --> 0:09:46.880 that direction, but it's slow, as you noted, and it's 0:09:47.000 --> 0:09:51.360 just the nature of the beast. These are not factories 0:09:51.400 --> 0:09:53.960 that can be thrown up overnight. It takes a very 0:09:54.000 --> 0:09:58.080 long time for even the physical building to go in, 0:09:58.240 --> 0:10:04.359 let alone the equipment, and then that ties into ASML 0:10:04.920 --> 0:10:08.319 that they too are playing into this. You can only 0:10:08.360 --> 0:10:12.280 make this exotic equipment as fast as you can make it, 0:10:12.640 --> 0:10:16.120 and that's part of the dilemma here is how quickly 0:10:16.160 --> 0:10:19.079 can people move And the answer is not very fast. 0:10:19.440 --> 0:10:22.360 And I think that's why stocks are trading lower because 0:10:22.400 --> 0:10:26.319 they see, if you know, the US puts up gates 0:10:26.360 --> 0:10:29.520 to sell this equipment, it's really going to affect these 0:10:29.559 --> 0:10:32.360 companies and the turnaround is not quick. 0:10:33.720 --> 0:10:33.960 Kim. 0:10:34.360 --> 0:10:37.040 On that last observation, I'm looking at the NASDAQ one hundred. 0:10:37.080 --> 0:10:40.280 The biggest percentage decline is of course oral chip makers. 0:10:40.800 --> 0:10:42.719 If we close down two point three percent, that's the 0:10:42.760 --> 0:10:44.280 biggest drop for the NASZAK one hundred. 0:10:44.320 --> 0:10:47.959 Since October of last year, things have changed quite quickly. 0:10:48.720 --> 0:10:51.120 This was a market until last night was looking at 0:10:51.280 --> 0:10:54.680 the election factor and was trading in a positive manner, 0:10:54.720 --> 0:10:55.840 and now things have changed. 0:10:56.160 --> 0:10:58.559 Why why this sudden anxiety do you think? 0:10:59.520 --> 0:11:04.719 Why do you think the geopolitical focus on semiconductors at 0:11:04.720 --> 0:11:07.960 the very smallest equation. We've all been told money makes 0:11:08.000 --> 0:11:11.560 the world go round. Well, semiconductors makes the money go round, 0:11:12.080 --> 0:11:16.319 and you know they're the under underpinning of every business. 0:11:16.360 --> 0:11:21.280 Now energy is important, but semiconductors are now equally important. 0:11:21.760 --> 0:11:26.000 And the more exotic the chips are for AI, which 0:11:26.080 --> 0:11:28.880 everyone seems to believe that that is the thing that 0:11:28.920 --> 0:11:32.160 will bring productivity and is the next big thing. It 0:11:32.280 --> 0:11:36.600 is a major focus. And do we let one area 0:11:36.760 --> 0:11:39.560 of the world be the only maker of it? I'd 0:11:39.640 --> 0:11:43.520 say no, we cannot. And this is all all countries, 0:11:44.000 --> 0:11:44.719 not just the. 0:11:44.760 --> 0:11:48.199 US, kim forest, the global perspective. 0:11:48.760 --> 0:11:52.000 Boca Capital Partners founder in Cio brilliant to have you 0:11:52.040 --> 0:11:52.440 on the show. 0:11:52.600 --> 0:11:53.440 Thank you coming up. 0:11:53.480 --> 0:11:56.600 Look Elo Musk's saying that X and SpaceX are going 0:11:56.679 --> 0:11:57.760 to change their headquarters. 0:11:58.320 --> 0:12:00.560 I'm going to Texas. We'll have all the tells next. 0:12:00.559 --> 0:12:08.319 This is Bloomberg Technology. 0:12:15.360 --> 0:12:16.880 Signed for Talking Tech and First Up. 0:12:16.880 --> 0:12:20.120 Global Wafers wins four hundred million dollars from the US. 0:12:20.160 --> 0:12:24.079 The Taiwan silicon wafer producer was awarded funds through the 0:12:24.160 --> 0:12:27.000 Chips and Science actors. The company radies for projects in 0:12:27.120 --> 0:12:30.240 Texas and Missouri. Global Wafer says it plans to invest 0:12:30.440 --> 0:12:33.680 a total of four billion dollars into the initiative, creating 0:12:33.679 --> 0:12:36.600 twenty five hundred jobs plus. Revolute is in talks with 0:12:36.679 --> 0:12:40.160 Tiger Global to lead an upcoming share sale. Revolute CEO 0:12:40.360 --> 0:12:44.480 Francesca Kalisi spoke earlier on Bloomberg about its prospects. 0:12:45.160 --> 0:12:46.520 These is are bought confidences. 0:12:46.559 --> 0:12:49.880 Every time that new investor comes to board is a 0:12:49.880 --> 0:12:54.000 big sign, and especially when there is also impact evaluation. Right, 0:12:54.040 --> 0:12:56.200 So this is a good measure moment or truth for 0:12:56.280 --> 0:12:56.719 all of us. 0:12:58.400 --> 0:13:01.439 Tiger's involvement would be leading a secondary offering. It can 0:13:01.440 --> 0:13:04.880 now value Revolute of more than forty billion dollars and 0:13:04.920 --> 0:13:08.360 shares of git lab arising today the outfitt Back software 0:13:08.360 --> 0:13:11.319 makers said to be exploring a sale after attracting interest 0:13:11.360 --> 0:13:14.520 from potential bidders. That's according to a report from Reuters. 0:13:14.559 --> 0:13:17.960 The San Francisco based company is working with investment bankers 0:13:18.120 --> 0:13:20.959 and has attracted peers like data Dog Carrot. 0:13:21.800 --> 0:13:24.240 Let's just talk about Elon Musk and what he's just 0:13:24.240 --> 0:13:26.280 been saying on X when it comes to a couple 0:13:26.280 --> 0:13:29.800 of his company's ed the headquarters of X and SpaceX 0:13:30.120 --> 0:13:34.559 will both relocate to Texas with a billionaire citing frustration 0:13:34.760 --> 0:13:37.720 over laws in California, where the companies are currently based. 0:13:38.200 --> 0:13:41.040 Let's break all of this down, and there's Kurt Wagner's 0:13:41.040 --> 0:13:44.000 with us, Max Chafkin. Kurt, I start with you as 0:13:44.000 --> 0:13:46.960 someone who's the lean byline on this story. The frustration 0:13:47.120 --> 0:13:49.880 being a new law recently passing California to do with 0:13:49.960 --> 0:13:54.840 transgender children in public schools politics affecting Elon Musk's view 0:13:55.040 --> 0:13:56.360 on where to base his companies. 0:13:56.360 --> 0:13:59.679 It seems, yeah, absolutely, and I think this is, you know, 0:13:59.760 --> 0:14:02.880 a regression that we've seen for the last couple of years, 0:14:02.880 --> 0:14:05.240 but especially just the last couple of weeks, right, I 0:14:05.320 --> 0:14:07.760 mean he has now come out publicly in support of 0:14:07.880 --> 0:14:10.720 former President Donald Trump and the upcoming election he's donating 0:14:10.800 --> 0:14:14.439 to his campaign. We've seen Elon Musk complain about the 0:14:14.520 --> 0:14:18.480 laws in California, the Liberals in California for years, and so, 0:14:18.920 --> 0:14:21.280 you know, while it feels like a bit of a 0:14:21.400 --> 0:14:23.880 reactive decision right to see this new law and suddenly 0:14:23.920 --> 0:14:25.600 say we're going to move these companies out of the state, 0:14:25.640 --> 0:14:27.200 I think this has been a long time coming. In 0:14:27.240 --> 0:14:30.560 anyone who's followed Elon closely could see that this was 0:14:30.600 --> 0:14:31.480 building and building. 0:14:32.200 --> 0:14:33.920 Max, I think it's really important that the four of 0:14:34.000 --> 0:14:36.720 us talk about the technology and company impact this is 0:14:36.720 --> 0:14:39.840 going to have. SpaceX is critically important as a leader 0:14:39.840 --> 0:14:43.280 in commercial space. But you've been focused on Elon's politics 0:14:43.280 --> 0:14:45.480 as well. In the Elon in pod, I mean, you 0:14:45.480 --> 0:14:49.120 will have seen the back and forth between Governor Newsome, 0:14:49.800 --> 0:14:53.000 who shared an image of a Trump true social post, 0:14:54.000 --> 0:14:55.920 the timing of which we can debate it must have 0:14:55.920 --> 0:14:59.720 been the photo taken during Trump's former period in the 0:14:59.760 --> 0:15:00.280 White House. 0:15:00.320 --> 0:15:01.520 But the point being. 0:15:01.400 --> 0:15:06.120 That that Musk here has changed his politics and it 0:15:06.160 --> 0:15:09.600 has impact to his companies, has impact at a macro level. 0:15:10.680 --> 0:15:11.440 Yeah, I mean, you know. 0:15:11.480 --> 0:15:16.000 Elon Musk identifying himself as a you know, supporter of 0:15:16.480 --> 0:15:19.760 the former president and also likely a major donor, maybe 0:15:19.800 --> 0:15:22.480 the biggest donor. You know, he's he's definitely in the 0:15:22.520 --> 0:15:24.840 middle of this debate, and we're seeing you know, Gavin 0:15:24.920 --> 0:15:29.160 Newsom effectively as a surrogate for for for the Biden administration, 0:15:30.120 --> 0:15:32.920 you know, doing what you would expect from a surrogate, 0:15:32.960 --> 0:15:36.040 which is to sort of point out the obvious, uh, 0:15:36.120 --> 0:15:38.960 the obvious apparent hypocrisy of being at one point opposed 0:15:39.000 --> 0:15:43.080 to president former president and now being an enthusiastic supporter. 0:15:43.320 --> 0:15:45.360 And as Kurt said, long time coming. 0:15:45.680 --> 0:15:48.880 You know, Elon Musk himself already lives in Texas, so 0:15:48.960 --> 0:15:51.280 it's not hugely surprising. 0:15:50.800 --> 0:15:51.440 That he's doing this. 0:15:51.560 --> 0:15:54.400 It does have the feel of a political stunt more 0:15:54.440 --> 0:15:54.960 than anything. 0:15:55.800 --> 0:15:59.360 Not hugely surprising, but important for California and its technology industry. 0:15:59.400 --> 0:16:01.880 Right there with me on SpaceX, they have around thirteen 0:16:01.920 --> 0:16:05.000 thousand employees, many of them are in Hawthorne. Falcon nine 0:16:05.040 --> 0:16:07.280 is built in Hawthorne. They stick it on truck and 0:16:07.320 --> 0:16:09.080 trailer and ship it to Florida. 0:16:09.400 --> 0:16:10.320 And then there's X. 0:16:10.680 --> 0:16:13.160 I think that that company was creeping out of the 0:16:13.160 --> 0:16:15.880 building on Market Street. Anyway, Yeah, but we're talking about 0:16:15.880 --> 0:16:17.920 the footprint of two companies leaving the state. 0:16:18.240 --> 0:16:20.320 Yeah, I mean, I don't think there's any way to 0:16:20.560 --> 0:16:23.479 sugarcoat this in terms of what it looks like for California. 0:16:23.560 --> 0:16:24.840 Right, It certainly looks bad. 0:16:24.920 --> 0:16:27.240 It looks like you're taking the best, the brightest, the 0:16:27.280 --> 0:16:32.120 smartest technologists in the industry and moving them somewhere else. 0:16:32.160 --> 0:16:35.480 And so there is definitely an optical issue here. Now, 0:16:35.840 --> 0:16:38.840 the logistics of this are very important because while Elon 0:16:38.920 --> 0:16:41.960 has also moved Tesla to Texas several years ago, there's 0:16:42.000 --> 0:16:45.080 still a huge office here in Palo Alto, as you know, 0:16:45.600 --> 0:16:48.000 for Tesla, And so the question is, are these employees 0:16:48.040 --> 0:16:50.880 actually going to be leaving California, Are the jobs literally 0:16:50.960 --> 0:16:53.760 leaving California or is this more of a logistics thing 0:16:53.960 --> 0:16:56.520 of rebranding the company there now? 0:16:56.560 --> 0:17:00.560 Max, Ultimately, this is quite a personal issue feel or 0:17:00.640 --> 0:17:03.760 musk this current new law coming in in California. One 0:17:03.800 --> 0:17:05.960 of his eldest children, as the Sighter than the Story, 0:17:06.119 --> 0:17:07.960 went to court the day after they turned eighteen and 0:17:08.000 --> 0:17:11.480 twenty twenty two and changed their name, citing gender identity 0:17:11.480 --> 0:17:13.760 and the fact that they no longer live or wish 0:17:13.800 --> 0:17:16.680 to be related to my biological father in any way, 0:17:16.720 --> 0:17:20.000 shape or form. This is personal, but it also makes 0:17:20.240 --> 0:17:24.159 the consumer feel personally about some of the moves that 0:17:24.160 --> 0:17:27.440 Elon Musk is taking. And ultimately, from your Elon Inc. 0:17:27.640 --> 0:17:31.200 Podcasting viewpoint, how much is going to impact the businesses 0:17:31.400 --> 0:17:33.200 that Elon's getting ever more political here? 0:17:34.840 --> 0:17:37.679 Well, I don't think this particular move is going to 0:17:37.720 --> 0:17:40.800 have a huge impact either on the way consumers feel 0:17:40.800 --> 0:17:43.960 about you know, Elon Musk, or about you know, even 0:17:44.000 --> 0:17:46.400 the way that his employees feel. I mean, as Kurt says, 0:17:46.200 --> 0:17:48.080 it's not clear many are even going. 0:17:48.040 --> 0:17:51.840 To have to move. It is the latest sign. 0:17:51.800 --> 0:17:54.680 In a series of signs of Elon Musk becoming this, 0:17:55.040 --> 0:17:59.400 you know, very polarizing figure, and that is a challenge 0:18:00.080 --> 0:18:04.000 for especially for Tesla Right, which has this enormous base 0:18:04.080 --> 0:18:06.760 of customers, many of whom live in suburbs, many of 0:18:06.760 --> 0:18:11.000 whom are not hardcore Donald Trump supporters. So so he 0:18:11.080 --> 0:18:12.840 has but he's sort of made his bet on this 0:18:13.000 --> 0:18:14.960 over the last few years. So in a way, I 0:18:14.960 --> 0:18:17.000 don't think it's going to have a huge impact. It's 0:18:17.040 --> 0:18:20.600 more just a symptom of this ongoing, you know, the 0:18:20.680 --> 0:18:23.160 ongoing politics of being Elon Musk. 0:18:24.400 --> 0:18:27.800 Poomber, Kurt Wagner here in SF Max Chafkin, thank you both. 0:18:35.960 --> 0:18:39.080 Today it's our AI in Action segment and we're joined 0:18:39.080 --> 0:18:42.280 by tech Wolf. It's a company focusing on utilizing artificial 0:18:42.280 --> 0:18:45.399 intelligence in the world of recruiting, actually in retention as 0:18:45.440 --> 0:18:48.440 a tool to manage talent. The company also recently closing 0:18:48.480 --> 0:18:50.919 a forty two million dollar Series B. We want to 0:18:50.920 --> 0:18:54.040 bring in Michael Warner, who's Techwolf co founder and COO. 0:18:54.160 --> 0:18:59.080 Michael Howe is the more targeted large language models that 0:18:59.119 --> 0:19:02.320 you're developing, helping companies identify the talent they already have. 0:19:03.920 --> 0:19:08.679 Yeah, so we use artificial intelligence to help employees flourish 0:19:08.680 --> 0:19:12.080 that work, but also employers to help employers make better, 0:19:12.200 --> 0:19:16.000 smarter workforce decisions, who to train, who to hire, who 0:19:16.040 --> 0:19:18.520 to develop. So instead of saying we need to hire 0:19:18.560 --> 0:19:21.159 a thousand AI engineers, our AI can come in and 0:19:21.200 --> 0:19:23.560 say no, actually you only need to hire five hundreds, 0:19:23.560 --> 0:19:26.679 and the other five hundred can be redeployed, reskill trained 0:19:27.000 --> 0:19:30.000 inside the company And essentially that can save the business 0:19:30.200 --> 0:19:33.800 millions in direct requiitment costs, millions in sovereigns fees and 0:19:33.840 --> 0:19:36.560 millions in anutrition, and so today we have about two 0:19:36.600 --> 0:19:40.399 million skill profiles for employees. We work together with the 0:19:40.400 --> 0:19:44.040 most innovative HR leaders on the planet. I'd say HIBC, 0:19:44.240 --> 0:19:48.560 GFADP ericson United Airlines, MetLife. We're really making all the 0:19:48.600 --> 0:19:51.920 difference here with AI Michael. 0:19:51.920 --> 0:19:53.840 Where in the hiring process does this come in? Right? 0:19:53.880 --> 0:19:56.840 There's already sort of algorithmic filtering of cvs and then 0:19:56.840 --> 0:20:00.240 you basically in the first line have HR people going 0:20:00.280 --> 0:20:02.960 through piles before the hiring manager gets it. 0:20:03.320 --> 0:20:04.119 Where do you come in? 0:20:05.800 --> 0:20:08.760 Yeah, and it's good to take a step back. Skill 0:20:08.800 --> 0:20:11.960 management has been around since the eighties. Trying to understand 0:20:11.960 --> 0:20:14.879 the skills of people inside the company has been around 0:20:14.920 --> 0:20:17.720 for quite a long time. So we come in big company, 0:20:17.760 --> 0:20:20.040 fifty thousand, one hundred thousand employees, and the first thing 0:20:20.080 --> 0:20:23.959 we do is essentially create data, skilled data for everybody. 0:20:24.400 --> 0:20:26.440 And that's the first we're the first company that can 0:20:26.520 --> 0:20:28.760 reliably do this, and then the second step is actually 0:20:28.840 --> 0:20:32.640 using that data to make better decisions. So better data, 0:20:32.680 --> 0:20:35.119 we can typically see that there's a twenty five percent 0:20:35.200 --> 0:20:38.399 skills mismatch. The twenty five percent of employees have not 0:20:38.480 --> 0:20:41.480 the skills to perform in a job. We can demonstrate 0:20:41.520 --> 0:20:43.560 that seventy five percent of vacancies can be filled with 0:20:43.600 --> 0:20:46.200 internal tables. So it's a completely new way of looking 0:20:46.240 --> 0:20:49.960 at the workforce. More than specifically focusing on improvement, it's 0:20:49.960 --> 0:20:51.040 a data platform for HR. 0:20:51.560 --> 0:20:55.200 Michael's interesting as you say, yeah, what's talent identification goes 0:20:55.240 --> 0:20:57.760 back to the eighties. There are some big HR players 0:20:57.760 --> 0:20:59.879 out there, and funnily enough, some of them are actually 0:21:00.119 --> 0:21:03.200 can you you've got some strategic investment Felix Capital leading 0:21:03.200 --> 0:21:06.520 a series BB it's SAP Service now Workday what's your outlook? 0:21:06.640 --> 0:21:07.760 Do you remain independent? 0:21:09.680 --> 0:21:12.840 Of course, and when we talked about the round composition, 0:21:13.480 --> 0:21:15.560 we took a step back and we asked herself the 0:21:15.640 --> 0:21:19.040 question what is needed to build a European generational AAI company. 0:21:19.080 --> 0:21:21.600 And then from like capability lands like three big investor 0:21:21.640 --> 0:21:24.439 groups came up, the HR and HR tech investor that 0:21:24.480 --> 0:21:27.440