WEBVTT - Salesforce to Buy Informatica for $8 Billion, Apple’s Tariff Headwinds 0:00:02.759 --> 0:00:09.920 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:10.000 --> 0:00:15.720 where innovation, money and power collide in Silicon Valley and beyond. 0:00:16.160 --> 0:00:43.879 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:35.400 --> 0:00:38.400 Live from New York and San Francisco. This is Bloomberg Technology. 0:00:38.440 --> 0:00:42.200 Coming up, Salesforce will acquire Informatica for eight billion dollars, 0:00:42.200 --> 0:00:44.320 one of the biggest ever deals with the company for 0:00:44.440 --> 0:00:46.160 the next phase to they I driven. 0:00:45.920 --> 0:00:49.559 Growth plus Apple shares coming off their longest selloff in 0:00:49.600 --> 0:00:50.560 more than three years. 0:00:50.640 --> 0:00:53.680 Is attacks from the White House escalate. 0:00:53.520 --> 0:00:56.280 And Elon Musk turns his attention back to his rocket 0:00:56.320 --> 0:00:59.040 company SpaceX and will lay out his vision to all 0:00:59.240 --> 0:01:01.880 in an ex line stream later today. But first we 0:01:02.080 --> 0:01:04.679 check it on the markets. Ed, we're a kind of 0:01:04.720 --> 0:01:07.080 rocketing higher on this space as well. We're currently up 0:01:07.160 --> 0:01:08.839 one point eight percent, let's call it on the NASA 0:01:08.959 --> 0:01:13.440 one hundred. You're seeing strength as consumer sentiment manages to 0:01:13.440 --> 0:01:16.000 show some encouragement as we see maybe encouragement when it 0:01:16.000 --> 0:01:18.679 comes to US and European trade talks. And it's game 0:01:18.760 --> 0:01:21.000 on after what was a down week last week. But 0:01:21.120 --> 0:01:23.160 you'll look at some of the biggest movers in the index. 0:01:24.160 --> 0:01:26.960 Yeah, we have a deal, and that deal is between 0:01:27.080 --> 0:01:31.480 Salesforce and the cloud data management platform, Informatica, eight billion 0:01:31.520 --> 0:01:31.920 dollar deal. 0:01:31.959 --> 0:01:33.200 As you said, twenty five. 0:01:33.080 --> 0:01:37.240 Dollars per share going to Informatica and Salesforce saying that 0:01:37.240 --> 0:01:39.520 they're going to use a combination of cash and some 0:01:39.640 --> 0:01:40.840 debt to finance the deal. 0:01:40.880 --> 0:01:42.680 But this is kind of interesting. It's a second bite 0:01:42.680 --> 0:01:43.199 of the apple. 0:01:43.440 --> 0:01:46.520 Informatica now twenty three dollars eighty cents in the session, 0:01:47.280 --> 0:01:50.520 confirmation of earlier Bloomberg reporting. A lot more to learn 0:01:50.560 --> 0:01:53.120 about what happened, not just in the last few days, 0:01:53.200 --> 0:01:55.080 but in the last year exactly. 0:01:55.160 --> 0:01:56.880 And let's get to someone who helped break this scube 0:01:56.920 --> 0:01:59.560 on Friday, Leanna Baker. It was a Friday story when 0:01:59.600 --> 0:02:00.920 it comes to this round of. 0:02:00.880 --> 0:02:01.200 Em and a. 0:02:01.320 --> 0:02:04.160 But of course Salesforce had I di Informatica a year ago. 0:02:04.480 --> 0:02:07.120 We've been tracking it also since the deal fell apart. 0:02:07.120 --> 0:02:09.840 But once you have a deal, you know, get scuttled 0:02:09.880 --> 0:02:11.960 and not happen. You have to be really sure that 0:02:12.000 --> 0:02:14.280 it's going to happen. So late Friday we heard that 0:02:14.320 --> 0:02:17.200 this could be coming, you know, as early as this week, 0:02:17.240 --> 0:02:19.240 and we sort of went for it here and we 0:02:19.240 --> 0:02:22.119 were trying to understand what a change for Salesforce. Well, 0:02:22.200 --> 0:02:24.400 for sure, what's changed is that they're paying two billion 0:02:24.440 --> 0:02:26.240 dollars less than they were a year ago, So they 0:02:26.240 --> 0:02:28.840 definitely look smart in that respect. 0:02:29.200 --> 0:02:32.240 Right a year ago informatic Well, what changed for Informatica 0:02:32.320 --> 0:02:34.600 is it shares were above thirty dollars a year ago. 0:02:34.680 --> 0:02:35.440 And when we broke the. 0:02:35.400 --> 0:02:38.359 Story Friday, I think it was somewhere around twenty dollars 0:02:38.639 --> 0:02:43.280 or so. How Salesforce is funding this, the sort of 0:02:43.320 --> 0:02:47.040 mechanics of the deal, Salesforce's history of EM and A, 0:02:47.400 --> 0:02:49.760 how much of this was surprising to the team. 0:02:50.040 --> 0:02:52.640 So Salesforce is sort of a juggernau An M and A. 0:02:52.800 --> 0:02:55.959 They came in the crosshairs of activists investors a few 0:02:56.000 --> 0:02:59.080 years ago. Both of you covered that really closely, where 0:02:59.160 --> 0:03:03.000 Benioff's A position strategy was under the spotlight. So he 0:03:03.120 --> 0:03:05.200 sort of took a breather for a few years, and 0:03:05.280 --> 0:03:07.200 here he's back in a big way with this eight 0:03:07.240 --> 0:03:09.600 billion dollar acquisition. You might recall in the fall we 0:03:09.639 --> 0:03:13.560 broke another story Salesforce pot Own, which is a smaller 0:03:13.600 --> 0:03:15.720 deal at one point nine billion. So Salesforce still has 0:03:15.760 --> 0:03:18.640 been doing deals, but you know, this is the largest 0:03:18.680 --> 0:03:22.560 in a while. Historically Slacked was larger, and they also 0:03:22.600 --> 0:03:25.600 did Tableau software many years ago. So this is a 0:03:25.639 --> 0:03:28.440 company that just loves inorganic growth and it's back on 0:03:28.520 --> 0:03:30.959 track in terms of getting those deals. 0:03:31.040 --> 0:03:33.640 I mean they also bought MuleSoft, which of course actually 0:03:33.680 --> 0:03:36.960 competes with Informatica. So how is the regulatory process going 0:03:37.040 --> 0:03:37.280 to look? 0:03:37.360 --> 0:03:40.840 So analysts are watching this overlap between the companies. It'll 0:03:40.880 --> 0:03:43.640 definitely be a test to see how Salesforce and Marke 0:03:43.640 --> 0:03:46.200 betting off or maybe viewed under this administration. So we'll 0:03:46.200 --> 0:03:48.960 be tracking that closely. But for what we understand, they 0:03:49.000 --> 0:03:51.520 got this deal done. It didn't stop them from getting 0:03:51.520 --> 0:03:54.320 it announced, and we'll see what comes next. 0:03:54.920 --> 0:03:58.120 Bloombergsianna Baker, who leads our deal's team, Thank you very much. 0:03:58.280 --> 0:04:00.920 It's get some markets reaction and a head of market 0:04:01.000 --> 0:04:05.440 analysis at RBC bre In Dolphin. It's an interesting headline, right, Janet, 0:04:05.520 --> 0:04:07.960 we have some M and A in the software space 0:04:08.480 --> 0:04:11.680 just as a moment in time. How do you see 0:04:11.720 --> 0:04:15.400 that playing out more broadly for SaaS and software corners 0:04:15.400 --> 0:04:16.240 of the tech market. 0:04:18.000 --> 0:04:21.400 Hi Ed thanks for having me. I think that's very exciting. 0:04:21.440 --> 0:04:24.320 I think AI is still driving a lot of these 0:04:24.400 --> 0:04:29.000 excitement and what we are looking is that there's some 0:04:29.040 --> 0:04:30.960 more consolidation in the industry. 0:04:31.000 --> 0:04:33.320 I think our companies want to deepen. 0:04:33.279 --> 0:04:39.719 And strengthen their capability in AI driven growth in our 0:04:39.800 --> 0:04:44.279 data analytics and CRR management, and also developing further in 0:04:44.320 --> 0:04:46.960 the cloud. So I guess this is a very exciting 0:04:47.080 --> 0:04:50.400 and sort of builds up further the case for that 0:04:50.560 --> 0:04:52.159 long term AI investment. 0:04:53.320 --> 0:04:55.720 I'm just looking at shares of Nvidia. They're up now 0:04:55.760 --> 0:04:58.920 three percent in the session. The macro event of the week, 0:04:58.960 --> 0:05:02.880 the macro event, it's probably in Video's earnings after the 0:05:02.920 --> 0:05:07.160 market closed on Wednesday night on your desk for your 0:05:07.200 --> 0:05:10.120 clients in your world. Is it a macro level event 0:05:10.200 --> 0:05:11.480 something like in video earnings. 0:05:12.720 --> 0:05:16.280 Yeah, definitely. I think everyone is very excited about it. 0:05:16.760 --> 0:05:21.080 I think what we'll be looking at is definitely the 0:05:21.120 --> 0:05:24.560 profit margins. It is getting harder and harder to defend, 0:05:25.200 --> 0:05:29.280 and also, of course the rampop of Blackwell and how 0:05:29.400 --> 0:05:35.400 the servers data services are basically digesting the inventores and 0:05:35.600 --> 0:05:36.840 also sovereign AI. 0:05:37.480 --> 0:05:41.080 I think that's a very important tailwind. 0:05:40.640 --> 0:05:44.760 For Nvidia in the future, and I think, of course 0:05:45.040 --> 0:05:49.480 commentaries on the geopolitic situation sells to China and things 0:05:49.520 --> 0:05:49.800 like that. 0:05:49.880 --> 0:05:51.000 And also I think. 0:05:50.880 --> 0:05:54.599 In general, I think the valuations of Nvidia is not 0:05:55.680 --> 0:05:56.440 demanding at all. 0:05:56.480 --> 0:05:59.120 It's only twenty five times for earnings. 0:05:59.160 --> 0:06:01.400 But I think I guess the market is still having 0:06:01.480 --> 0:06:05.680 doubts on the digestion of those AI chips, given that 0:06:05.720 --> 0:06:09.680 the hyperscalers have already spent hundreds billions of dollars and 0:06:09.800 --> 0:06:12.680 how much of that sovereign AI and stargate is going 0:06:12.720 --> 0:06:14.880 to compensate for that, And I think we're still in 0:06:14.920 --> 0:06:17.760 this digestion phase. So it'll be very interesting to hear 0:06:17.800 --> 0:06:20.640 how the executives are going to comment on that. 0:06:21.040 --> 0:06:23.919 So do you need to hear that bullishness, that ultimate 0:06:23.960 --> 0:06:29.840 demand being pushed forward and really enthusiastic guidance coming from 0:06:30.040 --> 0:06:33.520 Jensen to build around the AI theme once again outweighing 0:06:33.560 --> 0:06:35.960 what has been geopolitics that weighs down on some of 0:06:35.960 --> 0:06:37.120 these hardware names. 0:06:38.360 --> 0:06:40.479 I think, so, I think we actually need to see 0:06:40.520 --> 0:06:45.360 a pretty bullish guidance. The problem is that the stock 0:06:45.480 --> 0:06:49.720 has risen I think about forty percent since slow and 0:06:50.880 --> 0:06:53.000 to get even high to break the previous high. I 0:06:53.040 --> 0:06:55.479 think we need more good deals. And as I said, 0:06:55.520 --> 0:06:59.280 there's still a lot of concerns on geopolitics. I mean 0:06:59.600 --> 0:07:04.040 President Trump has canceled that aidefield and rule, but for 0:07:04.080 --> 0:07:06.520 sure if something else is coming. So I guess there's 0:07:06.560 --> 0:07:09.200 still a lot of concern on the competitive landscape. China 0:07:09.320 --> 0:07:12.880 is very close behind, you know. I guess we need 0:07:13.240 --> 0:07:15.360 a lot of good news for the share prices to 0:07:15.480 --> 0:07:16.520 power ahead. 0:07:16.880 --> 0:07:19.520 And just take stock for a moment of the on 0:07:19.720 --> 0:07:22.560 flought of headwinds we've had from a geopolitical nature. We're 0:07:22.600 --> 0:07:25.480 about to dig into Apple. Of course the tariff anxiety there, 0:07:25.800 --> 0:07:27.720 but also the tip for tap that might come back 0:07:27.760 --> 0:07:31.080 if Europe does indeed have its eye on big tech 0:07:31.360 --> 0:07:35.560 in terms of yet more digital services taxes. Ways to respond, Janet, 0:07:35.600 --> 0:07:37.640 how hard is it to invest in big tech big 0:07:37.720 --> 0:07:39.440 US names at the moment? 0:07:41.160 --> 0:07:43.360 To be honest, I think the long term story is intact. 0:07:43.400 --> 0:07:47.640 I think these are great growth compounders that I don't 0:07:47.640 --> 0:07:51.200 think people are doubtful of their potential and their long 0:07:51.280 --> 0:07:53.440 term growth. But the problem is that in near term 0:07:53.600 --> 0:07:56.600 there's still so much uncertainty on a tariff and I 0:07:56.600 --> 0:07:59.520 think even if the tariffs are scaling back or pause 0:07:59.600 --> 0:08:01.920 or whatever, I think at the end of the day, 0:08:02.000 --> 0:08:05.480 some of these big tech companies that are highly linked 0:08:05.480 --> 0:08:09.120 in the supply chains will still see some erosion in. 0:08:09.080 --> 0:08:12.440 Their profit margin. Right, So I guess that's the concern. 0:08:12.680 --> 0:08:15.680 And the thing is they're already very big and it 0:08:15.760 --> 0:08:18.760 is very hard to grow at such a fast pace 0:08:19.800 --> 0:08:22.920 going forward. So I guess given the valuations have come 0:08:22.960 --> 0:08:25.920 back up again after the recent valley, I guess investors 0:08:25.920 --> 0:08:29.160 are going to be back in a more cautious mode 0:08:29.200 --> 0:08:29.760 going forward. 0:08:29.840 --> 0:08:32.120 We need more good news. We need our trade US. 0:08:32.200 --> 0:08:35.560 We will need more AI good news, we need more 0:08:36.200 --> 0:08:37.720 better economic. 0:08:37.360 --> 0:08:40.040 Data from the US and lower inflation. 0:08:40.200 --> 0:08:44.280 For example, Janet, is there a corner of the technology 0:08:44.280 --> 0:08:46.920 sector that's underappreciated by the market. 0:08:51.080 --> 0:08:53.200 I think, I mean for US. 0:08:53.120 --> 0:08:56.760 Right, we are more enthusiastic on the AI pets and 0:08:56.800 --> 0:09:00.800 shovels play. But as I said, I think the recent 0:09:00.960 --> 0:09:04.120 rally has moved back up some of those valuations. I 0:09:04.160 --> 0:09:09.160 think software remains a good place to be given that 0:09:09.240 --> 0:09:13.560 it is arguably less impacted by tariff and I think 0:09:13.559 --> 0:09:16.880 there's still a lot of innovation going on. I think 0:09:17.559 --> 0:09:20.800 I think some of the share price movement in big 0:09:20.880 --> 0:09:24.760 tech companies, for example, Apple has been quite negative, and 0:09:24.880 --> 0:09:28.120 I think obviously it is impacted by geopolitics and tariffs, 0:09:28.320 --> 0:09:31.920 but I guess investors are also looking for some new innovation, 0:09:32.160 --> 0:09:35.960 new products, pipelines and things like that, like new features 0:09:36.000 --> 0:09:36.440 on AI. 0:09:36.480 --> 0:09:39.000 I think in April were able to deliver that. 0:09:39.080 --> 0:09:41.280 I think that can offset some of that worries and 0:09:41.280 --> 0:09:46.200 may potentially recover from the recent negative share price reaction. 0:09:46.679 --> 0:09:48.920 We're going to be digging into that, but a moment, 0:09:49.160 --> 0:09:52.000 a little bit more on Apple January. Obviously, Ruandolphin head 0:09:52.000 --> 0:09:54.160 a market analysis thank you coming up, as they say, 0:09:54.440 --> 0:09:56.760 well after a list getting a bit of a reprieve 0:09:56.840 --> 0:09:59.160 after its longest sell off we've seen in more than 0:09:59.160 --> 0:10:02.440 three years. But Trump's tas threats could introduce more volatility. 0:10:02.800 --> 0:10:04.719 I can discuss that in a moment. But ed, we've 0:10:04.720 --> 0:10:07.000 got some breaking news on moving Trump Media. 0:10:07.800 --> 0:10:10.800 Yeah, did you see DJT, the parent company of Truth Social. 0:10:10.880 --> 0:10:13.640 So the stocks down more than nine percent the news 0:10:14.120 --> 0:10:16.400 it's a pretty simple story. Trump Media is going to 0:10:16.480 --> 0:10:20.080 raise two and a half billion US dollars in capital 0:10:20.320 --> 0:10:21.440 to buy bitcoin. 0:10:22.320 --> 0:10:23.720 There was some tropy trading I think. 0:10:23.559 --> 0:10:26.720 We opened markedly higher, we are now very much down 0:10:26.880 --> 0:10:27.840 more than nine percent. 0:10:28.200 --> 0:10:29.760 We'll continue to track that story. 0:10:29.800 --> 0:10:30.000 Carro. 0:10:30.600 --> 0:10:48.680 This is plumbag technology. Take a look at shares of Apple, 0:10:48.760 --> 0:10:51.760 the tech giant finally in the green after eight straight 0:10:51.880 --> 0:10:56.120 days of losses. Still, Apple remains the mag seven's worst 0:10:56.160 --> 0:10:59.320 performing stock in twenty twenty five, having fallen twenty one 0:10:59.360 --> 0:11:00.280 percent so far. 0:11:00.559 --> 0:11:01.640 Yeah, todate Bluembos. 0:11:01.720 --> 0:11:05.520 Ryan for Seneca writes today the iPhone maker faces still 0:11:05.840 --> 0:11:07.840 more pain, and he joins us. Now, Ryan, where is 0:11:07.840 --> 0:11:11.120 that pain coming from from the stalks perspective? 0:11:11.840 --> 0:11:14.800 Hey, thanks for having me on so obviously, last week 0:11:14.800 --> 0:11:18.800 we got the surprise announcement about tariffs specifically on Apple 0:11:18.880 --> 0:11:21.440 if it doesn't bring its manufacturing to the United States. 0:11:21.640 --> 0:11:24.640 This was later expanded to include all smartphone makers. But 0:11:24.720 --> 0:11:28.160 I think just the level of political uncertainty remains extremely 0:11:28.320 --> 0:11:32.480 elevated for Apple. Obviously, we saw so much volatility following 0:11:32.480 --> 0:11:34.680 the initial tariff announcement in April. 0:11:34.960 --> 0:11:36.400 There was then, you know. 0:11:36.360 --> 0:11:39.440 Exemptions provided for a certain electronics category, a sort of 0:11:39.600 --> 0:11:40.240 a pause. 0:11:40.280 --> 0:11:41.319 With respect to China. 0:11:41.520 --> 0:11:44.560 We saw another tariffs against the European Union, which were 0:11:44.600 --> 0:11:47.280 also paused. So just the back and forth really has 0:11:47.280 --> 0:11:49.840 investors and analysts struggling to kind of figure out what 0:11:49.920 --> 0:11:52.400 is the impact that Apple going to be, how do 0:11:52.440 --> 0:11:55.160 they navigate this kind of environment, and what is going 0:11:55.200 --> 0:11:57.160 to be the sort of knock on effects with respects 0:11:57.200 --> 0:12:01.160 to its earnings, its margins, with the demand, with pricing. 0:12:01.440 --> 0:12:04.760 Still a lot of very fundamental questions surrounding the company 0:12:04.840 --> 0:12:05.280 right now. 0:12:05.640 --> 0:12:07.480 What's so interesting is we had Gil Luria on the 0:12:07.520 --> 0:12:11.600 show last week really talking from DA Davison Analysis, saying 0:12:12.120 --> 0:12:14.760 it's surprised at how poorly Tim Cook seems to be 0:12:14.840 --> 0:12:17.840 navigating this on a political perspective, but also there's so 0:12:17.880 --> 0:12:20.520 many other headwinds that are boveting the company right now. 0:12:21.200 --> 0:12:22.000 Yeah, absolutely so. 0:12:22.040 --> 0:12:25.200 They've already been struggling with their AI offerings. Growth has 0:12:25.200 --> 0:12:28.000 been pretty tepid, especially world up to other megacap companies 0:12:28.040 --> 0:12:30.640 for quite some time. The multiple remains sort of at 0:12:30.679 --> 0:12:32.560 the higher end of things. There are a lot of 0:12:32.600 --> 0:12:35.160 issues that have investors kind of looking around and saying, 0:12:35.360 --> 0:12:37.200 if you're going to buy a big tech company, what 0:12:37.320 --> 0:12:40.280 is really the argument for owning Apple over other ones 0:12:40.280 --> 0:12:43.520 that offer stronger growth or all over multiple or a 0:12:43.559 --> 0:12:46.200 stronger AI position. Or they don't come with this kind 0:12:46.200 --> 0:12:48.760 of political risk. So certainly all the sort of headwinds 0:12:48.760 --> 0:12:50.480 are stacked up against Apple in a way that they 0:12:50.480 --> 0:12:52.679 are not for the other megacap tech stocks. 0:12:53.480 --> 0:12:55.400 Set the scene for US then year to date for 0:12:55.440 --> 0:12:58.000 the mag seven Apples down twenty one percent. But what 0:12:58.040 --> 0:12:59.880 does the rest of the field look like you cover 0:13:00.040 --> 0:13:00.880 each of these names. 0:13:02.120 --> 0:13:03.400 Other names are doing pretty well. 0:13:03.400 --> 0:13:05.680 There's been obviously a great deal of volatility, but some 0:13:05.760 --> 0:13:08.200 names have recently broken back into the green for the year. 0:13:08.640 --> 0:13:10.960 I mean, I think a lot of these companies continue 0:13:10.960 --> 0:13:14.479 to have a lot of really you know, adamant supporters. 0:13:14.520 --> 0:13:17.280 They are still well liked on Wall Street. The most 0:13:17.280 --> 0:13:20.600 recent earning season showed pretty durable growth trends. A lot 0:13:20.600 --> 0:13:23.920 of them deal in market positions that don't have too 0:13:24.000 --> 0:13:27.960 much tariff impact, like software or just internet services, online advertising. 0:13:28.080 --> 0:13:30.280 You know, there's some sort of second derivative move if 0:13:30.320 --> 0:13:33.040 you consider the impact to just economic growth and so forth. 0:13:33.200 --> 0:13:35.480 But otherwise the names are doing pretty well. Apple is 0:13:35.520 --> 0:13:37.680 really an outlier here, and the only one that's pretty 0:13:37.679 --> 0:13:39.600 close to it is Tesla, although I think I checked 0:13:39.600 --> 0:13:42.040 this morning and that stock is down about thirteen percent 0:13:42.120 --> 0:13:44.760 or so. This year, so the degree to which that 0:13:44.760 --> 0:13:46.600 one is even lacking is far lower. 0:13:47.240 --> 0:13:51.120 Ran, Sorry, Ran Plastelica, It's great to have you. Or 0:13:51.280 --> 0:13:54.080 is some really well read stories, We appreciate it. Let's 0:13:54.080 --> 0:13:55.800 just go back to the nuts and bolts of the 0:13:55.800 --> 0:13:58.720 Apple story with Karenina and Anasy just create a strategies 0:13:58.720 --> 0:14:02.120 president and principle analyst and going back to well the 0:14:02.160 --> 0:14:05.280 torrent of truth social posts that were out on Friday 0:14:05.320 --> 0:14:07.679 first focused on Apple, but then spreading their way. It 0:14:07.720 --> 0:14:11.839 would feel from Trump that all foreign made smartphones would 0:14:11.840 --> 0:14:14.920 potentially be looking at a twenty five percent tariff, does 0:14:14.960 --> 0:14:17.040 happen in some way end up having an edge in that. 0:14:19.120 --> 0:14:23.080 You know, the phone is still the most valued device 0:14:23.280 --> 0:14:26.960 that consumers are caring and so hitting on smartphones when 0:14:27.160 --> 0:14:30.440 initially Trumpets said that they were going to be exempt, 0:14:30.600 --> 0:14:33.920 is going to be you know, hard for everybody. If 0:14:33.920 --> 0:14:37.520 you're looking at the US market, Samsung and Apple are 0:14:37.560 --> 0:14:43.320 dominating the market and so having tariffs apply to Samsung 0:14:43.360 --> 0:14:47.960 as well, who will have limited availability to make devices 0:14:48.000 --> 0:14:51.160 here in the US, is going to be hard for Apple. 0:14:51.400 --> 0:14:54.960 Is all about juggling the short term and the longer 0:14:55.040 --> 0:14:59.240 term prospect, trying to balance not upsetting the president for 0:14:59.440 --> 0:15:02.640 above say, time, not upsetting China either because it's a 0:15:02.640 --> 0:15:04.520 big market for them as well. 0:15:04.560 --> 0:15:07.720 And India where they've been shifting manufacturing currently. Not What 0:15:07.920 --> 0:15:10.960 does Tim Cook do to satisfy all players right now? 0:15:12.640 --> 0:15:16.040 I think buying time is probably his best option, and 0:15:16.120 --> 0:15:20.440 so making whatever promise he can make of investing in 0:15:20.480 --> 0:15:25.720 the US. Obviously, if you're thinking about repositioning the production 0:15:25.840 --> 0:15:28.200 here in the US, we're talking way further than the 0:15:28.320 --> 0:15:31.000 term that term is going to be serving, and so 0:15:31.600 --> 0:15:35.280 buying time for the next two to three years might 0:15:35.320 --> 0:15:37.200 be all that is needed for now. 0:15:38.600 --> 0:15:40.520 The way that Tim could it Tim Cook put it 0:15:40.560 --> 0:15:42.440 in twenty seventeen, I think it was on stage with 0:15:42.840 --> 0:15:46.360 Fortune magazine, is that in China you could fill a 0:15:46.400 --> 0:15:50.760 football stadium with specialist tooling engineers, and in America you 0:15:50.760 --> 0:15:53.560 couldn't fill a room, a meeting room with that same 0:15:53.680 --> 0:15:57.760 level of skill set. You know all about vertical integration 0:15:58.080 --> 0:16:00.800 and how the iPhone is assembled and all different hands 0:16:00.800 --> 0:16:03.560 that touch one handset. Just try and help our audience 0:16:03.640 --> 0:16:06.240 understand what it would mean not to move an iPhone 0:16:06.240 --> 0:16:10.360 factory to America, but everything else that comes with it. 0:16:10.600 --> 0:16:13.680 That is what is impossible to do. I mean moving 0:16:13.760 --> 0:16:17.080 the supply chain and then food production here is really 0:16:17.120 --> 0:16:20.960 impossible unless you're willing to invest, and not just from 0:16:20.960 --> 0:16:23.920 an Apple perspective, but from a government perspective. You know, 0:16:24.040 --> 0:16:28.680 billions of dollars in replicating this and investing ten plus 0:16:28.760 --> 0:16:32.080 years to do so. I think what you can aspire 0:16:32.200 --> 0:16:35.880 to do is, you know, an assembled in America the 0:16:35.960 --> 0:16:39.480 same way as you have designed in Cupertino on the 0:16:39.520 --> 0:16:42.520 back of a device. That is the short term hope. 0:16:43.400 --> 0:16:46.240 You know, everything else is really more a fairy tale. 0:16:46.760 --> 0:16:50.680 Apple shares fell last week when a headline crossed the 0:16:50.680 --> 0:16:54.480 Bloomberg terminal the Open AI was buying Johnny Ives hardware 0:16:54.520 --> 0:16:58.160 startup io for six point five billion dollars to make 0:16:58.240 --> 0:16:59.440 a suite of devices. 0:16:59.720 --> 0:17:01.760 Your action, please, Carolina Milanacy. 0:17:03.360 --> 0:17:06.240 You know that is definitely pressure that right now Apple 0:17:06.280 --> 0:17:09.400 could do without. You know, they have Apple Vision pro 0:17:10.119 --> 0:17:15.000 very successful in enterprise from an interest perspective, not necessarily 0:17:15.080 --> 0:17:19.119 a volume perspective, but hasn't really hit consumers for a 0:17:19.200 --> 0:17:22.800 range of things from the price point to the ecosystem. 0:17:23.200 --> 0:17:26.920 So hearing you know somebody that has worked for Apple 0:17:27.040 --> 0:17:31.240 so closely and maybe didn't leave on best terms coming 0:17:31.520 --> 0:17:37.520 with open AI. So you're bringing together daisore point for 0:17:37.600 --> 0:17:41.800 Apple right now with Apple Intelligence plus a competition from 0:17:42.560 --> 0:17:46.679 a glass or you know, some kind of XRAR play. 0:17:47.480 --> 0:17:49.439 Definitely not a good moment for Apple. 0:17:50.040 --> 0:17:52.560 Not a good moment, but only for cell ratings. On 0:17:52.600 --> 0:17:55.399 the stock, it's still very close to a three trillion 0:17:55.440 --> 0:18:00.280 dollar company. Can they swiftly turn things around? Nay, we 0:18:00.400 --> 0:18:01.880 galvanized growth here, Carolina. 0:18:03.080 --> 0:18:05.000 I do think that we are going to have some 0:18:05.080 --> 0:18:07.440 of the answer in a couple of weeks at WDC, 0:18:08.320 --> 0:18:12.480 when we're going to see possibly like Mark German was 0:18:12.520 --> 0:18:16.440 reporting a redesign from an OS perspective Beth for iPhone, 0:18:17.080 --> 0:18:22.679 watch a Mac, but also hearing awfully some improvement on 0:18:23.000 --> 0:18:28.080 the or some development on the Apple intelligence part. I 0:18:28.080 --> 0:18:31.640 think ultimately Apple is still from a vendor perspective, from 0:18:31.680 --> 0:18:34.040 a consumer point of view, the one that has the 0:18:34.080 --> 0:18:37.880 strongest ecosystem and that can tie in consumers both from 0:18:37.880 --> 0:18:41.960 a services perspective and hardware. And I think that the 0:18:42.800 --> 0:18:46.640 point that is getting people scratching their heads right now 0:18:46.800 --> 0:18:50.159 is how long it's been taken from an Apple intelligence perspective. 0:18:50.480 --> 0:18:53.520 But I still believe that ultimately are they have all 0:18:53.600 --> 0:18:57.639 the pieces that can come together to really continue to 0:18:57.760 --> 0:19:03.639 develop their ecosystem wrong way and police of their customers curly. 0:19:03.359 --> 0:19:05.320 In a millienacy of creative strategy. It's great to have 0:19:05.320 --> 0:19:08.680 you back here on Bloomberg Technology. Thank you know. Coming up, Mark. 0:19:08.560 --> 0:19:11.879 Zuckerberg's effort to get close with President Trump have given 0:19:11.960 --> 0:19:14.040 him direct access to the White House. 0:19:14.040 --> 0:19:17.000 But what's that actually done for his company? We have 0:19:17.080 --> 0:19:19.280 more on that next. This is Bloomberg Technology. 0:19:34.640 --> 0:19:37.960 Mark Zuckerberg's efforts to win over Maga World have brought 0:19:37.960 --> 0:19:41.000 the Meta CEO close to the President Trump and his administration, 0:19:41.440 --> 0:19:44.600 But according to the latest Bloomberg Big Take, Zark's efforts 0:19:44.600 --> 0:19:47.680 have yet to bear significant fruit for the social media company. 0:19:47.880 --> 0:19:50.240 Joining us with more is Bloomberg's Riley Griffin, one of 0:19:50.280 --> 0:19:54.199 the authors of that big Take. It's so deeply reported 0:19:54.240 --> 0:19:57.000 and it's to look at how Mark Zuckerberg has almost 0:19:57.040 --> 0:19:59.840 like changed himself over a period of time to kind 0:19:59.840 --> 0:20:04.119 of align with this administration. But the conclusion of the 0:20:04.119 --> 0:20:07.160 piece is that for Meta, it's not yet opened any 0:20:07.160 --> 0:20:10.080 doors in a way that helps the company's profile. 0:20:10.359 --> 0:20:10.959 Absolutely. 0:20:11.000 --> 0:20:13.320 My colleague Kurt Wagner and I spoke with more than 0:20:13.359 --> 0:20:17.280 fifty people for this story, which spans several decades really, 0:20:17.600 --> 0:20:19.840 and what we found is that the efforts to pivot 0:20:19.880 --> 0:20:23.080 towards Trump and his administration have not yet borne the 0:20:23.119 --> 0:20:27.800 fruit that the company so desires. And one of the 0:20:27.840 --> 0:20:31.840 case in points of that strategy, and it's perhaps failing 0:20:31.880 --> 0:20:35.040 so far, has been Mark Zuckerberg's attempts to end the 0:20:35.119 --> 0:20:37.359 FTC trial that you and I have spoken so often 0:20:37.400 --> 0:20:40.560 about Ed Mark Zuckerberg ended up taking the stand, but 0:20:40.640 --> 0:20:43.080 that was one of the moments that might show some 0:20:43.119 --> 0:20:44.520 of the weakness of this strategy. 0:20:45.320 --> 0:20:49.560 I love going through the piece the frequent flier visualizations 0:20:49.600 --> 0:20:51.800 of how often he's on his plane trying to go 0:20:51.880 --> 0:20:55.439 back and forth to Washington. But also what stunned me 0:20:56.119 --> 0:20:59.840 was just how little respect ultimately it seemed that previous 0:20:59.800 --> 0:21:03.800 President Biden had for Mark Zuckerberg and also many for Metta. 0:21:04.920 --> 0:21:07.399 Yes, that was one of the most interesting lines of 0:21:07.440 --> 0:21:10.560 reporting for me too, Caroline. What we found was that 0:21:10.600 --> 0:21:14.919 the Biden administration did not have a productive relationship with 0:21:14.960 --> 0:21:18.320 Meta over years, and that President Biden himself, even dating 0:21:18.359 --> 0:21:20.639 back to when he was a vice president, was incredibly 0:21:20.640 --> 0:21:24.800 skeptical of the social media giant, and Mark Zuckerberg personally. 0:21:25.200 --> 0:21:28.320 We learned that you called him behind closed doors little TOWRP, 0:21:28.640 --> 0:21:34.800 among other perhaps more colorful terms. And this really came 0:21:34.840 --> 0:21:38.280