WEBVTT - Iran Conflict Sell-Off Rattles Tech Stocks 0:00:02.520 --> 0:00:13.360 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.440 --> 0:00:17.239 from coast to coast with Caroline Hide in New York 0:00:17.520 --> 0:00:19.480 and v Low in Sent Francesco. 0:00:23.520 --> 0:00:26.840 This is Bloomberg Tech Technology stocks full, bonds full, and 0:00:26.880 --> 0:00:29.960 oil surges. As the war in Iran shows no signs 0:00:30.000 --> 0:00:33.479 of the escalation, investor concerns rise as the possibility of 0:00:33.520 --> 0:00:37.199 disruption to energy markets, supply chains, and a jump in 0:00:37.200 --> 0:00:38.680 inflation loom large. 0:00:38.720 --> 0:00:41.280 Correct, Let's take a look at those markets energy in particular, 0:00:41.560 --> 0:00:43.400 I mean extraordinary moves that we're seeing in oil. 0:00:43.880 --> 0:00:45.680 Oil is currently having the. 0:00:45.680 --> 0:00:47.760 Biggest move since twenty twenty two. 0:00:47.800 --> 0:00:49.720 At one point since twenty twenty it's the highest is 0:00:49.720 --> 0:00:50.360 twenty twenty four. 0:00:50.400 --> 0:00:53.560 That has implications for the Nasdaq down almost two percent 0:00:53.640 --> 0:00:56.160 and the S and P five hundred down almost two percent. 0:00:56.240 --> 0:00:58.480 Why because the Federal Reserve cannot cut. 0:00:58.280 --> 0:01:00.520 Into this inflationary environment. Is the way that the market 0:01:00.560 --> 0:01:03.320 is anticipating. Bitcoin is off by some one point. 0:01:03.080 --> 0:01:05.640 Seven percent, then as that one hundred is off session loads. 0:01:05.680 --> 0:01:07.679 But that is what we're looking at right There is 0:01:07.800 --> 0:01:11.440 targeted drone and missile activity as a threat to energy 0:01:11.440 --> 0:01:15.040 infrastructure in the Middle East. New York Crew WTI up 0:01:15.120 --> 0:01:17.920 eight percent seventy seven dollars a barrel, but also brent 0:01:18.000 --> 0:01:20.680 the global benchmark, surging to eighty five dollars first time 0:01:20.720 --> 0:01:23.280 in a long time. US tenure yield had been above 0:01:23.280 --> 0:01:25.360 four point one percent and on track for its biggest 0:01:25.360 --> 0:01:27.240 two day advance since April of last year. 0:01:27.480 --> 0:01:28.800 We've come off that little bit. 0:01:28.840 --> 0:01:31.160 We are very focused on what is happening in the 0:01:31.160 --> 0:01:33.320 Strait of Horn moves right. There are boats that are 0:01:33.400 --> 0:01:36.919 stuck and cannot carry oil. As a result, the producers 0:01:37.200 --> 0:01:40.440 like Iraq have stopped producing. By the way, America relies 0:01:40.440 --> 0:01:42.440 a lot on Iraqi oil in terms of the refiners. 0:01:42.520 --> 0:01:44.679 So we're going to look at that. There is specific 0:01:44.800 --> 0:01:47.160 tech action. So let's get to that action when Bloomberg 0:01:47.160 --> 0:01:48.320 equalties reporter Ryan. 0:01:48.200 --> 0:01:49.080 For the SELECA. 0:01:49.200 --> 0:01:51.040 There's a lot to unpick here right at one point, 0:01:51.040 --> 0:01:52.520 and as that one hundred was on track for its 0:01:52.560 --> 0:01:56.080 biggest drops since October, certainly since November when we got 0:01:56.120 --> 0:01:59.520 that strong jobs print. There is inflation concern, but broadly, 0:02:00.240 --> 0:02:02.720 where is the risk of sort of mentality and sentiment 0:02:02.760 --> 0:02:04.160 you're seeing, Ryan. 0:02:04.320 --> 0:02:06.280 Good morning, Thanks for having me. 0:02:06.480 --> 0:02:08.240 So one thing I would just notice that all of 0:02:08.280 --> 0:02:11.679 this recent news, all this rise in political uncertainty, comes 0:02:11.680 --> 0:02:14.919 at a time when investors were already showing signs of 0:02:14.960 --> 0:02:18.320 being cautious about tech. We have seen concerns about how 0:02:18.440 --> 0:02:20.720 much money is being spent on AI. We have seen 0:02:20.760 --> 0:02:23.960 concerns about AI related disruptions. So if you add a 0:02:24.000 --> 0:02:26.360 new wrinkle on top of that, I think you already 0:02:26.400 --> 0:02:30.200 had investors predisposed to sell and sell pretty broadly. 0:02:32.480 --> 0:02:36.400 Ryan more broadly, dwell a little bit more on what's 0:02:36.400 --> 0:02:40.239 happening in terms of the software perspective, and what's happening 0:02:40.240 --> 0:02:42.760 in certain names Mongo dB, and I hate to bring 0:02:42.800 --> 0:02:44.920 it back to what the market was treading water on 0:02:45.040 --> 0:02:48.160 or trying to digest before this geopolitical upheaval, but we 0:02:48.280 --> 0:02:49.920 have to go back to what's happened in terms of 0:02:49.960 --> 0:02:53.639 Mongo DB's extraordinary sell off, despite the numbers not being 0:02:53.720 --> 0:02:55.440 quite as ugly as many would have anticipated. 0:02:56.200 --> 0:02:58.520 Right, So this occurs against the backdrop of people being 0:02:58.680 --> 0:03:01.959 very cautious that AI services are going to diminish the 0:03:02.000 --> 0:03:05.760 growth prospects for legacy software companies offer some kind of replacement, 0:03:05.760 --> 0:03:09.519 diminish their pricing power, their margins. Marco DB's results kind 0:03:09.520 --> 0:03:12.680 of fit into that narrative where they weren't necessarily bad, 0:03:13.000 --> 0:03:15.600 but the upside was a little bit smaller than people 0:03:15.639 --> 0:03:18.800 had expected it or relative to past quarters, the outlook 0:03:18.919 --> 0:03:21.920 was not dramatically higher. All these sort of concerns is 0:03:21.919 --> 0:03:25.839 feed into this broader environment right now where people are 0:03:26.000 --> 0:03:28.360 very concerned about AI. When you have results like this, 0:03:28.480 --> 0:03:30.640 it just sort of add to the concern by not 0:03:30.680 --> 0:03:32.880 really diminishing them. You know, like I said, people were 0:03:32.919 --> 0:03:36.520 already predisposed to sell, and you're really seeing that in 0:03:36.640 --> 0:03:38.160 a stock like Mango right now. 0:03:38.960 --> 0:03:41.320 Right also massive underperformance in chip stocks, which we're going 0:03:41.360 --> 0:03:43.160 to explain a little bit later on in the show Bloomers. 0:03:43.240 --> 0:03:45.200 Ryan for Selca, thank you very much. 0:03:45.280 --> 0:03:47.600 Let's talk a bit more broadly about what's happening in markets, 0:03:47.600 --> 0:03:50.920 Brian White, it's pi Ersanla, cohead of Technology Investment Banking. 0:03:51.000 --> 0:03:53.120 We're going to have a different conversation probably to the 0:03:53.120 --> 0:03:56.040 one that we thought we might be having. Caroline made 0:03:56.080 --> 0:03:58.280 a really interesting observation at desk this morning. You look 0:03:58.320 --> 0:04:01.360 at a name like Palenteer for example, still down significantly. 0:04:01.440 --> 0:04:05.080 There was a big run up yesterday, cyber stocks under pressure. 0:04:05.560 --> 0:04:08.520 How those are areas that you might think in this scenario, 0:04:08.600 --> 0:04:11.360 if this environment a war in Iran might go to 0:04:11.400 --> 0:04:14.560 the upside, it's an area that you look at software 0:04:15.920 --> 0:04:16.440 go from there. 0:04:16.480 --> 0:04:18.560 Please, Yeah, I mean I think that it's still going 0:04:18.600 --> 0:04:20.719 to be the bride spart in this market. I think 0:04:20.720 --> 0:04:22.800 the challenge that we have right now is that this 0:04:22.920 --> 0:04:26.440 increasingly looks like a prolonged conflict, and so investors are 0:04:26.480 --> 0:04:29.560 selling off right now. They're panicking in regards to what 0:04:29.600 --> 0:04:31.920 continues to go on. This doesn't appear to be kind 0:04:31.960 --> 0:04:34.919 of the limited engagements that we've seen traditionally, and so 0:04:35.080 --> 0:04:37.840 thus when you're looking, you know broadly and you step back. 0:04:38.000 --> 0:04:39.599 I still think if you want to be in cyber 0:04:39.680 --> 0:04:41.279 or you want to be in defense, those are going 0:04:41.360 --> 0:04:44.120 to be bride sparks. But right now everything's risk off. 0:04:44.400 --> 0:04:46.760 Co Head of Tech IV five percent of I've read 0:04:46.800 --> 0:04:49.440 your CV. If you don't mind, and you know you 0:04:49.520 --> 0:04:53.760 know the apparatus of government, well, yes, how important is 0:04:53.760 --> 0:04:56.160 that that that kicks in in a market environment like this. 0:04:56.600 --> 0:05:01.159 You understand the understandable, you know what a policy maker 0:05:01.200 --> 0:05:04.120 may or not do in a war environment. 0:05:04.520 --> 0:05:07.320 I think it's helpful because you can put things in context. 0:05:07.440 --> 0:05:09.480 I mean Fundamentally, what we look to do is advise 0:05:09.560 --> 0:05:12.080 clients on how to navigate this termoril. And having the 0:05:12.160 --> 0:05:15.839 experience to see how government thinks through these issues, particularly 0:05:15.960 --> 0:05:19.400 during conflict like this, is critical because we're not just 0:05:19.480 --> 0:05:22.640 dealing with the AI disruption, We're dealing with geopolitical disruption, 0:05:22.960 --> 0:05:25.240 and clients are wondering, how do I raise capital in 0:05:25.240 --> 0:05:27.640 this environment? Should I think about M and A on 0:05:27.680 --> 0:05:29.880 the buy side or the south side. This is where 0:05:29.880 --> 0:05:32.240 people are going to be thinking about what moves should 0:05:32.240 --> 0:05:36.400 I make to take advantage of the uncertainty in this environment, because, 0:05:36.440 --> 0:05:38.760 as we know, people that are able to do smart 0:05:38.800 --> 0:05:41.840 moves right now often of the long term winners because 0:05:41.880 --> 0:05:44.680 they don't sit back risk off, and that experience is 0:05:44.680 --> 0:05:46.080 helpful when I'm advising clients. 0:05:46.920 --> 0:05:51.080 How much is that experience applicable to the current administration though. 0:05:51.440 --> 0:05:55.239 Well, I think it's traditionally the levers of government remain 0:05:55.360 --> 0:05:58.680 pretty stable. There is obviously some political influence that goes 0:05:58.680 --> 0:06:00.919 on over the years. You know, one thing that we 0:06:00.920 --> 0:06:04.160 should all take a great regard in is just the 0:06:04.200 --> 0:06:08.400 experience of the military that is there, the decision apparatus 0:06:08.440 --> 0:06:11.360 and what has been in place to make these informed decisions. 0:06:11.600 --> 0:06:14.359 I think as we're increasingly seeing this is going to 0:06:14.440 --> 0:06:18.080 be a prolonged conflict, it is going to require a 0:06:18.080 --> 0:06:21.240 lot of you know, deft policy making, particularly as we 0:06:21.320 --> 0:06:23.560 engage with the Middle East that is in a bit 0:06:23.600 --> 0:06:25.719 of turmoil. I don't think when we woke up on 0:06:25.760 --> 0:06:30.160 Saturday morning, people nearly suspected how wide this would appear 0:06:30.240 --> 0:06:32.119 to be. And so people are going to be looking 0:06:32.120 --> 0:06:34.919 for some off ramps soon and the market impact of 0:06:34.960 --> 0:06:37.520 that is unknown, and that is what people are reacting 0:06:37.560 --> 0:06:38.239 to right now. 0:06:38.760 --> 0:06:41.800 So without wanting to be just knee jerk and thinking 0:06:41.839 --> 0:06:44.200 through if this could be a longer term conflict, if 0:06:44.200 --> 0:06:47.000 there's inflationary pressure there, what does it mean in terms 0:06:47.040 --> 0:06:49.240 of the influence that AI has been having on the 0:06:49.279 --> 0:06:49.920 market thus far. 0:06:49.960 --> 0:06:52.760 Do you just stay in the winners that have been working. 0:06:52.640 --> 0:06:55.200 And yes, maybe overallocate a little bit more, even to 0:06:55.279 --> 0:06:55.839 defense TEP. 0:06:56.320 --> 0:06:58.800 I think defense will be a bright spot. And then 0:06:59.000 --> 0:07:02.000 even before ARA, defense looked like an area where there 0:07:02.080 --> 0:07:04.400 was going to be tremendous innovation. I mean, what we're 0:07:04.400 --> 0:07:08.280 continuing to see is that people are looking for new technology, 0:07:08.560 --> 0:07:12.720 new approaches. We have a increased geopolitical conflict in this world, 0:07:12.920 --> 0:07:14.560 So being in defense is a good place to be, 0:07:14.680 --> 0:07:17.400 and that was pre Iran, and as it relates to AI, 0:07:17.760 --> 0:07:20.760 I think there will remain some bright sparts, particularly in infrastructure, 0:07:20.800 --> 0:07:23.200 particularly in cyber. Those are going to be good places 0:07:23.240 --> 0:07:25.440 to be, and over time, I think people will gain 0:07:25.520 --> 0:07:28.400 more confidence as we see earnings come out. I mean, 0:07:28.680 --> 0:07:30.400 don't forget we've still got a couple more weeks of 0:07:30.440 --> 0:07:32.600 earnings to go. This week, we're going to have news 0:07:32.600 --> 0:07:35.320 out of a couple of the technology conferences, and hopefully 0:07:35.400 --> 0:07:37.280 that will start to calm this market down a little 0:07:37.320 --> 0:07:39.200 bit more and people will realize that this is a 0:07:39.200 --> 0:07:42.040 bit of a selloff that is not applicable to all. 0:07:42.480 --> 0:07:44.360 Just really quick and trying to keep this on the news. 0:07:44.440 --> 0:07:48.440 DHS is warning right, which seems inevitable about the threat 0:07:48.680 --> 0:07:52.320 to citizens in this country and response cyber. Just give 0:07:52.360 --> 0:07:54.840 me more on cyber and why it's not getting more 0:07:54.880 --> 0:07:56.080 traction in this environment. 0:07:56.120 --> 0:07:58.400 Yeah, I would say two things first and foremost, we've 0:07:58.400 --> 0:08:02.280 always known that Iran via it's proxies like hesbalah Is 0:08:02.680 --> 0:08:05.680 may have the capacity to do something in the American homeland. 0:08:05.840 --> 0:08:08.920 So I think that's partially what we're hearing from the administration. 0:08:09.120 --> 0:08:12.280 I think more saliently though, is that people need to 0:08:12.360 --> 0:08:15.760 invest in cyber right now. The attack surface for both 0:08:15.920 --> 0:08:18.840 the private sector as well as the public surf sector 0:08:19.080 --> 0:08:21.880 could not be any higher in terms of their threat environment. 0:08:22.080 --> 0:08:24.840 So everybody should be paying more attention to what they 0:08:24.880 --> 0:08:28.040 need to do because where the Iranian cyber capability is 0:08:28.120 --> 0:08:28.720 quite strong. 0:08:29.440 --> 0:08:32.280 Ry Pipersander, great to have you here on Bloomberg Tech. 0:08:32.520 --> 0:08:34.720 I want to get to what happened in Career overnight 0:08:34.760 --> 0:08:38.360 shares of Samsung and sk Heinex both falling by around 0:08:38.360 --> 0:08:41.400 fifteen percent. There was a holiday in the Korean markets 0:08:41.400 --> 0:08:44.360 on Monday, so this was the first session since the 0:08:44.679 --> 0:08:47.400 war in Iran and the events of the weekend. But 0:08:47.440 --> 0:08:49.600 remember that the costs fee, the main index in Career, 0:08:49.600 --> 0:08:53.359 has been a massive outperformer year to date, led by Samsung. 0:08:53.000 --> 0:08:53.920 And sk Heinex. 0:08:54.120 --> 0:08:57.360 It's just a market reaction as sentiment reaction, particularly with 0:08:57.400 --> 0:09:00.199 the energy infrastructure concern in those two names. But was 0:09:00.200 --> 0:09:03.160 a big move, and maybe that's transferred character chip names 0:09:03.160 --> 0:09:04.520 in the US in this session. 0:09:04.480 --> 0:09:07.840 Suddenly extraordinary sell off over there. Meanwhile, coming up, well, 0:09:07.920 --> 0:09:11.240 look at some extraordinary moves from Sam Altman calling open 0:09:11.240 --> 0:09:14.000 a eyes Pentagon deal roll out sloppy. 0:09:14.559 --> 0:09:15.880 That's next, there's a bluebir tech. 0:09:23.720 --> 0:09:26.760 Open Ai is facing backlash over its new Pentagon deal, 0:09:26.800 --> 0:09:30.200 and CEO Sam Altman is admitting the rollout was mishandled. 0:09:30.240 --> 0:09:32.920 In a post, Altman said the company shouldn't have rushed 0:09:32.960 --> 0:09:36.840 the announcement, saying it looked quite opportunistic and sloppy. Here 0:09:36.880 --> 0:09:39.960 of the latest is Bloomberg's AI reporter Rachel Metz. It's 0:09:39.960 --> 0:09:41.880 one where you probably need to explain to us what 0:09:41.920 --> 0:09:43.960 the deal is and how it came about. But a 0:09:44.080 --> 0:09:47.440 very public statement by open ai CEO about how it 0:09:47.559 --> 0:09:47.959 was done. 0:09:49.160 --> 0:09:51.920 Yeah, I mean this was all part of this really 0:09:52.040 --> 0:09:55.840 rush situation that happened over several days. We had Anthropic 0:09:56.160 --> 0:09:59.600 scoring off against the Pentagon, the Pentagon saying we're not 0:09:59.640 --> 0:10:04.240 going to be using Anthropics AI models anymore and making 0:10:04.280 --> 0:10:08.120 some even further declarations than that about how companies perhaps 0:10:08.120 --> 0:10:10.559 could even use Anthropics models if they work with the government, 0:10:11.160 --> 0:10:13.600 and then open Ai very quickly swooped in and said 0:10:14.040 --> 0:10:16.760 we have a deal with the government. So I think 0:10:16.800 --> 0:10:19.959 that caught a lot of people, maybe not so much 0:10:20.000 --> 0:10:23.600 off guard, but it certainly left a lot of people upset, 0:10:23.640 --> 0:10:26.040 including some people at open Ai who were posting about 0:10:26.040 --> 0:10:27.199 it publicly on social media. 0:10:28.840 --> 0:10:32.560 A lot of people were painting the streets outside open 0:10:32.600 --> 0:10:37.520 Ai and well fears and concerns, Rachel. This has prompted 0:10:37.600 --> 0:10:41.360 a backlash that is actually impacting downloads of chat GPT 0:10:41.600 --> 0:10:44.640 and certainly has been pushing those to be getting into 0:10:44.679 --> 0:10:47.720 Anthropics offering Claude instead. It would feel like the numbers 0:10:47.760 --> 0:10:50.080 stack out in that way, Rachel. But talk us through 0:10:50.360 --> 0:10:53.120 ultimately what has been changed in terms of their agreement 0:10:53.160 --> 0:10:54.520 with the Pentagon, if anything. 0:10:55.760 --> 0:10:59.000 I mean, it sounds like open Ai has basically done 0:10:59.040 --> 0:11:00.560 a little bit more back up and forth with the 0:11:00.600 --> 0:11:05.640 Pentagon to make sure that the redlines that Opening Eyes 0:11:05.640 --> 0:11:09.320 says are in place regarding their software not being used 0:11:09.360 --> 0:11:12.480 for surveillance will be kept in place. 0:11:13.720 --> 0:11:16.600 Rachel, Sorry, do we have any understanding of how big 0:11:17.080 --> 0:11:18.960 a piece of open aised business this is? 0:11:19.240 --> 0:11:19.360 Like? 0:11:19.480 --> 0:11:23.120 Is this something like severely critical to them or is 0:11:23.120 --> 0:11:25.720 it still the case that you know, CHATGBT subscriber as 0:11:25.760 --> 0:11:28.560 an enterprise is really what they're most concerned about. 0:11:29.559 --> 0:11:32.200 I mean, at this point, I don't think that this 0:11:32.280 --> 0:11:35.000 is like an overarching piece of their business. I thinkause 0:11:35.360 --> 0:11:38.600 is a smaller piece, but as we've seen with the 0:11:38.640 --> 0:11:42.120 disagreement between Anthropic and the Pentagon, just having this kind 0:11:42.160 --> 0:11:46.160 of connection can really telegraph a lot about your business 0:11:46.200 --> 0:11:48.560 and it could lead to other things, other ripple effects 0:11:48.640 --> 0:11:51.160 and other kinds of business, either happening or not happening 0:11:51.160 --> 0:11:52.000 now or in the future. 0:11:54.320 --> 0:11:56.520 Rachel Mattz, thank you so much. 0:11:57.040 --> 0:12:00.760 An ongoing narrative that involves geopolitics the same times as 0:12:00.840 --> 0:12:02.880 generator of AI. Let's take a look at those tech 0:12:02.960 --> 0:12:05.440 markets in the eye of a geopolitical storm that is 0:12:05.840 --> 0:12:09.160 Middle Eastern conflict. We're currently seeing one point seven percent 0:12:09.280 --> 0:12:11.319 lower on the Nasdaq one hundred. We had fallen more 0:12:11.360 --> 0:12:13.960 than two percent. In fact, only thirteen names are on 0:12:14.000 --> 0:12:15.880 the green on the Nasdaq one hundred as we speak. 0:12:16.000 --> 0:12:18.120 New York Crude is where the action lies. 0:12:18.120 --> 0:12:19.319 We're up more than eight percent ed. 0:12:19.600 --> 0:12:21.960 We're seeing this inflationary tension mean that people think the 0:12:22.000 --> 0:12:24.000 Federal Reserve cannot cut into the situation. 0:12:24.440 --> 0:12:25.480 Therefore that has a. 0:12:25.480 --> 0:12:27.560 Long term impact on the value of stocks. 0:12:27.640 --> 0:12:29.360 Right now well way off session lows, but at one 0:12:29.360 --> 0:12:30.719 point we're on track for the biggest drop on the 0:12:30.760 --> 0:12:33.400 NASZAG one hundred since October when the President was really 0:12:33.559 --> 0:12:38.200 escalating the tariff tension with China. That's how markets are 0:12:38.240 --> 0:12:41.520 weighing in here. We're also tracking shares of Nvidia, one 0:12:41.600 --> 0:12:43.720 of the top stories on the Bloomberg terminal and on 0:12:43.800 --> 0:12:46.680 dot com, down one point six percent. The US is 0:12:46.720 --> 0:12:49.600 weighing new limits on Nvidia's AI chip sales to China, 0:12:49.880 --> 0:12:53.040 including a potential cap of seventy five thousand of its 0:12:53.160 --> 0:12:56.480 h two hundred accelerators to any one, single Chinese company. 0:12:56.520 --> 0:12:59.440 That's according to sources. Bloomberg's Ian King is here to 0:12:59.480 --> 0:13:03.400 explain it. When that regulatory filing hit at earnings, they 0:13:03.400 --> 0:13:05.880 were pretty clear that they have no idea whether China 0:13:05.880 --> 0:13:08.240 would even let the chips in. But what we're reporting 0:13:08.320 --> 0:13:11.160 is on the US side putting a cap on the export, 0:13:11.559 --> 0:13:14.120 the cap level and the strategy behind it. 0:13:14.160 --> 0:13:14.720 What do we know? 0:13:15.080 --> 0:13:18.120 Yeah, I mean, the understanding had been that the US 0:13:18.240 --> 0:13:21.720 side was more amenable to this happening, right, and that 0:13:21.840 --> 0:13:24.800 China was kind of the roadblock. But now what we're 0:13:24.840 --> 0:13:27.600 reporting is that there are more restrictions, more kind of 0:13:27.640 --> 0:13:30.640 fine print details being piled upon it, and that obviously 0:13:30.720 --> 0:13:34.400 makes situation more difficult than the likelihood of major shipments 0:13:34.440 --> 0:13:35.880 and major business less likely. 0:13:36.080 --> 0:13:38.680 And that's why many ways in video and Jensen didn't 0:13:38.679 --> 0:13:41.760 include any China business and therefoward looking guidance. 0:13:42.200 --> 0:13:43.680 So do we just take it from here that China 0:13:43.720 --> 0:13:44.599 doesn't want. 0:13:44.559 --> 0:13:46.960 Even h two hundreds and where we are in terms 0:13:46.960 --> 0:13:49.200 of a potentially crafted blackwell offering. 0:13:49.400 --> 0:13:49.600 Yeah. 0:13:49.640 --> 0:13:52.240 I mean the way that in Videa's leadership are phrases 0:13:52.360 --> 0:13:54.400 is like, look, you'll know the Chinese have given us 0:13:54.400 --> 0:13:57.840 permission when you see the Chinese companies make orders. We 0:13:57.960 --> 0:14:01.240 haven't seen them make the big orders yet. That doesn't 0:14:01.280 --> 0:14:03.920 look positive. It doesn't look hopeful for the way things 0:14:03.920 --> 0:14:04.480 are progressing. 0:14:04.600 --> 0:14:06.520 Going back to the basics of what Caroline just said 0:14:06.600 --> 0:14:08.960 that the forecast for sales is seventy eight billion dollars 0:14:09.000 --> 0:14:11.360 plus or minus two percent in the quarter, does not 0:14:11.520 --> 0:14:14.560 include any China. But when you did your earnings piece 0:14:14.559 --> 0:14:16.120 the next day, a lot of the analysts were like, well, 0:14:16.320 --> 0:14:19.480 China is then therefore potential upside in the event they 0:14:19.520 --> 0:14:21.360 are allowed to do it. 0:14:21.520 --> 0:14:23.840 Jensen's modeling for that or not, it. 0:14:23.720 --> 0:14:26.200 Doesn't appear to be. I mean they're being prudent right now. 0:14:26.280 --> 0:14:29.160 I mean, the potential upside came from the detail that 0:14:29.200 --> 0:14:31.520 we got during earnings, which is, hey, we got a 0:14:31.560 --> 0:14:34.720 few licenses, so Wall Street was like, oh, great crack 0:14:34.720 --> 0:14:37.680 of light, here we go. And then now we get 0:14:37.680 --> 0:14:40.160 this and obviously we still haven't seen any movement from 0:14:40.200 --> 0:14:41.160 the China side either. 0:14:41.280 --> 0:14:44.280 Now, China used to be a significant era of revenue. 0:14:44.280 --> 0:14:46.400 What was it almost twenty percent one point. 0:14:46.160 --> 0:14:48.320 For a video numbers or thereabouts. 0:14:48.720 --> 0:14:50.040 Where's the Middle East at. 0:14:50.000 --> 0:14:51.960 Can I just ask something to throw a curve ball 0:14:52.000 --> 0:14:53.800 into the mix of the current Gyo political situation? 0:14:53.840 --> 0:14:57.120 Well, that's a very good question. Obviously, in video cares 0:14:57.200 --> 0:14:59.640 very much about what's called sovereign AI, which is, you know, 0:14:59.720 --> 0:15:02.560 come trees, attempts to try and build their own infrastructure. 0:15:02.600 --> 0:15:04.840 We've seen that in Saudi Arabia, we've seen that in 0:15:04.880 --> 0:15:07.880 the UAE, and these are areas where there's a lot 0:15:07.920 --> 0:15:09.640 of cash and there's a lot of investment in this 0:15:09.800 --> 0:15:13.000 future economy being made. So any threat to that would 0:15:13.000 --> 0:15:15.240 obviously be a threat to this whole system. 0:15:15.400 --> 0:15:17.560 Well, certainly in video is one of the key legs 0:15:17.560 --> 0:15:19.720 to the downside in a points perspective. Today, in King 0:15:19.800 --> 0:15:22.320 we're always so thrilled to have his expertise. 0:15:21.920 --> 0:15:23.560 And it's nice to be sat next to him as well. 0:15:23.800 --> 0:15:25.720 I Meanwhile, let's take a quick look on what's happening 0:15:25.760 --> 0:15:28.280 with Apple, because if you didn't realize amid the torrent 0:15:28.320 --> 0:15:30.280 of news that you're trying to digestiday, the company is 0:15:30.320 --> 0:15:33.920 actually introducing refreshed MacBook pros and airs with an M 0:15:34.000 --> 0:15:36.760 five chip. The company also raising the prices of those 0:15:36.800 --> 0:15:41.000 products amid an industry wide memory crunch. Other products announced 0:15:41.040 --> 0:15:43.360 include two new external monitors. 0:15:43.360 --> 0:15:45.000 As you see shows down nine. 0:15:44.800 --> 0:15:46.920 Tex percent, so actually better performing than the rest of 0:15:46.960 --> 0:15:47.520 the market ed. 0:15:54.920 --> 0:15:57.240 Welcome back to Bloomberg Tech. We're in the Middle East. 0:15:57.320 --> 0:15:59.120 We take a look at what's happening in the markets 0:15:59.320 --> 0:16:02.080 amid a US is really focus on Iran. We've got 0:16:02.120 --> 0:16:04.240 the Nastaq one hundred off by one point six percent, 0:16:04.480 --> 0:16:07.160 Micron leading you on the points perspective to the downside, 0:16:07.200 --> 0:16:09.080 so two it is in video, we're seeing the S 0:16:09.080 --> 0:16:10.800 and P five hundred off by one and a half percent. 0:16:11.200 --> 0:16:13.600 Bitcoin is acting like a risk asset today. 0:16:13.640 --> 0:16:15.920 We're back lower, but it's still elevated versus where it 0:16:15.920 --> 0:16:16.440 was on the weekend. 0:16:16.560 --> 0:16:18.400 Sixty eight eight hundred is where we trade. 0:16:18.400 --> 0:16:21.800 Move on to individual names because it is important. 0:16:21.360 --> 0:16:23.600 To see where the impact. 0:16:23.440 --> 0:16:26.040 Of tension and ongoing war in the Middle East, where 0:16:26.040 --> 0:16:28.480 it has and what it does to assets owned by Amazon. 0:16:28.480 --> 0:16:31.840 For example, AWS warning of prolonged disruptions to its services 0:16:31.880 --> 0:16:35.240 after drone strikes damage three of its data centers in 0:16:35.280 --> 0:16:37.640 the Middle East. They say the companies said drones had 0:16:37.640 --> 0:16:40.920 directly struck two facilities in the UAE in damaged infrastructure 0:16:40.960 --> 0:16:43.680 near other facilities in Bahrain Palanteer. 0:16:44.200 --> 0:16:45.920 The sentiment shift today. 0:16:45.720 --> 0:16:48.360 Is so negative that even companies that are meant to 0:16:48.400 --> 0:16:51.760 benefit from the focus on defense and defense tech are 0:16:51.760 --> 0:16:53.240 on the lower side. We're off by one point four 0:16:53.240 --> 0:16:56.480 percent after a rally yesterday. More analysts are going positive 0:16:56.520 --> 0:16:58.800 on Palenteer, of course, software that's used by the government 0:16:58.880 --> 0:17:01.640 very much in the defense perspective, and we're seeing twenty 0:17:01.640 --> 0:17:03.240 out of thirty one analysts now saying by. 0:17:03.160 --> 0:17:04.160 The stockhead we're great. 0:17:04.200 --> 0:17:06.399 Shares of defense firms have joined the market sell off, 0:17:06.520 --> 0:17:09.680 even as the conflict in Iran rearforce is their critical role, 0:17:09.720 --> 0:17:12.560 the critical role of the US primes. Let's bring a 0:17:12.560 --> 0:17:16.439 Bloomberg Intelligence senior analysts Wayne Sanders for more. You've been 0:17:16.520 --> 0:17:19.160 keeping the react and the research up to date over 0:17:19.160 --> 0:17:21.639 the last two or three days. You have this scenario 0:17:22.320 --> 0:17:26.200 where if this conflict losts weeks or more, you look 0:17:26.240 --> 0:17:29.959 at the air strike capabilities the United States has and 0:17:30.000 --> 0:17:32.080 who might benefit. We showed some of those names on 0:17:32.119 --> 0:17:35.200 the screen just there. But give us your latest research please. 0:17:36.520 --> 0:17:38.320 Yeah, absolutely, thank you so much for having me on. 0:17:39.000 --> 0:17:41.480 When you think about this conflicts so far, a lot 0:17:41.520 --> 0:17:44.520 of the munitions experts right you're looking at RTX, you're 0:17:44.560 --> 0:17:48.000 looking at Lockheed in Northrope, are really the ones that 0:17:48.040 --> 0:17:51.199 are set really to benefit off off of part of 0:17:51.240 --> 0:17:53.800 this because they're going to have to replenish what they've got. 0:17:54.520 --> 0:17:56.919 The problem is that as we continue to expand a 0:17:56.920 --> 0:18:00.240 lot of the munitions right now, especially if if you're 0:18:00.240 --> 0:18:03.280 looking at your AIM nine x's and your am rams, 0:18:03.400 --> 0:18:07.320 which your aircraft missile shots, as well as your Tomahawks 0:18:07.359 --> 0:18:10.320 that are coming from your naval vessels, which comes from 0:18:10.320 --> 0:18:12.720 our TX, these are the ones right now that are 0:18:12.760 --> 0:18:15.600 going to be critical also in further contingencies that we 0:18:15.600 --> 0:18:17.840 would look down the road twenty twenty seven and beyond. 0:18:17.840 --> 0:18:19.439 So we want to make sure that there's a balance 0:18:19.480 --> 0:18:23.000 between both that we are using them effectively now and 0:18:23.359 --> 0:18:26.280 having the ability to replenish in the future when. 0:18:26.160 --> 0:18:27.520 We turn to you, because not only are we lucky 0:18:27.600 --> 0:18:29.680 enough to have you as a senior defense research analysts 0:18:29.680 --> 0:18:32.560 here with us of BlueBag Intelligence, but your past experience 0:18:32.600 --> 0:18:34.439 with the officer of the under Sectary of Defense up 0:18:34.520 --> 0:18:36.280 until twenty twenty four, the fact that you were so 0:18:36.480 --> 0:18:38.399 ingrained with the Department of the Army as well. 0:18:38.920 --> 0:18:41.199