Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Caroline Hide and Ed Ludlow.
Speaker 2: Live from New York.
Speaker 3: I'm Caroline Hyde and I'm Jackie Devalas in San Francisco.
Speaker 4: This is Bloomberg Technology and.
Speaker 5: Coming up, President Trump plans to impose twenty five percent
Speaker 5: tariffs on auto's chips and more. Will break down the
Speaker 5: potential tech impact. Plus, Microsoft's a big quantum leak and
Speaker 5: they have its new Mayorana chip what it means for
Speaker 5: the future of computing and Elon Musk's ex is in
Speaker 5: talks to raise money from investors and a forty four
Speaker 5: billion dollar valuation the amount he bought it for back
Speaker 5: in twenty twenty two.
Speaker 2: But first we check in.
Speaker 5: On these markets and we look at the must all
Speaker 5: that is once again a tariff concern that drives through
Speaker 5: the market, and we try to work out who it
Speaker 5: helps it hinders. We're currently off by three tens percent
Speaker 5: on the NASDAK one hundred drag lower by metal once
Speaker 5: again in the fray after it finally stops it's run
Speaker 5: up that we've seen in market capitalization. The socks though
Speaker 5: the Chip Semiconductor Index that we're seeing at the moment
Speaker 5: up four tens percent. ADI coming out with its numbers
Speaker 5: looking good. We'll dig into what it means in terms
Speaker 5: of the overall tariffs they want individual chip makers.
Speaker 2: Move on some individual names.
Speaker 5: I want to shout out in the world of autos
Speaker 5: and chips, Tesla is actually your biggest points driver to
Speaker 5: the higher side today, Jackie, actually managing to push off
Speaker 5: some of the selling that's going on in the Nasdaq
Speaker 5: one hundred are up more than two percent. We'll dig into,
Speaker 5: of course, what Elon Musk and President Trump was saying
Speaker 5: to Fox yesterday. Intel off by almost five percent yesterday's
Speaker 5: run up. Of course, speculation surrounding potential deals selling off
Speaker 5: assets as much as TSMC some cold water being pulled
Speaker 5: on that. Today we're off by five percent, but still
Speaker 5: higher than we had been in the previous weeks. But
Speaker 5: let's dig into the news of the day, Jackie.
Speaker 3: Right, Let's go to Washington D's and bring in Bloomberg's
Speaker 3: Mike Shepherd to break down President Trump's potential tariffs and
Speaker 3: its impact. Mike, what do we know about the scope
Speaker 3: and timing of the tariffs that Trump is proposing here, Jackie.
Speaker 6: He gave us only a few clues yesterday, and one
Speaker 6: of them was on the timing. He floated a date
Speaker 6: of April second for this latest round of tariffs that
Speaker 6: could come on autos, chips and pharmaceuticals. And this of
Speaker 6: course would come on top of a lot of other
Speaker 6: levees that he has already rolled out or is planning
Speaker 6: to roll out, and those include the ten percent tariffs
Speaker 6: on all imports from China levees against Canadian and Mexican
Speaker 6: goods that could go into effect next month, and less
Speaker 6: our neighbors to the north and south are able to
Speaker 6: negotiate another delay or maybe avoid those tariffs altogether and
Speaker 6: then steal on alumin of imports as well. So we
Speaker 6: know the broad strokes. Now what this means in particular
Speaker 6: for chips remains unclear. Would there be exception and how
Speaker 6: far would these go? Would it be all categories of
Speaker 6: semiconductors or only the most advanced chips. So we still
Speaker 6: have a lot to learn before this actually gets implemented
Speaker 6: or gets the layed or negotiated away.
Speaker 2: Mike, It's interesting, of course.
Speaker 5: The ramifications on European stocks was felt hard, particularly in
Speaker 5: the auto sector today Tesla rallies.
Speaker 2: Is that a.
Speaker 5: Competition potential and the fact that it will have less
Speaker 5: of it from inbound and more costly at cars coming in.
Speaker 5: Was it more what Elol Musk had to say with
Speaker 5: Sean Hannity at Fox alongside the President.
Speaker 6: Well, Musk's comments certainly had that kind of ameliorative effect
Speaker 6: for anyone who wants to invest in Tesla after having
Speaker 6: seen the company struggle a little bit. We have seen
Speaker 6: concerns raised about how quickly they are coming up with
Speaker 6: that lower cost model that investors have been waiting for
Speaker 6: and consumers have been waiting for, and also concerns that
Speaker 6: maybe Elon Musk, the CEO of Tesla, is a a
Speaker 6: little bit too distracted with some other ventures, including Doge.
Speaker 4: But let's go back to the whole chips.
Speaker 6: And broader question that you were raising about autos. When
Speaker 6: you think about autos too, there are so many chips
Speaker 6: in vehicles today and so many of their goods today
Speaker 6: that the impact could be wide ranging. Now, Elon Musk,
Speaker 6: maybe I will find a way around that. Given his
Speaker 6: proximity to the President, Well.
Speaker 2: Said Mike, great to catch up with you. Thank you.
Speaker 2: We got some breaking news. We do know we're anticipating
Speaker 2: a new.
Speaker 5: More affordable phone coming from Apple, currently off by four
Speaker 5: tens percent as we get the details on the iPhone
Speaker 5: sixteen E.
Speaker 2: They call it a powerful new member of the iPhone.
Speaker 5: Sixteen is going to have capabilities at a more affordable price.
Speaker 5: They say, as soon as February the twenty eighth, you
Speaker 5: can buy a white and a black iPhone sixteen E
Speaker 5: for as little as five hundred and ninety nine dollars.
Speaker 5: Close eye on Apple, close eye on the markets. More broadly,
Speaker 5: Martin Laton's with US chief investment strategist that in power
Speaker 5: to really break down how in tests also take in
Speaker 5: the deluge of headlines, particularly when you're thinking we've got
Speaker 5: you know, launches and products still coming, but Apple affected
Speaker 5: by potential tariffs and geopolitics, not to mention the chips
Speaker 5: in the auto sector today, how do you see through that?
Speaker 7: Well, you know, it's so interesting because I think the
Speaker 7: market really is trying to see through all the tariffs.
Speaker 7: Who've had a lot of tariff noise of course during
Speaker 7: the Trump administration, but some kind of predictions are precursors
Speaker 7: to that. With what we saw President Trump posting on
Speaker 7: true social what he said during the campaign trail, And
Speaker 7: by and large, we've seen a market that's largely looking
Speaker 7: at tariffs as a negotiating tactic and able to kind
Speaker 7: of shed it off or not let it impact kind
Speaker 7: of how the market performs.
Speaker 2: And I think there's a kind of a.
Speaker 7: Missing calculus there that relates to Trump's broader comments around tariffs.
Speaker 7: He talks a lot about tariffs as a form of
Speaker 7: federal revenue. He talks a lot about tariffs as a
Speaker 7: way to even out trade deficits. He talks about tariffs
Speaker 7: as a way to build manufacture here in the US,
Speaker 7: and all of those other three elements beyond the negotiation,
Speaker 7: which we know is part of this manu as and
Speaker 7: the art of the deal. But all of those other
Speaker 7: three elements really focus on tariffs that are broad based
Speaker 7: and long lasting. And so I think this is something
Speaker 7: that the market is potentially going to need to grapple with,
Speaker 7: not on a case by case basis, but at the
Speaker 7: broad level for markets.
Speaker 3: Martin talk to us specifically about the technology industry's exposure
Speaker 3: to some of this tariff Tip for tat, how are
Speaker 3: you thinking about positioning certain pockets of your tech portfolio
Speaker 3: going forward.
Speaker 7: Well, it's interesting when we think about tariffs with technology.
Speaker 7: We've spent a lot of time thinking about areas like automotives,
Speaker 7: but we've spent less time thinking about tariffs with technology.
Speaker 7: And I think a lot of times investors are looking
Speaker 7: at areas like tech and expecting some sort of I guess,
Speaker 7: get out of jail free card with some carve outs
Speaker 7: or something along those lines. I don't think that's completely out.
Speaker 2: Of line thinking.
Speaker 7: When we think about one of the incentives that President
Speaker 7: Trump has is to really make AI in USAI a superpower,
Speaker 7: and we see a lot of enthusiasm for that within
Speaker 7: the Trump administration. So I think there's some potential to
Speaker 7: think that we see tariffs coming at tech and then
Speaker 7: we see the enthusiasm for AI coming into a bit
Speaker 7: of a collision course over the course of twenty twenty five.
Speaker 7: But frankly, you know, the devils and the details and
Speaker 7: the details aren't clear at this point in terms of
Speaker 7: how and where in the impact of the tariffs that
Speaker 7: we see in technology or the broad market.
Speaker 3: Let's zoom out of the United States for a bit.
Speaker 3: China tech has really rallied, even though it's somewhat lagged
Speaker 3: when it comes to AI investments coming from the private
Speaker 3: sector and perhaps even the public sector. How are you
Speaker 3: advising clients to take advantage of some of that diversification
Speaker 3: given they're seeing such a big boost. Well, you know,
Speaker 3: China tech is a really interesting investment question. Of course,
Speaker 3: China stacks in general have been under siege. We've seen
Speaker 3: weakness really stretching back the past few years, and a
Speaker 3: lot of that relating to geopolitical risk, relating to regulatory concerns,
Speaker 3: relating to economic questions as it relates to China tech,
Speaker 3: and so we're seeing valuations that are pretty cheap. Of course,
Speaker 3: we've had a rally that's undercut some of those valuations,
Speaker 3: but still marginally cheaper than they were. You know, if
Speaker 3: we're stretched back our gaze several years ago, pre pandemic,
Speaker 3: and you have some really healthy, big tech companies in China,
Speaker 3: some rivals to what we have here in the US.
Speaker 3: So I think if we're looking at the valuations here
Speaker 3: at home and they seem a bit stretched to us,
Speaker 3: and then we cast our gaze to something like the
Speaker 3: China valuations and there are a bit more approachable, I
Speaker 3: think a diversified approach isn't a bad strategy when it
Speaker 3: comes to technology exposure. I think the critical question is
Speaker 3: thinking about sizing it because of course you have these overhangs,
Speaker 3: the geopolitical and the economic and etc. That should adjust
Speaker 3: the position size accordingly.
Speaker 5: I just think of China and I think back to
Speaker 5: the market sell off we saw in that knee jote
Speaker 5: reaction to the deep seat news. I just want to
Speaker 5: think about market reaction forces at the moment, particularly in
Speaker 5: this age of generative AI. And what was so interesting
Speaker 5: is we heard from the FED Vice chair just speaking
Speaker 5: for the supervision indeed, Michael Barr, about potential market manipulation
Speaker 5: because of generative AI.
Speaker 2: I've just taken the listen.
Speaker 8: Marton, as they will be directed to maximize profit. Gen
Speaker 8: AI agents may converge on strategies to maximize returns through
Speaker 8: coordinated market manipulation, potentially fueling acid bubbles and crashes. Speed,
Speaker 8: automaticity and ubiquity could generate new risks at wide scale.
Speaker 5: On this show, we talk so much about the investment
Speaker 5: opportunity into the technology, right, but the technology is having
Speaker 5: an effect on investment and how is that affecting you?
Speaker 5: How you thinking about risks that come about because of
Speaker 5: generative AI.
Speaker 7: I mean, it's a very important question, and I think AI,
Speaker 7: as we've seen in different areas, opens up a whole
Speaker 7: new spectrum of risk. Whether we think about fraud, we
Speaker 7: think about market manipulation, we think about just misinformation. I
Speaker 7: think that those risks are real with AI, and I
Speaker 7: think there is some consideration that valuations haven't really taken
Speaker 7: into account the downside of AI.
Speaker 2: We think a lot about the upside.
Speaker 7: We think especially about the improvement in earnings that we
Speaker 7: can see certainly in technology but for the broad market overall.
Speaker 7: But we think less about what those risks can be.
Speaker 7: And I think it's partly because one we don't want
Speaker 7: to think about the risk, but two it's hard to
Speaker 7: speculate and it's hard to articulate. But I think that's
Speaker 7: where smart regulation, smart decisions by the companies themselves and
Speaker 7: of course by Washington, are going to really matter in
Speaker 7: terms of how we see this deployed as across the economy.
Speaker 3: Margin Norton, Chief Investment Strategists and Empower thank you for
Speaker 3: joining us. Now coming up, we'll be hearing from Microsoft's
Speaker 3: head of Strategic Missions and Technologies on the company's bran
Speaker 3: new quantum processor.
Speaker 4: This is Bloomberg.
Speaker 3: Microsoft just unveiled Mayor on a one, the tech giant's
Speaker 3: first quantum computing tip. We sat down with the company's
Speaker 3: executive vice president of Strategic Missions and Technologies, Jason Xander,
Speaker 3: to break down what this means for the future of
Speaker 3: quantum Take a listen.
Speaker 9: One of the best use cases that we see is
Speaker 9: going to be in places like chemistry. That's a place
Speaker 9: where we use even AI now we're using to discover
Speaker 9: new molecules and build new things.
Speaker 10: But AI is just an approximation.
Speaker 9: A quantum computer actually speaks the language of nature, which
Speaker 9: is quantum mechanics. That's what makes it so powerful. So
Speaker 9: we combine those things together, we're going to be able
Speaker 9: to do brand new things. Like I said, I'd love
Speaker 9: to get rid of forever chemicals. I would love to
Speaker 9: get rid of microplastics. We're going to need to invent
Speaker 9: new technology to be able to do that. Quantum computers
Speaker 9: are going to be able to help us accelerate it,
Speaker 9: and it's just not something you can do on a
Speaker 9: classic supercomputer.
Speaker 3: Let's talk about the competition, because Microsoft isn't the only
Speaker 3: one developing it's quantum computing tip. Google unveiled their own
Speaker 3: in December called Willow. Theirs has one hundred and five cubits.
Speaker 3: Microsoft is harnessing about eight Talk to us about how
Speaker 3: we can stack these up against each other. Is it
Speaker 3: account the cubic kind of race or is Microsoft doing
Speaker 3: something different in the approach that makes it better.
Speaker 9: And when you talk about cubas, there is sometimes this race,
Speaker 9: and industry say that I've got a ton of cubits.
Speaker 9: The real interesting question at the end of the day
Speaker 9: is what can you do with them? And so I
Speaker 9: could have a thousand cubic, but if they can't finish
Speaker 9: an actual quantum workload and application, it really doesn't matter.
Speaker 9: Or if it takes one thousand years to finish that application,
Speaker 9: climate doesn't matter. And so at the end of the day,
Speaker 9: what's most important is not the count of cubits. In
Speaker 9: some ways, that's kind of a vanity, correct. You know,
Speaker 9: that's for any vendor, not just you know, not's Google,
Speaker 9: But it's true for everyone. What really matters at the
Speaker 9: end of the day is can I get to that
Speaker 9: high count but make them useful? And that's the value
Speaker 9: of this topological conductor that we've got this topological core.
Speaker 9: These topological cubits have error resistance built in, they're small,
Speaker 9: they're fast, they're digitally controlled. There's just no one else
Speaker 9: that has that. So we can get to the scale
Speaker 9: and we can make sure.
Speaker 10: That they're useful.
Speaker 9: And like I said today, you're going to start off
Speaker 9: with a small count, just like you know transitions. Originally
Speaker 9: there weren't that many of them. There were tons of
Speaker 9: vacuum tubes. Over time, you're going to get that transition
Speaker 9: and that scale. That's what's going to help, you know,
Speaker 9: in twenty years of experimentation to get us there. Now
Speaker 9: starts the real race to go make the volume up
Speaker 9: and go higher.
Speaker 3: In January, Jensen Wong said that useful quantum computers are
Speaker 3: likely twenty years away.
Speaker 4: Is he wrong?
Speaker 9: I think that we're getting to the point, especially with
Speaker 9: this announcement, where we're years away, not decades away. And
Speaker 9: you know, I believe that part of what Jensen was
Speaker 9: referring to is some of those scale challenges that I
Speaker 9: mentioned in some of these technologies that leaving a warehouse
Speaker 9: size computer to make it work. We don't need that,
Speaker 9: and so but if you did need that, then you
Speaker 9: can imagine how it would take a long time to
Speaker 9: get through there. But from our perspective, the fact that
Speaker 9: I can put a million cubits on a chip that
Speaker 9: fits the palm in my hand. They're small, they're fast,
Speaker 9: they're digitally controlled. That means it's years, not decades. There's
Speaker 9: still a lot of work to do, but it's not
Speaker 9: going to be decades out. We're actually finding ways to accelerate.
Speaker 10: Even as we speed.
Speaker 5: Microsoft's executive vice president of Strategic Missions and Technologies, Jason Zander, there,
Speaker 5: let's get more on this announcement with Bloomberg's map day.
Speaker 5: I think back to the willowchip announcement of Alphabet and
Speaker 5: the stock rallied hard for us several days. I'm looking
Speaker 5: at the moment Microsoft has jumped about four tenser percent
Speaker 5: trading higher now on the back of this announcement.
Speaker 2: Map, and just talk us through.
Speaker 5: What it really means for Microsoft, what it means in
Speaker 5: terms of pushing its own computing forward.
Speaker 11: This means Microsoft thinks they're far enough long, they're close
Speaker 11: enough to a workable quantum machine where they say, hey,
Speaker 11: look we've built some hardware. Now, this isn't just a
Speaker 11: theoretical construct from us this is something that you know,
Speaker 11: maybe in a few years we could put in a
Speaker 11: data center in some capacity. Right, this is them saying,
Speaker 11: you know, this is not just a theoretical construct. This
Speaker 11: is something we built and we think it's you know,
Speaker 11: if not ready for prime time, they're ready to start
Speaker 11: turning these things out.
Speaker 3: Matt, do you have a sense of where this leaves
Speaker 3: the artificial intelligence priority? I think quantum has been the
Speaker 3: topic that we've all been waiting for for years, but
Speaker 3: AI came first. Where does it leave it in terms
Speaker 3: of what the company tackles the most over the next
Speaker 3: coming years?
Speaker 11: Oh go, quantum is is by no means going to
Speaker 11: supplant AI. You know, Microsoft and all of its peers
Speaker 11: in big cloud are still spending tens of billions of
Speaker 11: dollars on AI chips, on new data centers. None of
Speaker 11: that is going to go away. If you want a sense,
Speaker 11: I know, Jason Xander just said years, not decades. But
Speaker 11: it's worth checking out some of the photos of these
Speaker 11: systems that Microsoft published this morning. You know, because we're
Speaker 11: still talking about super culed you know, colder than space
Speaker 11: vacuum conditions, right, these are still operating very much in
Speaker 11: elaborate toy construct even if Microsoft built a product. So
Speaker 11: the I revolution is going to keep churning on even
Speaker 11: as they plug away on this in the background.
Speaker 4: That's Bloomberg's Matt Day.
Speaker 3: Thanks for joining us.
Speaker 5: Today's the day for Apple, the low end iPhone, larger screen, face, ID,
Speaker 5: in house, cellular modem chip, and we get the price point.
Speaker 5: The sixteen E will be five hundred and ninety nine dollars.
Speaker 5: Bloomberg's Mark gum and joins us some more. The big
Speaker 5: unveil comes a little bit later. We're getting all the
Speaker 5: details already.
Speaker 10: Yes, sixteen E.
Speaker 12: Yeah, five ninety nine, that's pretty pricey for a mid
Speaker 12: tier phone.
Speaker 2: Right, affordable, it's affordable.
Speaker 12: It's more affordable five ninety nine versus something like seven
Speaker 12: hundred dollars for the regular sixteen's one thousand dollars plus
Speaker 12: for the sixteen Pro models. You're getting most of the
Speaker 12: pro features here, right, You're missing a few, right, You
Speaker 12: don't have the dynamic island. You only have one camera
Speaker 12: versus two on the regular sixteens or three on the
Speaker 12: sixteen Pro models. But you have a screen size of
Speaker 12: six point one in Just so the same screen size
Speaker 12: as the entry level iPhone sixteen or I guess the
Speaker 12: old entry level the new mid tier, right, But this
Speaker 12: is Apple's new low end iPhone. They want this to
Speaker 12: do particularly well in China, places like India, Southeast Asia.
Speaker 12: They think this phone will help ignite a new growth
Speaker 12: story for the iPhone. Don't forget dipped one percent you
Speaker 12: over year in the holiday period. So this is very
Speaker 12: exciting for Apple and should be pretty exciting for shareholders consumers.
Speaker 12: People have not upgraded their iPhone in many years. This
Speaker 12: is this is a compelling upgrade. You got face ID,
Speaker 12: the home button is finally gone, you have USBC, you
Speaker 12: have fast charging, you have a very fast A eighteen processor,
Speaker 12: you have Apple Intelligence, you have CHAGPT integration.
Speaker 13: So it's a.
Speaker 12: Pretty compelling phone. The price though one hundred and eighty
Speaker 12: dollars more than the current iPhone sc it replaces mark.
Speaker 3: I'm super curious about what this means about Apple Intelligence.
Speaker 3: Are these phones going to have some of that new
Speaker 3: generative AI, you know.
Speaker 2: Boost to do it?
Speaker 3: Because I'm curious if this actually works in a lower
Speaker 3: cost phone. Talk to us about what we can plan
Speaker 3: to see from an AI front and if this lower
Speaker 3: cost strategy has worked for Apple in the past.
Speaker 12: So you're going to get the aaighteen chip and the
Speaker 12: necessary RAM requirements in this new model to support the
Speaker 12: on device models, the in cloud models that run as
Speaker 12: part of Apple Intelligence. You have that open AI integration
Speaker 12: in Siri. In the new writing tools feature, you'd be
Speaker 12: able to download all the AI apps like deep Seek
Speaker 12: and open Ai and Gemini and Copilot that are available
Speaker 12: on the App Store already. So from an AI standpoint,
Speaker 12: it's also a good citizen. But in terms of what
Speaker 12: Apple's doing with Siri and its own generative AI models,
Speaker 12: there are clearly a few years behind at this point,
Speaker 12: two or three years behind. They're supposed to launch a
Speaker 12: new AI, a fied version of Siri this year. I
Speaker 12: reported last week it's being delayed, probably from April to
Speaker 12: somewhere between May and June. But from an AI standpoint,
Speaker 12: this phone, if you buy it, we'll set you up
Speaker 12: big time to be able to run all the future
Speaker 12: AI features that all these companies, including app are trying
Speaker 12: to dream up right now.
Speaker 2: It's going to be available from February twenty eighth.
Speaker 5: Why the timing here and what we're seeing in this
Speaker 5: focus is it that we finally saw this reduction in
Speaker 5: revenue growth that we've seen more broadly. Is it the
Speaker 5: China anxiety? Is it the geopolitics that plays here?
Speaker 12: So Apple typically releases these types of products, lower end devices, iPads,
Speaker 12: non excite, the products that are another most exciting products
Speaker 12: in this sort of January to May time period. That
Speaker 12: February is a little bit earlier than typical for an
Speaker 12: SE You normally would see that somewhere between late March
Speaker 12: and April. So I would imagine they brought the release
Speaker 12: up a little bit. Knowing that DIP happened right six
Speaker 12: months out. Four months out, you're still able to maneuver
Speaker 12: things in this day and age where they're not holding
Speaker 12: physical launch events or doing everything online. You have a
Speaker 12: little bit more flexibility if your Apple to release these things.
Speaker 12: So getting it out during this quarter or Q two
Speaker 12: I think is important for Apple ahead of giving the
Speaker 12: results in several weeks from now.
Speaker 3: Mark you mentioned Siri has seen some some delays. What's
Speaker 3: the status there is It's something that we can expect
Speaker 3: coming this year and in what form will it come?
Speaker 12: So the new series features they announced this in June
Speaker 12: are three things. One is on screen awareness, so we
Speaker 12: can answer questions based on analyzing what you have up
Speaker 12: in front of you on your display. It could also
Speaker 12: answer questions with answer questions with the context of your
Speaker 12: own data.
Speaker 10: So those are supposed to come in April.
Speaker 12: Now those are probably coming closer to.
Speaker 2: Majun always keeping us up to speed the timing. Mark Guman,
Speaker 2: great to have him here in New York.
Speaker 5: I'm lucky, welcome back to Nu Metechnology, and Caroline Hide
Speaker 5: to New.
Speaker 4: York, and I'm Jackie Devalas in San Francisco.
Speaker 2: Quick check on these.
Speaker 5: Markets, Jackie, because look, we're trying to understand the ramifications
Speaker 5: of what a twenty five percent tariff on chips on
Speaker 5: auto's might look like for the market. And we have
Speaker 5: seen as selling on the Nasdaq. More broadly, when you're
Speaker 5: looking at what's pulling UN down on the Nasdaq more
Speaker 5: from a points perspective, it's actually Meta now off like
Speaker 5: two percent yesterday's sell off as well after a twenty.
Speaker 2: Days run up.
Speaker 5: Yes, we start to question maybe the market capitalization and
Speaker 5: the run up that we've seen in this stock, but
Speaker 5: we're only down by some two percent bumble interestingly, really
Speaker 5: falling on the back of its earnings. We of cause
Speaker 5: dating apps, seeing executive turnover, seeing a questioning of really
Speaker 5: how they try to update the app. And the earnings
Speaker 5: didn't look as good as had been anticipated, or indeed
Speaker 5: worse than had been anticipated.
Speaker 2: Rob By twenty five percent, Big Full.
Speaker 5: Etsy also down more than ten percent on the back
Speaker 5: of its numbers gross merchandise sales coming in weak in
Speaker 5: then expected first quarter forecast as well not looking so strong.
Speaker 5: This is they do see some good profitability numbers, but
Speaker 5: more broadly, we're worrying about numbers. Let's move on, have
Speaker 5: a look at what's happening in the world of crypto
Speaker 5: right now, because Bitcoin actually at one point four percent,
Speaker 5: Remember it has been hammered hard over the last few
Speaker 5: training days. We're currently training ah more around sort of
Speaker 5: a ninety six thousand.
Speaker 2: Dollars levels, so well off of those hires, Jackie.
Speaker 3: The crypto markets enthusiasm as skyrocketed since President Trump's reelection
Speaker 3: with hopes of a more crypto friendly regime. Bloomberg Xander
Speaker 3: Bell Drulers spoke with Binance CEO Richard Teng, who says
Speaker 3: the US has moved on from an oppressive crypto environment.
Speaker 13: Under the Biden administration. Operation chip Point wards in progress. Right,
Speaker 13: So there's a bauty of oppression in the US and
Speaker 13: US players. Global crypto players are facing grand certing, and
Speaker 13: governments around the world are not really very supportive of
Speaker 13: crypto I think we have a fresh we said, and
Speaker 13: we start now. Since President Trump's election, actually we have
Speaker 13: gotten a lot of approaches by governments around the world
Speaker 13: to say, hey, we want to look at this pace
Speaker 13: huw virtue by the virgin of fact that US is
Speaker 13: appointed that cryptos are represents that these are the two
Speaker 13: most important industries to support all future economies around the world,
Speaker 13: and we are seeing fresh optimism governments around the world
Speaker 13: supporting them.
Speaker 14: So you're talking directly with the SEC then about what
Speaker 14: the regulatory rodemap could look like? Are you talking with
Speaker 14: the Trump administration directly?
Speaker 13: Well, we give inputs to governments around the role. I
Speaker 13: think their value are inputs because we are the most
Speaker 13: regulated exchange by now global. If we are regulated in
Speaker 13: plenty one different jurisdiction.
Speaker 4: What does your input to the US government look like?
Speaker 2: What do you want to see there?
Speaker 4: Exactly?
Speaker 13: Well, so on the US front, you see very taught
Speaker 13: full appointments right in terms of the different David Seccess
Speaker 13: and Cryptosa are the different appointments to the different agencies
Speaker 13: regulatory agencies on that front, and they want to come
Speaker 13: out with a very good framework. So it's still early days,
Speaker 13: but you know, as and when there are film proposals
Speaker 13: where very different puts on that round.
Speaker 14: What exactly do you want to see that I want
Speaker 14: to understand what would bring you back into that market?
Speaker 4: What is it exactly?
Speaker 13: Well, I think for every country they have their own
Speaker 13: concerns that have own interest to take care of. But
Speaker 13: we want to see a framework, regulatory framework that is
Speaker 13: on the one hand managing the risks bas of the industry,
Speaker 13: on the on hand resupport of innovation and growth aspects. Right,
Speaker 13: if you just focus on the res aspect of it,
Speaker 13: you're missing out on all the new innovation that's coming
Speaker 13: into this space, right, and it's a very dynamic.
Speaker 10: Space of that.
Speaker 14: Do you think that the US is going to take
Speaker 14: a more business friendly approach or do you think it's
Speaker 14: going to take an approach that's higher on consumer protections.
Speaker 14: I think you've kind of got to go down either
Speaker 14: Varra for instance in Dubai, that's one that's more business friendly.
Speaker 4: For instance, Hong Kong a bit more on the consumer side.
Speaker 13: I think the US is going to come out and
Speaker 13: only my speculation is it going to be a v
Speaker 13: spoke framework that really supports innovation, supports growth, but at
Speaker 13: the same time protect consumers and all these different aspects
Speaker 13: are actually important.
Speaker 14: So if you get that kind of framework that's bespoke,
Speaker 14: is it enough to bring you into the US market.
Speaker 13: Well, we always consider global deployment, right, so we are
Speaker 13: holding a washing grief on the US. We need to
Speaker 13: see greater clarity coming from out from the US, and
Speaker 13: we'll consider options at a point in time.
Speaker 2: What would that look like to you? For instance, that.
Speaker 5: Is speculator Pushia Tang see you Finance Holding Speaking with
Speaker 5: blievegg's Anabel Drouders a little bit earlier. Look, let's talk
Speaker 5: about what is needed here from a regulatory perspective. Kristen
Speaker 5: Smith of the Blockchain Association that we've had the promise
Speaker 5: of more crypto friendly regulation legislation, but it's slow to happen,
Speaker 5: of course, because Congress needs to weigh in.
Speaker 2: How are you making us out of ten?
Speaker 15: Well, I think we're on a ten out of ten
Speaker 15: right now. I think there is obviously a lot of
Speaker 15: work to do, and it takes a lot of time.
Speaker 15: I think we're looking at things in sort of two phases.
Speaker 4: You know.
Speaker 15: The first step is we need to undo the harm
Speaker 15: that happened in the last administration, and we've seen hints
Speaker 15: of this with the repeal of SAB one twenty one.
Speaker 4: Congress is actually working.
Speaker 15: On a really important bill right now, the Congressional Review Act,
Speaker 15: to undo a rulemaking that the IRS tried to apply
Speaker 15: to DeFi in the late hours of seventy five. Companies
Speaker 15: wrote a letter on that this morning to Congress, and
Speaker 15: I think we're going to get a vote on it
Speaker 15: this week. That's really important. So it's undoing the harm,
Speaker 15: it's stopping the litigation. But then we need to go in,
Speaker 15: as Richard was saying, get a framework in place. We
Speaker 15: need stable coin legislation, we need market structure legislation. These
Speaker 15: pieces are harder because they require a lot of work,
Speaker 15: but we're really optimistic that Congress and the White House
Speaker 15: are aligned on this and that this is the year
Speaker 15: to get these items done.
Speaker 5: How much patience do you think, ultimately those that have
Speaker 5: plowed in to cryptocurrencies as an asset of choice have
Speaker 5: for the actual legislative process, because it feels as though
Speaker 5: many were like, oh, they're just forming a task force.
Speaker 2: More broadly, they I'll.
Speaker 5: Actually bring in regulations here enough.
Speaker 15: Yeah, well, I think that the task force of the
Speaker 15: Presidential Working Group that you've talked to spoke about is
Speaker 15: actually incredibly important. The SEC also has their Crypto task Force.
Speaker 15: You know, these things don't happen overnight. You want to
Speaker 15: get the regulatory framework right, and it requires a lot
Speaker 15: of discussion and debate. I mean, the good news is
Speaker 15: we're not starting at zero. Congress did a lot of
Speaker 15: work this past year to really lay the groundwork and
Speaker 15: move the ball forward. But you know, like any draft legislation,
Speaker 15: there are issues here there that still need to be
Speaker 15: worked out. And so you know, one of the things
Speaker 15: we're doing at the Blockchain Association, within our working groups
Speaker 15: is really to get people together to focus in on
Speaker 15: the specific issues and the details so we can bring smart,
Speaker 15: thoughtful approaches to Congress, because I think you know, what
Speaker 15: everybody in the industry wants is a pro competition framework
Speaker 15: that also protects consumers. And so we're on the same
Speaker 15: page about the goals. It's working through the details. It
Speaker 15: takes time, but you know.
Speaker 4: I think there was a press conference last week where.
Speaker 15: David Sachs and the chair of the committees stood up
Speaker 15: and said they want to get this done in the
Speaker 15: first hundred days. I think that's pretty ambitious, but I
Speaker 15: think they're going to try.
Speaker 4: I think they're moving.
Speaker 15: Very very quickly on Capitol Hill and that we're going
Speaker 15: to see a lot of progress.
Speaker 4: Kristin, you mentioned the consumer.
Speaker 3: There's still plenty of people out there who are skeptical
Speaker 3: about the safety of their assets in some of these instruments.
Speaker 3: What policies or measures are you in fame for that
Speaker 3: would protect consumers?
Speaker 15: Yeah, well, I think listen, we need to make sure
Speaker 15: that whenever there's an intermediary involved in crypto, they need
Speaker 15: to have appropriate regulations. Right if you're handing your crypto
Speaker 15: assets over to someone else, you want to know that
Speaker 15: they're safe, that they're not going to be taken away
Speaker 15: or used for harm. So we need to put those
Speaker 15: types of frameworks into place, and I think it's fairly
Speaker 15: easy to do. I think it's it's known. I think
Speaker 15: some of the more complex topics are, you know, figuring
Speaker 15: out when something is a security or a commodity that's
Speaker 15: that's a long time issue that the industry has been
Speaker 15: grappling with. But there are a lot of creative ideas
Speaker 15: out there and people are talking. But yeah, we want
Speaker 15: to make sure that consumers have confidence in using this.
Speaker 15: I mean, you know, the irony is, it's actually oftentimes
Speaker 15: much better in crypto. If you look at these DeFi
Speaker 15: systems that are don't you don't have to hand your
Speaker 15: assets over to an intermediary in order to borrow or
Speaker 15: lend or trade. They're actually like a lot safer because
Speaker 15: the code is there, it's autos, you can look at it.
Speaker 4: You know what's happening.
Speaker 15: So crypto is trying to improve the world for consumers.
Speaker 15: But you know that, listen, there's things that are happening.
Speaker 15: It's still very early days, and so we want to
Speaker 15: make sure we get the regulatory framework right that gives
Speaker 15: people the confidence to come into the market.
Speaker 3: One of the biggest skeptics out there, longtime skeptic, is
Speaker 3: JP Morgan's Jamie Dimond just last month said he doesn't think.
Speaker 4: People should buy bitcoin.
Speaker 3: What does this mean for crypto's rise long term? If
Speaker 3: the bank, the largest bank in the country hasn't come
Speaker 3: around yet, well, listen, I think it takes time for
Speaker 3: these bigger institutions to change their mind, but there certainly
Speaker 3: is a lot of demand for bitcoin.
Speaker 15: I mean, obviously that's reflected in the price increase over
Speaker 15: the past year. And I think this is an asset
Speaker 15: that is really here to stay. I mean, this is
Speaker 15: something where it's scarce, it's serving as a store of value.
Speaker 15: It is something that you can access from anywhere in
Speaker 15: the world without.
Speaker 4: Needing to go through an intermediary.
Speaker 15: So it's a truly revolutionary idea and I think it's
Speaker 15: one that as more and more institutions become educated and
Speaker 15: comfortable with the idea, we'll see financial advisors recommending. You
Speaker 15: know that people include a little bit of this in
Speaker 15: their portfolio, but no Bigquin's are wonderful innovation and I
Speaker 15: think it's here to stay.
Speaker 3: That's Kristin Smith, Blockchain Association CEO, thanks so much for
Speaker 3: joining us. Coming up, we speak with Turo CEO Andre
Speaker 3: Hadad as they drop plans to IPO.
Speaker 4: This is Bloomberg.
Speaker 5: More ex open ai members are setting up their own
Speaker 5: AI startups after co founder Alias sets Koba is Now
Speaker 5: we have the former open ai CTO Mira Maraati launching
Speaker 5: her own AI company called Thinking Machines Lab, along with
Speaker 5: several former open ai executives fromo showing Gafari brings us
Speaker 5: more and everyone has been waiting with baited breath, what
Speaker 5: will she do? And here we have it no product,
Speaker 5: but an inspiration and a product roadmap and east to
Speaker 5: at an extent.
Speaker 4: That's right.
Speaker 16: So Mira Murti, the former CTO of open Ai, is
Speaker 16: starting a new venture and she will be building both
Speaker 16: the research models as well as some kind of products
Speaker 16: that are to be determined. And she's recruited quite a
Speaker 16: few former open ai employees, or I should say that
Speaker 16: quite a few open employees open ee employees.
Speaker 3: Now work there, Sharine, What do we know about why
Speaker 3: investors are so confident that a company with no product
Speaker 3: and no super clear roadmap yet, how can it they
Speaker 3: actually emerge as a contender in AI?
Speaker 16: I mean, right now, there is almost it seems like
Speaker 16: insatiable demand to invest in the next big AI company.
Speaker 16: It's still sort of anyone's game. As we're seeing all
Speaker 16: these AI models are becoming increasingly competitive.
Speaker 2: With each other.
Speaker 16: Just this week we saw Elon Musk's Xai release the
Speaker 16: latest Grock three model that they say outperforms open Ai
Speaker 16: and other competitors on certain evaluations.
Speaker 4: We've seen the rise.
Speaker 16: Of Chinese startup with deep Seek similarly come out with
Speaker 16: a very competitive model. So it's still very early in
Speaker 16: this big race to agi, right, and I think investors
Speaker 16: are keen to put their money and someone who's a
Speaker 16: big name and a trusted figure in the industry like Miramadi.
Speaker 5: I mean, look, we were just talking about the thirty
Speaker 5: billion dollar plus valuation that Ilios Atsugva is looking for
Speaker 5: in the market.
Speaker 2: What about evaluation?
Speaker 5: A talk of people who want to be backing Mir's
Speaker 5: new project.
Speaker 2: That's right.
Speaker 16: So you know, we've heard that she has been talking
Speaker 16: to investors and that there are talks you know, to
Speaker 16: put in money, but none of this has been finalized yet.
Speaker 4: It's still very early.
Speaker 2: We will see, you know.
Speaker 16: I think that you know, there is high demand we
Speaker 16: are hearing to put money toward her company.
Speaker 3: That's Glutenberg Sharreingkafari, thanks so much for joining us. It's
Speaker 3: still early into twenty twenty five, but it's already proving
Speaker 3: to be a tough year for the IPO market, with
Speaker 3: many companies opting to postpone or cancel their planned offerings outright.
Speaker 3: The latest coming from car sharing company Turo, which is
Speaker 3: scrap plans to go public three years after initially filing
Speaker 3: for USIPO. Turo ceo Andre Hadad joins us. Now, Andre,
Speaker 3: you're not the only company out there that's really you know,
Speaker 3: rethinking ibo plans. But what about the market conditions made
Speaker 3: this not the right time for you guys to go public.
Speaker 3: Did it have to do with growth or external factors?
Speaker 17: Well, the market definitely hasn't helped. You know, we've been
Speaker 17: waiting for an opening for the past three years. We
Speaker 17: filed our first S one back in late twenty twenty one,
Speaker 17: and as you know, twenty two and twenty three were
Speaker 17: tough years.
Speaker 10: We thought twenty four might get better. There was some slight.
Speaker 17: Improvements, but as we entered twenty five, we've continued to
Speaker 17: see market conditions to be pretty choppy. There's a lot
Speaker 17: of change going on. There's a lot of adaptations that
Speaker 17: are happening. And you know, we have been on file
Speaker 17: for almost three years and it's had become a bit
Speaker 17: of a distraction to continue to file every quarter, and
Speaker 17: since the near term prospects of going public seemed a
Speaker 17: bit remote, we decided to postpone.
Speaker 3: We've reported that some other late stage startups are facing
Speaker 3: a cash crunch as they postponed plans to IPO, some
Speaker 3: of them having to go out and raise cash again,
Speaker 3: and they're finding a more skeptical group of venture capitalists
Speaker 3: that are more unwilling to give them additional cash at
Speaker 3: that stage. What does this mean for your future funding plans?
Speaker 3: Will you have to tap VC cash again at some
Speaker 3: point this year?
Speaker 17: No, we don't have any plans to raise any capital.
Speaker 17: You know, we have been seeing listen to. Fundamentals of
Speaker 17: the business continue to be very very strong. So just
Speaker 17: to give you a sense of where we are from
Speaker 17: a business standpoint, you know, last year we ended twenty
Speaker 17: twenty four with a little bit over nine hundred and
Speaker 17: fifty million dollars of revenue, up from you one hundred
Speaker 17: and fifty back.
Speaker 10: In twenty twenty.
Speaker 17: So the business has grown over six and a half
Speaker 17: x in the last four or five years. It's been
Speaker 17: profitable since twenty twenty one. We've been EBITDA positive for
Speaker 17: the last three four years now, and we have a
Speaker 17: very strong balance sheet with over two hundred and fifty
Speaker 17: million dollars of cash. So thankfully, you know, we don't
Speaker 17: have to go out and tap into the markets. But
Speaker 17: I agree with you the markets have been more challenging
Speaker 17: recently for late stage startups. In our case, we're just
Speaker 17: going to be focused on the fundamentals, you know, for
Speaker 17: the next few years and hoping that the markets will
Speaker 17: be more receptive and a bit less turbilent, you know,
Speaker 17: in maybe two to three years from now, and.
Speaker 5: You want to be making more investments in the business
Speaker 5: while you'll make private where.
Speaker 17: Andre, well, you know, we still are early, frankly in
Speaker 17: this market, you know, just you know, we're excited about
Speaker 17: the growth and the numbers that I shared with you,
Speaker 17: but when you think about the size of the opportunity, Caroen,
Speaker 17: you know this market quite well and the opportunities very
Speaker 17: very large. We have been investing in our team, We
Speaker 17: have been investing in innovation in the product experience.
Speaker 10: There's still a lot to build.
Speaker 17: We launched seventy different new features last year enhancing the
Speaker 17: host experience, the guest experience, but there's a lot more
Speaker 17: that we want to do, and frankly, we're going to
Speaker 17: take the opportunity of staying private for the next two
Speaker 17: to three years or so to make some bold, longer
Speaker 17: term investments that are part of the roadmap that we're
Speaker 17: accelerating and bringing forward.
Speaker 5: Andre I go to a sensitive topic here, because the
Speaker 5: start of twenty to twenty five was pretty devastating in
Speaker 5: terms of not one, but two tragedies that involved turo cars.
Speaker 5: How have you thought about safety and how much in
Speaker 5: any way the decision to delay IPO been because of that.
Speaker 17: No, those two things are not really connected, Carolyn. Those
Speaker 17: you know, the timing coincidence of course looks like they are,
Speaker 17: but they're not. You know, Yes, the start of the
Speaker 17: year has been extremely tragic for us. As you mentioned,
Speaker 17: the events of January first, the attacks of January first
Speaker 17: were made with.
Speaker 10: Two Tuo vehicles.
Speaker 17: We've been very focused on understanding what's going on and
Speaker 17: looking inwards to our trust and safety over the last
Speaker 17: you know, two months now. As I indicated, you know,
Speaker 17: back in early January, you know, we ended up of
Speaker 17: course doing a lot of investigating internally, cooperating with investigators externally,
Speaker 17: and we found out that the perpetrators of these crimes
Speaker 17: were you know, very legitimate people, you know, with valid
Speaker 17: driver's licenses, with no criminal backgrounds. And so our trust
Speaker 17: and safety system that we built over the last thirteen
Speaker 17: years actually performed as planned. However, you know, we did
Speaker 17: want to take a look at everything. You know, when
Speaker 17: such a tragedy strikes, you have to re.
Speaker 10: Look at everything, and we did.
Speaker 17: And one thing that I wanted to mention is that
Speaker 17: we're launching at the end of this quarter a new
Speaker 17: way for our hosts to signal any concerns.
Speaker 10: That they have with public safety.
Speaker 17: So today, you know, our hosts can always cancel a
Speaker 17: trip if they're feeling uncomfortable with anything that's going on, right,
Speaker 17: and there's no penalties when that happens. Now, we're specifically
Speaker 17: adding a topic which is related to public safety, and
Speaker 17: not only we'll be able to enable our host to
Speaker 17: cancel these trips without any penalties on their track record,
Speaker 17: but also we'll be connecting them with a hotline of
Speaker 17: specialized representatives that will be able to support them while
Speaker 17: they're dealing with something that might be stressful.
Speaker 10: That's great, So we're making this change.
Speaker 17: We think it's important for us to be standing behind
Speaker 17: our hosts and supporting them whenever they feel anxious about
Speaker 17: something that looks like a public safety issue.
Speaker 3: What about other investments you mentioned bold investments, will.
Speaker 4: That include m and A. We only have about thirty seconds.
Speaker 17: MNA is always an option. You know, there's been a
Speaker 17: lot of consolidation in the space, and you know, last
Speaker 17: last year you might recall we did announce it a
Speaker 17: great partnership with Uber, you know, sort of taking over
Speaker 17: their Uber car share business that they had been building
Speaker 17: in Australia.
Speaker 10: And we're partnering with Uber.
Speaker 17: We're going to become part of the Uber rent products
Speaker 17: and we'll be launching soon this integration. So there's a
Speaker 17: lot I think a lot of consolidation happening, especially as
Speaker 17: you pointed out, with private capital becoming more scarce and
Speaker 17: more skeptical, I think it's pushing a lot of later
Speaker 17: stage companies to rethink their growth plans.
Speaker 2: And you remain independent.
Speaker 10: That's the plan.
Speaker 6: You know.
Speaker 17: We think the market is really big, We think that
Speaker 17: the fundamentals are very strong, and we have an exciting
Speaker 17: roadmap ahead. So we'll continue to you know, chart.
Speaker 2: Our own path, Andre Hadad, thank you.
Speaker 5: Cro ceo x is said to be in talks to
Speaker 5: raise money from investors that could value the company forty
Speaker 5: four billion dollars. Katie roof joins US now forty four
Speaker 5: billion being the amount that Elon bought Twitter for in
Speaker 5: twenty twenty two.
Speaker 18: Yeah, so much has been made about you know, this
Speaker 18: acquisition price. Many people said he overpaid, and you know,
Speaker 18: at one point they had many people fleeing the platform.
Speaker 18: But they are now in talks to receive investment at
Speaker 18: a forty four billion dollar valuation, same price. And you
Speaker 18: know this is at a time when all Elon companies,
Speaker 18: SpaceX Tesla, they're all going XAI. They're all going up
Speaker 18: in value because partly because of Elon's ties to President
Speaker 18: Trump and the perceived value that that could add.
Speaker 5: And briefly, Katie, just who would be willing to give
Speaker 5: them money and why do they need the money?
Speaker 18: So it could be potentially from existing investors.
Speaker 4: We know that the talks are are early.
Speaker 18: You know, it's hard to say what they're planning to
Speaker 18: use the money for. But you know one thing that
Speaker 18: adds to their value is they are are a significant
Speaker 18: shareholder in XAIS.
Speaker 4: It turns out, so they go.
Speaker 18: Up in value pretty much automatically when XAI goes up
Speaker 18: in value. But usually the funding reason would be for
Speaker 18: hiring or potentially acquisitions.
Speaker 2: Great breaking news, Katie Roof. We appreciate it. Thank you.
Speaker 10: Now.
Speaker 2: That does it for this edition of Bloomberg Technology. You
Speaker 2: do not want to forget to check out our podcasts.
Speaker 5: Find it on the terminal as well as online on Apple, Spotify,
Speaker 5: and iHeart.
Speaker 2: This is Bloomberg Technology.