WEBVTT - Trump Proposes More Tariffs, Musk's X Looks To $44B Valuation 0:00:01.000 --> 0:00:05.240 From the heart of where innovation, money and power collide 0:00:05.519 --> 0:00:10.800 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:35.840 Caroline Hide and Ed Ludlow. 0:00:27.200 --> 0:00:27.840 Live from New York. 0:00:27.880 --> 0:00:31.240 I'm Caroline Hyde and I'm Jackie Devalas in San Francisco. 0:00:31.320 --> 0:00:32.879 This is Bloomberg Technology and. 0:00:32.800 --> 0:00:36.479 Coming up, President Trump plans to impose twenty five percent 0:00:36.600 --> 0:00:39.519 tariffs on auto's chips and more. Will break down the 0:00:39.560 --> 0:00:43.839 potential tech impact. Plus, Microsoft's a big quantum leak and 0:00:43.960 --> 0:00:47.159 they have its new Mayorana chip what it means for 0:00:47.240 --> 0:00:50.400 the future of computing and Elon Musk's ex is in 0:00:50.440 --> 0:00:52.720 talks to raise money from investors and a forty four 0:00:52.720 --> 0:00:55.520 billion dollar valuation the amount he bought it for back 0:00:55.520 --> 0:00:56.440 in twenty twenty two. 0:00:56.480 --> 0:00:57.880 But first we check in. 0:00:57.840 --> 0:01:00.360 On these markets and we look at the must all 0:01:00.360 --> 0:01:04.679 that is once again a tariff concern that drives through 0:01:04.720 --> 0:01:06.160 the market, and we try to work out who it 0:01:06.160 --> 0:01:08.080 helps it hinders. We're currently off by three tens percent 0:01:08.120 --> 0:01:10.200 on the NASDAK one hundred drag lower by metal once 0:01:10.240 --> 0:01:12.720 again in the fray after it finally stops it's run 0:01:12.800 --> 0:01:15.640 up that we've seen in market capitalization. The socks though 0:01:15.680 --> 0:01:18.440 the Chip Semiconductor Index that we're seeing at the moment 0:01:18.720 --> 0:01:21.279 up four tens percent. ADI coming out with its numbers 0:01:21.280 --> 0:01:23.280 looking good. We'll dig into what it means in terms 0:01:23.319 --> 0:01:26.039 of the overall tariffs they want individual chip makers. 0:01:25.880 --> 0:01:27.040 Move on some individual names. 0:01:27.080 --> 0:01:28.680 I want to shout out in the world of autos 0:01:28.720 --> 0:01:31.920 and chips, Tesla is actually your biggest points driver to 0:01:31.959 --> 0:01:35.119 the higher side today, Jackie, actually managing to push off 0:01:35.280 --> 0:01:37.160 some of the selling that's going on in the Nasdaq 0:01:37.200 --> 0:01:39.320 one hundred are up more than two percent. We'll dig into, 0:01:39.319 --> 0:01:41.600 of course, what Elon Musk and President Trump was saying 0:01:41.600 --> 0:01:44.840 to Fox yesterday. Intel off by almost five percent yesterday's 0:01:44.920 --> 0:01:48.200 run up. Of course, speculation surrounding potential deals selling off 0:01:48.200 --> 0:01:51.040 assets as much as TSMC some cold water being pulled 0:01:51.080 --> 0:01:53.280 on that. Today we're off by five percent, but still 0:01:53.400 --> 0:01:55.760 higher than we had been in the previous weeks. But 0:01:55.960 --> 0:01:58.400 let's dig into the news of the day, Jackie. 0:01:58.520 --> 0:02:01.360 Right, Let's go to Washington D's and bring in Bloomberg's 0:02:01.360 --> 0:02:04.800 Mike Shepherd to break down President Trump's potential tariffs and 0:02:04.840 --> 0:02:07.720 its impact. Mike, what do we know about the scope 0:02:07.760 --> 0:02:13.160 and timing of the tariffs that Trump is proposing here, Jackie. 0:02:13.200 --> 0:02:15.520 He gave us only a few clues yesterday, and one 0:02:15.560 --> 0:02:18.000 of them was on the timing. He floated a date 0:02:18.080 --> 0:02:22.720 of April second for this latest round of tariffs that 0:02:22.760 --> 0:02:26.720 could come on autos, chips and pharmaceuticals. And this of 0:02:26.760 --> 0:02:28.720 course would come on top of a lot of other 0:02:28.840 --> 0:02:31.800 levees that he has already rolled out or is planning 0:02:31.840 --> 0:02:34.320 to roll out, and those include the ten percent tariffs 0:02:34.320 --> 0:02:38.280 on all imports from China levees against Canadian and Mexican 0:02:38.320 --> 0:02:41.040 goods that could go into effect next month, and less 0:02:41.040 --> 0:02:43.960 our neighbors to the north and south are able to 0:02:44.200 --> 0:02:50.320 negotiate another delay or maybe avoid those tariffs altogether and 0:02:50.360 --> 0:02:53.440 then steal on alumin of imports as well. So we 0:02:53.720 --> 0:02:56.960 know the broad strokes. Now what this means in particular 0:02:57.040 --> 0:03:00.839 for chips remains unclear. Would there be exception and how 0:03:00.880 --> 0:03:04.040 far would these go? Would it be all categories of 0:03:04.040 --> 0:03:07.760 semiconductors or only the most advanced chips. So we still 0:03:07.800 --> 0:03:11.239 have a lot to learn before this actually gets implemented 0:03:11.440 --> 0:03:13.600 or gets the layed or negotiated away. 0:03:14.600 --> 0:03:15.840 Mike, It's interesting, of course. 0:03:15.880 --> 0:03:19.720 The ramifications on European stocks was felt hard, particularly in 0:03:19.760 --> 0:03:22.480 the auto sector today Tesla rallies. 0:03:22.919 --> 0:03:23.320 Is that a. 0:03:23.240 --> 0:03:26.079 Competition potential and the fact that it will have less 0:03:26.120 --> 0:03:28.640 of it from inbound and more costly at cars coming in. 0:03:28.880 --> 0:03:30.959 Was it more what Elol Musk had to say with 0:03:31.080 --> 0:03:33.240 Sean Hannity at Fox alongside the President. 0:03:34.520 --> 0:03:40.040 Well, Musk's comments certainly had that kind of ameliorative effect 0:03:40.440 --> 0:03:44.360 for anyone who wants to invest in Tesla after having 0:03:44.400 --> 0:03:47.400 seen the company struggle a little bit. We have seen 0:03:47.920 --> 0:03:50.720 concerns raised about how quickly they are coming up with 0:03:50.800 --> 0:03:53.720 that lower cost model that investors have been waiting for 0:03:53.840 --> 0:03:56.760 and consumers have been waiting for, and also concerns that 0:03:56.840 --> 0:04:00.040 maybe Elon Musk, the CEO of Tesla, is a a 0:04:00.040 --> 0:04:04.400 little bit too distracted with some other ventures, including Doge. 0:04:04.800 --> 0:04:07.440 But let's go back to the whole chips. 0:04:07.160 --> 0:04:11.000 And broader question that you were raising about autos. When 0:04:11.000 --> 0:04:13.800 you think about autos too, there are so many chips 0:04:13.800 --> 0:04:17.040 in vehicles today and so many of their goods today 0:04:17.040 --> 0:04:20.240 that the impact could be wide ranging. Now, Elon Musk, 0:04:20.520 --> 0:04:23.200 maybe I will find a way around that. Given his 0:04:23.279 --> 0:04:25.880 proximity to the President, Well. 0:04:25.800 --> 0:04:28.039 Said Mike, great to catch up with you. Thank you. 0:04:28.080 --> 0:04:31.440 We got some breaking news. We do know we're anticipating 0:04:31.440 --> 0:04:31.880 a new. 0:04:31.720 --> 0:04:34.040 More affordable phone coming from Apple, currently off by four 0:04:34.080 --> 0:04:36.320 tens percent as we get the details on the iPhone 0:04:36.360 --> 0:04:37.040 sixteen E. 0:04:37.400 --> 0:04:40.040 They call it a powerful new member of the iPhone. 0:04:39.640 --> 0:04:43.680 Sixteen is going to have capabilities at a more affordable price. 0:04:43.760 --> 0:04:46.240 They say, as soon as February the twenty eighth, you 0:04:46.279 --> 0:04:49.400 can buy a white and a black iPhone sixteen E 0:04:49.760 --> 0:04:52.640 for as little as five hundred and ninety nine dollars. 0:04:52.960 --> 0:04:55.320 Close eye on Apple, close eye on the markets. More broadly, 0:04:55.400 --> 0:04:57.839 Martin Laton's with US chief investment strategist that in power 0:04:58.040 --> 0:05:01.760 to really break down how in tests also take in 0:05:01.800 --> 0:05:04.600 the deluge of headlines, particularly when you're thinking we've got 0:05:04.760 --> 0:05:07.560 you know, launches and products still coming, but Apple affected 0:05:07.600 --> 0:05:10.960 by potential tariffs and geopolitics, not to mention the chips 0:05:11.000 --> 0:05:13.200 in the auto sector today, how do you see through that? 0:05:13.600 --> 0:05:15.800 Well, you know, it's so interesting because I think the 0:05:15.839 --> 0:05:19.120 market really is trying to see through all the tariffs. 0:05:19.120 --> 0:05:22.039 Who've had a lot of tariff noise of course during 0:05:22.040 --> 0:05:25.680 the Trump administration, but some kind of predictions are precursors 0:05:25.680 --> 0:05:28.279 to that. With what we saw President Trump posting on 0:05:28.320 --> 0:05:31.160 true social what he said during the campaign trail, And 0:05:31.200 --> 0:05:33.480 by and large, we've seen a market that's largely looking 0:05:33.480 --> 0:05:36.240 at tariffs as a negotiating tactic and able to kind 0:05:36.240 --> 0:05:39.360 of shed it off or not let it impact kind 0:05:39.400 --> 0:05:40.600 of how the market performs. 0:05:40.839 --> 0:05:42.600 And I think there's a kind of a. 0:05:42.680 --> 0:05:48.120 Missing calculus there that relates to Trump's broader comments around tariffs. 0:05:48.120 --> 0:05:51.279 He talks a lot about tariffs as a form of 0:05:51.320 --> 0:05:54.520 federal revenue. He talks a lot about tariffs as a 0:05:54.560 --> 0:05:58.080 way to even out trade deficits. He talks about tariffs 0:05:58.160 --> 0:06:01.119 as a way to build manufacture here in the US, 0:06:01.440 --> 0:06:05.080 and all of those other three elements beyond the negotiation, 0:06:05.160 --> 0:06:07.160 which we know is part of this manu as and 0:06:07.160 --> 0:06:09.000 the art of the deal. But all of those other 0:06:09.080 --> 0:06:12.239 three elements really focus on tariffs that are broad based 0:06:12.360 --> 0:06:15.040 and long lasting. And so I think this is something 0:06:15.040 --> 0:06:18.160 that the market is potentially going to need to grapple with, 0:06:18.279 --> 0:06:20.640 not on a case by case basis, but at the 0:06:20.640 --> 0:06:22.240 broad level for markets. 0:06:23.080 --> 0:06:27.360 Martin talk to us specifically about the technology industry's exposure 0:06:27.480 --> 0:06:31.080 to some of this tariff Tip for tat, how are 0:06:31.120 --> 0:06:34.800 you thinking about positioning certain pockets of your tech portfolio 0:06:34.800 --> 0:06:35.440 going forward. 0:06:35.720 --> 0:06:39.000 Well, it's interesting when we think about tariffs with technology. 0:06:39.080 --> 0:06:42.160 We've spent a lot of time thinking about areas like automotives, 0:06:42.160 --> 0:06:45.760 but we've spent less time thinking about tariffs with technology. 0:06:45.800 --> 0:06:48.280 And I think a lot of times investors are looking 0:06:48.279 --> 0:06:52.760 at areas like tech and expecting some sort of I guess, 0:06:52.880 --> 0:06:55.320 get out of jail free card with some carve outs 0:06:55.560 --> 0:06:59.239 or something along those lines. I don't think that's completely out. 0:06:59.080 --> 0:06:59.920 Of line thinking. 0:07:00.360 --> 0:07:03.279 When we think about one of the incentives that President 0:07:03.279 --> 0:07:08.680 Trump has is to really make AI in USAI a superpower, 0:07:08.920 --> 0:07:11.720 and we see a lot of enthusiasm for that within 0:07:11.760 --> 0:07:14.720 the Trump administration. So I think there's some potential to 0:07:14.800 --> 0:07:17.480 think that we see tariffs coming at tech and then 0:07:17.480 --> 0:07:20.520 we see the enthusiasm for AI coming into a bit 0:07:20.520 --> 0:07:23.640 of a collision course over the course of twenty twenty five. 0:07:23.960 --> 0:07:26.800 But frankly, you know, the devils and the details and 0:07:26.840 --> 0:07:29.640 the details aren't clear at this point in terms of 0:07:30.000 --> 0:07:33.800 how and where in the impact of the tariffs that 0:07:33.840 --> 0:07:36.320 we see in technology or the broad market. 0:07:37.080 --> 0:07:39.240 Let's zoom out of the United States for a bit. 0:07:39.440 --> 0:07:43.000 China tech has really rallied, even though it's somewhat lagged 0:07:43.000 --> 0:07:45.800 when it comes to AI investments coming from the private 0:07:45.840 --> 0:07:48.760 sector and perhaps even the public sector. How are you 0:07:48.800 --> 0:07:52.600 advising clients to take advantage of some of that diversification 0:07:53.320 --> 0:07:55.800 given they're seeing such a big boost. Well, you know, 0:07:56.440 --> 0:07:59.800 China tech is a really interesting investment question. Of course, 0:08:00.160 --> 0:08:03.360 China stacks in general have been under siege. We've seen 0:08:03.640 --> 0:08:06.800 weakness really stretching back the past few years, and a 0:08:06.840 --> 0:08:11.120 lot of that relating to geopolitical risk, relating to regulatory concerns, 0:08:11.440 --> 0:08:14.680 relating to economic questions as it relates to China tech, 0:08:14.720 --> 0:08:18.200 and so we're seeing valuations that are pretty cheap. Of course, 0:08:18.200 --> 0:08:20.680 we've had a rally that's undercut some of those valuations, 0:08:20.720 --> 0:08:24.200 but still marginally cheaper than they were. You know, if 0:08:24.240 --> 0:08:28.120 we're stretched back our gaze several years ago, pre pandemic, 0:08:28.680 --> 0:08:32.520 and you have some really healthy, big tech companies in China, 0:08:32.640 --> 0:08:35.200 some rivals to what we have here in the US. 0:08:35.200 --> 0:08:37.880 So I think if we're looking at the valuations here 0:08:37.920 --> 0:08:40.000 at home and they seem a bit stretched to us, 0:08:40.000 --> 0:08:42.000 and then we cast our gaze to something like the 0:08:42.120 --> 0:08:44.640 China valuations and there are a bit more approachable, I 0:08:44.640 --> 0:08:48.920 think a diversified approach isn't a bad strategy when it 0:08:49.000 --> 0:08:52.320 comes to technology exposure. I think the critical question is 0:08:52.320 --> 0:08:55.400 thinking about sizing it because of course you have these overhangs, 0:08:55.600 --> 0:08:59.080 the geopolitical and the economic and etc. That should adjust 0:08:59.160 --> 0:09:00.679 the position size accordingly. 0:09:00.840 --> 0:09:02.480 I just think of China and I think back to 0:09:02.559 --> 0:09:05.280 the market sell off we saw in that knee jote 0:09:05.280 --> 0:09:07.920 reaction to the deep seat news. I just want to 0:09:07.960 --> 0:09:11.640 think about market reaction forces at the moment, particularly in 0:09:11.640 --> 0:09:14.280 this age of generative AI. And what was so interesting 0:09:14.360 --> 0:09:16.960 is we heard from the FED Vice chair just speaking 0:09:16.960 --> 0:09:20.959 for the supervision indeed, Michael Barr, about potential market manipulation 0:09:21.000 --> 0:09:21.839 because of generative AI. 0:09:21.880 --> 0:09:23.160 I've just taken the listen. 0:09:22.960 --> 0:09:26.840 Marton, as they will be directed to maximize profit. Gen 0:09:26.960 --> 0:09:31.960 AI agents may converge on strategies to maximize returns through 0:09:32.000 --> 0:09:38.840 coordinated market manipulation, potentially fueling acid bubbles and crashes. Speed, 0:09:38.960 --> 0:09:43.720 automaticity and ubiquity could generate new risks at wide scale. 0:09:44.040 --> 0:09:45.920 On this show, we talk so much about the investment 0:09:45.920 --> 0:09:49.640 opportunity into the technology, right, but the technology is having 0:09:49.679 --> 0:09:52.720 an effect on investment and how is that affecting you? 0:09:52.800 --> 0:09:55.079 How you thinking about risks that come about because of 0:09:55.120 --> 0:09:55.679 generative AI. 0:09:55.800 --> 0:09:59.440 I mean, it's a very important question, and I think AI, 0:10:00.000 --> 0:10:03.120 as we've seen in different areas, opens up a whole 0:10:03.280 --> 0:10:06.280 new spectrum of risk. Whether we think about fraud, we 0:10:06.320 --> 0:10:10.400 think about market manipulation, we think about just misinformation. I 0:10:10.400 --> 0:10:13.600 think that those risks are real with AI, and I 0:10:13.640 --> 0:10:18.720 think there is some consideration that valuations haven't really taken 0:10:18.760 --> 0:10:21.040 into account the downside of AI. 0:10:21.120 --> 0:10:22.520 We think a lot about the upside. 0:10:22.520 --> 0:10:25.040 We think especially about the improvement in earnings that we 0:10:25.080 --> 0:10:28.280 can see certainly in technology but for the broad market overall. 0:10:28.280 --> 0:10:30.160 But we think less about what those risks can be. 0:10:30.200 --> 0:10:32.040 And I think it's partly because one we don't want 0:10:32.080 --> 0:10:34.520 to think about the risk, but two it's hard to 0:10:34.520 --> 0:10:37.559 speculate and it's hard to articulate. But I think that's 0:10:37.679 --> 0:10:42.240 where smart regulation, smart decisions by the companies themselves and 0:10:42.280 --> 0:10:45.440 of course by Washington, are going to really matter in 0:10:45.520 --> 0:10:49.160 terms of how we see this deployed as across the economy. 0:10:50.120 --> 0:10:53.720 Margin Norton, Chief Investment Strategists and Empower thank you for 0:10:53.800 --> 0:10:57.079 joining us. Now coming up, we'll be hearing from Microsoft's 0:10:57.120 --> 0:11:00.160 head of Strategic Missions and Technologies on the company's bran 0:11:00.280 --> 0:11:01.640 new quantum processor. 0:11:01.920 --> 0:11:02.720 This is Bloomberg. 0:11:14.440 --> 0:11:17.760 Microsoft just unveiled Mayor on a one, the tech giant's 0:11:17.880 --> 0:11:21.280 first quantum computing tip. We sat down with the company's 0:11:21.320 --> 0:11:25.559 executive vice president of Strategic Missions and Technologies, Jason Xander, 0:11:25.880 --> 0:11:28.040 to break down what this means for the future of 0:11:28.120 --> 0:11:29.400 quantum Take a listen. 0:11:30.000 --> 0:11:32.360 One of the best use cases that we see is 0:11:32.400 --> 0:11:34.800 going to be in places like chemistry. That's a place 0:11:34.800 --> 0:11:37.200 where we use even AI now we're using to discover 0:11:37.280 --> 0:11:39.200 new molecules and build new things. 0:11:39.400 --> 0:11:41.000 But AI is just an approximation. 0:11:41.360 --> 0:11:45.440 A quantum computer actually speaks the language of nature, which 0:11:45.600 --> 0:11:48.559 is quantum mechanics. That's what makes it so powerful. So 0:11:48.640 --> 0:11:50.720 we combine those things together, we're going to be able 0:11:50.760 --> 0:11:53.200 to do brand new things. Like I said, I'd love 0:11:53.240 --> 0:11:55.520 to get rid of forever chemicals. I would love to 0:11:55.520 --> 0:11:58.760 get rid of microplastics. We're going to need to invent 0:11:59.200 --> 0:12:02.360 new technology to be able to do that. Quantum computers 0:12:02.360 --> 0:12:04.040 are going to be able to help us accelerate it, 0:12:04.080 --> 0:12:05.439 and it's just not something you can do on a 0:12:05.480 --> 0:12:06.480 classic supercomputer. 0:12:07.559 --> 0:12:10.719 Let's talk about the competition, because Microsoft isn't the only 0:12:10.760 --> 0:12:14.680 one developing it's quantum computing tip. Google unveiled their own 0:12:14.679 --> 0:12:18.360 in December called Willow. Theirs has one hundred and five cubits. 0:12:18.520 --> 0:12:22.160 Microsoft is harnessing about eight Talk to us about how 0:12:22.200 --> 0:12:25.040 we can stack these up against each other. Is it 0:12:25.040 --> 0:12:28.440 account the cubic kind of race or is Microsoft doing 0:12:28.480 --> 0:12:31.000 something different in the approach that makes it better. 0:12:32.640 --> 0:12:35.760 And when you talk about cubas, there is sometimes this race, 0:12:35.760 --> 0:12:38.440 and industry say that I've got a ton of cubits. 0:12:38.679 --> 0:12:40.800 The real interesting question at the end of the day 0:12:40.920 --> 0:12:43.200 is what can you do with them? And so I 0:12:43.240 --> 0:12:45.880 could have a thousand cubic, but if they can't finish 0:12:45.960 --> 0:12:50.559 an actual quantum workload and application, it really doesn't matter. 0:12:50.720 --> 0:12:53.240 Or if it takes one thousand years to finish that application, 0:12:53.679 --> 0:12:56.079 climate doesn't matter. And so at the end of the day, 0:12:56.080 --> 0:12:58.640 what's most important is not the count of cubits. In 0:12:58.640 --> 0:13:00.400 some ways, that's kind of a vanity, correct. You know, 0:13:00.480 --> 0:13:03.120 that's for any vendor, not just you know, not's Google, 0:13:03.160 --> 0:13:05.559 But it's true for everyone. What really matters at the 0:13:05.640 --> 0:13:07.200 end of the day is can I get to that 0:13:07.280 --> 0:13:10.800 high count but make them useful? And that's the value 0:13:10.840 --> 0:13:13.920 of this topological conductor that we've got this topological core. 0:13:14.280 --> 0:13:18.160 These topological cubits have error resistance built in, they're small, 0:13:18.280 --> 0:13:21.360 they're fast, they're digitally controlled. There's just no one else 0:13:21.400 --> 0:13:23.440 that has that. So we can get to the scale 0:13:23.520 --> 0:13:24.600 and we can make sure. 0:13:24.400 --> 0:13:25.480 That they're useful. 0:13:25.800 --> 0:13:27.679 And like I said today, you're going to start off 0:13:27.679 --> 0:13:30.360 with a small count, just like you know transitions. Originally 0:13:30.360 --> 0:13:31.800 there weren't that many of them. There were tons of 0:13:31.840 --> 0:13:34.720 vacuum tubes. Over time, you're going to get that transition 0:13:34.840 --> 0:13:37.160 and that scale. That's what's going to help, you know, 0:13:37.280 --> 0:13:40.400 in twenty years of experimentation to get us there. Now 0:13:40.480 --> 0:13:43.040 starts the real race to go make the volume up 0:13:43.080 --> 0:13:43.720 and go higher. 0:13:44.040 --> 0:13:48.800 In January, Jensen Wong said that useful quantum computers are 0:13:49.000 --> 0:13:50.560 likely twenty years away. 0:13:51.000 --> 0:13:51.480 Is he wrong? 0:13:53.080 --> 0:13:55.160 I think that we're getting to the point, especially with 0:13:55.200 --> 0:13:58.320 this announcement, where we're years away, not decades away. And 0:13:58.400 --> 0:14:00.000 you know, I believe that part of what Jensen was 0:14:00.200 --> 0:14:02.439 referring to is some of those scale challenges that I 0:14:02.559 --> 0:14:05.520 mentioned in some of these technologies that leaving a warehouse 0:14:05.559 --> 0:14:08.319 size computer to make it work. We don't need that, 0:14:08.640 --> 0:14:10.320 and so but if you did need that, then you 0:14:10.360 --> 0:14:12.160 can imagine how it would take a long time to 0:14:12.440 --> 0:14:15.719 get through there. But from our perspective, the fact that 0:14:15.800 --> 0:14:18.240 I can put a million cubits on a chip that 0:14:18.280 --> 0:14:21.120 fits the palm in my hand. They're small, they're fast, 0:14:21.160 --> 0:14:25.000 they're digitally controlled. That means it's years, not decades. There's 0:14:25.040 --> 0:14:27.080 still a lot of work to do, but it's not 0:14:27.120 --> 0:14:30.360 going to be decades out. We're actually finding ways to accelerate. 0:14:29.880 --> 0:14:30.600 Even as we speed. 0:14:31.400 --> 0:14:36.440 Microsoft's executive vice president of Strategic Missions and Technologies, Jason Zander, there, 0:14:36.560 --> 0:14:39.080 let's get more on this announcement with Bloomberg's map day. 0:14:39.520 --> 0:14:42.440 I think back to the willowchip announcement of Alphabet and 0:14:42.480 --> 0:14:45.200 the stock rallied hard for us several days. I'm looking 0:14:45.240 --> 0:14:47.760 at the moment Microsoft has jumped about four tenser percent 0:14:47.800 --> 0:14:49.960 trading higher now on the back of this announcement. 0:14:50.000 --> 0:14:51.520 Map, and just talk us through. 0:14:51.400 --> 0:14:54.480 What it really means for Microsoft, what it means in 0:14:54.560 --> 0:14:56.880 terms of pushing its own computing forward. 0:14:57.960 --> 0:15:00.600 This means Microsoft thinks they're far enough long, they're close 0:15:00.640 --> 0:15:02.680 enough to a workable quantum machine where they say, hey, 0:15:02.720 --> 0:15:04.840 look we've built some hardware. Now, this isn't just a 0:15:04.880 --> 0:15:07.000 theoretical construct from us this is something that you know, 0:15:07.080 --> 0:15:08.920 maybe in a few years we could put in a 0:15:09.000 --> 0:15:11.840 data center in some capacity. Right, this is them saying, 0:15:11.840 --> 0:15:13.920 you know, this is not just a theoretical construct. This 0:15:14.000 --> 0:15:15.800 is something we built and we think it's you know, 0:15:15.840 --> 0:15:17.480 if not ready for prime time, they're ready to start 0:15:17.520 --> 0:15:18.280 turning these things out. 0:15:19.440 --> 0:15:21.720 Matt, do you have a sense of where this leaves 0:15:21.840 --> 0:15:25.560 the artificial intelligence priority? I think quantum has been the 0:15:25.640 --> 0:15:28.160 topic that we've all been waiting for for years, but 0:15:28.280 --> 0:15:31.320 AI came first. Where does it leave it in terms 0:15:31.320 --> 0:15:33.920 of what the company tackles the most over the next 0:15:33.960 --> 0:15:34.560 coming years? 0:15:35.200 --> 0:15:36.800 Oh go, quantum is is by no means going to 0:15:36.800 --> 0:15:39.200 supplant AI. You know, Microsoft and all of its peers 0:15:39.200 --> 0:15:40.960 in big cloud are still spending tens of billions of 0:15:40.960 --> 0:15:43.000 dollars on AI chips, on new data centers. None of 0:15:43.000 --> 0:15:45.320 that is going to go away. If you want a sense, 0:15:45.360 --> 0:15:47.800 I know, Jason Xander just said years, not decades. But 0:15:47.840 --> 0:15:49.560 it's worth checking out some of the photos of these 0:15:49.600 --> 0:15:52.600 systems that Microsoft published this morning. You know, because we're 0:15:52.600 --> 0:15:56.120 still talking about super culed you know, colder than space 0:15:56.400 --> 0:15:59.560 vacuum conditions, right, these are still operating very much in 0:15:59.600 --> 0:16:02.280 elaborate toy construct even if Microsoft built a product. So 0:16:02.480 --> 0:16:04.400 the I revolution is going to keep churning on even 0:16:04.440 --> 0:16:06.480 as they plug away on this in the background. 0:16:06.800 --> 0:16:08.040 That's Bloomberg's Matt Day. 0:16:08.040 --> 0:16:15.160 Thanks for joining us. 0:16:16.520 --> 0:16:20.960 Today's the day for Apple, the low end iPhone, larger screen, face, ID, 0:16:21.480 --> 0:16:24.280 in house, cellular modem chip, and we get the price point. 0:16:24.320 --> 0:16:26.920 The sixteen E will be five hundred and ninety nine dollars. 0:16:27.160 --> 0:16:29.680 Bloomberg's Mark gum and joins us some more. The big 0:16:29.760 --> 0:16:31.440 unveil comes a little bit later. We're getting all the 0:16:31.440 --> 0:16:32.240 details already. 0:16:32.880 --> 0:16:33.680 Yes, sixteen E. 0:16:34.000 --> 0:16:38.320 Yeah, five ninety nine, that's pretty pricey for a mid 0:16:38.320 --> 0:16:38.880 tier phone. 0:16:38.960 --> 0:16:40.400 Right, affordable, it's affordable. 0:16:40.440 --> 0:16:43.640 It's more affordable five ninety nine versus something like seven 0:16:43.720 --> 0:16:47.440 hundred dollars for the regular sixteen's one thousand dollars plus 0:16:47.480 --> 0:16:50.080 for the sixteen Pro models. You're getting most of the 0:16:50.080 --> 0:16:52.640 pro features here, right, You're missing a few, right, You 0:16:52.640 --> 0:16:54.800 don't have the dynamic island. You only have one camera 0:16:54.880 --> 0:16:57.840 versus two on the regular sixteens or three on the 0:16:57.880 --> 0:17:00.440 sixteen Pro models. But you have a screen size of 0:17:00.480 --> 0:17:02.800 six point one in Just so the same screen size 0:17:02.840 --> 0:17:05.720 as the entry level iPhone sixteen or I guess the 0:17:05.720 --> 0:17:08.719 old entry level the new mid tier, right, But this 0:17:08.760 --> 0:17:11.040 is Apple's new low end iPhone. They want this to 0:17:11.080 --> 0:17:14.800 do particularly well in China, places like India, Southeast Asia. 0:17:15.080 --> 0:17:17.200 They think this phone will help ignite a new growth 0:17:17.240 --> 0:17:19.960 story for the iPhone. Don't forget dipped one percent you 0:17:20.000 --> 0:17:22.440 over year in the holiday period. So this is very 0:17:22.480 --> 0:17:26.080 exciting for Apple and should be pretty exciting for shareholders consumers. 0:17:26.080 --> 0:17:28.879 People have not upgraded their iPhone in many years. This 0:17:29.040 --> 0:17:32.080 is this is a compelling upgrade. You got face ID, 0:17:32.520 --> 0:17:35.399 the home button is finally gone, you have USBC, you 0:17:35.480 --> 0:17:38.639 have fast charging, you have a very fast A eighteen processor, 0:17:38.720 --> 0:17:41.360 you have Apple Intelligence, you have CHAGPT integration. 0:17:41.520 --> 0:17:42.119 So it's a. 0:17:42.119 --> 0:17:45.040 Pretty compelling phone. The price though one hundred and eighty 0:17:45.080 --> 0:17:49.800 dollars more than the current iPhone sc it replaces mark. 0:17:49.880 --> 0:17:53.840 I'm super curious about what this means about Apple Intelligence. 0:17:53.960 --> 0:17:56.280 Are these phones going to have some of that new 0:17:57.040 --> 0:17:59.720 generative AI, you know. 0:17:59.640 --> 0:18:00.720 Boost to do it? 0:18:00.960 --> 0:18:03.879 Because I'm curious if this actually works in a lower 0:18:03.920 --> 0:18:06.680 cost phone. Talk to us about what we can plan 0:18:06.760 --> 0:18:09.119 to see from an AI front and if this lower 0:18:09.160 --> 0:18:11.240 cost strategy has worked for Apple in the past. 0:18:11.480 --> 0:18:13.720 So you're going to get the aaighteen chip and the 0:18:13.760 --> 0:18:17.159 necessary RAM requirements in this new model to support the 0:18:17.280 --> 0:18:20.199 on device models, the in cloud models that run as 0:18:20.280 --> 0:18:23.440 part of Apple Intelligence. You have that open AI integration 0:18:23.640 --> 0:18:26.200 in Siri. In the new writing tools feature, you'd be 0:18:26.280 --> 0:18:28.720 able to download all the AI apps like deep Seek 0:18:28.840 --> 0:18:32.480 and open Ai and Gemini and Copilot that are available 0:18:32.480 --> 0:18:35.359 on the App Store already. So from an AI standpoint, 0:18:35.400 --> 0:18:37.240 it's also a good citizen. But in terms of what 0:18:37.280 --> 0:18:40.480 Apple's doing with Siri and its own generative AI models, 0:18:40.480 --> 0:18:42.400 there are clearly a few years behind at this point, 0:18:42.440 --> 0:18:44.960 two or three years behind. They're supposed to launch a 0:18:45.040 --> 0:18:47.560 new AI, a fied version of Siri this year. I 0:18:47.600 --> 0:18:50.359 reported last week it's being delayed, probably from April to 0:18:50.440 --> 0:18:53.520 somewhere between May and June. But from an AI standpoint, 0:18:53.520 --> 0:18:55.679 this phone, if you buy it, we'll set you up 0:18:55.720 --> 0:18:57.280 big time to be able to run all the future 0:18:57.320 --> 0:19:00.360 AI features that all these companies, including app are trying 0:19:00.359 --> 0:19:01.200 to dream up right now. 0:19:01.359 --> 0:19:03.240 It's going to be available from February twenty eighth. 0:19:03.520 --> 0:19:06.600 Why the timing here and what we're seeing in this 0:19:06.640 --> 0:19:10.359 focus is it that we finally saw this reduction in 0:19:10.440 --> 0:19:12.679 revenue growth that we've seen more broadly. Is it the 0:19:12.760 --> 0:19:15.440 China anxiety? Is it the geopolitics that plays here? 0:19:15.800 --> 0:19:20.440 So Apple typically releases these types of products, lower end devices, iPads, 0:19:20.600 --> 0:19:23.640 non excite, the products that are another most exciting products 0:19:23.680 --> 0:19:27.000 in this sort of January to May time period. That 0:19:27.119 --> 0:19:29.800 February is a little bit earlier than typical for an 0:19:29.880 --> 0:19:32.720 SE You normally would see that somewhere between late March 0:19:32.760 --> 0:19:35.040 and April. So I would imagine they brought the release 0:19:35.119 --> 0:19:38.600