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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 2: weekdays at ten am Eastern on Affle Card playing Android

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Speaker 2: you get your podcasts, or watch us live on YouTube.

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Speaker 3: Under those retailers, I mean Dollar General, the numbers came in,

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Speaker 3: blow expectations, guidance, blow expectations, stock well, blow expectations of

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Speaker 3: socks down twenty eight percent today, hitting an all time low.

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Speaker 3: My question, Emily and will talk to Jen Bartashes, She's

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Speaker 3: a Bloomberg Intelligence. My question is is the consumer versus

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Speaker 3: Dollar General specific? So Jen Bartash's Bloomberg Intelligence. Thank so

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Speaker 3: much for joining us here. I'm trying to get a

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Speaker 3: sense Jen of kind of how much of this is

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Speaker 3: just the lower end consumer facing economic headwinds versus Dollar

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Speaker 3: General just doesn't have it together in terms of good stores,

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Speaker 3: good product, good inventory management.

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Speaker 4: Help us break it down.

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Speaker 5: Yeah, good morning, Paul. So when we look in at

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Speaker 5: Dollar General, we do think a lot of their current

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Speaker 5: troubles are self inflicted. There's no doubt that the low

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Speaker 5: income consumer is under pressure, but this is their core

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Speaker 5: consumer that they know better than anybody else. And the

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Speaker 5: fact that they're misreading where that consumer is and not

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Speaker 5: you know, not ready to serve them in the way

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Speaker 5: that they need to be served is a little bit concerning.

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Speaker 5: So we're looking for you know, they're saying that they're

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Speaker 5: going to increase, you know, spending on promotions, they're going

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Speaker 5: to mark down prices, try to get customers back into stores.

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Speaker 5: But we'll be really watching them for the rest of

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Speaker 5: the year and how they execute against those plans.

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Speaker 6: So John Tucker was talking about how Dollar General needed

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Speaker 6: to improve their store experience, perhaps take up a get

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Speaker 6: a mom, get a mom.

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Speaker 4: I'm just like once a week, maybe somebody clean the store.

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Speaker 6: How much of this is actually about the products that

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Speaker 6: they're offering versus the in store experience. When we talk

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Speaker 6: about Dollar General trying to lure customers back in.

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Speaker 5: It's a great question. And having clean, safe, well lit

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Speaker 5: stores is a basic of retail. And you know, when

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Speaker 5: Dollar General says they're executing on a back to basic strategy,

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Speaker 5: that should be part of that strategy. We've all seen

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Speaker 5: reports of just you know, boxes piled in the aisles

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Speaker 5: and unable to navigate and consumers, you know, not having

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Speaker 5: a great experience in store. I think that that is improving,

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Speaker 5: it's just not yet at the pace where it's consistent

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Speaker 5: across their entire chain and where consumers are really responding

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Speaker 5: to it.

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Speaker 4: Hey, Jen, if.

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Speaker 3: Consumer doesn't go to Dollar General, where does that consumer go?

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Speaker 5: Well, you know, it's interesting, but we're seeing big market

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Speaker 5: share gains at the likes of Walmart also in the

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Speaker 5: hard discount grossers like Aldi. So you know, consumers are

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Speaker 5: looking for where they're going to get the best deal,

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Speaker 5: and whether that's on an everyday low price it's something

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Speaker 5: like a Walmart or an Aldi, or are they're doing

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Speaker 5: more cherry picking of deals, you know at regular grocery

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Speaker 5: stores or other types of of retail stores, buying things

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Speaker 5: specifically on promotion in order to save money. So, you know,

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Speaker 5: Dollar General talked about not getting enough of the available

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Speaker 5: share that's up for grabs, But part of that is

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Speaker 5: is that other companies like a Walmart are really executing

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Speaker 5: well right now and are capturing more of those consumers.

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Speaker 6: Let's talk about the stock because it is down twenty

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Speaker 6: eight percent right now, the worst inter day drop on record.

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Speaker 6: What do you make of that move? Is that really

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Speaker 6: justified today?

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Speaker 5: Well? That's a very very steep drop. And I think

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Speaker 5: part of the reaction is that in the second quarter,

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Speaker 5: the the the kind of sentiment was that the turnaround

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Speaker 5: plan was gaining traction, and all of a sudden, the

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Speaker 5: bottom sort of fell out of that. And that's the

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Speaker 5: response that you're seeing with the stock today. You know,

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Speaker 5: is it as bad as you know, as the stock

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Speaker 5: price might might be saying. It's hard to say. I mean,

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Speaker 5: they still had positive same store sales, they still had

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Speaker 5: positive traffic into stores. You know, they seem to have

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Speaker 5: a plan for how they're going to build on that

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Speaker 5: in the second half. But it really at this point,

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Speaker 5: the message is that people want to see execution by

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Speaker 5: the management team.

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Speaker 4: Hey, Jen, thanks so much for joining us. Really appreciate it.

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Speaker 3: Jen Bartashes, she's a senior retail analysts for Bloomberg Intelligence.

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Speaker 3: Let me tell you, folks, Jen, we asked Jen Bartashes

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Speaker 3: to join us, I don't know, twelve thirteen, fourteen years

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Speaker 3: ago Bloomberg Intelligence. She was already a season Bloomberg executive

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Speaker 3: and she's like, I'm not a research analyst. We said, no,

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Speaker 3: you're really, really smart. We'll teach you how to be

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Speaker 3: a rechannel analyst, and sure enough, here we are, and

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Speaker 3: she's one of the leading voices on Wall Street. We

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Speaker 3: appreciate getting a few minutes of a time. She really

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Speaker 3: knows the retail space, helping us break down the dollar

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Speaker 3: general stuff.

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Speaker 4: So we appreciate that.

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Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 2: weekdays at ten am Eastern on applecar Play and Android

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Speaker 4: Let's check in with Dan Morgan.

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Speaker 3: He's a senior portfolio manager Sonova's trust company. Joining us

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Speaker 3: on zoom from Atlanta. Hey, Dan, what did you make

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Speaker 3: of the Nvidia.

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Speaker 4: Earnings last night? The conference call?

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Speaker 7: All event, Well, I have kind of a little bit

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Speaker 7: more of a positive bias view towards the stock and

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Speaker 7: maybe the rest of the street. Does. You have to

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Speaker 7: bear in mind that we added in video to our

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Speaker 7: buy list back in about twenty eighteen, twenty nineteen, when

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Speaker 7: they were, you know, really gaining a lot of momentum

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Speaker 7: in the data center space, kind of gaining market share

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Speaker 7: against the likes of AMD and Intel. And up to

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Speaker 7: that point, as you know, they were construed as a

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Speaker 7: company that produced chips that were going into you know,

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Speaker 7: various video games that people played, and you know, they

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Speaker 7: had a big spike in their demand during COVID and

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Speaker 7: then it kind of pulled back on that, and then

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Speaker 7: obviously the whole thing flipped where their data center revenue

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Speaker 7: became far greater than the gaming unit. And then the

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Speaker 7: AI thing exploded about you know, a couple of years ago.

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Speaker 7: It's the rest is history. So you know, overall, to

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Speaker 7: be honest with you, I think this is a stellar report.

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Speaker 7: I think the street has just gotten a point where

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Speaker 7: it becomes so spoiled with these huge, you know, colossal

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Speaker 7: beats that Nvidia's put together the last four or five

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Speaker 7: quarters that their expectations have just gone off the you know,

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Speaker 7: off the ray. I mean, even if you look at

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Speaker 7: this number they did on the third quarter, you know,

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Speaker 7: they topped the consensus essmate. Obviously there was Whisher numbers

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Speaker 7: at thirty three and thirty four billion, but you know,

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Speaker 7: let's face reality, it was a strong, strong number thirty

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Speaker 7: two point five billion. So I think everything is still

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Speaker 7: on track with Nvidia to ship the Blackwell chip. Out

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Speaker 7: next year in volume, and I would expect margins to

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Speaker 7: continue to rise because the average selling prices on these

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Speaker 7: Blackwells are anywhere from twenty five you know, the thirty

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Speaker 7: five thousand, far greater than what they're on the hopper

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Speaker 7: of the H twenties.

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Speaker 6: Talk a little bit about some of the production issues

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Speaker 6: that Nvidia is having with the Blackwell chips and what

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Speaker 6: did you learn from this earnings report about how quickly

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Speaker 6: those can be resolved?

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Speaker 7: Emily, that's been one of the big issues, also supply

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Speaker 7: constraints that they try to build out this network of

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Speaker 7: suppliers to kind of ramp up for Blackwell. I think

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Speaker 7: it was kind of expected that this upcoming October quarter

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Speaker 7: that there would be some shipments out, but it's not

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Speaker 7: going to be in volume. There's still going to be

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Speaker 7: relying on the H twenty and the H two hundred

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Speaker 7: like they did in this quarter really to really post

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Speaker 7: huge gains. I just think it's growing pains. I really

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Speaker 7: am not concerned about it. I think they'll work through it.

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Speaker 7: They've done a dynamite job back when we're having huge

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Speaker 7: supply constraints in the overall chip sector. You all probably remember,

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Speaker 7: you know, trying to buy a new automobile and you

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Speaker 7: can get a chip to go in a new car.

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Speaker 7: I mean, they worked through that and still did very well.

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Speaker 7: So I think they'll get through this hurdle and they'll

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Speaker 7: start doing volume probably, like I said, first half of

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Speaker 7: twenty five. So again, you know, Emily and Paul, you're

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Speaker 7: asking the wrong guy, right, because I'm an eternal n

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Speaker 7: Vidio bull.

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Speaker 3: Hey, Dan, farbe it from me to call you an

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Speaker 3: old man, but you've been covering his tech industry for

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Speaker 3: a long time.

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Speaker 4: Where are the competitors here? That's kind of my question.

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Speaker 4: I would think with this we'd see the AMDs of the.

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Speaker 3: World and some others, really Intel, even Intel, Maybe why

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Speaker 3: does Nvidia have seemingly.

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Speaker 4: Such a stranglehold on this part of the market.

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Speaker 7: You know, it's interesting, Paul. When I started really you know,

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Speaker 7: diving into the stock and covering you very closely, sitting

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Speaker 7: in on the developer conferences and all the conference calls,

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Speaker 7: they would mention AI. They talk more about omniverse, and

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Speaker 7: then of course the AI thing took off, and that,

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Speaker 7: by the way, we're seventy percent of the AI market.

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Speaker 7: They would mention that in their public release and nobody

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Speaker 7: would care. But you're right, you know, everybody else has

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Speaker 7: been extremely late getting to the table. You've got AMD

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Speaker 7: with their Mi three hundred chips. You've got Intel rolling

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Speaker 7: out their Dotty two, Gotty three and their Falcon shores

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Speaker 7: next year, but again that's in twenty five. Marvel has

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Speaker 7: the pam DSP chip. You probably covered on your show

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Speaker 7: about yahweh coming out with their Ascend nine ten C

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Speaker 7: chip to compete against the H twenty. But you know,

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Speaker 7: Paul and Emily, where the real competition may come in

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Speaker 7: is from the hyperscalers, who are their top purchasers, right

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Speaker 7: about fifty percent of their revenues coming from them with

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Speaker 7: their own internal chips. You know, we know that Meta,

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Speaker 7: We know that Google has the TensorFlow chip that they

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Speaker 7: developed with Broadcom. They have version six right now. I

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Speaker 7: think there's a dual chip coming out called Athena that

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Speaker 7: they're working on also. So there's there's a lot with AMD.

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Speaker 7: There's a lot of things going on internally where these

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Speaker 7: hyperscalers are trying to become rest reliant on Nvidia. But

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Speaker 7: quite frankly, guys, the chips are coming out with still

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Speaker 7: aren't going to pop the performance they're going to get

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Speaker 7: out of blackwell, but I think I'd use it for

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Speaker 7: lesser capability, you know, task so to speak, and try

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Speaker 7: to save some money from as I mentioned, for the

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Speaker 7: average selling prices are very higher on these newer chips.

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Speaker 6: So revenue doubled in the quarter, Dan, but yet the

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Speaker 6: stock is down this morning. I'm just wondering. I know

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Speaker 6: you said that investors might be getting a little spoiled.

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Speaker 6: What do we need, like, what does the street want

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Speaker 6: to see out of Nvidia then to move this stock

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Speaker 6: up higher? If revenue doubling isn't isn't enough?

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Speaker 7: Yeah, I mean again, Emily, it's perplexing for me. I

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Speaker 7: Like you said, you look at the revenue year over year,

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Speaker 7: it was up you know a huge amount, one hundred

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Speaker 7: and twenty two percent. You had the data center group,

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Speaker 7: which one hundred and fifty four percent. I've got the

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Speaker 7: data center group going over one hundred billion dollars in

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Speaker 7: revenue for twenty five compared to forty four billion them

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Speaker 7: in twenty four. So that's more than a double just

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Speaker 7: in that unit. So again, this has become such a

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Speaker 7: momentum stock, right, I mean, trades, it's sixty times price

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Speaker 7: to book. The Philadelphia Stock Exchange Index trades at six

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Speaker 7: times book. You know, it's a trailing seventy five times earnings.

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Speaker 7: So you have this massive multiple, this huge momentum, you

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Speaker 7: have this situation where you can't make any errors at

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Speaker 7: anything that you're reporting, otherwise you're bringing the stock down.

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Speaker 7: So again, I just think quite frankly, and Vidia has

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Speaker 7: kind of spoiled investors, you know, since that Dynamite quarter

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Speaker 7: about two and a half years ago, and people just

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Speaker 7: keep raising the bar and raising the bar and they're

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Speaker 7: never satisfied, but they're still doing really well.

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Speaker 3: Hey, Dan, you know you raise for me what I

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Speaker 3: think would be the biggest risk, which is my customers

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Speaker 3: are going to develop their own chips.

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Speaker 4: Frame that risk out for me, and how do you

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Speaker 4: think about that?

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Speaker 7: Yeah, I mean that is a risk. Every single hyperscale,

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Speaker 7: as I mentioned, has their own chips. Probably the best

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Speaker 7: chip out there is going to be coming from Alphabet

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Speaker 7: and the Broadcom joint venture with their Tenser version six

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Speaker 7: what they're bringing out. So you know, that's the worry.

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Speaker 7: Even Apple has their own chips now. So the worry

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Speaker 7: is that instead of buying all their chips from the

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Speaker 7: video or eighty ninety percent of chips from the video,

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Speaker 7: maybe a little bit from AMD, let's say, or Marvel.

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Speaker 7: They may start, you know, keeping thirty forty percent in

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Speaker 7: house in saving money and using their own chips. So

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Speaker 7: that does potentially slow demand down for nvidio chips in

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Speaker 7: the data center space. However, if you're a you know,

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Speaker 7: probably the man, you know, someone in charge of this

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Speaker 7: or a video, you're saying, well, guess what we're We're

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Speaker 7: starting to get demand from other sources, right enterprise, We've

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Speaker 7: got demand from Tesla. They talk about different governments who

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Speaker 7: are now buying data center chips for their own use.

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Speaker 7: So you can make a case that yeah, maybe you're

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Speaker 7: going to lose a little bit from the homegrown stuff

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Speaker 7: coming from the hyperscalal, but then you're going to be

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Speaker 7: able to grow it out by the fact that you're

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Speaker 7: going to get greater demand from these other markets that

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Speaker 7: you're not getting right now. So you know, it's great

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Speaker 7: to Yeah, I mean there's a lot of moving parts,

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Speaker 7: but I mean I still feel u Paul Emily, that

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Speaker 7: we're at the beginning of this this ride out and

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Speaker 7: you know, the key to making money and technology and

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Speaker 7: all you alluded to the fact that I've been in

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Speaker 7: this for a long time. I've been writing, research and

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Speaker 7: following and buying tech stock since nineteen ninety. The key

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Speaker 7: is to ride a wave, and if you ride away,

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Speaker 7: it always goes up and then rides out. And you know,

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Speaker 7: in the early nineties you had the big you know,

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Speaker 7: move towards the internet, everybody going to a mobile phone.

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Speaker 7: If you caught one of those waves at the right stock,

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Speaker 7: you did great. So exactly you're on an AI wave

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Speaker 7: in the chip space right now with n video.

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Speaker 3: Very good, Dan Morgan, thanks so much for that. We

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Speaker 3: really appreciate gating a few minutes of your time, Dan Morgan.

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Speaker 3: He's a senior portfolio manager Sonova's trust company down there

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Speaker 3: in Atlanta. He was early on in video, he was

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Speaker 3: right on in video, and it's been a heck of

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Speaker 3: a run this stock.

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Speaker 4: Just this year, up one hundred and forty two percent year.

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Speaker 2: Today, you're listening to the Bloomberg Intelligence Podcast. Catch us

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Speaker 2: live weekdays at ten am Eastern on applecar Playing and

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Speaker 2: broud Otto with the Bloomberg Business app. Listen on demand

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Speaker 2: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 3: Like yourfeos sitting in for Alex Steel on Paul Sweeney.

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Speaker 3: We're live here in our Bloomberg Interactive Brokers studio. We're

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Speaker 3: streaming live on that internet thing that Gene Monster keeps

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Speaker 3: talking about. I think you go to YouTube dot com

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Speaker 3: and search Bloomberg Podcast, and I think.

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Speaker 4: That's where you'll find us. I'm not really sure you'll

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Speaker 4: know that.

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Speaker 3: One of the topics that Alex Steel and I like

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Speaker 3: to talk about Emily.

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Speaker 4: Is commercial real estate.

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Speaker 3: So it's just fascinating how that industry is adapting to

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Speaker 3: a post pandemic world, particularly in the office, but also

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Speaker 3: just across the border commercial real estate and what it

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Speaker 3: means for the banks and all that kind of stuff. Fortunately,

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Speaker 3: we've got a lot of good folks to help us figure.

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Speaker 4: Out what going on.

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Speaker 3: And Abigail Doolittle, I mean, she covers all the markets

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Speaker 3: for Bloombergers, but she's been really helpful in bringing some

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Speaker 3: smart commercial real estate people into Bloomberg Radio, and we

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Speaker 3: appreciate Abigail. She joins us here in our studio along

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Speaker 3: with Scott Kelly. He's a founder and CEO of Ato's

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Speaker 3: Capital real Estate. Scott's one of these guys. He's part

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Speaker 3: of that Morgan Stanley real Estate mafia. They're everywhere. Anytime

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Speaker 3: you see a commercial real estate person come in here

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Speaker 3: with some money in their pockets talking to investing. They

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Speaker 3: did a stint at Morgan Stanley real Estate and they

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Speaker 3: just the best on the street as long as I've

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Speaker 3: been on the street.

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Speaker 4: Scott, thanks so much for joining us here.

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Speaker 3: I guess my question is simply, where do you guys

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Speaker 3: see the best value and opportunity in commercial real estate today?

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Speaker 3: Are you going to the Lipstick Building or something like

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Speaker 3: it on Third Avenue that's dealing with occupants issues.

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Speaker 4: Are you looking at other places?

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Speaker 8: Well, I would I'd make two points one. People have

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Speaker 8: been us included anticipating this stressed wave of real estate

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Speaker 8: which has not come as quickly as folks thought. But

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Speaker 8: it's also inevitable just because the refinancing rates are totally

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Speaker 8: disconnected from the underwriting of a bunch of these properties.

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Speaker 8: So the answer is no, We're focused on places we

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Speaker 8: can add value. And we've got a new company called

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Speaker 8: waiver Tree Property Partners, which we've got development capabilities from

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Speaker 8: guys that were with the Fract family for a long time.

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Speaker 8: I mean, they're good developers. We think that the combination

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Speaker 8: of financial expertise and development. Redevelopment is going to be

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Speaker 8: the key to making money going forward.

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Speaker 9: So a question that I have, Scott, is that we've

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Speaker 9: all been waiting for this crash and commercial real estate,

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Speaker 9: and there were some big headlines in twenty twenty three,

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Speaker 9: there were some big office buildings that were defaulted on,

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Speaker 9: But since then there really hasn't been that much. It

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Speaker 9: seems like properties are still not trading maybe a couple

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Speaker 9: here there, Is that true? And is there going to

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Speaker 9: be a moment where all of a sudden a ton

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Speaker 9: of properties are going to flood the market or is

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Speaker 9: it just going to take a really long time to

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Speaker 9: work this thing out?

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Speaker 8: Well, your observation is absolutely true. You know, again, people

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Speaker 8: have been waiting for the tidal wave of stuff to happen.

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Speaker 8: And there's a where is it there's a billion Well,

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Speaker 8: there's a billion dollar loan portfolio on the market right

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Speaker 8: now from a foreign bank that's just getting out of everything,

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Speaker 8: and some of it's performing, a lot of it's not.

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Speaker 8: There are a couple more coming later this year. But interestingly,

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Speaker 8: as we discussed previously, so much of this bad debt

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Speaker 8: is held in you know, regional and community banks, and

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Speaker 8: they're just extend it's extended and pretend you know they

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Speaker 8: they're renegotiating the terms, they're they're putting out the maturities.

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Speaker 4: They're never going to get repaid.

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Speaker 8: Can they do that for Well, I think it's a

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Speaker 8: regulatory matter. I think the regulators don't have they don't

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Speaker 8: want to cause a banking crisis in an election year.

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Speaker 8: So I think the thing that changes is after the

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Speaker 8: election the regulators start to and again, this bank that's

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Speaker 8: selling a billion dollar portfolio is because there is a

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Speaker 8: European bank, and it's because the European regulators are saying,

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Speaker 8: get rid of this trash. And so I think that

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Speaker 8: doesn't happen until after the election. But after the election,

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Speaker 8: I think it really does.

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Speaker 9: Interesting, So twenty twenty five could be kind of painful.

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Speaker 6: Yes, we've been talking a lot about Nvidia today and

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Speaker 6: this hunger for AI and demand. I'm wondering how that

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Speaker 6: is impacting commercial real estate. Are you seeing opportunities in

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Speaker 6: data centers?

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Speaker 8: Well, yes, I mean data centers are one of the

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Speaker 8: data centers are one of the big Again, real estate,

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Speaker 8: if you want to go by category, office has got issues.

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Speaker 8: Retail got issues increasingly apartments due to some extent, but

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Speaker 8: data centers have just been on fire, and you know,

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Speaker 8: and there continues to be an almost unquenchable demand for

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Speaker 8: data center capacity. So yeah, I think, I mean, I

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Speaker 8: do think the bigger opportunity with AI and real estate,

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Speaker 8: which we're working on with a partner, is to really

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Speaker 8: synthesize the information in a way to help you make

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Speaker 8: not just good commercial judgments, but informed commercial judgments, data driven.

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Speaker 3: Scott, You've been in this business for decades, you and

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Speaker 3: your team, everybody knows you, every banker knows every lender

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Speaker 3: knows you. When you go out to buy a you know,

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Speaker 3: a property today, you're the equity. Can you get a

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Speaker 3: loan for your capital structure? Are the banks lending?

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Speaker 8: Well, that's I mean, that's that, honestly is the big

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Speaker 8: issue that yes, the banks are lending, but at terms

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Speaker 8: which are radically different than most of the current owners anticipated.

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Speaker 8: So you know, somebody that has borrowed money at three percent,

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Speaker 8: all of a sudden they get a term sheet back

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Speaker 8: from the bank and it's seven or eight percent at

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Speaker 8: the same loan to value ratios. So that's what inevitably

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Speaker 8: is going to cause a big turnover in a repricing

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Speaker 8: of the industry. It just hasn't happened yet. And the

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Speaker 8: subordinated lenders are you know, are in control of all

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Speaker 8: these situations when that debt matures. It's just that, you know,

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Speaker 8: rather than pull the trigger right now, the banks I think,

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Speaker 8: have been encouraged to push it out for a year

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Speaker 8: or two so that the problem is profound, it's identifiable.

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Speaker 8: It's just going to take a while to come to fruition.

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Speaker 9: I'm so interested in what you were saying about the

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Speaker 9: regional banks because when you joined US about a year ago,

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Speaker 9: you were saying that you thought that there could be

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Speaker 9: a crisis once we put this election past. Us has

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Speaker 9: enough extend and pretend to happen that twenty twenty five

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Speaker 9: might not be awful. Do I mean, do you think

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Speaker 9: that there could be a regional banking crisis if the

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Speaker 9: regulators wake up?

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Speaker 8: Well, I think it's going to take as we talked about,

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Speaker 8: you know, I think this is going to be a

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Speaker 8: slow burn. I mean, this isn't in RTC type situation

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Speaker 8: where they're gonna you know, liquidate the I mean basically

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Speaker 8: the government liquidated the whole savings and loan industry. So

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Speaker 8: it's a huge opportunity that probably lasted twenty four months.

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Speaker 8: This is not going to be that way because this

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Speaker 8: debt is all over the place. It's in really you know,

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Speaker 8: bad refinancing, you know condition. But it's going to be

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Speaker 8: a slow burn as opposed to everything happening at once.

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Speaker 8: So I think the answer is there's going to be

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Speaker 8: a lot more distress in twenty five, but the opportunity

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Speaker 8: is going to last for a while.

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Speaker 4: For an investor Scott.

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Speaker 3: Here in New York City, there's so many families that

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Speaker 3: are just owned so much real estate here in New

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Speaker 3: York City hav been so successful over generations. Any of

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Speaker 3: them stressed right now, really financially stressed.

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Speaker 8: Some that have been more active developing recently. I mean,

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Speaker 8: I'm going to tell you who, but yes there are,

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Speaker 8: I mean the long term owners who've owned for a

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Speaker 8: long period of time. I mean, if you look at

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Speaker 8: the New York market, if you own good office properties

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Speaker 8: as an example, the one thing that's really happening in

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Speaker 8: the office market here is that all these buildings are

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Speaker 8: being heavily immendatized. You look at you know, the three

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Speaker 8: star restaurants, the gyms, the places for you know, tenants

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Speaker 8: to hang out. I mean that's the way that the classic,

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Speaker 8: really high quality office buildings have been able to retain

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Speaker 8: their tenants, and they're really in pretty good shape. A

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Speaker 8: lot of those are owned by roots, which tend to

435
00:22:54,200 --> 00:22:56,880
Speaker 8: be low leverage, and a lot of these families don't

436
00:22:56,880 --> 00:22:59,720
Speaker 8: have a lot of leverage. The people that are stressed

437
00:22:59,840 --> 00:23:03,440
Speaker 8: are the ones that have levered up to do new developments,

438
00:23:04,320 --> 00:23:07,800
Speaker 8: you know recently, particularly in the office space that just

439
00:23:07,880 --> 00:23:11,399
Speaker 8: haven't worked out. But there is going to be the

440
00:23:11,440 --> 00:23:14,720
Speaker 8: winners and losers that if you have you know, class

441
00:23:14,760 --> 00:23:19,080
Speaker 8: B C office buildings, those are going to be really tough,

442
00:23:19,560 --> 00:23:22,320
Speaker 8: where the Class A ones continue to perform pretty well.

443
00:23:22,320 --> 00:23:24,439
Speaker 3: What just thirty seconds, what percentage of in York real

444
00:23:24,480 --> 00:23:28,760
Speaker 3: estate would you characterize this Class A oh ten?

445
00:23:29,119 --> 00:23:30,120
Speaker 4: See that's my point.

446
00:23:30,240 --> 00:23:32,080
Speaker 3: I think this is going to get ugly, and that's

447
00:23:32,080 --> 00:23:34,400
Speaker 3: what I keep waiting for, and we just haven't seen.

448
00:23:35,119 --> 00:23:36,520
Speaker 4: I don't know. I don't know how it's going to plan.

449
00:23:36,640 --> 00:23:37,119
Speaker 4: I don't know.

450
00:23:37,400 --> 00:23:39,399
Speaker 3: But here on Bloomberg Intelligence, we're going to continue to

451
00:23:39,400 --> 00:23:41,640
Speaker 3: cover this commercial real estate business because you think it's

452
00:23:41,720 --> 00:23:44,439
Speaker 3: really interesting. We've got smart people like Scott Kelly, founder

453
00:23:44,440 --> 00:23:47,359
Speaker 3: and CEO of Ato's Capital real Estate, is also waiver

454
00:23:47,480 --> 00:23:50,600
Speaker 3: Tree Property Partners managing. Remember there, and then our good

455
00:23:50,640 --> 00:23:52,960
Speaker 3: friend Abigail Do, a little market supporter for Bloomberg News.

456
00:23:53,000 --> 00:23:55,920
Speaker 3: Abigail's got so many great relationships here and we appreciate

457
00:23:55,960 --> 00:23:57,480
Speaker 3: her sharing them with Bloomberg Radio.

458
00:23:57,480 --> 00:24:00,159
Speaker 4: Here talking about the commercial real estate business. I don't know.

459
00:24:00,400 --> 00:24:01,960
Speaker 6: It's all about gyms and offices.

460
00:24:02,080 --> 00:24:02,919
Speaker 4: I guess. I don't know.

461
00:24:03,440 --> 00:24:05,560
Speaker 3: Back in the day, I came in at nine o'clock,

462
00:24:05,560 --> 00:24:08,080
Speaker 3: We worked like ten or eleven o'clock. We got dinner

463
00:24:08,280 --> 00:24:11,200
Speaker 3: and a car home, and that was That was just plenty.

464
00:24:11,359 --> 00:24:12,560
Speaker 6: Now you need a sawn it, I know.

465
00:24:12,680 --> 00:24:13,399
Speaker 4: Now I need to sign it.

466
00:24:15,880 --> 00:24:19,760
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

467
00:24:19,840 --> 00:24:22,880
Speaker 2: weekdays at ten am Eastern on Apple card Play and

468
00:24:22,880 --> 00:24:25,800
Speaker 2: Android Outo with the Bloomberg Business app. You can also

469
00:24:25,880 --> 00:24:29,359
Speaker 2: listen live on Amazon Alexa from our flagship New York station,

470
00:24:29,760 --> 00:24:33,240
Speaker 2: Just say Alexa playing Bloomberg eleven thirty.

471
00:24:34,359 --> 00:24:37,040
Speaker 3: Let's switch over to Nvidia here. I mean Stock's down

472
00:24:37,040 --> 00:24:38,280
Speaker 3: two point six percent.

473
00:24:38,560 --> 00:24:38,960
Speaker 4: I don't know.

474
00:24:39,000 --> 00:24:42,399
Speaker 3: I thought the numbers were darn good. I need some

475
00:24:42,480 --> 00:24:45,040
Speaker 3: perspective on this name. I need some perspective on AI

476
00:24:45,160 --> 00:24:47,399
Speaker 3: because to me and I think for a lot of

477
00:24:47,520 --> 00:24:50,360
Speaker 3: listeners a lot of viewers, AI is still something new.

478
00:24:50,440 --> 00:24:52,600
Speaker 3: It's a new technology. I'm not really sure what it is.

479
00:24:52,960 --> 00:24:55,760
Speaker 3: But our next guest has been really helpful and explaining

480
00:24:55,760 --> 00:24:57,480
Speaker 3: what AI is and explaining.

481
00:24:57,040 --> 00:24:58,720
Speaker 4: What the opportunities are. That is Gene Munster.

482
00:24:59,000 --> 00:25:01,439
Speaker 3: He's a managing partner co founder of Loop Adventures, one

483
00:25:01,480 --> 00:25:05,040
Speaker 3: of the leading voices in my opinion on all things technology.

484
00:25:05,320 --> 00:25:07,320
Speaker 4: Hey, Gene, thanks so much for joining us.

485
00:25:07,320 --> 00:25:09,600
Speaker 3: Can you give us your take on what we heard

486
00:25:09,600 --> 00:25:12,280
Speaker 3: from Nvidia last night and how we should think of

487
00:25:12,600 --> 00:25:14,399
Speaker 3: in Nvidia and AI going forward.

488
00:25:16,240 --> 00:25:19,760
Speaker 10: Well, my take starts with what is a misunderstanding related

489
00:25:19,800 --> 00:25:22,760
Speaker 10: to I think the narrative around this quarter and the

490
00:25:22,800 --> 00:25:26,960
Speaker 10: guidance specifically, and the narrative is that the guidance is

491
00:25:27,160 --> 00:25:29,280
Speaker 10: not as exciting as it was in the past. And

492
00:25:29,320 --> 00:25:32,760
Speaker 10: so a few months ago when they reported their April quarter,

493
00:25:33,119 --> 00:25:36,080
Speaker 10: they guided the out quarter of the July quarter up

494
00:25:36,119 --> 00:25:39,160
Speaker 10: by five point two percent. So that's kind of the bogie.

495
00:25:39,160 --> 00:25:43,920
Speaker 10: That's how investors thought about this October guide last night,

496
00:25:44,440 --> 00:25:46,639
Speaker 10: and they only guided October up by two and a

497
00:25:46,720 --> 00:25:52,080
Speaker 10: half percent, and that diminishing return effectively on the upside

498
00:25:52,200 --> 00:25:55,600
Speaker 10: is something that is dominated. I think this view that

499
00:25:56,680 --> 00:25:59,960
Speaker 10: the second derivative is not working in the advantage of Nvidia,

500
00:26:00,440 --> 00:26:04,760
Speaker 10: that's just not the beats are raises are not as exciting.

501
00:26:05,440 --> 00:26:08,800
Speaker 10: But that view misses a critical point. And it is

502
00:26:09,000 --> 00:26:11,000
Speaker 10: very clear, even though they were not clear on the

503
00:26:11,040 --> 00:26:15,080
Speaker 10: call that this Blackwell chip, this next generation chip, was

504
00:26:15,119 --> 00:26:17,760
Speaker 10: delayed by three months, and if you go back and

505
00:26:17,840 --> 00:26:20,800
Speaker 10: listen to their earnings call three months ago, they were

506
00:26:20,920 --> 00:26:24,240
Speaker 10: very clear. They use the word ramp in October. That's

507
00:26:24,240 --> 00:26:27,080
Speaker 10: when the revenue is going to ramp for Blackwell, and

508
00:26:27,119 --> 00:26:28,919
Speaker 10: now they're saying that that is going to ramp in

509
00:26:28,960 --> 00:26:32,680
Speaker 10: the January quarter. So, Paul, if you take that revenue

510
00:26:32,720 --> 00:26:35,520
Speaker 10: and basically bring it back into the October quarter, it's

511
00:26:35,520 --> 00:26:38,720
Speaker 10: about three billion in revenue. They would have actually raised

512
00:26:38,800 --> 00:26:42,600
Speaker 10: revenue by twelve percent, and I think so that's an

513
00:26:42,640 --> 00:26:46,640
Speaker 10: acceleration from the five percent raise that they did three

514
00:26:46,640 --> 00:26:49,840
Speaker 10: months ago. I think that is the reality is that

515
00:26:49,920 --> 00:26:52,280
Speaker 10: this business continues to accelerate nicely.

516
00:26:53,800 --> 00:26:57,879
Speaker 6: Gene. I think intuitively, investors when they see a stock

517
00:26:57,960 --> 00:27:02,600
Speaker 6: that's run up so much so quickly, they get nervous

518
00:27:02,640 --> 00:27:05,400
Speaker 6: that we've hit you know, we've hit euphoria, we've hit

519
00:27:05,920 --> 00:27:10,600
Speaker 6: peak AI. What are you telling you know, those investors

520
00:27:10,600 --> 00:27:13,200
Speaker 6: who are just skeptical of just how quickly this stock

521
00:27:13,480 --> 00:27:16,679
Speaker 6: has moved up higher? What are you telling them? Because

522
00:27:16,680 --> 00:27:20,320
Speaker 6: you are still owning in Nvidia at deep water.

523
00:27:21,280 --> 00:27:25,080
Speaker 10: That's right, we still own this And I would tell them,

524
00:27:25,119 --> 00:27:28,160
Speaker 10: I would just ask a question about just fundamentally, how

525
00:27:28,200 --> 00:27:31,679
Speaker 10: do they see AI plane out over the next several years,

526
00:27:32,240 --> 00:27:34,760
Speaker 10: and if you believe that this is going to be

527
00:27:34,840 --> 00:27:38,400
Speaker 10: truly transformative more than for example, the smartphone or the internet,

528
00:27:39,400 --> 00:27:42,639
Speaker 10: I would tell them that just continue to stay the course.

529
00:27:42,720 --> 00:27:45,720
Speaker 10: This is a rocket ship. You can debate whether you

530
00:27:45,800 --> 00:27:48,520
Speaker 10: have a window seat and that would be akin to

531
00:27:48,680 --> 00:27:51,720
Speaker 10: your entry price to in Nvidia or an aisle seat.

532
00:27:51,800 --> 00:27:54,679
Speaker 10: But either way, this ship is going to continue to

533
00:27:54,720 --> 00:27:57,119
Speaker 10: go up. Because at the end of the day, is

534
00:27:57,160 --> 00:28:01,280
Speaker 10: that in order for AI to come to its full

535
00:28:01,320 --> 00:28:06,800
Speaker 10: capacity of general intelligence and eventually superintelligence, we need to scale.

536
00:28:07,040 --> 00:28:11,240
Speaker 10: And scale requires not only more compute capacity, but more data.

537
00:28:11,760 --> 00:28:15,000
Speaker 10: If you continue to need more compute and data, then

538
00:28:15,000 --> 00:28:16,959
Speaker 10: in video is going to be a beneficiary of that.

539
00:28:17,040 --> 00:28:20,800
Speaker 10: And so we also have a venture investing business. We

540
00:28:20,880 --> 00:28:24,560
Speaker 10: invest in technologies. Some of them compete with what in

541
00:28:24,720 --> 00:28:27,640
Speaker 10: video is doing, and we know from that side how

542
00:28:27,680 --> 00:28:30,919
Speaker 10: difficult it is to close that gap, and so I

543
00:28:30,920 --> 00:28:35,400
Speaker 10: think they will continue the market, will continue to need

544
00:28:35,520 --> 00:28:39,240
Speaker 10: their chips to enable what I think is a very

545
00:28:39,320 --> 00:28:42,280
Speaker 10: robust outlook for AI. And just to put a final

546
00:28:42,320 --> 00:28:44,800
Speaker 10: thought on Emily, is that I think we're in a

547
00:28:44,840 --> 00:28:47,720
Speaker 10: three to five year bowl market still early. I don't

548
00:28:47,720 --> 00:28:51,080
Speaker 10: think we're even close to a peak. I understand why

549
00:28:51,080 --> 00:28:53,160
Speaker 10: people are nervous when you see the movement in video

550
00:28:53,160 --> 00:28:55,360
Speaker 10: of the last couple of years, but I think it's

551
00:28:55,400 --> 00:28:58,360
Speaker 10: an uncomfortable truth about this market is it's going to

552
00:28:58,360 --> 00:28:59,360
Speaker 10: continue to go higher.

553
00:29:00,040 --> 00:29:02,960
Speaker 3: Hey, Gene, a reader just kind of piped up here

554
00:29:03,000 --> 00:29:05,200
Speaker 3: and said, how about some of the competitors, like some

555
00:29:05,240 --> 00:29:07,680
Speaker 3: of their customers might be competitors in terms of these

556
00:29:07,760 --> 00:29:09,480
Speaker 3: chips frame that force.

557
00:29:11,720 --> 00:29:14,480
Speaker 10: So some of the customers make their own chips. Microsoft

558
00:29:14,840 --> 00:29:19,400
Speaker 10: makes its own chips. You also have companies like Google

559
00:29:19,520 --> 00:29:24,280
Speaker 10: has their tensor chip, and so Amazon's working on different chips.

560
00:29:24,320 --> 00:29:26,800
Speaker 10: And so these are the hyperscalers, and these are the

561
00:29:27,080 --> 00:29:29,840
Speaker 10: parts of the business that have been kind of fueling

562
00:29:30,120 --> 00:29:31,800
Speaker 10: a lot of the growth and if you just look

563
00:29:31,800 --> 00:29:34,640
Speaker 10: at think about in total how much of their growth

564
00:29:34,640 --> 00:29:38,000
Speaker 10: has come from the hyperscalers, it's probably about sixty percent

565
00:29:38,200 --> 00:29:42,440
Speaker 10: over the last year. And so it's been really important

566
00:29:42,840 --> 00:29:45,480
Speaker 10: at the end of the day, is that I continue

567
00:29:45,520 --> 00:29:48,400
Speaker 10: to believe that they will the hyperscalers will start to

568
00:29:48,440 --> 00:29:51,320
Speaker 10: add some of their own chips. They still don't have

569
00:29:51,400 --> 00:29:54,720
Speaker 10: the performance. And this is the central point. Just because

570
00:29:54,760 --> 00:29:57,400
Speaker 10: you're creating a chip doesn't mean that it has the

571
00:29:57,440 --> 00:30:01,320
Speaker 10: same performance as Nvidio GPU. And a big part of

572
00:30:01,360 --> 00:30:06,280
Speaker 10: the call last night was Jensen trying to educate investors

573
00:30:06,720 --> 00:30:10,360
Speaker 10: about how the hyperscalers think about the return on investment

574
00:30:10,440 --> 00:30:13,400
Speaker 10: and that there is a return on investment for spending

575
00:30:13,440 --> 00:30:17,080
Speaker 10: these buying these more expensive chips, and so simply football

576
00:30:17,200 --> 00:30:19,440
Speaker 10: is that just because they're working on chips doesn't mean

577
00:30:19,480 --> 00:30:22,080
Speaker 10: that they are comparable to in videos GPUs A.

578
00:30:22,160 --> 00:30:24,320
Speaker 4: Gene, thanks so much again for joining us.

579
00:30:24,320 --> 00:30:26,360
Speaker 3: We really appreciate getting some of your time helping us

580
00:30:26,400 --> 00:30:28,200
Speaker 3: really understand what's going on out there in the world

581
00:30:28,240 --> 00:30:29,800
Speaker 3: of technology and in this.

582
00:30:29,760 --> 00:30:30,680
Speaker 4: New phase of it.

583
00:30:30,720 --> 00:30:33,320
Speaker 3: Including Ai Gene Munster, he's a Mansion partner. He's a

584
00:30:33,360 --> 00:30:35,880
Speaker 3: co founder of Loop Adventures. He's based in Minneapolis. He's

585
00:30:35,880 --> 00:30:39,520
Speaker 3: been covering to tech industry really for decades and gives

586
00:30:39,600 --> 00:30:42,280
Speaker 3: us a good perspective on AI. And as I remember,

587
00:30:42,320 --> 00:30:44,400
Speaker 3: Gen probably told us maybe a year ago, or maybe

588
00:30:44,400 --> 00:30:46,360
Speaker 3: more than a year ago, kind of just how big

589
00:30:46,400 --> 00:30:49,640
Speaker 3: AI is relative to things like, oh, I don't know

590
00:30:49,920 --> 00:30:53,360
Speaker 3: the internet and the electricity, and he puts it in

591
00:30:53,440 --> 00:30:56,120
Speaker 3: that context, and that kind of gives you a good

592
00:30:56,200 --> 00:30:59,600
Speaker 3: frame of reference for perhaps how big this AI can

593
00:30:59,640 --> 00:31:01,880
Speaker 3: be for everyone.

594
00:31:02,360 --> 00:31:06,240
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

595
00:31:06,320 --> 00:31:09,840
Speaker 2: weekdays at ten am Eastern on Applecar Play and Android

596
00:31:09,880 --> 00:31:12,640
Speaker 2: Auto with the Bloomberg Business app. You can also listen

597
00:31:12,760 --> 00:31:15,840
Speaker 2: live on Amazon Alexa from our flagship New York station,

598
00:31:16,240 --> 00:31:19,960
Speaker 2: Just say Alexa play Bloomberg eleven thirty.

599
00:31:21,120 --> 00:31:25,479
Speaker 3: Aside from Nvidia Emily, another big tech story out there's ASML.

600
00:31:25,560 --> 00:31:29,840
Speaker 3: The Netherlands plans to limit ASML Holding's ability to repair

601
00:31:30,400 --> 00:31:34,480
Speaker 3: and maintain its semiconductor equipment in China, a potentially painful

602
00:31:34,480 --> 00:31:38,600
Speaker 3: blow to Beijing's efforts to develop a world class chip industry.

603
00:31:38,640 --> 00:31:42,120
Speaker 3: So that tech cold war seems to be pretty hot

604
00:31:42,120 --> 00:31:42,880
Speaker 3: out there these days.

605
00:31:42,920 --> 00:31:44,200
Speaker 4: Let's get some latest on that. We'll do that with

606
00:31:44,240 --> 00:31:44,880
Speaker 4: Sarah Jacob.

607
00:31:45,080 --> 00:31:47,960
Speaker 3: She's an Amsterdam beurea reporter for Bloomberg News, joining us

608
00:31:48,120 --> 00:31:50,640
Speaker 3: from Amsterdam via Zoom Sarah.

609
00:31:50,680 --> 00:31:52,840
Speaker 4: This seems like a pretty big step.

610
00:31:52,560 --> 00:31:57,240
Speaker 3: By the Netherlands government to limit ASML's business with China.

611
00:31:57,360 --> 00:31:58,160
Speaker 4: Give us the background.

612
00:32:00,240 --> 00:32:04,040
Speaker 1: Well, essentially, the Dutch government will likely not renew certain

613
00:32:04,080 --> 00:32:07,640
Speaker 1: ASML licenses to service and provide spare parts for its

614
00:32:07,720 --> 00:32:10,719
Speaker 1: chip equipment when some of those licenses expired the end

615
00:32:10,720 --> 00:32:14,200
Speaker 1: of this year. The move is expected to cover ASML's

616
00:32:14,240 --> 00:32:17,040
Speaker 1: top of the line machine So we're talking to v machines,

617
00:32:17,040 --> 00:32:21,320
Speaker 1: which are deep ultra lithography machines. We know that ASML's

618
00:32:21,320 --> 00:32:25,080
Speaker 1: most advanced ship making equipment are sold with maintenance agreements,

619
00:32:25,120 --> 00:32:28,920
Speaker 1: So a decision to limit ASML's ability to repair and

620
00:32:29,040 --> 00:32:33,120
Speaker 1: maintain those machines could could make at least some of

621
00:32:33,160 --> 00:32:36,360
Speaker 1: those machines inoperable in China as soon as next year.

622
00:32:37,080 --> 00:32:40,160
Speaker 6: And what was the rationale behind this ban?

623
00:32:41,720 --> 00:32:45,600
Speaker 1: Well, the Biden administration has sought to limit China's advances

624
00:32:45,640 --> 00:32:49,000
Speaker 1: in the semiconductor sector for some time now, and it

625
00:32:49,040 --> 00:32:52,440
Speaker 1: has implemented sweeping export controls on China on the sale

626
00:32:52,440 --> 00:32:56,760
Speaker 1: of advanced chip making equipment over citing national security grounds.

627
00:32:56,760 --> 00:32:59,840
Speaker 1: So we have also previously reported that the administration, the

628
00:33:00,280 --> 00:33:04,040
Speaker 1: administration has raised the possibility of opposing the FDPR, which

629
00:33:04,080 --> 00:33:07,720
Speaker 1: is essentially a rule that allows American officials to control

630
00:33:07,760 --> 00:33:10,640
Speaker 1: the flow of foreign products built with even the tiniest

631
00:33:10,680 --> 00:33:14,080
Speaker 1: amount of you know, technology originating from the US. And

632
00:33:14,160 --> 00:33:16,080
Speaker 1: in this context, the US has sort of also been

633
00:33:16,200 --> 00:33:18,320
Speaker 1: urging the Dutch government in many of its allies to

634
00:33:18,360 --> 00:33:21,760
Speaker 1: align their China controls with the US. So that's sort

635
00:33:21,800 --> 00:33:24,800
Speaker 1: of the backdrop for this move.

636
00:33:26,360 --> 00:33:31,000
Speaker 3: You know, what percentage or how big is China for ASML?

637
00:33:31,000 --> 00:33:33,200
Speaker 3: Because I'm looking at the stock. The stock's actually up today.

638
00:33:33,200 --> 00:33:36,600
Speaker 3: I thought it would have been down and down maybe materially.

639
00:33:38,000 --> 00:33:38,240
Speaker 8: Well.

640
00:33:38,360 --> 00:33:41,720
Speaker 1: China, yes, China is you know, accounts for about half

641
00:33:41,920 --> 00:33:45,120
Speaker 1: of a SML sales, So we do expect if this

642
00:33:45,960 --> 00:33:49,240
Speaker 1: were to be announced, it would impact smls sales and

643
00:33:49,320 --> 00:33:51,600
Speaker 1: these new curbs would put a SML and the same

644
00:33:51,680 --> 00:33:55,360
Speaker 1: constraints that US pers such as you know, applied materials

645
00:33:55,400 --> 00:33:58,600
Speaker 1: are is experiencing. But the implications of such a move

646
00:33:58,680 --> 00:34:02,840
Speaker 1: also is for China, right, it's in terms of obtaining

647
00:34:03,040 --> 00:34:06,160
Speaker 1: most spare paths brings and maintaining machines are critical to

648
00:34:06,200 --> 00:34:09,040
Speaker 1: the smooth operation of a chip plant, and China relies

649
00:34:09,080 --> 00:34:13,359
Speaker 1: on a SML's emotion DUV lithography systems to advance its

650
00:34:13,360 --> 00:34:16,560
Speaker 1: ship making technology. So for China it would be a

651
00:34:16,560 --> 00:34:19,480
Speaker 1: blow to in its efforts to develop its SCHIP industry,

652
00:34:19,520 --> 00:34:23,719
Speaker 1: could make it difficult for Huawei and Semiconductor Manufacturing International

653
00:34:23,760 --> 00:34:27,160
Speaker 1: cop to make breakthroughs in their current capability.

654
00:34:28,200 --> 00:34:31,399
Speaker 6: Is this ban expected to then If it's not going

655
00:34:31,440 --> 00:34:34,959
Speaker 6: to be good for the huaweis of the of the world,

656
00:34:35,120 --> 00:34:39,480
Speaker 6: is it better then for US chip companies? Is that

657
00:34:39,600 --> 00:34:40,400
Speaker 6: the idea.

658
00:34:40,160 --> 00:34:44,920
Speaker 1: Here I s it's essentially just part of this broad

659
00:34:45,480 --> 00:34:48,560
Speaker 1: uh broad uh you know or planned by the Biden

660
00:34:48,560 --> 00:34:52,360
Speaker 1: administration and its allies to sort of limit China's advances.

661
00:34:52,440 --> 00:34:56,359
Speaker 1: So that's the real goal over here. And SML being

662
00:34:56,880 --> 00:34:59,960
Speaker 1: you know, one of the largest and in you know

663
00:35:00,040 --> 00:35:04,840
Speaker 1: uh so makes makes this most advanced ship making equipment

664
00:35:04,880 --> 00:35:07,560
Speaker 1: that others don't have in the world, is very critical

665
00:35:07,719 --> 00:35:12,200
Speaker 1: in this whole plan across with the US and the

666
00:35:12,239 --> 00:35:12,840
Speaker 1: Dutch government.

667
00:35:13,080 --> 00:35:17,120
Speaker 3: What extent, Sarah is the feeling within you know, the

668
00:35:17,120 --> 00:35:20,520
Speaker 3: Netherlands that this is a SML just following US policy

669
00:35:20,600 --> 00:35:23,719
Speaker 3: versus maybe acting a little bit more independently.

670
00:35:23,920 --> 00:35:26,160
Speaker 4: How willingly is a SML doing this?

671
00:35:27,560 --> 00:35:27,799
Speaker 5: Well?

672
00:35:28,120 --> 00:35:31,080
Speaker 1: Uh, this is this is coming from the Dutch government.

673
00:35:31,160 --> 00:35:34,640
Speaker 1: So the Dutch government under Prime Minister Mark Rutter, which

674
00:35:34,640 --> 00:35:38,040
Speaker 1: was the previous prime minister, had resisted US pressure to

675
00:35:38,080 --> 00:35:41,600
Speaker 1: add is just new restrictions on servicing, arguing that, you know,

676
00:35:41,640 --> 00:35:45,319
Speaker 1: they needed more time to evaluate how the the the

677
00:35:45,360 --> 00:35:47,560
Speaker 1: export bands had taken effect. But we say with the

678
00:35:47,600 --> 00:35:51,759
Speaker 1: new administration, Dutch Prime Minister Dick Scorefolio this month said

679
00:35:51,760 --> 00:35:54,799
Speaker 1: the government has good negotiations with US in Japan and

680
00:35:54,840 --> 00:35:57,000
Speaker 1: he expects the will end with good results. So we'll

681
00:35:57,000 --> 00:35:57,640
Speaker 1: have to see.

682
00:35:59,239 --> 00:36:01,040
Speaker 3: Sarah Jacob, thank you so much for joining us. Really

683
00:36:01,040 --> 00:36:04,480
Speaker 3: appreciate that. Sarah Jacob. She's at Amsterdam bureau reporter for

684
00:36:04,560 --> 00:36:07,160
Speaker 3: Bloomberg News. How cool is it when you got news

685
00:36:07,200 --> 00:36:10,120
Speaker 3: coming out of Amsterdam. We have a bureau there, and

686
00:36:10,160 --> 00:36:12,719
Speaker 3: we have an expert right there that we can talk to.

687
00:36:13,080 --> 00:36:16,680
Speaker 3: That is the power folks of Bloomberg News. Matt Winkler

688
00:36:16,719 --> 00:36:19,560
Speaker 3: building that with Mike way way back in the day,

689
00:36:19,840 --> 00:36:21,160
Speaker 3: and we can tap into that.

690
00:36:21,080 --> 00:36:22,520
Speaker 4: For Bloomberg Radios's great stuff.

691
00:36:22,560 --> 00:36:26,080
Speaker 3: Sarah Jacob Amsterdam Brewer reported there on ASML.

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00:36:26,280 --> 00:36:30,759
Speaker 2: This is the Bloomberg Intelligence podcast, available on apples, Spotify,

693
00:36:30,960 --> 00:36:34,640
Speaker 2: and anywhere else you get your podcasts. Listen live each weekday,

694
00:36:34,760 --> 00:36:37,719
Speaker 2: ten am to noon Eastern on Bloomberg dot com, the

695
00:36:37,840 --> 00:36:41,279
Speaker 2: iHeartRadio app tune In, and the Bloomberg Business app. You

696
00:36:41,320 --> 00:36:44,520
Speaker 2: can also watch us live every weekday on YouTube and

697
00:36:44,680 --> 00:36:46,280
Speaker 2: always on the Bloomberg terminal