1 00:00:02,520 --> 00:00:09,959 Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of 2 00:00:10,000 --> 00:00:15,720 Speaker 1: where innovation, money and power collide in Silicon Valley and beyond. 3 00:00:16,160 --> 00:00:21,480 Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed louveloan. 4 00:00:35,560 --> 00:00:37,880 Speaker 2: Lie from New York. I'm Caroline Hyde and. 5 00:00:37,800 --> 00:00:41,279 Speaker 3: I'm Mike Sheppard in San Francisco. This is Bloomberg. 6 00:00:40,760 --> 00:00:43,800 Speaker 2: Technology coming up the US probes where the deep seek 7 00:00:43,920 --> 00:00:47,600 Speaker 2: bypassed US restrictions to buy advanced in video chips through 8 00:00:47,640 --> 00:00:51,640 Speaker 2: third parties. In Singapore, Plus, Apple gives a reassuring revenue 9 00:00:51,640 --> 00:00:55,320 Speaker 2: forecast for the current quarter. The results show declining iPhone 10 00:00:55,360 --> 00:00:58,560 Speaker 2: and Chinese sales over the holidays, and we sit down 11 00:00:58,560 --> 00:01:01,800 Speaker 2: with the CEO of HPE of thedoj swing to stop 12 00:01:01,840 --> 00:01:06,319 Speaker 2: its fourteen billion dollar acquisition of Juniper Networks, but first 13 00:01:06,640 --> 00:01:10,240 Speaker 2: check in on these markets, which have underperformed from a 14 00:01:10,280 --> 00:01:14,360 Speaker 2: tech perspective in the last month the most. It's twenty sixteen. 15 00:01:14,720 --> 00:01:18,040 Speaker 2: A brilliant line coming from Bank of America's Michael Hartnett, 16 00:01:18,160 --> 00:01:20,640 Speaker 2: who potentially thinks we are now seeing the dawn of 17 00:01:20,680 --> 00:01:25,559 Speaker 2: the Lagnificent seven. He coined the phrase magnificent seven. Mike, 18 00:01:25,800 --> 00:01:29,880 Speaker 2: and we're starting to question the overall peak of AI spending. 19 00:01:30,360 --> 00:01:32,960 Speaker 2: This is of course crucial in the context of this week. 20 00:01:33,120 --> 00:01:35,840 Speaker 2: We started the week on deep seak revelations. Do you 21 00:01:35,920 --> 00:01:37,840 Speaker 2: need as much compute when you've got an R one 22 00:01:37,880 --> 00:01:40,600 Speaker 2: model that's brought to bear the implications that that has 23 00:01:40,680 --> 00:01:43,039 Speaker 2: for the GPU sellers such as in video, And today 24 00:01:43,080 --> 00:01:45,280 Speaker 2: we get that first official meeting between in Vidio, CEO 25 00:01:45,440 --> 00:01:48,840 Speaker 2: just One and indeed President Donald Trump. That we understand 26 00:01:48,840 --> 00:01:51,200 Speaker 2: that the meeting has been in the week's works for 27 00:01:51,280 --> 00:01:54,360 Speaker 2: several weeks now. They plan to discuss AI policy, but 28 00:01:54,400 --> 00:01:57,200 Speaker 2: that policy just got so much more interesting following the 29 00:01:57,440 --> 00:01:58,280 Speaker 2: revelations of. 30 00:01:58,240 --> 00:02:03,040 Speaker 3: Our one Caro. There is so much riding on this 31 00:02:03,200 --> 00:02:06,200 Speaker 3: meeting for Jensen Wang, and you're right. We heard him 32 00:02:06,240 --> 00:02:09,080 Speaker 3: say at CES that he was looking forward to a 33 00:02:09,120 --> 00:02:12,399 Speaker 3: meeting with Donald Trump. But so much has happened since then, 34 00:02:12,520 --> 00:02:15,440 Speaker 3: and all the other major tech leaders have had their 35 00:02:15,520 --> 00:02:17,920 Speaker 3: chance in their sit downs with Donald Trump. And the 36 00:02:18,000 --> 00:02:21,120 Speaker 3: question now is whether it might be a case of 37 00:02:21,200 --> 00:02:24,440 Speaker 3: too little, too late for Jensen Wang as he sits 38 00:02:24,480 --> 00:02:27,400 Speaker 3: down with Trump with all the pressure growing on whether 39 00:02:27,480 --> 00:02:30,639 Speaker 3: the US should impose even more restrictions on AI chip 40 00:02:30,680 --> 00:02:31,920 Speaker 3: sales to China, Cara. 41 00:02:32,200 --> 00:02:34,679 Speaker 2: And of course for many, the question still remains as 42 00:02:34,680 --> 00:02:37,919 Speaker 2: to whether or not it was done with very high 43 00:02:37,960 --> 00:02:40,040 Speaker 2: powered in video chips or not. It all comes as 44 00:02:40,120 --> 00:02:43,400 Speaker 2: US officials and Fat Mike approbing whether Deep Seat bought 45 00:02:43,440 --> 00:02:47,600 Speaker 2: advanced video chips through third parties perhaps in Singapore. We 46 00:02:47,760 --> 00:02:50,760 Speaker 2: here's what a representative Roga Krishna Mudy had to say 47 00:02:51,000 --> 00:02:53,359 Speaker 2: on the Show of Balance and Power yesterday. 48 00:02:54,200 --> 00:02:56,840 Speaker 4: What I'm concerned about is, for instance, with deep Sea, 49 00:02:57,000 --> 00:02:59,280 Speaker 4: that they weren't able to stockpile a number of the 50 00:02:59,360 --> 00:03:04,200 Speaker 4: highest ends before the export controls actually went into effect, 51 00:03:04,360 --> 00:03:07,880 Speaker 4: namely the H one hundred chips, and then they bought 52 00:03:07,919 --> 00:03:10,960 Speaker 4: a lot of these H eight hundred chips. And so 53 00:03:11,280 --> 00:03:14,040 Speaker 4: what we want to do is both strengthen the export 54 00:03:14,080 --> 00:03:16,960 Speaker 4: controls and make sure that they're not porous. 55 00:03:17,360 --> 00:03:21,160 Speaker 2: A leading lawmaker there on the policy implications of China 56 00:03:21,200 --> 00:03:24,120 Speaker 2: and US, and we bring in Blumeg's Jordan Robertson because 57 00:03:24,160 --> 00:03:27,359 Speaker 2: there is much speculation as to whether or not Deep 58 00:03:27,400 --> 00:03:31,440 Speaker 2: Seak achieved this with chips that it was allowed to purchase, 59 00:03:31,720 --> 00:03:35,920 Speaker 2: or chips that perhaps it circumvented some key policies here 60 00:03:35,920 --> 00:03:36,800 Speaker 2: in the United States. 61 00:03:38,280 --> 00:03:41,680 Speaker 5: Yeah, thanks for having me. We reported today that US 62 00:03:41,680 --> 00:03:45,720 Speaker 5: officials are investigating whether deep Seek achieved its breakthrough in 63 00:03:46,480 --> 00:03:50,760 Speaker 5: AI chatbots, you know, through the acquisition of Nvidia advanced 64 00:03:50,760 --> 00:03:52,800 Speaker 5: in video chips that it's not supposed to have. Now, 65 00:03:52,840 --> 00:03:55,160 Speaker 5: I should point out that the timeline here, you know, 66 00:03:55,400 --> 00:03:59,600 Speaker 5: it's messy, you know, because deep Seek has acknowledged using 67 00:04:00,320 --> 00:04:02,840 Speaker 5: chips in its in its network. You know, that is 68 00:04:02,880 --> 00:04:04,960 Speaker 5: not a secret. That is not something the company has 69 00:04:04,960 --> 00:04:09,120 Speaker 5: tried to hide. The question is which chips has it used, 70 00:04:09,480 --> 00:04:11,520 Speaker 5: and when did it buy those chips and where did 71 00:04:11,520 --> 00:04:14,960 Speaker 5: it buy those chips from? And our reporting, our reporting 72 00:04:15,160 --> 00:04:18,320 Speaker 5: is that American officials are looking at, you know, whether 73 00:04:18,440 --> 00:04:22,440 Speaker 5: those acquisitions of chips included chips that were not supposed 74 00:04:22,480 --> 00:04:26,280 Speaker 5: to be sold to China and that transited you know, 75 00:04:26,320 --> 00:04:28,160 Speaker 5: from the US to China via Singapore. 76 00:04:29,760 --> 00:04:34,120 Speaker 3: Jordan, let's get blunt here, are the export controls even working? 77 00:04:34,520 --> 00:04:37,200 Speaker 3: Have they been able to stay ahead of what appears 78 00:04:37,200 --> 00:04:42,160 Speaker 3: to be China's ability to leapfrog ahead or around them. 79 00:04:42,680 --> 00:04:44,280 Speaker 5: Yeah, that's the big question in a lot of the 80 00:04:44,360 --> 00:04:46,719 Speaker 5: China revelations we've seen over the last you know, especially 81 00:04:46,720 --> 00:04:48,600 Speaker 5: twelve months, whether it's you know, the chips used in 82 00:04:48,680 --> 00:04:51,599 Speaker 5: Huawei phones or in this case, you know, the chips 83 00:04:51,680 --> 00:04:56,200 Speaker 5: used to you know, facilitate Deep Seeks breakthroughs. You know, 84 00:04:56,279 --> 00:04:58,600 Speaker 5: I think there's certainly a story to be told about 85 00:04:58,640 --> 00:05:02,480 Speaker 5: creativity and ingenu in you know, rethinking how you do 86 00:05:02,520 --> 00:05:05,720 Speaker 5: these AI large language models. You know, that certainly is 87 00:05:05,800 --> 00:05:08,440 Speaker 5: part of it. But at its core, you do need hardware, 88 00:05:08,480 --> 00:05:11,040 Speaker 5: you do need software. You still do need the most 89 00:05:11,040 --> 00:05:15,200 Speaker 5: advanced technology available, whether that's a SML hardware to make 90 00:05:15,279 --> 00:05:18,279 Speaker 5: chips or in this case, you know, in videos GPUs 91 00:05:18,640 --> 00:05:21,240 Speaker 5: to run these these models. And again deep Seek has 92 00:05:21,279 --> 00:05:24,040 Speaker 5: not hidden the fact that it uses in Vidio chips. 93 00:05:24,279 --> 00:05:27,400 Speaker 5: The question is which chips and when did it get them? 94 00:05:28,320 --> 00:05:31,760 Speaker 2: Maybe a classic example here of just fast follow the 95 00:05:31,880 --> 00:05:36,280 Speaker 2: idea that if you curtail, you bring about innovation. Jordan, 96 00:05:36,400 --> 00:05:37,920 Speaker 2: that innovation has got a lot of people in the 97 00:05:38,000 --> 00:05:40,719 Speaker 2: US excited the app being downloaded for deep Seek, But 98 00:05:40,839 --> 00:05:44,000 Speaker 2: you're reporting that actually we're having to prevent it being 99 00:05:44,080 --> 00:05:45,839 Speaker 2: used by government by companies. 100 00:05:47,240 --> 00:05:47,520 Speaker 3: Yeah. 101 00:05:47,720 --> 00:05:50,000 Speaker 5: Yeah, the Pentagon, I mean, we've had a number of 102 00:05:50,000 --> 00:05:51,640 Speaker 5: stories come out in the past few days. One of 103 00:05:51,640 --> 00:05:55,239 Speaker 5: them was that the Pentagon was kind of caught flat 104 00:05:55,240 --> 00:05:58,440 Speaker 5: footed on this. You know a number of Department of Defense, 105 00:05:58,839 --> 00:06:02,120 Speaker 5: you know, employees in official downloaded, you know, connected their 106 00:06:02,120 --> 00:06:05,520 Speaker 5: work computers to the Chinese deep deep seek servers and 107 00:06:05,600 --> 00:06:09,680 Speaker 5: downloaded the code the large language models. It was not blocked, 108 00:06:10,720 --> 00:06:13,760 Speaker 5: and they were downloading this code for several days before 109 00:06:14,360 --> 00:06:17,200 Speaker 5: the Defense Information Systems Agency, which is essentially like the 110 00:06:17,240 --> 00:06:22,640 Speaker 5: IT and Cybersecurity Department for the Pentagon, began blocking those links. 111 00:06:23,279 --> 00:06:25,560 Speaker 5: And what we've also reported is that now there's an 112 00:06:25,560 --> 00:06:30,280 Speaker 5: effort underway throughout the military to identify where deep Seek's 113 00:06:30,279 --> 00:06:33,600 Speaker 5: code has wound up on military networks and to remove it. 114 00:06:34,080 --> 00:06:37,000 Speaker 5: So this was an example of, you know, the fast 115 00:06:37,480 --> 00:06:40,520 Speaker 5: changing nature of technology and the fact that it's really 116 00:06:40,600 --> 00:06:43,120 Speaker 5: hard to keep up with what the latest potential threats are. 117 00:06:44,080 --> 00:06:48,920 Speaker 3: Bloomberg's Jordan robertson Thank You Coming up. Apple's holiday results 118 00:06:49,120 --> 00:06:52,600 Speaker 3: showed declines for China and the iPhone, but the company's 119 00:06:52,640 --> 00:06:56,760 Speaker 3: forecast helped to reassure investors. Will break down Apples earnings 120 00:06:56,800 --> 00:06:57,600 Speaker 3: after the break. 121 00:07:10,080 --> 00:07:13,400 Speaker 6: If you look at our Greater China revenue for the quarter, 122 00:07:13,520 --> 00:07:19,320 Speaker 6: we were down eleven percent year over year, and over 123 00:07:19,560 --> 00:07:24,440 Speaker 6: half of the decline that we experienced was driven by 124 00:07:24,440 --> 00:07:26,040 Speaker 6: a change in channel inventory. 125 00:07:27,400 --> 00:07:30,560 Speaker 2: Apple CEO Tim Cobb there trying to perhaps comment on 126 00:07:30,600 --> 00:07:33,880 Speaker 2: the sales decline in China, which was a key miss 127 00:07:33,880 --> 00:07:36,720 Speaker 2: in the numbers. Apple's biggest market well is the US, 128 00:07:36,800 --> 00:07:39,760 Speaker 2: but in large part China is dominant too. It struggled 129 00:07:39,760 --> 00:07:42,920 Speaker 2: to fend off competition from local brands. Let's get to 130 00:07:42,960 --> 00:07:45,760 Speaker 2: Mark German, who was trying to understand really what this 131 00:07:45,920 --> 00:07:49,360 Speaker 2: inventory change really meant it. How did it spawn an 132 00:07:49,400 --> 00:07:51,200 Speaker 2: eleven percent decline in China sales. 133 00:07:52,600 --> 00:07:55,480 Speaker 7: Yeah, so whenever Apple has a shortfall these days, of 134 00:07:55,480 --> 00:07:57,480 Speaker 7: course there were days where they didn't have these shortfalls, 135 00:07:58,040 --> 00:08:01,120 Speaker 7: they have some color or I guess, an excuse as 136 00:08:01,160 --> 00:08:03,760 Speaker 7: to why that happened. And for China this time around, 137 00:08:03,800 --> 00:08:07,640 Speaker 7: we're talking a seven billion dollar decline from a few 138 00:08:07,680 --> 00:08:10,480 Speaker 7: years ago. On the holiday quarter. They're saying that they 139 00:08:10,480 --> 00:08:14,239 Speaker 7: simply didn't have enough inventory. They're saying that they underprojected 140 00:08:14,240 --> 00:08:17,200 Speaker 7: how many units they needed in the channel for the quarter, 141 00:08:17,680 --> 00:08:19,280 Speaker 7: and by the end of the quarter, by the end 142 00:08:19,320 --> 00:08:22,040 Speaker 7: of December, they simply ran out, which meant they weren't 143 00:08:22,120 --> 00:08:25,080 Speaker 7: able to fulfill those orders, which led to a decrease 144 00:08:25,120 --> 00:08:27,520 Speaker 7: in revenue. And he says about half of the eleven 145 00:08:27,560 --> 00:08:31,240 Speaker 7: percent shortfall was due to that find It makes sense, right, 146 00:08:31,320 --> 00:08:34,800 Speaker 7: but clearly that you are anticipating a shortfall to begin 147 00:08:34,840 --> 00:08:38,160 Speaker 7: with if they under provided inventory. And I think the 148 00:08:38,320 --> 00:08:41,360 Speaker 7: response right this morning you see the saw prices up 149 00:08:41,360 --> 00:08:46,080 Speaker 7: considerably despite the significant miss in China, right and the 150 00:08:46,160 --> 00:08:48,520 Speaker 7: three percent decline of iPhone revenue. I think one is 151 00:08:48,559 --> 00:08:52,000 Speaker 7: the guidance, right, they're going to grow again in the 152 00:08:52,040 --> 00:08:54,600 Speaker 7: March quarter, which is a far cry from where they 153 00:08:54,640 --> 00:08:56,439 Speaker 7: were just a year and a half ago where there 154 00:08:56,480 --> 00:08:58,480 Speaker 7: was a series of quarters in a row where they 155 00:08:58,480 --> 00:09:02,160 Speaker 7: were declining. So that's positive. But I also think investors 156 00:09:02,480 --> 00:09:06,400 Speaker 7: believe that because they missed those sales in China due 157 00:09:06,400 --> 00:09:09,640 Speaker 7: to inventory in Q one, those sales will return in 158 00:09:09,720 --> 00:09:12,600 Speaker 7: Q two. If you're an Apple customer and you want 159 00:09:12,640 --> 00:09:14,800 Speaker 7: the new iPhone or ipowder watch or what have you, 160 00:09:15,200 --> 00:09:18,239 Speaker 7: and the Apple store doesn't have it and it's unavailable, 161 00:09:18,520 --> 00:09:20,920 Speaker 7: you're not really going to give up in most cases, right, 162 00:09:21,120 --> 00:09:23,440 Speaker 7: You're going to go back when it's in sock. And 163 00:09:23,480 --> 00:09:26,640 Speaker 7: so I think investors and analysts believe that is going 164 00:09:26,679 --> 00:09:28,560 Speaker 7: to happen, and we are going to see that China 165 00:09:28,640 --> 00:09:32,000 Speaker 7: revenue actually come in and factor in into the March quarter. 166 00:09:33,040 --> 00:09:35,480 Speaker 3: Mark. How much have a grace period are investors they're 167 00:09:35,559 --> 00:09:38,400 Speaker 3: willing to give Apple given some of the struggles that 168 00:09:38,400 --> 00:09:42,160 Speaker 3: we've seen with Apple Intelligence and also areas like wearables too. 169 00:09:43,240 --> 00:09:45,920 Speaker 7: Yeah, no, both good points. So on Apple Intelligence, I 170 00:09:45,920 --> 00:09:49,199 Speaker 7: think investors are giving Apple a little bit of leeway. 171 00:09:49,480 --> 00:09:52,720 Speaker 7: They've shown their ability to come into new categories slowly 172 00:09:52,800 --> 00:09:56,280 Speaker 7: and improve the product over time. Obviously AI is a 173 00:09:56,280 --> 00:09:59,959 Speaker 7: different beast. Obviously they have rivals both here and abroad. 174 00:10:00,480 --> 00:10:03,839 Speaker 7: They are absolutely crushing them right now. But I think 175 00:10:03,960 --> 00:10:05,760 Speaker 7: investors are going to give them a little bit of leeway. 176 00:10:05,880 --> 00:10:09,000 Speaker 7: I would give them two more quarters, right analysts, I 177 00:10:09,040 --> 00:10:11,840 Speaker 7: believe we'll give them two more quarters before they start 178 00:10:11,960 --> 00:10:14,640 Speaker 7: having real concerns about this technology and its ability to 179 00:10:14,760 --> 00:10:17,880 Speaker 7: drive sales and from a fundamental perspective, how it works 180 00:10:18,160 --> 00:10:22,120 Speaker 7: feature wise. In terms of wearables. The new CFO, Kevin Burakt, 181 00:10:22,160 --> 00:10:24,680 Speaker 7: made an interesting point on the earnings call that. 182 00:10:24,679 --> 00:10:26,160 Speaker 8: There was a little bit of a tough compare. 183 00:10:26,360 --> 00:10:28,880 Speaker 7: So typically over the last few years or so, you've 184 00:10:28,880 --> 00:10:31,160 Speaker 7: see an Apple roll out two or three new Apple 185 00:10:31,200 --> 00:10:34,120 Speaker 7: Watch models. This past fall, in September, they only released 186 00:10:34,120 --> 00:10:36,839 Speaker 7: an Apple Watch Series ten. There was no new Apple 187 00:10:36,920 --> 00:10:40,600 Speaker 7: Watch Ultra that's coming later in the year. This year. 188 00:10:40,720 --> 00:10:43,679 Speaker 7: There'll be a new Apple Watch se later in the 189 00:10:43,800 --> 00:10:45,800 Speaker 7: year this year, so you will see a little bit 190 00:10:45,840 --> 00:10:48,960 Speaker 7: of that momentum return to the wearables category. But clearly 191 00:10:49,040 --> 00:10:52,440 Speaker 7: the Apple vision pro not driving anything material to grow. 192 00:10:52,360 --> 00:10:53,240 Speaker 8: That category, right. 193 00:10:53,320 --> 00:10:55,480 Speaker 7: I mean, if you look at the big picture, Apple's 194 00:10:55,520 --> 00:10:59,080 Speaker 7: first major new product category in years thirty five hundred 195 00:10:59,080 --> 00:11:02,040 Speaker 7: dollars in revenue or peace at minimum, and it's not 196 00:11:02,200 --> 00:11:05,920 Speaker 7: driving anything to that segment. That just tells you how 197 00:11:06,000 --> 00:11:07,559 Speaker 7: few of these devices they're still selling. 198 00:11:08,640 --> 00:11:12,079 Speaker 3: Bloomberg's Mark German, thanks for joining us. Let's get more 199 00:11:12,120 --> 00:11:16,640 Speaker 3: with Gene Monster of deep Water Asset Management. Deep Seek 200 00:11:16,760 --> 00:11:19,800 Speaker 3: really shook up the markets earlier this week and cause 201 00:11:20,160 --> 00:11:24,480 Speaker 3: so many reflections upon investment in AI and development of 202 00:11:24,520 --> 00:11:27,760 Speaker 3: AI in this country. What sort of pressure does that 203 00:11:27,880 --> 00:11:32,160 Speaker 3: put on Apple specifically with its Apple Intelligence product. 204 00:11:34,120 --> 00:11:38,120 Speaker 9: It's probably put a relief on Apple because if deep 205 00:11:38,280 --> 00:11:41,800 Speaker 9: Seek does advance some of these third party models and 206 00:11:43,160 --> 00:11:47,840 Speaker 9: basically creates an environment where the primary models like GPT 207 00:11:48,120 --> 00:11:50,880 Speaker 9: or Gemini will have to lower their price to compete 208 00:11:50,920 --> 00:11:54,120 Speaker 9: with more of these open source that benefits Apple from 209 00:11:54,280 --> 00:11:58,520 Speaker 9: two perspectives. First is that as you use Apple Intelligence 210 00:11:58,679 --> 00:12:02,360 Speaker 9: and it goes and taps into open ai, for example, 211 00:12:02,840 --> 00:12:05,599 Speaker 9: there is a cost that comes to Apple for that 212 00:12:05,880 --> 00:12:08,600 Speaker 9: those tokens. That's how it's measured. The usage is measured, 213 00:12:08,640 --> 00:12:11,600 Speaker 9: and they sell tokens. As the price of those comes 214 00:12:11,720 --> 00:12:14,800 Speaker 9: down driven by deep seek. That's a positive for Apple. 215 00:12:14,840 --> 00:12:18,960 Speaker 9: And separately is Apple's app developers who are building these 216 00:12:19,080 --> 00:12:23,079 Speaker 9: AI tools need to be aware of the costs that 217 00:12:23,200 --> 00:12:25,800 Speaker 9: these apps have in terms of pulling in the token 218 00:12:25,920 --> 00:12:31,240 Speaker 9: costs and lowering the token costs will should promote more 219 00:12:31,400 --> 00:12:33,920 Speaker 9: AI development within the apps. And so that's why you 220 00:12:34,080 --> 00:12:37,920 Speaker 9: saw Apple move up on the deep seek news. And 221 00:12:38,160 --> 00:12:41,120 Speaker 9: I think that more broadly, I mean this has been 222 00:12:42,240 --> 00:12:44,679 Speaker 9: I've been around tech for a while, and what I've 223 00:12:44,760 --> 00:12:47,600 Speaker 9: seen this week related to deep seek is I think 224 00:12:47,800 --> 00:12:52,000 Speaker 9: captured in the concept that the market is now the 225 00:12:52,120 --> 00:12:55,520 Speaker 9: nastak is now flat from where it closed on Friday, 226 00:12:56,080 --> 00:12:59,320 Speaker 9: and I think that essentially the commentary from Apple about 227 00:12:59,360 --> 00:13:02,920 Speaker 9: how they can better fit from this. To answer your question, Mike, specifically, 228 00:13:03,880 --> 00:13:04,640 Speaker 9: they focus in a. 229 00:13:04,679 --> 00:13:08,560 Speaker 2: Long way on and AI security. They talk up their chips, 230 00:13:08,600 --> 00:13:10,920 Speaker 2: they talk up private service. Is that going to be 231 00:13:10,960 --> 00:13:13,920 Speaker 2: integral to a consumer when we're thinking about using Chinese 232 00:13:14,440 --> 00:13:16,439 Speaker 2: apps When it comes to artificient intelligence. 233 00:13:18,120 --> 00:13:21,800 Speaker 9: So for US consumers and Western consumers, they're probably not 234 00:13:21,920 --> 00:13:25,559 Speaker 9: going to want to use a model I think. I 235 00:13:25,640 --> 00:13:27,800 Speaker 9: suspect most people will not want to use a model 236 00:13:27,840 --> 00:13:31,679 Speaker 9: that's based in China. And part of it is because 237 00:13:31,720 --> 00:13:35,360 Speaker 9: I think this data integrity question, that's something that matters 238 00:13:35,480 --> 00:13:37,960 Speaker 9: more for people who are over thirty five years old, 239 00:13:38,080 --> 00:13:42,360 Speaker 9: when through our research we've seen that younger demographics tend 240 00:13:42,480 --> 00:13:45,120 Speaker 9: not to care. I think the whole TikTok example is 241 00:13:45,120 --> 00:13:48,120 Speaker 9: a pretty clear example. People just want the content, and 242 00:13:48,600 --> 00:13:51,120 Speaker 9: I think some of the potential downfalls to using some 243 00:13:51,280 --> 00:13:54,319 Speaker 9: platforms it's just not top of radar. But to answer 244 00:13:54,320 --> 00:13:58,360 Speaker 9: your question, is that Apple will brand around security of 245 00:13:58,440 --> 00:14:02,600 Speaker 9: course with AI and benefit I think with deep seek 246 00:14:02,679 --> 00:14:06,240 Speaker 9: or some other third party open source AI within China. 247 00:14:06,480 --> 00:14:09,320 Speaker 9: Is that that needs to Apple really needs to fill 248 00:14:09,400 --> 00:14:12,559 Speaker 9: that AI hole in terms of Apple intelligence. Who is 249 00:14:12,600 --> 00:14:13,839 Speaker 9: their partner in China. 250 00:14:14,520 --> 00:14:16,760 Speaker 2: Let's just talk about Apple intelligence that we just heard 251 00:14:16,800 --> 00:14:19,280 Speaker 2: from Mark German. I know you speak with him. He's 252 00:14:19,480 --> 00:14:22,640 Speaker 2: been saying, look, you the analyst community and the investor 253 00:14:22,680 --> 00:14:25,480 Speaker 2: community will give Apple a two quarter grace period to 254 00:14:25,520 --> 00:14:27,760 Speaker 2: get this intelligence side right. Is that the sort of 255 00:14:27,840 --> 00:14:28,600 Speaker 2: length of time we need. 256 00:14:30,640 --> 00:14:33,240 Speaker 9: I think actually investors are going to give probably a 257 00:14:33,280 --> 00:14:37,640 Speaker 9: little bit more room and probably give a pass largely 258 00:14:37,800 --> 00:14:40,920 Speaker 9: on fiscal twenty twenty five. And if you look at 259 00:14:40,920 --> 00:14:44,160 Speaker 9: the street numbers right now after these adjustments last night, 260 00:14:44,440 --> 00:14:46,440 Speaker 9: iPhone growth is going to be around three percent. It 261 00:14:46,480 --> 00:14:50,040 Speaker 9: steps up to eight percent in fiscal twenty six. And 262 00:14:50,200 --> 00:14:53,280 Speaker 9: so I think that as long as that carrot is 263 00:14:53,320 --> 00:14:56,120 Speaker 9: out there, and Apple did a good job of reminding 264 00:14:56,240 --> 00:15:00,480 Speaker 9: investors that carrot's there because in markets that Apple Intelligence available, 265 00:15:00,520 --> 00:15:03,120 Speaker 9: they said sales did better than in the other markets. 266 00:15:03,640 --> 00:15:05,720 Speaker 9: As long as that carrot's out there, I think you're 267 00:15:05,760 --> 00:15:09,880 Speaker 9: going to see this kind of this trend towards investors 268 00:15:09,920 --> 00:15:12,800 Speaker 9: focused on what this breakout potentially could look like. And 269 00:15:12,800 --> 00:15:14,800 Speaker 9: I would just say this, and Mark's done an incredible 270 00:15:14,920 --> 00:15:17,960 Speaker 9: job of reporting on the features, on Apple Intelligence, the 271 00:15:18,040 --> 00:15:21,160 Speaker 9: timing all these and from my perspective, I think that 272 00:15:22,120 --> 00:15:26,040 Speaker 9: they still fall short of well short of what needs 273 00:15:26,080 --> 00:15:29,160 Speaker 9: to happen for these products to really get people excited 274 00:15:29,240 --> 00:15:30,880 Speaker 9: and tell their friends to buy it. I think they're 275 00:15:30,920 --> 00:15:33,760 Speaker 9: going to get there. I'm an Apple shareholder, are Fermones, 276 00:15:33,800 --> 00:15:36,080 Speaker 9: and I think they're going to get there. But I 277 00:15:36,160 --> 00:15:40,160 Speaker 9: think that the product needs not only more distribution over 278 00:15:40,160 --> 00:15:42,680 Speaker 9: the next few quarters, but the feature set really needs 279 00:15:42,720 --> 00:15:43,480 Speaker 9: to get pumped up. 280 00:15:44,760 --> 00:15:48,760 Speaker 3: Gene In China, we saw Apple report inventory issues there, 281 00:15:49,080 --> 00:15:51,920 Speaker 3: but soon they're going to have some geopolitical ones, perhaps 282 00:15:52,280 --> 00:15:55,560 Speaker 3: thanks to tariffs that Donald Trump is threatening against the 283 00:15:55,640 --> 00:15:59,400 Speaker 3: world's second largest economy. How do you see Apple navigating 284 00:15:59,480 --> 00:16:01,120 Speaker 3: that later this year if that happens. 285 00:16:02,280 --> 00:16:04,800 Speaker 9: Well, just quickly on the tariff side of it was 286 00:16:04,840 --> 00:16:06,800 Speaker 9: the second to last question on the call last night, 287 00:16:06,840 --> 00:16:09,920 Speaker 9: and Cook just said, we're monitoring the situation, so basically 288 00:16:09,960 --> 00:16:14,320 Speaker 9: sidestepped the question. I think most investors believe that there's 289 00:16:14,480 --> 00:16:18,120 Speaker 9: just no risk to the tariffs given what happened seven 290 00:16:18,120 --> 00:16:20,840 Speaker 9: eight years ago. They're able to navigate around that. So 291 00:16:21,360 --> 00:16:23,680 Speaker 9: this probably is more of a risk to Apple stock, 292 00:16:23,840 --> 00:16:27,600 Speaker 9: just given I think that most investors are complacent on 293 00:16:27,760 --> 00:16:29,680 Speaker 9: what this potentially could mean. I think it's going to 294 00:16:29,720 --> 00:16:30,920 Speaker 9: be fine. I think they're going to be able to 295 00:16:31,120 --> 00:16:33,760 Speaker 9: navigate that. But I think there's something bigger going on 296 00:16:34,000 --> 00:16:36,880 Speaker 9: in China. Potentially something bigger going on when you see 297 00:16:36,960 --> 00:16:40,560 Speaker 9: Huawei their phone sales up fifteen percent of the December quarter, 298 00:16:40,640 --> 00:16:42,840 Speaker 9: and Samsung and Apple, if you just for the channel 299 00:16:42,840 --> 00:16:46,400 Speaker 9: inventory down three four or five six percent. It begs 300 00:16:46,440 --> 00:16:50,120 Speaker 9: a question, is it about lack of AI features or 301 00:16:50,320 --> 00:16:53,840 Speaker 9: is there some sort of shift that Chinese consumers, some 302 00:16:53,960 --> 00:16:57,720 Speaker 9: sort of bias movity towards more homegrown products. And this 303 00:16:57,880 --> 00:17:00,480 Speaker 9: goes beyond Apple and Samsung, but maybe think about like 304 00:17:00,520 --> 00:17:04,520 Speaker 9: how Tesla could be impacted, and the Chinese government does 305 00:17:04,560 --> 00:17:08,000 Speaker 9: an amazing job of being able to kind of steer 306 00:17:09,000 --> 00:17:11,720 Speaker 9: how public sentiment is around some of these products. And 307 00:17:12,200 --> 00:17:13,879 Speaker 9: that's kind of in the back of my mind about 308 00:17:13,960 --> 00:17:16,280 Speaker 9: what me something else may be going on. This isn't 309 00:17:16,359 --> 00:17:19,520 Speaker 9: just China economies week and a quarter in that negative 310 00:17:20,520 --> 00:17:21,360 Speaker 9: in a way exactly. 311 00:17:22,880 --> 00:17:25,560 Speaker 2: I mean, with thirty seconds to go, give marks out 312 00:17:25,600 --> 00:17:28,960 Speaker 2: of ten for this earning season. This week with Tesla 313 00:17:29,040 --> 00:17:31,679 Speaker 2: their Meta two, I. 314 00:17:31,720 --> 00:17:35,920 Speaker 9: Think the fundamentals were six out of ten. It was 315 00:17:36,080 --> 00:17:38,920 Speaker 9: it was okay, nothing, But I think what was most 316 00:17:39,000 --> 00:17:41,680 Speaker 9: important as far as the a topic deep seek, the 317 00:17:41,760 --> 00:17:44,719 Speaker 9: commentary about how they feel AI is going to proceed, 318 00:17:44,840 --> 00:17:45,920 Speaker 9: and the spending around that. 319 00:17:46,040 --> 00:17:47,040 Speaker 8: It was a ten out of ten. 320 00:17:47,680 --> 00:17:58,720 Speaker 2: Gene Monster, a deep water asset management, more earnings, more chips. 321 00:17:58,760 --> 00:18:01,320 Speaker 2: Let's look at Samsung chip maker, of course, on the 322 00:18:01,400 --> 00:18:05,280 Speaker 2: downside by three tenths of percent. It's Pivotal Chip division's 323 00:18:05,320 --> 00:18:08,159 Speaker 2: reported a smaller than expected profit. The company is fighting 324 00:18:08,520 --> 00:18:10,919 Speaker 2: off arch rival s k Heinez so itself has been 325 00:18:10,960 --> 00:18:14,040 Speaker 2: on the downside after a four day holiday in sat 326 00:18:14,280 --> 00:18:16,800 Speaker 2: Over in South Korea, and some warriors post deep seek 327 00:18:17,080 --> 00:18:20,760 Speaker 2: and what it means that chips. More broadly, mic Caro. 328 00:18:20,920 --> 00:18:24,200 Speaker 3: Intel posted better than expected fourth quarter results as the 329 00:18:24,280 --> 00:18:28,119 Speaker 3: company saw a sales beat, partly from Asia customer orders 330 00:18:28,160 --> 00:18:30,960 Speaker 3: ahead of possible tariffs from the US, But the company 331 00:18:31,000 --> 00:18:33,639 Speaker 3: says first quarter sales are expected to fall short of 332 00:18:33,760 --> 00:18:38,280 Speaker 3: expectations on weaker demand and tougher competition. We're joined now 333 00:18:38,359 --> 00:18:41,240 Speaker 3: by Wedbush analyst Matt Bryson, who's been writing that the 334 00:18:41,320 --> 00:18:45,960 Speaker 3: results were quote nothing unexpected. He maintains a neutral rating 335 00:18:46,040 --> 00:18:48,760 Speaker 3: on the stock with a twenty dollars price target, and 336 00:18:48,880 --> 00:18:53,080 Speaker 3: he's with us now, Matt. We did hear a somewhat 337 00:18:53,160 --> 00:18:57,440 Speaker 3: more realistic tone from the interim CEO about the prospects 338 00:18:57,520 --> 00:19:01,040 Speaker 3: for maybe turning the company around in the short term. 339 00:19:01,160 --> 00:19:02,359 Speaker 3: How did that land with you? 340 00:19:05,359 --> 00:19:08,399 Speaker 8: I think it's the right way to think about things 341 00:19:09,680 --> 00:19:16,960 Speaker 8: in the sense that Intel Underpat Elsinger was consistently you know, 342 00:19:17,080 --> 00:19:20,119 Speaker 8: being optimistic about where where things were going to end up, 343 00:19:21,440 --> 00:19:24,040 Speaker 8: and at the end of the day that that ended 344 00:19:24,119 --> 00:19:29,600 Speaker 8: up disappointing investors. So you start off with a more 345 00:19:29,680 --> 00:19:32,520 Speaker 8: realistic bar and the hope is you're you're able to 346 00:19:32,560 --> 00:19:33,360 Speaker 8: execute from there. 347 00:19:34,280 --> 00:19:38,600 Speaker 2: Realistic looks pretty painful and the shares do drop on 348 00:19:38,680 --> 00:19:41,040 Speaker 2: the back of all of this. No quick fixes, but 349 00:19:41,160 --> 00:19:42,800 Speaker 2: what can be done the interim when you get no 350 00:19:42,920 --> 00:19:43,760 Speaker 2: news on a new CEO? 351 00:19:45,640 --> 00:19:48,479 Speaker 8: Yeah, so I think the big question is what does 352 00:19:48,560 --> 00:19:54,520 Speaker 8: Intel do from here? So under underpat Intel's plan was 353 00:19:54,880 --> 00:19:57,439 Speaker 8: we're going to make Intel grate again. So we're going 354 00:19:57,520 --> 00:20:01,439 Speaker 8: to restore our our fabs to competit ofness. That's going 355 00:20:01,480 --> 00:20:05,760 Speaker 8: to bolster the entire operation. So now the real question 356 00:20:06,000 --> 00:20:09,240 Speaker 8: is when you bring in a new CEO, is that 357 00:20:09,440 --> 00:20:13,760 Speaker 8: still the plan of record or rather, do you do 358 00:20:13,880 --> 00:20:16,480 Speaker 8: what a m D did, try to split the business up, 359 00:20:17,200 --> 00:20:21,520 Speaker 8: look more like a Broadcom or Marvel, be a chip 360 00:20:21,560 --> 00:20:25,240 Speaker 8: design house, spin the fab out. I think until we 361 00:20:25,280 --> 00:20:28,000 Speaker 8: get an answer to that, it's going to be hard 362 00:20:28,040 --> 00:20:30,480 Speaker 8: to kind of figure out what future looks like for Intel. 363 00:20:31,680 --> 00:20:35,399 Speaker 3: Matt, what is your timeline? Nonetheless for Intel to be 364 00:20:35,520 --> 00:20:38,760 Speaker 3: able to close the gap with rivals in critical areas 365 00:20:39,560 --> 00:20:42,080 Speaker 3: like server chips for all those data centers that we're 366 00:20:42,160 --> 00:20:44,280 Speaker 3: starting to see built across the country. 367 00:20:46,080 --> 00:20:48,960 Speaker 8: Yeah, so there's two things to think about there. One 368 00:20:49,119 --> 00:20:52,040 Speaker 8: is where are they with their fabs. They've they've told 369 00:20:52,119 --> 00:20:55,200 Speaker 8: us that AT and A is going to ship second 370 00:20:55,240 --> 00:20:57,840 Speaker 8: half of this year, So I think it's really important 371 00:20:57,960 --> 00:21:01,879 Speaker 8: as to what those new chips look like. If the 372 00:21:02,200 --> 00:21:06,080 Speaker 8: ships are competitive, that's a huge victory for Intel. Their 373 00:21:06,119 --> 00:21:10,840 Speaker 8: struggles really started almost a decade ago when they missed 374 00:21:11,560 --> 00:21:15,280 Speaker 8: their their their FAB upgrades. So getting that right, I 375 00:21:15,320 --> 00:21:17,119 Speaker 8: think would be would be a huge positive. But the 376 00:21:17,200 --> 00:21:19,600 Speaker 8: next piece is what we're seeing is a whole lot 377 00:21:19,640 --> 00:21:23,399 Speaker 8: more consumption of AI chips. So whether it's Nvidia or 378 00:21:23,880 --> 00:21:26,440 Speaker 8: Broadcom or Marvel building for for some of the large 379 00:21:26,480 --> 00:21:29,080 Speaker 8: data centers or a m D, their growth has come 380 00:21:29,119 --> 00:21:32,800 Speaker 8: from the AI side. Intel there, they still really don't 381 00:21:32,840 --> 00:21:35,600 Speaker 8: have a product. Gouty disappointed. They just told us that 382 00:21:35,680 --> 00:21:37,560 Speaker 8: their next product, Fealton Shores, is going to be more 383 00:21:37,600 --> 00:21:41,159 Speaker 8: of a test product. So I think getting things right 384 00:21:41,240 --> 00:21:43,800 Speaker 8: there it is important, But we don't have a whole 385 00:21:43,840 --> 00:21:47,200 Speaker 8: lot of insight into what exactly that that roadmap is 386 00:21:47,200 --> 00:21:48,840 Speaker 8: going to look like and how successful it's going to be. 387 00:21:49,000 --> 00:21:49,200 Speaker 7: Matt. 388 00:21:49,240 --> 00:21:52,399 Speaker 2: In thirty seconds, they're planning to spend twenty billion dollars 389 00:21:52,440 --> 00:21:55,400 Speaker 2: on new plants. Will the administration be supporting this long term? 390 00:21:57,480 --> 00:21:57,800 Speaker 6: That is? 391 00:21:58,040 --> 00:22:00,600 Speaker 8: That is a great great question is SEMs like this 392 00:22:00,680 --> 00:22:05,280 Speaker 8: administration goes from one place to another place. You never 393 00:22:05,520 --> 00:22:07,840 Speaker 8: quite know where it's going to go. So hopefully for 394 00:22:07,920 --> 00:22:10,680 Speaker 8: Intel sake they will. But I'm not going to guess 395 00:22:10,680 --> 00:22:12,119 Speaker 8: what the Trump administration is going to do. 396 00:22:12,440 --> 00:22:14,520 Speaker 2: Matt Bryson, a wed Verse, Thanks so much for your 397 00:22:14,560 --> 00:22:25,080 Speaker 2: time today. Welcome back to Blue Meg Technology. I'm Caroline 398 00:22:25,119 --> 00:22:25,560 Speaker 2: Hide in New. 399 00:22:25,560 --> 00:22:28,119 Speaker 3: York and I'm Mike Shepard in San Francisco. 400 00:22:28,280 --> 00:22:30,119 Speaker 2: As we wrap up the week, let's look at these markets, 401 00:22:30,359 --> 00:22:34,280 Speaker 2: because what a week has been. The Monday anxiety. What 402 00:22:34,600 --> 00:22:38,360 Speaker 2: does deep seek our one model mean for the need 403 00:22:38,440 --> 00:22:41,440 Speaker 2: for GPU, the need for AR infrastructure. The selloff was 404 00:22:41,520 --> 00:22:44,240 Speaker 2: hard on the Monday, but we've actually managed to grind 405 00:22:44,359 --> 00:22:46,400 Speaker 2: our a higher on the NASZAC over the last five days. 406 00:22:46,440 --> 00:22:48,000 Speaker 2: On the Naszak one hundred, we are now up the 407 00:22:48,080 --> 00:22:51,000 Speaker 2: tenth of a percent. Sure underperforms on an SMP level 408 00:22:51,000 --> 00:22:52,959 Speaker 2: from a tech perspective versus the rest of the index, 409 00:22:53,200 --> 00:22:55,800 Speaker 2: but in the NASVAC we core it higher. But that 410 00:22:55,960 --> 00:22:58,600 Speaker 2: release of deep seeks are one has perhaps for some 411 00:22:58,840 --> 00:23:02,840 Speaker 2: venture capitalists do rethink their strategy around investing in AI startups, 412 00:23:02,880 --> 00:23:04,880 Speaker 2: particularly on the hardware side of thing. But let's get 413 00:23:05,119 --> 00:23:08,160 Speaker 2: the VC take. Joining us now is Joshualf, co founder 414 00:23:08,160 --> 00:23:10,560 Speaker 2: of lux Capital, which is an investor in Hugging Face 415 00:23:10,600 --> 00:23:13,280 Speaker 2: and Angual industries in data bricks the name but a 416 00:23:13,359 --> 00:23:16,000 Speaker 2: few Josh, and you actually have been more plowing into 417 00:23:16,000 --> 00:23:19,120 Speaker 2: the application layer of generative AI rather than the models. 418 00:23:19,480 --> 00:23:20,320 Speaker 2: But what do you make of this? 419 00:23:21,720 --> 00:23:24,160 Speaker 10: Well, I think there's two key takeaways from this past 420 00:23:24,200 --> 00:23:26,280 Speaker 10: week and basically the entire trend of what's happening in AI. 421 00:23:26,600 --> 00:23:28,440 Speaker 10: The first is on the capital side, and then the 422 00:23:28,520 --> 00:23:31,160 Speaker 10: second is on the human capital side. On the capital side, 423 00:23:31,200 --> 00:23:32,720 Speaker 10: I think that the people that have been investing in 424 00:23:32,760 --> 00:23:35,639 Speaker 10: the large foundation models are a little bit shaken. The 425 00:23:35,720 --> 00:23:37,760 Speaker 10: idea of putting tens of billions of dollars into something, 426 00:23:38,119 --> 00:23:41,199 Speaker 10: even if it was partially replicated by China, and then 427 00:23:41,240 --> 00:23:43,360 Speaker 10: having a five or six million dollar overlay on top 428 00:23:43,400 --> 00:23:45,320 Speaker 10: of that, I think has people shaken to their core, 429 00:23:45,480 --> 00:23:48,240 Speaker 10: and rightly so. But the other piece of this is 430 00:23:48,280 --> 00:23:50,920 Speaker 10: thinking about the open source models. Those are things like 431 00:23:50,960 --> 00:23:55,520 Speaker 10: you mentioned, hugging face together compute, thinking about novel model 432 00:23:55,600 --> 00:23:58,520 Speaker 10: architectures like Sikana out of Japan. This is where we've 433 00:23:58,560 --> 00:24:00,760 Speaker 10: been investing over the past two or three years. And 434 00:24:00,880 --> 00:24:03,280 Speaker 10: then also thinking about the next wave, which is going 435 00:24:03,320 --> 00:24:06,760 Speaker 10: to be really in AI for the three dimensional physical world, 436 00:24:07,040 --> 00:24:10,080 Speaker 10: biology and robotics, and there I think you're going to 437 00:24:10,080 --> 00:24:14,399 Speaker 10: see a lot of great new companies physical intelligence evolutionary scale. 438 00:24:14,840 --> 00:24:17,119 Speaker 10: Those are people that are not going to have the 439 00:24:17,119 --> 00:24:20,000 Speaker 10: same kind of competition on the large language model scale. 440 00:24:21,160 --> 00:24:23,680 Speaker 3: Josh, is there a third piece to this though, maybe 441 00:24:23,800 --> 00:24:27,720 Speaker 3: geopolitics and the rivalry between the US and China. How 442 00:24:27,840 --> 00:24:31,080 Speaker 3: does deep Seek fit into that You're invested in Andrail 443 00:24:31,160 --> 00:24:34,159 Speaker 3: and Palanteer. Where do you see this as part of 444 00:24:34,320 --> 00:24:37,200 Speaker 3: pantheon of issues between the US and China? 445 00:24:38,080 --> 00:24:41,040 Speaker 10: Mike, I think you nailed it. This is increasingly, you know, 446 00:24:41,080 --> 00:24:42,800 Speaker 10: whether you think we are in Cold War two point 447 00:24:42,840 --> 00:24:46,159 Speaker 10: zero or not. The TikTok piece over the past few 448 00:24:46,240 --> 00:24:48,640 Speaker 10: year and now with President Trump coming in and maybe 449 00:24:48,680 --> 00:24:52,080 Speaker 10: thwarting what I think is a grave national security threat 450 00:24:52,160 --> 00:24:54,440 Speaker 10: is number one. Number two is deep Seek. With people 451 00:24:54,440 --> 00:24:56,840 Speaker 10: saying my gosh, this is not just made in China 452 00:24:56,960 --> 00:24:59,320 Speaker 10: with us things that are manufactured there like our iPhones, 453 00:24:59,359 --> 00:25:02,159 Speaker 10: but actually created and invented there or even if it 454 00:25:02,280 --> 00:25:05,400 Speaker 10: is copied. I think the bigger thing is this human capital. 455 00:25:05,560 --> 00:25:07,960 Speaker 10: We are at war for talent. We need a brain 456 00:25:08,080 --> 00:25:10,160 Speaker 10: drain coming here. And let me give you three stats 457 00:25:10,200 --> 00:25:12,560 Speaker 10: that shocked me to my core and viewers are listening. 458 00:25:12,960 --> 00:25:17,199 Speaker 10: Fifty percent of undergraduates in AI around the world are 459 00:25:17,240 --> 00:25:19,480 Speaker 10: coming from China. They are producing fifty percent of the 460 00:25:19,560 --> 00:25:23,879 Speaker 10: undergraduate researchers in AI. Number two, thirty eight percent of 461 00:25:23,960 --> 00:25:28,440 Speaker 10: American researchers are from China. Thirty seven percent are Native Americans. 462 00:25:28,440 --> 00:25:30,879 Speaker 10: So think about that, we're outnumbered in our own country. Now. 463 00:25:30,920 --> 00:25:32,959 Speaker 10: We want to get those people here and keep them here, 464 00:25:33,000 --> 00:25:34,680 Speaker 10: but if they're going back to Chinese companies, it's. 465 00:25:34,560 --> 00:25:35,239 Speaker 7: A really bad thing. 466 00:25:35,720 --> 00:25:38,200 Speaker 10: And Number three, the US used to be about twenty 467 00:25:38,200 --> 00:25:41,320 Speaker 10: three to twenty five percent of international students that we're 468 00:25:41,400 --> 00:25:44,480 Speaker 10: coming here to our country. Today it's only about fifteen percent. 469 00:25:44,880 --> 00:25:47,720 Speaker 10: So it underscores the need that we are in competition 470 00:25:47,880 --> 00:25:50,440 Speaker 10: not just for the hardware and the physical capital, not 471 00:25:50,600 --> 00:25:53,119 Speaker 10: just for the financial capital, but for the human capital. 472 00:25:53,160 --> 00:25:54,720 Speaker 10: And we need to do something. I think this is 473 00:25:54,760 --> 00:25:55,960 Speaker 10: a real big wake up call. 474 00:25:56,520 --> 00:25:58,600 Speaker 2: You should know you're on trustee of the SANA fans 475 00:25:58,640 --> 00:26:02,280 Speaker 2: to think a look about Josh. I want to go back, though, 476 00:26:02,320 --> 00:26:04,320 Speaker 2: to something you've been posting a lot on the national 477 00:26:04,400 --> 00:26:06,840 Speaker 2: security front. I think of what you put on X 478 00:26:06,920 --> 00:26:09,640 Speaker 2: and you're talking about Chinese state backed companies and not companies. 479 00:26:10,000 --> 00:26:13,639 Speaker 2: They're arms of the government. They're designed to erode US competitiveness. 480 00:26:13,920 --> 00:26:16,840 Speaker 2: And you talk about TikTok, Dji and I in the Sky, 481 00:26:17,040 --> 00:26:21,280 Speaker 2: deep Sea Huawei. I'm interested, though, does it matter if 482 00:26:21,400 --> 00:26:25,800 Speaker 2: China continues to fast follow. They need the compute power, 483 00:26:25,840 --> 00:26:28,480 Speaker 2: the inference to actually get all of this innovation into 484 00:26:28,560 --> 00:26:31,800 Speaker 2: people's hands. If you rate what just happened this week, 485 00:26:32,240 --> 00:26:35,120 Speaker 2: is this really a concern or is this like us 486 00:26:35,400 --> 00:26:37,720 Speaker 2: even more determination to remain ahead of the game and 487 00:26:37,840 --> 00:26:41,119 Speaker 2: have to continue to invest in the overall AI infrastructure. 488 00:26:41,840 --> 00:26:44,080 Speaker 10: Well, as you said, very well right now, if it 489 00:26:44,200 --> 00:26:46,120 Speaker 10: is a wake of call and people are now saying 490 00:26:46,160 --> 00:26:47,920 Speaker 10: we need to compete, we need to be more aggressive. 491 00:26:48,119 --> 00:26:50,560 Speaker 10: We cannot be complacent or lazy, than it's a win 492 00:26:50,720 --> 00:26:52,720 Speaker 10: for America. We do not want the rest of the 493 00:26:52,760 --> 00:26:56,040 Speaker 10: world relying on Chinese models which will approach inn as 494 00:26:56,119 --> 00:26:59,200 Speaker 10: in totive truth but never fully get there. Try searching 495 00:26:59,240 --> 00:27:02,399 Speaker 10: for Wigers or Jannaman Square Taiwan. You're not going to 496 00:27:02,440 --> 00:27:05,520 Speaker 10: get truth. You're going to get CCP censorship. We don't 497 00:27:05,560 --> 00:27:08,439 Speaker 10: want the world or the world's companies developing on those models. 498 00:27:08,720 --> 00:27:11,280 Speaker 10: To the point about hardware infrastructure, you also now in 499 00:27:11,359 --> 00:27:14,040 Speaker 10: that we are seeing a shift from training where you 500 00:27:14,119 --> 00:27:16,520 Speaker 10: need one hundred thousand clusters of h one hundred chips 501 00:27:16,680 --> 00:27:19,000 Speaker 10: and video chips to inference. And there's going to be 502 00:27:19,040 --> 00:27:21,520 Speaker 10: a big fight on inference on two fronts. And I'll 503 00:27:21,560 --> 00:27:23,320 Speaker 10: give you a sort of preview what I think is 504 00:27:23,359 --> 00:27:25,240 Speaker 10: going to be the next big wave here. If you 505 00:27:25,359 --> 00:27:28,480 Speaker 10: can do inference on device, I suspect about thirty to 506 00:27:28,600 --> 00:27:31,800 Speaker 10: fifty percent of your inference, your prompts, your queries will 507 00:27:31,800 --> 00:27:34,639 Speaker 10: be on your chats, your cash, emails, your photos, your 508 00:27:34,680 --> 00:27:36,560 Speaker 10: health data. You don't need to go to the cloud 509 00:27:36,600 --> 00:27:38,760 Speaker 10: for that. And so the memory players and other chip 510 00:27:38,800 --> 00:27:41,359 Speaker 10: makers are going to become dominant, and I think that 511 00:27:41,520 --> 00:27:43,720 Speaker 10: the attention and the capital allocation is going to shift 512 00:27:43,760 --> 00:27:46,119 Speaker 10: towards them. Maybe you're doing fifty to seventy percent of 513 00:27:46,160 --> 00:27:49,280 Speaker 10: your inference in the cloud, and you're going to perplexity 514 00:27:49,320 --> 00:27:52,520 Speaker 10: your chat GPT with search or Google Gemini as you 515 00:27:52,680 --> 00:27:55,800 Speaker 10: today would for Google for basic search. But that ecosystem 516 00:27:55,880 --> 00:27:58,359 Speaker 10: is going to change. The other big thing we're going 517 00:27:58,440 --> 00:28:01,600 Speaker 10: to see the death of ap high. AI going to 518 00:28:01,720 --> 00:28:03,520 Speaker 10: bring in the death of APIs. And what I mean 519 00:28:03,560 --> 00:28:07,640 Speaker 10: by that is all of the backwards backchannel software negotiation 520 00:28:07,720 --> 00:28:10,240 Speaker 10: that happens between all of our applications today are going 521 00:28:10,320 --> 00:28:13,480 Speaker 10: to be usurped by AI basically just acting like a 522 00:28:13,640 --> 00:28:16,240 Speaker 10: user and navigating on your phone. And there's going to 523 00:28:16,280 --> 00:28:18,800 Speaker 10: be big fights between Meta and Apple and some of 524 00:28:18,840 --> 00:28:21,000 Speaker 10: the app layer people in that. So those are two 525 00:28:21,040 --> 00:28:21,760 Speaker 10: big things to watch. 526 00:28:21,920 --> 00:28:24,920 Speaker 2: The agent fight. You of course a part of the 527 00:28:25,040 --> 00:28:29,320 Speaker 2: Hill and Valley Forum group. It's a private, bipartisan community 528 00:28:29,359 --> 00:28:34,040 Speaker 2: of lawmakers and business people about the national security focus 529 00:28:34,400 --> 00:28:37,680 Speaker 2: of US versus China. And I just want to take 530 00:28:38,040 --> 00:28:41,200 Speaker 2: your thought on whether the administration current one gets this, 531 00:28:41,800 --> 00:28:44,000 Speaker 2: because we've got Jenson One meeting Trump today. 532 00:28:45,240 --> 00:28:46,480 Speaker 3: You know, I think that they do. 533 00:28:47,040 --> 00:28:48,840 Speaker 10: I think there's a lot of brilliant people that have 534 00:28:48,920 --> 00:28:51,320 Speaker 10: gone into this administration. When you think about Jacob Hilbert, 535 00:28:51,360 --> 00:28:53,280 Speaker 10: you think about Scott Besson, these are both friends and 536 00:28:53,320 --> 00:28:56,800 Speaker 10: people that I think are extraordinary service and highly competent. 537 00:28:57,160 --> 00:29:00,440 Speaker 10: They feel very strongly about this issue. Now has done 538 00:29:00,440 --> 00:29:02,720 Speaker 10: a good job of flattering Trump because they know that 539 00:29:02,800 --> 00:29:05,720 Speaker 10: flattery works to influence. I hope that the people around 540 00:29:05,760 --> 00:29:09,120 Speaker 10: him recognized, particularly on the TikTok issue, how nefarious and dangerous, 541 00:29:09,200 --> 00:29:12,280 Speaker 10: insidious TikTok is for the American public and the things 542 00:29:12,320 --> 00:29:15,320 Speaker 10: that we believe for the rest of the technological competitiveness. 543 00:29:15,640 --> 00:29:17,480 Speaker 10: I think it is great to see things like Hill 544 00:29:17,520 --> 00:29:20,880 Speaker 10: and Valley where you have cutting edge technologists, venture capitalists 545 00:29:20,920 --> 00:29:24,120 Speaker 10: like us, and policymakers that are all working together. People 546 00:29:24,240 --> 00:29:27,600 Speaker 10: used to warn about the military industrial complex, and rightly 547 00:29:27,680 --> 00:29:30,080 Speaker 10: so back in the day we went from fifty primes 548 00:29:30,120 --> 00:29:33,320 Speaker 10: to five. Now you're seeing Anderill and Sale, Drone and 549 00:29:33,400 --> 00:29:37,120 Speaker 10: Hadrian and Varda, these neo primes, these new emergent companies 550 00:29:37,440 --> 00:29:39,760 Speaker 10: getting the space and the speed pass to compete. I 551 00:29:39,840 --> 00:29:44,880 Speaker 10: think that is absolutely critical against the civil military fusion doctrine. 552 00:29:45,160 --> 00:29:47,760 Speaker 10: Where As I said in my tweetstorm there that every 553 00:29:47,840 --> 00:29:50,080 Speaker 10: company is not an independent Chinese company, it is part 554 00:29:50,160 --> 00:29:52,960 Speaker 10: of the government. They have to report everything that they 555 00:29:53,080 --> 00:29:55,920 Speaker 10: do and all the information to the Chinese Communist Party 556 00:29:55,920 --> 00:29:57,239 Speaker 10: into Shujipin. 557 00:29:57,960 --> 00:30:03,280 Speaker 3: Josh, you stress the importance of research as fundamental to 558 00:30:03,400 --> 00:30:05,880 Speaker 3: developing AI in this country. Do you have any concerns 559 00:30:06,360 --> 00:30:10,160 Speaker 3: that the new administration may be taking a chillier or 560 00:30:10,280 --> 00:30:13,840 Speaker 3: more hostile approach to science. You're a scientist, to yourself, 561 00:30:14,000 --> 00:30:16,120 Speaker 3: what is your view? I do. 562 00:30:16,280 --> 00:30:18,920 Speaker 10: I feel very deeply that we should be funding basic science. 563 00:30:18,960 --> 00:30:20,880 Speaker 10: If we knew the answer to questions, we would just 564 00:30:20,960 --> 00:30:24,000 Speaker 10: go and pursue them. But you need fundamental research, you 565 00:30:24,080 --> 00:30:27,520 Speaker 10: need funding. Can those things operate better? Yes, But the 566 00:30:27,600 --> 00:30:30,600 Speaker 10: answer is not on the administrative side trying to cut things. 567 00:30:30,640 --> 00:30:33,920 Speaker 10: The answer is giving more grants and more money, not less, 568 00:30:34,200 --> 00:30:36,680 Speaker 10: to younger people, to younger researchers. And I know that 569 00:30:36,760 --> 00:30:39,760 Speaker 10: sounds crazy, but most of the great breakthroughs happen from 570 00:30:39,800 --> 00:30:44,000 Speaker 10: that crazy cocktail, that potent combination of ambition and naivete 571 00:30:44,560 --> 00:30:47,960 Speaker 10: and people that question why wouldn't. 572 00:30:47,560 --> 00:30:47,920 Speaker 3: We try that? 573 00:30:48,080 --> 00:30:50,720 Speaker 10: Why not try? Versus the old guard that often is 574 00:30:51,320 --> 00:30:55,160 Speaker 10: set in their ways and sclerotic and solidified, and they 575 00:30:55,240 --> 00:30:59,080 Speaker 10: are basically always saying why try that? So instead give 576 00:30:59,200 --> 00:31:01,880 Speaker 10: more money to young people. But we should absolutely, as 577 00:31:01,880 --> 00:31:04,880 Speaker 10: we're seeing from China and their competitive rise, We should 578 00:31:04,960 --> 00:31:08,160 Speaker 10: absolutely be giving more federal funding to basic science and 579 00:31:08,360 --> 00:31:12,560 Speaker 10: undirected research to create the spontaneous breakthroughs that can change 580 00:31:12,600 --> 00:31:15,520 Speaker 10: the world. We want the GLP ones invented here. We 581 00:31:15,560 --> 00:31:19,479 Speaker 10: want the GPUs invented here. TSMC itself should have been 582 00:31:19,520 --> 00:31:23,440 Speaker 10: invented here instead of in Taiwan. So we want all 583 00:31:23,520 --> 00:31:28,320 Speaker 10: these break great breakthroughs, whether they're in chemistry, physics, material science. 584 00:31:28,640 --> 00:31:31,000 Speaker 10: We dominated in software for the past two decades and 585 00:31:31,080 --> 00:31:33,640 Speaker 10: for the past generation. We really want to dominate in 586 00:31:33,720 --> 00:31:39,400 Speaker 10: the physical sciences, robots, space rocketry. Thank gosh for SpaceX, 587 00:31:39,400 --> 00:31:41,800 Speaker 10: even though I'm really critical of Elon. An amazing company 588 00:31:42,040 --> 00:31:44,120 Speaker 10: and an amazing American company, So we need more of 589 00:31:44,200 --> 00:31:44,920 Speaker 10: that no less. 590 00:31:46,000 --> 00:31:48,880 Speaker 3: Josh Wolf, co founder and managing partner at Lux Capital, 591 00:31:49,040 --> 00:31:51,560 Speaker 3: thank you for joining us. Coming up, we speak with 592 00:31:51,640 --> 00:31:55,680 Speaker 3: Hewlett Packard Enterprise CEO Antonio nari As the US sus 593 00:31:55,760 --> 00:31:59,160 Speaker 3: to block the company's acquisition of Juniper Networks. This is 594 00:31:59,200 --> 00:32:00,240 Speaker 3: Bloomberg technol. 595 00:32:11,720 --> 00:32:13,600 Speaker 2: Let's take a quick look at shares of HPE and 596 00:32:13,680 --> 00:32:17,240 Speaker 2: Juniper Networks. The DOJ yesterday announcing it's suing to stop 597 00:32:17,280 --> 00:32:20,400 Speaker 2: the fourteen billion dollar acquisition of Juniper Networks arguing the 598 00:32:20,440 --> 00:32:24,120 Speaker 2: merger would harm competition in the market for enterprise wireless equipment. 599 00:32:24,680 --> 00:32:27,360 Speaker 2: We're rallying off the back of some falls yesterday joining 600 00:32:27,440 --> 00:32:31,640 Speaker 2: us now Antonio nairy hpe CEO, and you have fought 601 00:32:31,720 --> 00:32:35,640 Speaker 2: back saying the DOJ is ignoring key competitors here. Why 602 00:32:35,680 --> 00:32:36,400 Speaker 2: are they doing that? 603 00:32:37,800 --> 00:32:40,560 Speaker 11: Welcome on it, Caroline, thank you for having me. We 604 00:32:40,720 --> 00:32:44,800 Speaker 11: believe the thesis from the euj's flawed because they consider 605 00:32:44,840 --> 00:32:48,560 Speaker 11: their market very narrowly in the wireless line, only three competitors, 606 00:32:48,880 --> 00:32:50,200 Speaker 11: when the reality there are eight. 607 00:32:51,040 --> 00:32:51,200 Speaker 3: You know. 608 00:32:51,680 --> 00:32:55,800 Speaker 11: Even industry analysts came out yesterday, you know, stating that 609 00:32:56,080 --> 00:32:59,640 Speaker 11: that's the case. So as we go in through the process, 610 00:33:00,280 --> 00:33:03,280 Speaker 11: we understood that that's going to be a challenge, but 611 00:33:03,520 --> 00:33:06,280 Speaker 11: ultimately we believe there is no case here. This is 612 00:33:06,320 --> 00:33:10,240 Speaker 11: pro competitive. We will bring it too complementary technologies together, 613 00:33:11,320 --> 00:33:13,920 Speaker 11: which also will enable us to compete outside the United 614 00:33:13,960 --> 00:33:16,800 Speaker 11: States in the context of the previous competition we have 615 00:33:17,000 --> 00:33:20,560 Speaker 11: with Josh against the Chinese vendors, in the context of 616 00:33:20,680 --> 00:33:24,560 Speaker 11: national security, particularly in cloud and the service provider space. 617 00:33:25,040 --> 00:33:27,560 Speaker 11: So that's why we're going to fight this vigorously, and 618 00:33:27,680 --> 00:33:30,440 Speaker 11: we believe we're going to prevail. Through the process. 619 00:33:31,360 --> 00:33:33,920 Speaker 2: Do your lawyers think you will prevail? It's interesting, of 620 00:33:34,000 --> 00:33:37,080 Speaker 2: course other regulators sign this off, so it must have 621 00:33:37,120 --> 00:33:37,720 Speaker 2: been a surprise. 622 00:33:39,240 --> 00:33:42,920 Speaker 11: Yeah, it was a surprise because fourteen of these sixteen 623 00:33:43,080 --> 00:33:46,719 Speaker 11: jurisdictions around the globe approved the deal pretty much by 624 00:33:46,800 --> 00:33:50,480 Speaker 11: September last year, which was very very quick. You know, 625 00:33:50,600 --> 00:33:54,840 Speaker 11: since the announcement was January nine, twenty twenty fourth, and 626 00:33:54,960 --> 00:33:58,239 Speaker 11: that included in the UK, in the European Union. They 627 00:33:58,400 --> 00:34:02,520 Speaker 11: never asked for a second request. Customer testimony was always 628 00:34:02,880 --> 00:34:05,600 Speaker 11: in favor of the transaction, and that's why, you know, 629 00:34:05,920 --> 00:34:10,160 Speaker 11: since September we were pretty much substantially complete with the 630 00:34:10,239 --> 00:34:13,000 Speaker 11: DOJ process, but obviously through the elections and the like, 631 00:34:13,600 --> 00:34:16,319 Speaker 11: we took us to today and then you know, when 632 00:34:16,360 --> 00:34:20,520 Speaker 11: I meet with it DOJ on Tuesday, nothing new came 633 00:34:20,560 --> 00:34:23,640 Speaker 11: out of that conversation, and therefore, you know, we are 634 00:34:23,680 --> 00:34:28,000 Speaker 11: surprised and disappointed, but ultimately we believe this is pro 635 00:34:28,120 --> 00:34:31,040 Speaker 11: competitive and we believe this is the interested on the 636 00:34:31,200 --> 00:34:37,200 Speaker 11: national security in alignment with the current administration agenda. And 637 00:34:37,320 --> 00:34:40,600 Speaker 11: that's why from a puran the trust perspective, we believe 638 00:34:40,640 --> 00:34:41,920 Speaker 11: we have a case here for us. 639 00:34:43,080 --> 00:34:45,120 Speaker 3: And tell you, did you try in the course of 640 00:34:45,160 --> 00:34:49,120 Speaker 3: those conversations with the Justice Department ahead of the losses 641 00:34:49,239 --> 00:34:53,279 Speaker 3: being filed, to negotiate something or perhaps offer concessions. What 642 00:34:53,520 --> 00:34:56,560 Speaker 3: might those have been and what did DOJ ask you for? 643 00:34:58,400 --> 00:35:01,000 Speaker 11: No, it was not necessary. In the DOJ never asked 644 00:35:01,040 --> 00:35:05,560 Speaker 11: for any concessions whatsoever. They ask us through the process 645 00:35:06,360 --> 00:35:10,680 Speaker 11: several extensions, but we never discuss remediation or any concessions 646 00:35:10,719 --> 00:35:11,760 Speaker 11: as a part of the approval. 647 00:35:13,360 --> 00:35:16,560 Speaker 3: Are you a little surprised them by the current administration 648 00:35:16,920 --> 00:35:21,279 Speaker 3: actually following through with this case? You pointed to its 649 00:35:21,400 --> 00:35:24,719 Speaker 3: posture when it comes to competitiveness in the US and 650 00:35:24,960 --> 00:35:29,800 Speaker 3: trying to foster investment. How does this square with what 651 00:35:30,239 --> 00:35:33,440 Speaker 3: the President, for instance, would be talking about when it 652 00:35:33,480 --> 00:35:34,120 Speaker 3: comes to business. 653 00:35:35,360 --> 00:35:39,120 Speaker 11: Well, Mike, we don't have yet the permanent leaders, neither 654 00:35:39,160 --> 00:35:43,680 Speaker 11: of the DOJ nor at the Antitrust Division, so we're 655 00:35:43,719 --> 00:35:46,719 Speaker 11: looking forward to have them on board. We hope that 656 00:35:46,800 --> 00:35:49,360 Speaker 11: they will take a second look at the case and 657 00:35:49,600 --> 00:35:54,439 Speaker 11: realize that this transaction is core tech, no big tech. 658 00:35:55,120 --> 00:35:59,239 Speaker 11: Remember that both Juniper Networks and HP powers a lot 659 00:35:59,320 --> 00:36:03,400 Speaker 11: of the United States infrastructure in the Department of Defense, 660 00:36:03,800 --> 00:36:09,480 Speaker 11: Department of Energy, and many other administrations. Across the government, 661 00:36:10,040 --> 00:36:12,719 Speaker 11: and so we're hopeful that when the new administration is 662 00:36:12,800 --> 00:36:14,960 Speaker 11: in charge, they're going to look at this and take 663 00:36:15,000 --> 00:36:18,680 Speaker 11: a second look and realize this is aligned perfectly with 664 00:36:18,800 --> 00:36:22,320 Speaker 11: the agenda that the President has America first, building the 665 00:36:22,440 --> 00:36:26,200 Speaker 11: United States. Let's remind yourself a lot of the equipment 666 00:36:26,280 --> 00:36:30,440 Speaker 11: that HP produces today for the United State governments building 667 00:36:30,480 --> 00:36:33,920 Speaker 11: the United States and also outside the United States to 668 00:36:34,040 --> 00:36:36,920 Speaker 11: compete with China. The reason why the market looks the 669 00:36:37,000 --> 00:36:39,560 Speaker 11: way it looks in the United States, which is eight 670 00:36:39,760 --> 00:36:44,480 Speaker 11: vendors and this is data from the industry analysts, which 671 00:36:44,560 --> 00:36:48,520 Speaker 11: we provided obviously tremendous amount of documentation, is because worldwet 672 00:36:48,600 --> 00:36:50,400 Speaker 11: is not allowed to play in the United States, but 673 00:36:50,480 --> 00:36:53,600 Speaker 11: when you go outside the United States, they're actually nine members. 674 00:36:54,480 --> 00:36:57,040 Speaker 2: It does feel like China continues to be the bogey 675 00:36:57,080 --> 00:36:59,160 Speaker 2: man that a lot of companies are going to turn 676 00:36:59,280 --> 00:37:01,800 Speaker 2: on to try and get things through. And ultimately, I 677 00:37:02,200 --> 00:37:04,920 Speaker 2: put to you that James McHenry, who's the acting Attorneys 678 00:37:04,960 --> 00:37:07,320 Speaker 2: General at the moment in the US, probably want to 679 00:37:07,400 --> 00:37:09,239 Speaker 2: pursue this and as he got some sort of sign 680 00:37:09,280 --> 00:37:13,719 Speaker 2: off from the new administration, a more pro business administration. 681 00:37:14,400 --> 00:37:16,560 Speaker 2: So do you think really this is going to land 682 00:37:16,600 --> 00:37:17,800 Speaker 2: any differently with Pamboni. 683 00:37:19,320 --> 00:37:23,239 Speaker 11: We don't know, Karen, I will not speak related to that. 684 00:37:23,840 --> 00:37:26,000 Speaker 11: Excuse me for my voice. I will not speak related 685 00:37:26,000 --> 00:37:28,960 Speaker 11: in that. You know, we have dealt with the Department 686 00:37:29,000 --> 00:37:34,319 Speaker 11: of Energy Anti Trust Division. We were very collaborative, constructive 687 00:37:34,400 --> 00:37:37,600 Speaker 11: throughout the process, and we hope that the new administration 688 00:37:37,680 --> 00:37:39,200 Speaker 11: one is in charge, they're going to look at this 689 00:37:39,800 --> 00:37:41,960 Speaker 11: and they will bring us back at the table. Otherwise, 690 00:37:42,440 --> 00:37:45,120 Speaker 11: you know, we will pursue the actions through the court. 691 00:37:45,920 --> 00:37:49,520 Speaker 11: They were the ones decided to file the lawsuit to 692 00:37:49,640 --> 00:37:52,160 Speaker 11: block the transaction, and we believe we have the right 693 00:37:52,640 --> 00:37:56,239 Speaker 11: to defend ourselves there and we believe that we can 694 00:37:56,320 --> 00:37:59,840 Speaker 11: prevail through the just the anti trust aspect of the 695 00:38:00,760 --> 00:38:03,160 Speaker 11: and then in addition to that, we hope that also 696 00:38:03,280 --> 00:38:06,880 Speaker 11: the national security aspect of this article see. 697 00:38:06,760 --> 00:38:07,200 Speaker 10: That as well. 698 00:38:07,560 --> 00:38:19,719 Speaker 3: HPE CEO Antonio Neri, thank you. Here's the story. We've 699 00:38:19,800 --> 00:38:21,880 Speaker 3: got to get to the future of H one B 700 00:38:22,080 --> 00:38:25,920 Speaker 3: visas in America's tech industry under the new administration. This 701 00:38:26,200 --> 00:38:29,759 Speaker 3: is Trump's birthright citizenship order, sparks fear in H one 702 00:38:29,880 --> 00:38:32,960 Speaker 3: B parents. Let's bring in HIBBA and from the ericson 703 00:38:33,080 --> 00:38:36,960 Speaker 3: immigration group HIBBA. The rhetoric from the White House and 704 00:38:37,040 --> 00:38:41,520 Speaker 3: elsewhere in the administration about immigration has to be very 705 00:38:41,600 --> 00:38:44,800 Speaker 3: troubling for a lot of your clients to digest what 706 00:38:44,920 --> 00:38:46,120 Speaker 3: are you hearing from them. 707 00:38:47,719 --> 00:38:50,759 Speaker 12: So what we're hearing is basically concerns resulting from some 708 00:38:50,920 --> 00:38:55,279 Speaker 12: of the impacts of the Birthright Citizenship Executive Order, namely that, 709 00:38:55,800 --> 00:38:58,279 Speaker 12: for example, if an individual who's here on an H 710 00:38:58,360 --> 00:39:01,240 Speaker 12: one B visa has a baby in the United States, 711 00:39:01,560 --> 00:39:04,040 Speaker 12: according to this executive order, that baby is no longer 712 00:39:04,160 --> 00:39:07,800 Speaker 12: considered a US citizen. So if that child is not 713 00:39:07,960 --> 00:39:10,400 Speaker 12: a US citizen at birth, and if that child is 714 00:39:10,480 --> 00:39:12,919 Speaker 12: not a citizen of the parents' home country at birth, 715 00:39:13,320 --> 00:39:16,320 Speaker 12: then what this executive order does is essentially create a 716 00:39:16,440 --> 00:39:20,400 Speaker 12: category of stateless children. And that is very, very concerning 717 00:39:20,480 --> 00:39:22,640 Speaker 12: for a lot of the visa holders in the United States, 718 00:39:22,719 --> 00:39:25,480 Speaker 12: inclusive of the age one B visa. And so a 719 00:39:25,560 --> 00:39:28,960 Speaker 12: lot of the questions that we're getting stem from those concerns, 720 00:39:29,080 --> 00:39:32,359 Speaker 12: because a lot of these restrictionist policies are creating an 721 00:39:32,440 --> 00:39:35,080 Speaker 12: environment that is seemingly hostile towards immigrants. 722 00:39:35,520 --> 00:39:36,440 Speaker 1: So if the tech. 723 00:39:36,360 --> 00:39:40,080 Speaker 12: Industry is about talent attraction and employee incentives, this really 724 00:39:40,200 --> 00:39:40,680 Speaker 12: isn't going. 725 00:39:40,640 --> 00:39:43,360 Speaker 2: To help hiper I'm going to make this personal. I 726 00:39:43,440 --> 00:39:46,359 Speaker 2: came here with already one child, and I gave birth 727 00:39:46,400 --> 00:39:51,000 Speaker 2: to one in the United States and automatically got us citizenship. 728 00:39:51,239 --> 00:39:54,080 Speaker 2: I was on a temporary visa at the time. I 729 00:39:54,280 --> 00:39:57,560 Speaker 2: wasn't worried about coming here to have an American baby, 730 00:39:57,880 --> 00:40:00,279 Speaker 2: and it wasn't hard for me to get her case 731 00:40:00,320 --> 00:40:04,080 Speaker 2: citizenship afterwards. So who is it that is really concerned here, 732 00:40:04,080 --> 00:40:06,960 Speaker 2: because I imagine it's not developed nation to develop nation. 733 00:40:07,080 --> 00:40:09,520 Speaker 2: Who of your clients when he thinks that it's integral 734 00:40:09,600 --> 00:40:12,000 Speaker 2: to have a child that is with birthright citizenship. 735 00:40:13,280 --> 00:40:14,640 Speaker 12: So the thing is that there are a lot of 736 00:40:14,680 --> 00:40:18,200 Speaker 12: countries around the world where if the parents have a 737 00:40:18,360 --> 00:40:22,239 Speaker 12: child born abroad, that child is not going to automatically 738 00:40:22,320 --> 00:40:25,920 Speaker 12: get citizenship from the home country until the parents take 739 00:40:26,000 --> 00:40:28,560 Speaker 12: some sort of affirmative steps to apply. 740 00:40:28,440 --> 00:40:30,719 Speaker 2: For that city. Night had to do that too, which 741 00:40:30,920 --> 00:40:32,879 Speaker 2: wasn't add well. 742 00:40:33,000 --> 00:40:34,880 Speaker 12: So essentially, you have to look at it in the 743 00:40:34,960 --> 00:40:37,200 Speaker 12: totality of the circumstances. We can't look at it in 744 00:40:37,280 --> 00:40:39,960 Speaker 12: a vacuum. If the United States is going to have 745 00:40:40,120 --> 00:40:44,160 Speaker 12: policies that are seemingly hostile towards immigrants, or making it 746 00:40:44,280 --> 00:40:47,160 Speaker 12: harder for immigrants to establish their families and their lives 747 00:40:47,200 --> 00:40:50,799 Speaker 12: in the United States than irrespective of whether the citizenship 748 00:40:50,840 --> 00:40:53,000 Speaker 12: of the home country is easy for the parent to 749 00:40:53,040 --> 00:40:56,000 Speaker 12: obtain for their child, that visa holder in the United 750 00:40:56,040 --> 00:40:58,520 Speaker 12: States is going to think twice about whether or not 751 00:40:58,680 --> 00:41:00,960 Speaker 12: they want to settle in the United States long term. 752 00:41:01,320 --> 00:41:02,960 Speaker 12: So then if you take a look at the companies 753 00:41:03,000 --> 00:41:07,120 Speaker 12: that actually employ those individuals, those companies are going to 754 00:41:07,160 --> 00:41:10,279 Speaker 12: find it more difficult to retain the top talent that 755 00:41:10,360 --> 00:41:12,640 Speaker 12: they rely on in order for them to be competitive 756 00:41:12,680 --> 00:41:15,759 Speaker 12: on a global stage. So what I'm hopeful for is 757 00:41:15,800 --> 00:41:19,360 Speaker 12: that whatever policy comes out of this administration continues to 758 00:41:19,440 --> 00:41:23,000 Speaker 12: be very welcoming and creates that culture welcome irrespective of 759 00:41:23,040 --> 00:41:25,760 Speaker 12: whether the individuals have to deal with certain citizenship issues 760 00:41:26,000 --> 00:41:28,720 Speaker 12: for their child or not. But we have to understand 761 00:41:28,800 --> 00:41:32,799 Speaker 12: that birthright citizenship is enshrined in our constitution. So one 762 00:41:32,880 --> 00:41:34,959 Speaker 12: of the key issues here is the fact that there's 763 00:41:35,040 --> 00:41:39,080 Speaker 12: a presidential action that is seeking to overturn something in 764 00:41:39,200 --> 00:41:42,600 Speaker 12: the Constitution outside the proper process, and that's also been 765 00:41:42,640 --> 00:41:44,359 Speaker 12: concerning to a lot of individuals as well. 766 00:41:45,600 --> 00:41:48,560 Speaker 3: Hibba Trump has yet to alter the H one B 767 00:41:48,840 --> 00:41:52,040 Speaker 3: program itself. Let's home in there for a moment. Are 768 00:41:52,080 --> 00:41:56,320 Speaker 3: you anticipating any changes from the administration or Congress to it. 769 00:41:58,120 --> 00:42:00,480 Speaker 12: I don't know if we're necessarily going to see something 770 00:42:00,520 --> 00:42:04,600 Speaker 12: that directly impacts the he B program. However, there are 771 00:42:04,719 --> 00:42:07,120 Speaker 12: a lot of executive orders that have come out since 772 00:42:07,160 --> 00:42:12,000 Speaker 12: the inauguration that indirectly impact legal immigration in the United States. 773 00:42:12,320 --> 00:42:16,600 Speaker 12: For example, this Birthright Citizenship Executive Order. So, for example, 774 00:42:16,800 --> 00:42:19,960 Speaker 12: if this executive order ends up being successful, and if 775 00:42:20,080 --> 00:42:22,040 Speaker 12: children that are born in the United States are not 776 00:42:22,120 --> 00:42:25,680 Speaker 12: automatically US citizens, then what that implies is that there's 777 00:42:25,719 --> 00:42:29,120 Speaker 12: an additional number of individuals that are going to get 778 00:42:29,239 --> 00:42:33,440 Speaker 12: included in the overall green card Q. Now, the backlogs 779 00:42:33,480 --> 00:42:35,920 Speaker 12: for obtaining a green card in the United States are 780 00:42:36,760 --> 00:42:38,920 Speaker 12: they're already very, very lengthy and long for a lot 781 00:42:38,920 --> 00:42:41,480 Speaker 12: of individuals, So this is only going to increase their 782 00:42:41,560 --> 00:42:44,120 Speaker 12: wait times. So again, if you look at the totality 783 00:42:44,160 --> 00:42:47,759 Speaker 12: of the circumstances, this is getting a little bit of 784 00:42:47,880 --> 00:42:50,640 Speaker 12: like a discouraging environment for individuals that are seeking to 785 00:42:50,719 --> 00:42:51,680 Speaker 12: live in the United States. 786 00:42:52,000 --> 00:42:53,640 Speaker 2: Well said, I can tell you it took a long 787 00:42:53,719 --> 00:42:56,439 Speaker 2: time to get a green card Heave and the really 788 00:42:56,480 --> 00:42:58,759 Speaker 2: great to have you on the show from ericson Immigration Group. 789 00:42:59,320 --> 00:43:01,759 Speaker 2: Now that does it for this edition of Bloomberg Technology, Mike, 790 00:43:01,880 --> 00:43:04,160 Speaker 2: do not forget to check out our podcast provided on 791 00:43:04,200 --> 00:43:07,200 Speaker 2: the terminal, as well as online on Apple, Spotify, and 792 00:43:07,360 --> 00:43:08,880 Speaker 2: iHeart This is Bloomberg.