1 00:00:02,520 --> 00:00:09,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of 2 00:00:09,800 --> 00:00:15,520 Speaker 1: where innovation, money and power collide in Silicon Valley and beyond. 3 00:00:15,960 --> 00:00:50,400 Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 4 00:00:36,400 --> 00:00:39,159 Speaker 2: Live from San Francisco. I'm Tim Stenebeck, and this is 5 00:00:39,159 --> 00:00:43,120 Speaker 2: Bloomberg Technology. Coming up on the program today, Elon tries 6 00:00:43,159 --> 00:00:46,360 Speaker 2: to alleviate Tesla concerns, telling staffers to hold onto their 7 00:00:46,360 --> 00:00:51,280 Speaker 2: stock after plunging fifty percent in three months, plus micron 8 00:00:51,479 --> 00:00:56,360 Speaker 2: under pressure, disappointing margins, overshadowing an otherwise impressive set of 9 00:00:56,440 --> 00:01:01,040 Speaker 2: quarterly results. And in video, that's on America announcing new 10 00:01:01,040 --> 00:01:04,840 Speaker 2: plans to invest billions of dollars on US manufacturing. All 11 00:01:04,840 --> 00:01:06,400 Speaker 2: that and more coming up over the next hour on 12 00:01:06,440 --> 00:01:07,400 Speaker 2: Bloomberg Technology. 13 00:01:07,440 --> 00:01:07,840 Speaker 3: First Up. 14 00:01:08,040 --> 00:01:10,440 Speaker 2: Shares a Tesla over the last five days down about 15 00:01:10,440 --> 00:01:14,119 Speaker 2: three point five percent. Elon musk yesterday trying to reassure 16 00:01:14,120 --> 00:01:17,240 Speaker 2: Tesla employees during what he referred to as quote a 17 00:01:17,240 --> 00:01:19,479 Speaker 2: little bit of stormy weather. Check out what he had 18 00:01:19,520 --> 00:01:22,120 Speaker 2: to say. He urged employees to hang onto their stock. 19 00:01:22,400 --> 00:01:24,520 Speaker 2: He called Arc invest Kathy Wood as an example of 20 00:01:24,560 --> 00:01:27,160 Speaker 2: someone's still believing in the stock. He said some people 21 00:01:27,520 --> 00:01:29,800 Speaker 2: like Kathy Wood at Ark invest do you see the future? 22 00:01:30,080 --> 00:01:33,199 Speaker 2: So what I'm saying is, hang on to your stock. 23 00:01:33,680 --> 00:01:36,280 Speaker 2: Let's talk a little bit more about Tesla had things 24 00:01:36,319 --> 00:01:40,240 Speaker 2: over to Europe where we're joined by Bloomberg's Craig or Trudell. Craig, 25 00:01:40,400 --> 00:01:42,240 Speaker 2: what did you make of what we heard from elon 26 00:01:42,520 --> 00:01:44,640 Speaker 2: late yesterday? What was the tone that he was trying 27 00:01:44,640 --> 00:01:46,080 Speaker 2: to communicate to his employees. 28 00:01:47,800 --> 00:01:51,120 Speaker 4: It was highly unusual, and you know, I know that 29 00:01:51,520 --> 00:01:54,000 Speaker 4: we've of course, you know, over the years, you know, 30 00:01:54,080 --> 00:01:57,080 Speaker 4: heard from from Musk via you know, memos that he's 31 00:01:57,120 --> 00:01:59,120 Speaker 4: sent out to staff that you know, tend to leak, 32 00:01:59,720 --> 00:02:02,840 Speaker 4: you know, soon after. But this was, you know, in 33 00:02:02,880 --> 00:02:05,440 Speaker 4: the middle of a quarter, you know, not not a 34 00:02:05,440 --> 00:02:07,840 Speaker 4: product event or anything like that, a sort of spur 35 00:02:07,880 --> 00:02:10,320 Speaker 4: of the moment, all hands and to sort of stream 36 00:02:10,360 --> 00:02:12,920 Speaker 4: it publicly. It seemed to be a sort of you know, 37 00:02:13,480 --> 00:02:16,280 Speaker 4: reassure the employees and in the in the course of 38 00:02:16,320 --> 00:02:20,560 Speaker 4: doing so, reassure the market that, you know, yes, Tesla's 39 00:02:20,600 --> 00:02:23,280 Speaker 4: in his words, are are on fire and they you know, 40 00:02:23,320 --> 00:02:27,440 Speaker 4: that keeps getting shown on TV. But you know, essentially, 41 00:02:27,520 --> 00:02:30,160 Speaker 4: don't worry. Everything's going to be fine, you know, the 42 00:02:30,200 --> 00:02:31,240 Speaker 4: future is going to be bright. 43 00:02:32,280 --> 00:02:34,920 Speaker 2: Okay, Well, speaking of the future, he did bring up 44 00:02:34,960 --> 00:02:38,280 Speaker 2: the idea once again that self driving cars, autonomous driving 45 00:02:38,320 --> 00:02:41,080 Speaker 2: for Tesla on a wide scale is right around the corner. 46 00:02:41,080 --> 00:02:43,280 Speaker 2: This is something he's been talking about for close to 47 00:02:43,320 --> 00:02:46,640 Speaker 2: ten years. How close is he though, this time, Craig. 48 00:02:48,040 --> 00:02:50,800 Speaker 4: I think, you know, that is the key question for Tesla, 49 00:02:50,919 --> 00:02:53,120 Speaker 4: and it's it's stock. You know, this is something that 50 00:02:53,280 --> 00:02:56,280 Speaker 4: Musk has been talking about since twenty sixteen, and he 51 00:02:56,400 --> 00:02:59,680 Speaker 4: himself has you know, referred to the idea that you know, 52 00:02:59,720 --> 00:03:01,720 Speaker 4: he's he's sort of a boy who cried wolf at 53 00:03:01,720 --> 00:03:05,079 Speaker 4: this point. He's made this prediction that you know, at 54 00:03:05,120 --> 00:03:08,080 Speaker 4: some point they'll have a software update where your Tesla 55 00:03:08,160 --> 00:03:10,520 Speaker 4: will be able to drive itself and it'll be useful 56 00:03:10,600 --> 00:03:12,960 Speaker 4: even when you're not in it, and perhaps you know, 57 00:03:13,240 --> 00:03:15,200 Speaker 4: go fetch people and it essentially work the way in 58 00:03:15,320 --> 00:03:18,320 Speaker 4: Uber would. That has not happened, and I think there 59 00:03:18,320 --> 00:03:20,760 Speaker 4: are a lot of reasons to be skeptical that that 60 00:03:21,320 --> 00:03:24,240 Speaker 4: you know, future will arrive. With the hardware set that 61 00:03:24,280 --> 00:03:27,280 Speaker 4: he's put in his vehicles, you can both you know, 62 00:03:27,360 --> 00:03:31,880 Speaker 4: be impressed by the fact that his systems are quite 63 00:03:31,960 --> 00:03:35,040 Speaker 4: capable for assisting drivers, but they still need the human 64 00:03:35,080 --> 00:03:38,000 Speaker 4: in the loop. And until and unless that changes, I 65 00:03:38,000 --> 00:03:42,040 Speaker 4: think you're going to have this this you know, a 66 00:03:42,160 --> 00:03:45,600 Speaker 4: real reason to sort of second guess why this company 67 00:03:45,800 --> 00:03:47,920 Speaker 4: is valued as richly as it is. 68 00:03:48,720 --> 00:03:50,680 Speaker 2: We Tesla Sharre is getting hit over the last three months. 69 00:03:50,760 --> 00:03:53,480 Speaker 2: Hired today by two percent, down on the week. Still 70 00:03:53,520 --> 00:03:56,080 Speaker 2: though Bloomberg's Preye Tree Jel joining us from London, could 71 00:03:56,120 --> 00:03:58,000 Speaker 2: just see you, Craig, have a good weekend. Well, let's 72 00:03:58,000 --> 00:04:00,720 Speaker 2: talk about another company that has had a week, and 73 00:04:00,720 --> 00:04:04,200 Speaker 2: that's in Vidia. Maydeep saying of Bloomberg Intelligence joins us. 74 00:04:04,200 --> 00:04:07,640 Speaker 2: Now Mandy, as we reflect on the week that was 75 00:04:07,880 --> 00:04:13,840 Speaker 2: in Video GtC, Why did this week fail to really 76 00:04:13,880 --> 00:04:17,760 Speaker 2: capture the attention and the excitement of investors like a 77 00:04:17,839 --> 00:04:19,680 Speaker 2: previous GtC events have. 78 00:04:21,480 --> 00:04:25,200 Speaker 3: Yeah, I mean, look, I think from a product roadmap perspective, 79 00:04:25,279 --> 00:04:28,119 Speaker 3: they did everything they could have, you know, in terms 80 00:04:28,160 --> 00:04:30,600 Speaker 3: of showing the next three years what it would mean 81 00:04:30,680 --> 00:04:34,960 Speaker 3: for in video and even on the supply side, it seems, 82 00:04:36,040 --> 00:04:41,039 Speaker 3: you know, it will remain inelastic around the accelerated computing chips. 83 00:04:41,520 --> 00:04:44,800 Speaker 3: The demand side is where there are still question marks, 84 00:04:44,920 --> 00:04:49,119 Speaker 3: because you know, he talked about infrincing using one hundred 85 00:04:49,200 --> 00:04:55,000 Speaker 3: times more compute than prior sort of infrincing. So reasoning 86 00:04:55,080 --> 00:04:57,560 Speaker 3: and the deep sea type approach is what's driving the 87 00:04:57,600 --> 00:05:01,320 Speaker 3: additional compute, but it remains to be seen whether it 88 00:05:01,440 --> 00:05:05,440 Speaker 3: can pull offset. You know, the plateauing of pre training, 89 00:05:05,520 --> 00:05:08,440 Speaker 3: which everyone seems to agree on at this moment of time, 90 00:05:08,920 --> 00:05:13,080 Speaker 3: and you know there is always that lurking competition from 91 00:05:13,120 --> 00:05:17,240 Speaker 3: your hyperscalers developing data own a six even though he 92 00:05:17,360 --> 00:05:21,240 Speaker 3: downplayed the competition, and really for him, it's about the 93 00:05:21,320 --> 00:05:24,080 Speaker 3: next version, which is the black Belt and Rubin. 94 00:05:24,200 --> 00:05:25,159 Speaker 5: And look, I. 95 00:05:25,480 --> 00:05:28,600 Speaker 3: Think if you're a customer of Nvidia, you're asking yourself, 96 00:05:28,600 --> 00:05:32,240 Speaker 3: if Blackvel is forty times better, do I really appreciate 97 00:05:32,360 --> 00:05:34,800 Speaker 3: all the Hopper chips that I have right now within 98 00:05:34,839 --> 00:05:37,560 Speaker 3: two years? And I think that will come up at 99 00:05:37,560 --> 00:05:40,000 Speaker 3: some point in terms of the depreciation expenses. 100 00:05:40,600 --> 00:05:43,200 Speaker 2: So it raises the question about the next catalyst here 101 00:05:43,279 --> 00:05:46,919 Speaker 2: a man deep. If this didn't excite investors, then what 102 00:05:47,000 --> 00:05:49,800 Speaker 2: are they looking toward to get more information about what 103 00:05:49,800 --> 00:05:51,200 Speaker 2: could move the stock higher. 104 00:05:53,040 --> 00:05:56,320 Speaker 3: I think the single biggest thing right now is how 105 00:05:56,400 --> 00:05:59,640 Speaker 3: would Nvidia's gross margin look like in the second half, 106 00:05:59,720 --> 00:06:03,599 Speaker 3: because there is that concern that you know, given Nvidia 107 00:06:04,000 --> 00:06:08,400 Speaker 3: is packaging two GPU chips now in their black Belt series, 108 00:06:08,600 --> 00:06:11,239 Speaker 3: how does that impact the gross margin? And gross margins 109 00:06:11,240 --> 00:06:14,800 Speaker 3: have already been trending down with the Blackwell ramp that 110 00:06:14,800 --> 00:06:18,320 Speaker 3: they were with seventy five percent and now it's closer 111 00:06:18,320 --> 00:06:22,080 Speaker 3: to seventy percent. So clearly that gross margin ramp is 112 00:06:22,200 --> 00:06:25,920 Speaker 3: critical in terms of the next series that in video 113 00:06:26,000 --> 00:06:28,640 Speaker 3: is going to produce, and that for me, is the 114 00:06:28,720 --> 00:06:31,760 Speaker 3: key determinant of where the stock is headed next. 115 00:06:32,880 --> 00:06:36,480 Speaker 2: Mandy Seeing of Bloomberg Intelligence, Mandy always get to see you. 116 00:06:36,560 --> 00:06:38,960 Speaker 2: Thanks for joining us. Well, let's break down the week 117 00:06:39,000 --> 00:06:42,440 Speaker 2: in markets. Nancy Curtain is Alti Teadman, a global chief 118 00:06:42,480 --> 00:06:46,120 Speaker 2: investment officer, and she joins us. Now, Nancy, we're still 119 00:06:46,200 --> 00:06:49,480 Speaker 2: talking about a correction, especially when it comes to tech stocks. 120 00:06:49,520 --> 00:06:53,159 Speaker 2: The NASTAC one hundred could close down for a fifth 121 00:06:53,160 --> 00:06:55,160 Speaker 2: week in a row, the longest losing streak going back 122 00:06:55,160 --> 00:06:58,719 Speaker 2: to May of twenty twenty two. Is this correction a 123 00:06:58,800 --> 00:07:01,480 Speaker 2: sign of more weakness to or do you think we're 124 00:07:01,520 --> 00:07:02,560 Speaker 2: at the bottom. 125 00:07:03,160 --> 00:07:03,440 Speaker 6: Look. 126 00:07:03,720 --> 00:07:07,000 Speaker 7: I think near term forecasting is pretty na on impossible. 127 00:07:07,560 --> 00:07:09,600 Speaker 7: But one of the things to keep in mind is 128 00:07:09,720 --> 00:07:13,120 Speaker 7: we have a pretty big D day deadline ahead, which 129 00:07:13,160 --> 00:07:16,600 Speaker 7: is April second, and until we know what these tarts are, 130 00:07:16,600 --> 00:07:20,320 Speaker 7: the magnitude, reciprocal, etc. I think markets are going to 131 00:07:20,360 --> 00:07:23,760 Speaker 7: be pretty volatile here. But look, we think this is 132 00:07:23,800 --> 00:07:26,600 Speaker 7: a correction and not the beginnings of a bear market, 133 00:07:26,800 --> 00:07:28,960 Speaker 7: because we don't see a recession. And I think that's 134 00:07:29,000 --> 00:07:32,440 Speaker 7: an important thing to keep in mind. You were overdue 135 00:07:32,480 --> 00:07:36,720 Speaker 7: a correction. Corrections normally resolve themselves as the markets move higher. 136 00:07:37,080 --> 00:07:41,640 Speaker 7: Huge levels of pessimism, which I find very encouraging, but 137 00:07:41,760 --> 00:07:45,040 Speaker 7: we could have some volatility here, as you mentioned, for 138 00:07:45,080 --> 00:07:47,120 Speaker 7: at least another eleven days. 139 00:07:48,240 --> 00:07:50,960 Speaker 2: What makes you so sure that we're not going to 140 00:07:50,960 --> 00:07:53,640 Speaker 2: see a recession? The consumer, we know powers this economy. 141 00:07:54,160 --> 00:07:57,320 Speaker 2: We've gotten some mixed consumer data, especially in the early 142 00:07:57,360 --> 00:08:01,520 Speaker 2: part of last week when it comes to airlines. What 143 00:08:01,640 --> 00:08:03,640 Speaker 2: makes you so sure we're not headed twitter recession. 144 00:08:04,760 --> 00:08:07,680 Speaker 7: Well, first of all, I think it's the dichotomy between 145 00:08:07,680 --> 00:08:10,440 Speaker 7: the heart and the soft data. So the soft data 146 00:08:10,560 --> 00:08:16,000 Speaker 7: has been weaker, consumer sentiment, inflation expectations one year have risen, 147 00:08:16,720 --> 00:08:19,760 Speaker 7: and we do think that the economy is slow and 148 00:08:19,880 --> 00:08:22,680 Speaker 7: certainly going to be negative, probably in the first quarter. 149 00:08:22,760 --> 00:08:27,880 Speaker 7: Because we had all that buying of imports proactively by companies, 150 00:08:27,920 --> 00:08:30,000 Speaker 7: which is meaning that net trade is going to be 151 00:08:30,040 --> 00:08:32,680 Speaker 7: a negative. So expect the first quarter to be lower. 152 00:08:33,040 --> 00:08:36,080 Speaker 7: Expect GDP overall for twenty twenty five to be weaker 153 00:08:36,600 --> 00:08:39,040 Speaker 7: than expectations. But you know, let's get back to the 154 00:08:39,120 --> 00:08:44,080 Speaker 7: hard data, jobs, personal incomes. The household balance sheet, which 155 00:08:44,160 --> 00:08:47,160 Speaker 7: was announced by the Fed two weeks ago, still remains 156 00:08:47,200 --> 00:08:49,960 Speaker 7: pretty strong, and you know, we haven't talked about the 157 00:08:50,000 --> 00:08:54,679 Speaker 7: fact it could well be that investment surprises. Look, you 158 00:08:54,720 --> 00:08:57,280 Speaker 7: saw in Nvidia committing to five hundred billion over the 159 00:08:57,320 --> 00:09:00,600 Speaker 7: next four years. That comes on top of Apple, that 160 00:09:00,640 --> 00:09:05,320 Speaker 7: comes on top of TSMC. Add those three companies together 161 00:09:05,920 --> 00:09:09,319 Speaker 7: and you're looking at close to one point four trillion 162 00:09:09,880 --> 00:09:13,320 Speaker 7: of expenditure over the next four years back into the 163 00:09:13,440 --> 00:09:16,960 Speaker 7: United States, not to manage, not to mention, you know, 164 00:09:17,040 --> 00:09:20,199 Speaker 7: the funding bill making its way through Congress, which might 165 00:09:20,240 --> 00:09:22,839 Speaker 7: have some CAPEX goodies like you know, one hundred percent 166 00:09:22,880 --> 00:09:26,680 Speaker 7: expensing of R and D and depreciation, etc. So you know, 167 00:09:26,720 --> 00:09:29,440 Speaker 7: there are some things here. Hard data is still solid, 168 00:09:29,760 --> 00:09:32,480 Speaker 7: those slowing, and we think there are some things that 169 00:09:32,559 --> 00:09:35,720 Speaker 7: will come in what I call the goody side of 170 00:09:35,840 --> 00:09:37,160 Speaker 7: Trump that are still to come. 171 00:09:38,520 --> 00:09:41,200 Speaker 2: Let's zero in a little bit on tech specifically, the 172 00:09:41,240 --> 00:09:45,640 Speaker 2: MAG seven Meta Platforms is actually higher for the year 173 00:09:45,800 --> 00:09:48,920 Speaker 2: as of now, but for the first time this year, 174 00:09:49,080 --> 00:09:52,360 Speaker 2: it did dip into negative territory for the year. Other 175 00:09:52,400 --> 00:09:55,840 Speaker 2: than that, six of the seven MAG seven are negative 176 00:09:55,960 --> 00:09:58,720 Speaker 2: on the year. Do you see a turnaround with the 177 00:09:58,760 --> 00:09:59,319 Speaker 2: MAG seven. 178 00:10:00,400 --> 00:10:03,680 Speaker 7: Well, we don't buy stocks, we buy managers. But you know, 179 00:10:03,760 --> 00:10:07,040 Speaker 7: our managers have been underweight. Our active managers are underweight 180 00:10:07,080 --> 00:10:09,960 Speaker 7: the MAG seven. So that's been a good positioning for 181 00:10:10,080 --> 00:10:13,280 Speaker 7: us this year. Met has done a much better job 182 00:10:13,360 --> 00:10:17,280 Speaker 7: I think of communicating how they expect all this AI 183 00:10:17,559 --> 00:10:23,320 Speaker 7: spend to result in better metrics, advertising, metrics, engagement, et cetera. 184 00:10:23,960 --> 00:10:26,960 Speaker 7: The other companies have been a little bit more vague, 185 00:10:27,320 --> 00:10:30,280 Speaker 7: and that's why investors are concerned, at least for the 186 00:10:30,280 --> 00:10:32,760 Speaker 7: four horsemen that are spending what three hundred and twenty 187 00:10:32,880 --> 00:10:36,720 Speaker 7: billion plus, you know, on various forms of AI infrastructure, 188 00:10:37,040 --> 00:10:41,280 Speaker 7: how that's going to result in returns our view, let's 189 00:10:41,320 --> 00:10:44,840 Speaker 7: go to the spending beneficiary. So we like digital infrastructure. 190 00:10:44,880 --> 00:10:48,679 Speaker 7: We like infrastructure generally because that's where all the spending 191 00:10:48,800 --> 00:10:52,040 Speaker 7: is going. We like power, we like energy, we like 192 00:10:52,080 --> 00:10:55,400 Speaker 7: onshore in a production We think infrastructure is something that's 193 00:10:55,520 --> 00:10:59,520 Speaker 7: less correlated to equity markets, very very good counter parties, 194 00:11:00,000 --> 00:11:02,720 Speaker 7: but also is part of what I call this huge 195 00:11:02,760 --> 00:11:07,280 Speaker 7: spending surge that's likely to continue. So MAG seven underweight. 196 00:11:07,559 --> 00:11:10,360 Speaker 7: We think that's the right positioning, but we want to 197 00:11:10,400 --> 00:11:12,080 Speaker 7: be with the spending beneficiaries. 198 00:11:12,840 --> 00:11:17,560 Speaker 2: What's your view on how Jenai adoption moves to other 199 00:11:17,640 --> 00:11:21,400 Speaker 2: parts of the market. So far, the beneficiaries have largely 200 00:11:21,480 --> 00:11:25,720 Speaker 2: been the hyperscalers, the chip manufacturers, the companies that we 201 00:11:25,760 --> 00:11:27,600 Speaker 2: talk about each and every day. When does that move 202 00:11:27,679 --> 00:11:29,360 Speaker 2: beyond these companies? 203 00:11:30,360 --> 00:11:33,880 Speaker 7: So well, our theme has been a broadening in market participation, 204 00:11:34,200 --> 00:11:36,200 Speaker 7: and by the way, we're seeing that this year. You know, 205 00:11:36,240 --> 00:11:39,120 Speaker 7: it feels horrible, but you know, ninety seven percent of 206 00:11:39,160 --> 00:11:41,040 Speaker 7: the decline is coming from the MAG seven. There are 207 00:11:41,040 --> 00:11:44,240 Speaker 7: a bunch of sectors that are in positive territory, but 208 00:11:44,360 --> 00:11:46,760 Speaker 7: you know, looking forward and of course European markets, the 209 00:11:46,840 --> 00:11:49,960 Speaker 7: Chinese markets in positive territory as well, So you know, 210 00:11:50,040 --> 00:11:52,640 Speaker 7: as we look forward, we think that broadening theme will 211 00:11:52,640 --> 00:11:57,400 Speaker 7: be operative that we think Jenai is early innings, early innings, right, 212 00:11:57,800 --> 00:12:00,920 Speaker 7: compute power is going to come down these large language 213 00:12:00,960 --> 00:12:02,959 Speaker 7: models are going to come down the cost of that, 214 00:12:03,160 --> 00:12:07,000 Speaker 7: and of course that's Jevan's paradox that leads to greater adoption, 215 00:12:07,240 --> 00:12:11,160 Speaker 7: and that's not been priced in. The profitability and productivity 216 00:12:11,240 --> 00:12:15,319 Speaker 7: enhancements across large sections of the global economy from jen 217 00:12:15,360 --> 00:12:18,320 Speaker 7: Ai is still to come and that's really not priced in. 218 00:12:18,520 --> 00:12:21,680 Speaker 7: And so again that's not a tomorrow thing. But we 219 00:12:21,760 --> 00:12:25,079 Speaker 7: think that is positive yearly from the kind of a 220 00:12:25,200 --> 00:12:29,280 Speaker 7: medium term perspective, and again our clients are longer term, 221 00:12:29,360 --> 00:12:31,520 Speaker 7: you know, investors. We don't try to play the markets 222 00:12:31,559 --> 00:12:33,199 Speaker 7: with a day to day trading mentality. 223 00:12:34,280 --> 00:12:37,600 Speaker 2: Nancy Curtin of Aalti Teadman, thanks so much for joining us. 224 00:12:37,720 --> 00:12:38,520 Speaker 8: Have a great weekend. 225 00:12:39,200 --> 00:12:42,440 Speaker 2: Hey, coming up Micron, it disappoints investors of the week 226 00:12:42,480 --> 00:12:44,480 Speaker 2: margin Now look we're gonna have more on the chip 227 00:12:44,520 --> 00:12:47,959 Speaker 2: maker right after this. Shares down by eight percent. 228 00:12:47,679 --> 00:12:50,000 Speaker 8: Right now, this is Bloomberg. 229 00:13:05,080 --> 00:13:05,240 Speaker 7: Well. 230 00:13:05,240 --> 00:13:08,160 Speaker 2: Shares of Micron are following today after the memory chip 231 00:13:08,200 --> 00:13:11,319 Speaker 2: maker said margins will miss analysts estimates this quarter. Look 232 00:13:11,320 --> 00:13:14,080 Speaker 2: at that shares down eight point two percent as we speak. 233 00:13:14,400 --> 00:13:18,240 Speaker 2: It's ours investor sentiment despite posting a strong sales and 234 00:13:18,320 --> 00:13:21,960 Speaker 2: profit For more. Pierre farragu joins us New Street Research 235 00:13:21,960 --> 00:13:25,000 Speaker 2: head of Chech Infrastructure. Pierre, good to see you today. 236 00:13:25,520 --> 00:13:28,920 Speaker 2: I'm wondering about this margin miss Why did analysts get 237 00:13:28,960 --> 00:13:31,000 Speaker 2: it so wrong and why did Micron miss there? 238 00:13:31,000 --> 00:13:34,320 Speaker 5: What happened, Well, you have to put that into the 239 00:13:34,360 --> 00:13:38,920 Speaker 5: context of the perspective of analysts, financial analysts and the 240 00:13:38,960 --> 00:13:41,480 Speaker 5: perspective of management. So if we get it from the 241 00:13:41,520 --> 00:13:44,320 Speaker 5: perspective of analysts, the stock had like a fantastic rome, 242 00:13:44,400 --> 00:13:47,960 Speaker 5: like if you get old stocks exposed to AI. Really 243 00:13:48,040 --> 00:13:50,719 Speaker 5: Micron is the one who behaved the best in the 244 00:13:51,360 --> 00:13:54,000 Speaker 5: last few weeks and even in the last like you 245 00:13:54,040 --> 00:13:58,400 Speaker 5: have to date, and that kind of situation always calls for, 246 00:13:58,800 --> 00:14:02,360 Speaker 5: like you know, taking profits a bit of a pose 247 00:14:02,880 --> 00:14:05,960 Speaker 5: in the outperformance, and we do think Memory is going 248 00:14:06,000 --> 00:14:08,959 Speaker 5: to outperform AI is the AI world, because that's really 249 00:14:09,400 --> 00:14:11,160 Speaker 5: the part of the AI achieve the path as the 250 00:14:11,160 --> 00:14:13,280 Speaker 5: bill of material of the chief that's is growing the fastest, 251 00:14:14,360 --> 00:14:20,080 Speaker 5: and so when you get more memory, margins should expand. 252 00:14:20,200 --> 00:14:23,000 Speaker 5: And if you don't get that immediately, the stock running 253 00:14:23,040 --> 00:14:25,680 Speaker 5: to the numbers expecting that. So there is a profit taking. 254 00:14:26,560 --> 00:14:29,400 Speaker 5: Does that mean there is a change in trend? Something weird? Happening. No, 255 00:14:31,680 --> 00:14:33,600 Speaker 5: If you look at it from the perspective of management, 256 00:14:34,280 --> 00:14:37,720 Speaker 5: the situation is interesting. As a CEO of Micron, you 257 00:14:37,760 --> 00:14:40,760 Speaker 5: don't want to warm up investors too much on margins 258 00:14:40,800 --> 00:14:42,600 Speaker 5: for tour reasons. The first one that you don't want 259 00:14:42,640 --> 00:14:45,840 Speaker 5: to set expectations too high to avoid situations like today, 260 00:14:46,240 --> 00:14:48,480 Speaker 5: And the second one is your clients are listening to 261 00:14:48,480 --> 00:14:50,240 Speaker 5: the code as well, and you don't want to brag 262 00:14:50,320 --> 00:14:54,600 Speaker 5: too much that margin expanding towards because for your clients 263 00:14:54,680 --> 00:14:57,440 Speaker 5: it means you know you your pricing is going up. 264 00:14:58,960 --> 00:15:01,400 Speaker 2: Okay, So let's talk big picture a little bit. How 265 00:15:01,440 --> 00:15:06,680 Speaker 2: would you characterize Microns really stacking up to competition when 266 00:15:06,680 --> 00:15:08,880 Speaker 2: it comes to this high bandwidth memory. 267 00:15:10,520 --> 00:15:13,000 Speaker 5: Yes, so hybend with memory is going to be the 268 00:15:13,080 --> 00:15:15,240 Speaker 5: largest segment of memory at the end of this year 269 00:15:15,680 --> 00:15:19,840 Speaker 5: and it barely existed three years ago. And at the moment, 270 00:15:19,880 --> 00:15:24,760 Speaker 5: from a technological standpoint, Micron and Highnix are in the 271 00:15:24,840 --> 00:15:28,120 Speaker 5: lead position for hybend with memory. They are coming up 272 00:15:28,360 --> 00:15:33,720 Speaker 5: in the market the earliest with the latest generation of 273 00:15:33,760 --> 00:15:37,400 Speaker 5: these chips, and Samsung is like running a bit behind, 274 00:15:37,440 --> 00:15:40,160 Speaker 5: like struggling a bit with their production. But I think 275 00:15:40,200 --> 00:15:42,160 Speaker 5: they will eventually catch up, and at the end of 276 00:15:42,200 --> 00:15:43,840 Speaker 5: the day, what you have to keep in mind that 277 00:15:43,880 --> 00:15:46,320 Speaker 5: this market is going to remain a treeopoly. Only the 278 00:15:46,400 --> 00:15:50,680 Speaker 5: three companies have the technology as the decades of experience 279 00:15:50,760 --> 00:15:54,360 Speaker 5: required to be able to manufacture these chips. And what 280 00:15:54,480 --> 00:15:56,680 Speaker 5: really matters is that if you look at the H 281 00:15:56,800 --> 00:16:01,880 Speaker 5: one hundred, the GPU that is largely deployed today from Nvidia, 282 00:16:02,200 --> 00:16:06,920 Speaker 5: it has ninety six yeabytes of HBM. The Robin Ultra 283 00:16:07,160 --> 00:16:09,880 Speaker 5: that will roll out in twenty twenty seven is going 284 00:16:09,920 --> 00:16:13,520 Speaker 5: to have one terabytes of HBM, ten times more. That's 285 00:16:13,520 --> 00:16:15,560 Speaker 5: really what the opportunity is these guys are facing. 286 00:16:17,280 --> 00:16:19,800 Speaker 2: Pierre, what would you say when you look out across 287 00:16:19,800 --> 00:16:22,240 Speaker 2: this year and even in the next year, the cycle 288 00:16:22,280 --> 00:16:24,800 Speaker 2: looks like, the trend looks like when it comes to 289 00:16:25,200 --> 00:16:30,200 Speaker 2: pieces and smartphones, is there concern there still about weakness? 290 00:16:30,880 --> 00:16:34,240 Speaker 5: Yeah, it's a great question. I am actually very very cautious, 291 00:16:34,320 --> 00:16:36,640 Speaker 5: very variation on pieces and smart phones. I think consumer 292 00:16:36,680 --> 00:16:39,680 Speaker 5: demand is not there, and I think AI is not 293 00:16:39,760 --> 00:16:43,200 Speaker 5: going to trigger a hardware with fresh cycle. So people 294 00:16:43,200 --> 00:16:45,320 Speaker 5: are not going to buy a new phone or buy 295 00:16:45,360 --> 00:16:48,400 Speaker 5: a new laptop to use AI. They are going to 296 00:16:48,440 --> 00:16:51,560 Speaker 5: start using AI first and then AI is going to 297 00:16:51,600 --> 00:16:56,360 Speaker 5: push up, you know, the specification requirements of your device 298 00:16:56,440 --> 00:16:59,880 Speaker 5: over time. So definitely not to bullish on that front. 299 00:17:00,400 --> 00:17:02,680 Speaker 5: At the same time, we are at a point in 300 00:17:02,720 --> 00:17:05,480 Speaker 5: the cycle which is a low point. So when I 301 00:17:05,560 --> 00:17:08,159 Speaker 5: say I'm not bullish, it means I expect the recovery 302 00:17:08,640 --> 00:17:11,920 Speaker 5: from two day's level of demand to be very very sluggish, 303 00:17:12,000 --> 00:17:14,879 Speaker 5: very slow, but it's still recover So the story for 304 00:17:15,000 --> 00:17:18,320 Speaker 5: Micron is these businesses are to low they're going to 305 00:17:18,359 --> 00:17:22,520 Speaker 5: recover very very little. But the data center business is 306 00:17:22,560 --> 00:17:23,640 Speaker 5: really going through the roof. 307 00:17:24,280 --> 00:17:26,280 Speaker 2: Hey, Pierre, we only have just twenty seconds left for 308 00:17:26,320 --> 00:17:28,760 Speaker 2: the answer, but a little bit of a peppert because 309 00:17:28,760 --> 00:17:30,919 Speaker 2: we're just learning that ten Cent has launched upgrades of 310 00:17:30,960 --> 00:17:34,119 Speaker 2: a Deep six style reasoning AI model. Twenty seconds on 311 00:17:34,240 --> 00:17:37,200 Speaker 2: your reaction to what China's doing when it comes to reasoning. 312 00:17:38,119 --> 00:17:41,120 Speaker 5: Yes, AI is just joining the pack. Everybody is doing 313 00:17:41,160 --> 00:17:44,480 Speaker 5: the same. Every time you create a great model, you 314 00:17:44,600 --> 00:17:48,320 Speaker 5: have like a lot of innovation happening to try and 315 00:17:48,320 --> 00:17:52,080 Speaker 5: make the model more efficient, and like the US and 316 00:17:52,119 --> 00:17:54,560 Speaker 5: the West has been doing that for a decade, even 317 00:17:54,840 --> 00:17:58,000 Speaker 5: like a couple of decades, and China is joining the group. 318 00:17:58,680 --> 00:18:01,280 Speaker 5: And there is nothing really new in deepse You got 319 00:18:01,320 --> 00:18:02,920 Speaker 5: what ten cent ilt you bit about doing? 320 00:18:04,840 --> 00:18:05,240 Speaker 9: All right? 321 00:18:05,320 --> 00:18:08,439 Speaker 2: Pierre Farrague of New Street Research, Pierre, good to see you. 322 00:18:08,520 --> 00:18:11,639 Speaker 2: Thanks for joining us. Have a wonderful weekend. Well, we 323 00:18:11,680 --> 00:18:15,119 Speaker 2: do have some breaking news. Boeing has won a contract 324 00:18:15,119 --> 00:18:18,920 Speaker 2: to design and build the US's next generation fighter jet, 325 00:18:18,960 --> 00:18:21,800 Speaker 2: beating out Lockheed Martin. The contract is part of the 326 00:18:21,840 --> 00:18:24,679 Speaker 2: Next Generation Air Dominance Program. It aims to develop a 327 00:18:24,680 --> 00:18:27,719 Speaker 2: new fighter jet that will operate with drones and replace 328 00:18:27,760 --> 00:18:30,240 Speaker 2: the F twenty two Raptor. The new fighter jet is 329 00:18:30,280 --> 00:18:33,120 Speaker 2: expected enter service in the twenty thirties, and the Air 330 00:18:33,119 --> 00:18:36,000 Speaker 2: Force plans to spend up to twenty billion dollars on 331 00:18:36,080 --> 00:18:39,080 Speaker 2: research and development through twenty twenty nine. You see shares 332 00:18:39,119 --> 00:18:45,320 Speaker 2: of Lockheed Martin down, you see shares of Boeing. Uh Well, 333 00:18:45,359 --> 00:18:48,320 Speaker 2: billionaire who made his fortune and cryptocurrency is turning his 334 00:18:48,359 --> 00:18:51,679 Speaker 2: attention to space. Jed Michaeleb is the sole financial backer 335 00:18:51,720 --> 00:18:54,480 Speaker 2: of vast Space. It's a startup aiming to build the 336 00:18:54,520 --> 00:18:58,439 Speaker 2: world's first commercial space station. Bloomberg's Kyle Porter has the 337 00:18:58,480 --> 00:19:01,959 Speaker 2: details of this story. Kyle, this is a very quickly 338 00:19:02,040 --> 00:19:06,120 Speaker 2: growing startup. They're hiring people every single day. This guy 339 00:19:06,160 --> 00:19:10,160 Speaker 2: has put pretty much half of his fortune behind this company. 340 00:19:10,480 --> 00:19:11,400 Speaker 2: Can he pull it off? 341 00:19:12,600 --> 00:19:15,720 Speaker 6: Well, that's a really good open question. I was very 342 00:19:15,720 --> 00:19:18,919 Speaker 6: skeptical before I visited in December. I came away thinking, 343 00:19:19,040 --> 00:19:20,840 Speaker 6: you know, they've got a decent shot of this. They 344 00:19:20,920 --> 00:19:23,680 Speaker 6: might revolutionize how you go about these type of projects. 345 00:19:24,960 --> 00:19:27,119 Speaker 2: How are they doing it? How are they revolutionizing it? 346 00:19:27,920 --> 00:19:30,920 Speaker 6: Well, most people in the space industry or any big 347 00:19:30,960 --> 00:19:33,840 Speaker 6: industrial company, tend to think of you build a product, 348 00:19:34,040 --> 00:19:37,240 Speaker 6: you get investors, you grow. It happens over time, you 349 00:19:37,280 --> 00:19:40,320 Speaker 6: reach benchmarks, and a lot of these projects tend not 350 00:19:40,359 --> 00:19:42,440 Speaker 6: to reach the finish line because something goes wrong during 351 00:19:42,440 --> 00:19:45,360 Speaker 6: the process. An investor pulls out, You sell that what's 352 00:19:45,440 --> 00:19:48,800 Speaker 6: left of the company. Vast have decided time is money, 353 00:19:48,800 --> 00:19:51,760 Speaker 6: but money is time. So why not spend five hundred 354 00:19:51,760 --> 00:19:54,439 Speaker 6: million dollars a year, get a product to market, and 355 00:19:54,480 --> 00:19:55,840 Speaker 6: then have your revenue come back. 356 00:19:55,720 --> 00:19:59,080 Speaker 2: In Kyle, As I was reading your story, and as 357 00:19:59,080 --> 00:20:02,680 Speaker 2: I watched the Real Good Bloomberg Originals documentary that a 358 00:20:02,800 --> 00:20:05,320 Speaker 2: Company is It, I was thinking to myself, talk about 359 00:20:05,320 --> 00:20:07,480 Speaker 2: putting all your eggs in one basket. If they do 360 00:20:07,560 --> 00:20:09,040 Speaker 2: not get this contract from NASA. 361 00:20:09,760 --> 00:20:13,520 Speaker 6: Is that it Well, they've sort of hinted there might 362 00:20:13,520 --> 00:20:15,800 Speaker 6: be a Middle Eastern investor that might take it if 363 00:20:15,840 --> 00:20:18,600 Speaker 6: they don't manage it, but they're very upfront the yeah, 364 00:20:18,640 --> 00:20:20,359 Speaker 6: this is the big swing, and if it doesn't happen, 365 00:20:20,400 --> 00:20:22,159 Speaker 6: it could be, you know, lights out for the company. 366 00:20:23,119 --> 00:20:25,240 Speaker 2: Who's the talent that they've brought in to help run 367 00:20:25,280 --> 00:20:25,760 Speaker 2: the company. 368 00:20:26,760 --> 00:20:28,920 Speaker 6: They bought a company called Launcher, which was headed by 369 00:20:28,960 --> 00:20:32,600 Speaker 6: Max Hote a couple of years ago. Now, Max also 370 00:20:32,600 --> 00:20:35,080 Speaker 6: had never built a space station before, didn't have any 371 00:20:35,160 --> 00:20:38,800 Speaker 6: real experience in space until he started a Launcher, and 372 00:20:38,960 --> 00:20:40,920 Speaker 6: neither of his rockets I think preached all a bit. 373 00:20:41,480 --> 00:20:42,760 Speaker 8: But now he's running the show for. 374 00:20:42,680 --> 00:20:46,199 Speaker 2: Them, all right, Bloomberg, Kyle Porter, thanks for joining us. 375 00:20:46,280 --> 00:20:48,440 Speaker 2: It's the big take. Check it out on the Bloomberg terminal. 376 00:20:48,480 --> 00:20:50,600 Speaker 2: Also check out the documentary about it. 377 00:20:50,720 --> 00:20:51,400 Speaker 8: Very very cool. 378 00:21:01,359 --> 00:21:04,879 Speaker 2: Welcome back to Bloomberg Technology. I'm Jim Steneveek in San Francisco. 379 00:21:04,920 --> 00:21:07,880 Speaker 2: I'm also watching shares at Apple today down about three 380 00:21:07,920 --> 00:21:10,760 Speaker 2: tenths of one percent. The company is shaking up its 381 00:21:10,800 --> 00:21:13,520 Speaker 2: executive ranks to get its AI efforts back on track 382 00:21:13,560 --> 00:21:16,480 Speaker 2: after months of delays and stumbles. The changes aim to 383 00:21:16,640 --> 00:21:21,040 Speaker 2: rescue Siri, which has struggled to release new features, and 384 00:21:21,080 --> 00:21:24,920 Speaker 2: Apple is betting on Rockwell's technical experience to solve the problems. 385 00:21:25,119 --> 00:21:27,800 Speaker 2: From all on the personnel moves, we're joined by Bloomberg's 386 00:21:27,920 --> 00:21:31,480 Speaker 2: Dana Wollman. Dana, what's going on at Apple when it 387 00:21:31,520 --> 00:21:32,240 Speaker 2: comes to AI? 388 00:21:32,400 --> 00:21:34,040 Speaker 8: Why are they so far behind? 389 00:21:35,160 --> 00:21:41,560 Speaker 10: So Apple really over promised, promised a whole raft of 390 00:21:42,520 --> 00:21:45,560 Speaker 10: upgrades to Apple Intelligence at its Developer conference in June 391 00:21:45,680 --> 00:21:48,800 Speaker 10: of last year, and behind the scenes, the engineering team 392 00:21:48,840 --> 00:21:51,119 Speaker 10: has struggled to keep up with those promises and deliver 393 00:21:51,240 --> 00:21:55,000 Speaker 10: on pace. And so the company just took control of 394 00:21:55,040 --> 00:21:57,000 Speaker 10: Syria and took it away from the executive who had 395 00:21:57,040 --> 00:22:01,760 Speaker 10: been overseeing this ambitious upgrade and had moved it under 396 00:22:01,800 --> 00:22:05,000 Speaker 10: the person who brought us the Vision Pro, which itself 397 00:22:05,000 --> 00:22:07,160 Speaker 10: has not been a commercial hit, but if nothing else, 398 00:22:07,240 --> 00:22:09,760 Speaker 10: has been well regarded for its technical innovations. 399 00:22:10,160 --> 00:22:13,439 Speaker 2: So Apple, Yes, well, people, I mean I haven't actually 400 00:22:13,440 --> 00:22:15,800 Speaker 2: tried the Vision Pro yet. People who talk about it 401 00:22:15,880 --> 00:22:17,720 Speaker 2: just rave about it. But you know, you don't see 402 00:22:17,720 --> 00:22:19,880 Speaker 2: the sales numbers for it, and you don't, by any 403 00:22:19,880 --> 00:22:23,040 Speaker 2: means see it being one of Apple's blockbuster devices by 404 00:22:23,119 --> 00:22:25,960 Speaker 2: any means, Dana, I think the question that I have 405 00:22:26,320 --> 00:22:30,480 Speaker 2: is context here. It's really rare for Apple to make 406 00:22:30,520 --> 00:22:32,679 Speaker 2: a big personnel move such as this. 407 00:22:34,160 --> 00:22:36,480 Speaker 10: It is rare for Apple to make a personnel move 408 00:22:37,200 --> 00:22:39,800 Speaker 10: like this like this, as you said, and according to 409 00:22:39,800 --> 00:22:42,200 Speaker 10: our own reporting, it was in the works even before 410 00:22:43,480 --> 00:22:49,000 Speaker 10: some recent bombshells. Bloomberg reported that a different company executive 411 00:22:49,040 --> 00:22:52,560 Speaker 10: called the delays ugly and embarrassing. According to Bloomberg's reporting, 412 00:22:52,600 --> 00:22:54,080 Speaker 10: this move had been in the works for a while, 413 00:22:54,119 --> 00:22:57,760 Speaker 10: but as you said, it doesn't usually happen, and I 414 00:22:57,800 --> 00:22:59,880 Speaker 10: think a lot of industry observers were waiting for some 415 00:23:00,000 --> 00:23:02,159 Speaker 10: sort of shoot a drop, whether it was someone being fired, 416 00:23:02,240 --> 00:23:06,199 Speaker 10: really heads rolling, or something of this nature, at least 417 00:23:06,680 --> 00:23:08,760 Speaker 10: the project being reassigned to somebody else. 418 00:23:10,320 --> 00:23:12,160 Speaker 2: All right, Dana, we are going to have to leave 419 00:23:12,200 --> 00:23:14,199 Speaker 2: things there. I do want to head now to the 420 00:23:14,200 --> 00:23:16,560 Speaker 2: Oval Office and the White House, where we're hearing from 421 00:23:16,600 --> 00:23:19,160 Speaker 2: President Trump and Defense Secretary Pete Hagsath. 422 00:23:19,240 --> 00:23:22,640 Speaker 9: It's going to be amazing. Should have been nine years ago. 423 00:23:22,720 --> 00:23:24,880 Speaker 11: They've been talking about doing it for many years, but 424 00:23:24,960 --> 00:23:30,280 Speaker 11: nobody ever got it off. But we did, and there 425 00:23:30,320 --> 00:23:34,680 Speaker 11: was great excitement and great acceptance of it by almost everybody, 426 00:23:34,760 --> 00:23:37,720 Speaker 11: including a lot of Democrats. Actually, I do want to 427 00:23:37,720 --> 00:23:42,800 Speaker 11: say that I've decided that the SBA, the Small Business Administration, 428 00:23:43,040 --> 00:23:47,359 Speaker 11: headed by Kelly Loffler's a terrific person, will handle all 429 00:23:47,520 --> 00:23:49,960 Speaker 11: of the student portfolio. 430 00:23:50,040 --> 00:23:52,480 Speaker 9: We have a portfolio that's very large, lots of. 431 00:23:52,920 --> 00:23:59,320 Speaker 12: Loans, tens of thousands of loans, pretty complicated deal, and 432 00:23:59,440 --> 00:24:03,439 Speaker 12: that's coming out of the Department of Education immediately, and 433 00:24:03,480 --> 00:24:06,320 Speaker 12: it's going to be headed up by Kelly Laffler SBA 434 00:24:06,400 --> 00:24:07,399 Speaker 12: and the role set for it. 435 00:24:07,920 --> 00:24:10,720 Speaker 11: They're waiting for it that it will be serviced much 436 00:24:10,720 --> 00:24:12,040 Speaker 11: better than it has in the past. 437 00:24:12,119 --> 00:24:13,359 Speaker 9: It's been a mess. 438 00:24:14,240 --> 00:24:17,800 Speaker 11: And also Bobby Kennedy, the Health and Human Services will 439 00:24:18,480 --> 00:24:22,359 Speaker 11: be handling special needs and all of the nutrition programs 440 00:24:22,400 --> 00:24:25,880 Speaker 11: and everything else rather complex, but that's going to be 441 00:24:25,960 --> 00:24:30,119 Speaker 11: headed by and handled by Health and Human Services, So 442 00:24:30,200 --> 00:24:32,280 Speaker 11: I think that will work out very well. Those two 443 00:24:32,680 --> 00:24:36,400 Speaker 11: elements will be taken out of the Department of Education, 444 00:24:36,520 --> 00:24:38,560 Speaker 11: and then all we have to do is get the 445 00:24:38,600 --> 00:24:42,120 Speaker 11: students to get guidance from the people that love them 446 00:24:42,320 --> 00:24:45,800 Speaker 11: and cherish them, including their parents by the way, or 447 00:24:45,880 --> 00:24:48,640 Speaker 11: be totally involved in their education along with the boards 448 00:24:49,160 --> 00:24:51,040 Speaker 11: and the governors and the states, and it's going to 449 00:24:51,040 --> 00:24:53,200 Speaker 11: be a great it's going to be a great situation. 450 00:24:53,359 --> 00:24:56,639 Speaker 11: I guarantee that in a few years from now, I 451 00:24:56,680 --> 00:24:58,160 Speaker 11: hope I'm going to be around. 452 00:24:57,840 --> 00:24:59,840 Speaker 9: To see it, but I think we're going to see 453 00:24:59,840 --> 00:25:02,320 Speaker 9: a lot. I think that you're going to. 454 00:25:02,320 --> 00:25:07,159 Speaker 11: Have tremendous results. You're going to have results like Norway, Sweden, Denmark, 455 00:25:07,240 --> 00:25:09,920 Speaker 11: a lot of the countries that do so well. 456 00:25:09,960 --> 00:25:11,680 Speaker 9: I think you're going to have a lot of those results. 457 00:25:11,680 --> 00:25:16,000 Speaker 11: If you look at Iowa and Indiana and Idaho, so 458 00:25:16,080 --> 00:25:20,840 Speaker 11: many places that run so well, Florida, Texas, big ones, 459 00:25:21,320 --> 00:25:24,119 Speaker 11: and you're going to have great education, much better than 460 00:25:24,119 --> 00:25:27,240 Speaker 11: it is now at half the cost. And we're not 461 00:25:27,320 --> 00:25:29,480 Speaker 11: even doing it as a cost item, although you will 462 00:25:29,480 --> 00:25:33,240 Speaker 11: say probably half, maybe more than that, and you're not 463 00:25:33,280 --> 00:25:34,720 Speaker 11: going to be at the bottom of the list. You're 464 00:25:34,720 --> 00:25:37,359 Speaker 11: going to be much higher, and maybe you'll be I 465 00:25:37,400 --> 00:25:39,520 Speaker 11: will guarantee some of the states will be at the 466 00:25:39,560 --> 00:25:40,240 Speaker 11: top of the list. 467 00:25:40,280 --> 00:25:43,600 Speaker 9: They'll be comparable or better than these number. 468 00:25:43,359 --> 00:25:46,199 Speaker 11: One, two, three, four, five countries, the countries that are 469 00:25:46,200 --> 00:25:50,199 Speaker 11: in the top five positions. So to me, it's very 470 00:25:50,240 --> 00:25:52,480 Speaker 11: exciting and it's been received very well, So I just 471 00:25:52,520 --> 00:25:55,760 Speaker 11: want to tell you about the student loans and special needs. 472 00:25:56,680 --> 00:25:59,760 Speaker 11: But we're here for a reason today that is very 473 00:26:00,520 --> 00:26:04,199 Speaker 11: and I'm thrilled to announce that at my direction, the 474 00:26:04,320 --> 00:26:07,520 Speaker 11: United States Air Force is moving forward with the world's 475 00:26:07,600 --> 00:26:12,400 Speaker 11: first sixth generation fighter jet, number six six generation. 476 00:26:13,400 --> 00:26:15,960 Speaker 9: Nothing in the world comes even. 477 00:26:15,760 --> 00:26:18,560 Speaker 11: Close to it, and it'll be known as the F 478 00:26:18,600 --> 00:26:22,879 Speaker 11: forty seven. The General's picked a title, and it's a 479 00:26:22,880 --> 00:26:28,320 Speaker 11: beautiful number, F forty seven. It's something the likes of 480 00:26:28,359 --> 00:26:30,840 Speaker 11: which nobody has seen before. 481 00:26:30,920 --> 00:26:32,679 Speaker 9: In terms of all of. 482 00:26:32,560 --> 00:26:35,439 Speaker 11: The attributes of a fighter jet, there's never been anything 483 00:26:35,480 --> 00:26:38,600 Speaker 11: even close to it, from speed to maneuverability to what 484 00:26:38,680 --> 00:26:40,240 Speaker 11: it can have to payload. 485 00:26:41,480 --> 00:26:43,800 Speaker 9: And this has been in the works for a long 486 00:26:43,800 --> 00:26:44,560 Speaker 9: period of time. 487 00:26:45,880 --> 00:26:49,679 Speaker 11: After a rigorous and thorough competition between some of America's 488 00:26:49,680 --> 00:26:53,000 Speaker 11: top aerospace companies, the Air Force is going to be 489 00:26:53,040 --> 00:26:57,840 Speaker 11: awarding the contract for the next generation air dominance platform 490 00:26:58,119 --> 00:26:58,720 Speaker 11: to Boeing. 491 00:27:00,080 --> 00:27:02,480 Speaker 9: You know, was highly competed for. 492 00:27:02,600 --> 00:27:07,560 Speaker 11: There was a lot of competition, generals, and it's been 493 00:27:07,600 --> 00:27:10,240 Speaker 11: going on for a long time, very very tough competition. 494 00:27:10,400 --> 00:27:15,840 Speaker 11: But this plane is produced numbers that nobody's ever seen before. 495 00:27:16,359 --> 00:27:19,320 Speaker 11: Their forty seven will be the most advanced, most capable, 496 00:27:19,400 --> 00:27:24,480 Speaker 11: most lethal aircraft ever built. An experimental version of the 497 00:27:24,520 --> 00:27:28,199 Speaker 11: plane has secretly been flying for almost five years, and 498 00:27:28,320 --> 00:27:33,200 Speaker 11: we're confident that it massively overpowers the capabilities of any 499 00:27:33,200 --> 00:27:35,800 Speaker 11: other nation. There's no other nation. We know every other plane. 500 00:27:36,160 --> 00:27:39,080 Speaker 11: I've seen every one of them, and it's not even 501 00:27:39,119 --> 00:27:42,880 Speaker 11: close as the next level. You know, level five is good. 502 00:27:42,920 --> 00:27:46,040 Speaker 11: This is level six. They say their forty seven is 503 00:27:46,080 --> 00:27:50,280 Speaker 11: equipped with state of the arts stealth technology. It's virtually 504 00:27:50,640 --> 00:27:56,720 Speaker 11: unseeable and unprecedented power. It's got the most power of 505 00:27:56,960 --> 00:28:01,400 Speaker 11: any jet of its kind ever made. New verability, likewise 506 00:28:01,560 --> 00:28:04,840 Speaker 11: is the There's never been anything like it. Despite the 507 00:28:04,880 --> 00:28:11,880 Speaker 11: power and speed, its speed is top over two, which 508 00:28:11,920 --> 00:28:16,160 Speaker 11: is something that you don't hear very often. America's enemies 509 00:28:16,200 --> 00:28:19,040 Speaker 11: will never see it coming. Hopefully we won't have to 510 00:28:19,119 --> 00:28:22,280 Speaker 11: use it for that purpose, but you have to have it, and. 511 00:28:24,320 --> 00:28:26,520 Speaker 9: If it ever happens, they won't know what the hell 512 00:28:26,600 --> 00:28:27,000 Speaker 9: hit them. 513 00:28:27,920 --> 00:28:30,280 Speaker 11: A new fleet of these magnificence and planes will be 514 00:28:30,320 --> 00:28:33,400 Speaker 11: built in the and in the air during my administration 515 00:28:33,760 --> 00:28:35,560 Speaker 11: for the next couple of years. 516 00:28:35,600 --> 00:28:36,440 Speaker 9: It's ready to go. 517 00:28:36,760 --> 00:28:40,000 Speaker 11: They've already built much of what has to be built 518 00:28:40,040 --> 00:28:45,000 Speaker 11: in terms of production, including the sheds. We'll ensure that 519 00:28:45,040 --> 00:28:48,800 Speaker 11: the USA continues to dominate the skies. Given an order 520 00:28:48,840 --> 00:28:50,880 Speaker 11: for a lot, we can't tell you the price because 521 00:28:50,920 --> 00:28:54,000 Speaker 11: it would give it would give way to some of 522 00:28:54,040 --> 00:28:57,320 Speaker 11: the technology and some of the size of the planet's 523 00:28:57,400 --> 00:29:01,840 Speaker 11: good sized plane. This contract also represents a historic investment 524 00:29:01,880 --> 00:29:04,560 Speaker 11: in our defense industrial base, helping to keep America at 525 00:29:04,560 --> 00:29:09,320 Speaker 11: the cutting edge of aerospace and technology. Our allies are 526 00:29:09,320 --> 00:29:12,680 Speaker 11: calling constantly. They want to buy them also, and will 527 00:29:12,880 --> 00:29:17,080 Speaker 11: certain allies We'll be selling them, perhaps toned down versions. 528 00:29:17,680 --> 00:29:20,680 Speaker 11: We like to tone them down about ten percent, which 529 00:29:20,960 --> 00:29:23,040 Speaker 11: probably makes sense because someday maybe. 530 00:29:22,800 --> 00:29:24,080 Speaker 9: They're not our allies. Right. 531 00:29:24,840 --> 00:29:28,320 Speaker 11: But I would like to ask Secretary Hegseth, who's doing 532 00:29:28,320 --> 00:29:33,719 Speaker 11: a fantastic job. He's really really been very inspiring in 533 00:29:33,720 --> 00:29:35,680 Speaker 11: so many ways, and I must say. 534 00:29:35,480 --> 00:29:37,320 Speaker 9: That before he speaks. 535 00:29:37,360 --> 00:29:41,640 Speaker 11: We have had record people wanting to join our military 536 00:29:41,760 --> 00:29:46,160 Speaker 11: in the last two and a half months, literally since 537 00:29:46,240 --> 00:29:50,240 Speaker 11: this I think probably since the election November fifth, but 538 00:29:50,360 --> 00:29:55,720 Speaker 11: especially since we came to office and since I announced Pete. 539 00:29:56,600 --> 00:30:00,360 Speaker 9: He's young, he's smarty, strong, he loves it of him. 540 00:30:00,400 --> 00:30:01,120 Speaker 9: But we've had. 541 00:30:01,040 --> 00:30:05,000 Speaker 11: Record numbers of people wanting to join our military. 542 00:30:05,160 --> 00:30:05,960 Speaker 9: Now, if you go. 543 00:30:06,000 --> 00:30:09,160 Speaker 11: Back six months, it was the exact opposite. You had 544 00:30:09,200 --> 00:30:12,000 Speaker 11: record numbers of people not wanting to join the military. 545 00:30:12,080 --> 00:30:14,960 Speaker 11: Now you have record numbers of people wanting to be 546 00:30:15,040 --> 00:30:19,120 Speaker 11: in our military. And that's a really that's a great honor. 547 00:30:19,160 --> 00:30:21,240 Speaker 11: That shows you we're really on the right track. So 548 00:30:21,600 --> 00:30:24,160 Speaker 11: Pete maybe say if you were Chorts, well. 549 00:30:24,080 --> 00:30:25,400 Speaker 9: Mister President, this is a big day. 550 00:30:25,920 --> 00:30:27,440 Speaker 8: This is a big day for our war. 551 00:30:27,280 --> 00:30:29,560 Speaker 13: Fighters, this is a big day for our country, a 552 00:30:29,640 --> 00:30:30,160 Speaker 13: big day. 553 00:30:30,040 --> 00:30:30,560 Speaker 9: In the world. 554 00:30:30,840 --> 00:30:34,120 Speaker 13: The name of this program is the next Generation of 555 00:30:34,280 --> 00:30:39,000 Speaker 13: Air Dominance, and mister President, because of your leadership, your clarity, 556 00:30:39,840 --> 00:30:42,000 Speaker 13: we are going to America is going to have a 557 00:30:42,200 --> 00:30:46,640 Speaker 13: generations in the future of air dominance because of this 558 00:30:47,080 --> 00:30:51,480 Speaker 13: sixth generation fighter. We've had the F fifteen, we had 559 00:30:51,520 --> 00:30:53,920 Speaker 13: the F sixteen, the F eighteen, the F twenty two, 560 00:30:54,000 --> 00:30:57,800 Speaker 13: the F thirty five. Now we have the F forty seven, 561 00:30:58,440 --> 00:31:02,840 Speaker 13: which sends a very direct, clear message to our allies 562 00:31:02,880 --> 00:31:05,480 Speaker 13: that we're not going anywhere and to our enemies that 563 00:31:05,480 --> 00:31:08,680 Speaker 13: we will be able to project power around the globe 564 00:31:09,000 --> 00:31:10,400 Speaker 13: unimpeded for. 565 00:31:10,480 --> 00:31:11,280 Speaker 9: Generations to come. 566 00:31:11,320 --> 00:31:14,479 Speaker 13: Mister President, this is a gift to my kids and 567 00:31:14,520 --> 00:31:17,880 Speaker 13: your kids, to my grandkids and your grandkids. This is 568 00:31:17,920 --> 00:31:22,200 Speaker 13: a historic investment in the American military, in the American 569 00:31:22,240 --> 00:31:26,680 Speaker 13: industrial base, in American industry that will help revive the 570 00:31:26,680 --> 00:31:31,040 Speaker 13: warrior ethos inside our military, which we're doing rebuild our military, 571 00:31:31,120 --> 00:31:32,400 Speaker 13: which the previous. 572 00:31:32,000 --> 00:31:35,320 Speaker 9: Administration did not do. By the way, mister President, they paused. 573 00:31:34,960 --> 00:31:38,520 Speaker 13: This program and were prepared to potentially scrap it. We 574 00:31:38,600 --> 00:31:41,880 Speaker 13: know this is cheaper, longer, rage and more stealthy. President 575 00:31:41,920 --> 00:31:44,280 Speaker 13: Trump said, we're reviving it, and we're doing it. 576 00:31:45,240 --> 00:31:47,480 Speaker 9: And then we are also going to re establish de terrence. 577 00:31:47,920 --> 00:31:49,880 Speaker 9: Under the previous administration. 578 00:31:49,560 --> 00:31:50,640 Speaker 8: We looked like fools. 579 00:31:51,480 --> 00:31:52,080 Speaker 9: Not anymore. 580 00:31:52,600 --> 00:31:55,880 Speaker 13: President Trump has re established American leadership. The F forty 581 00:31:55,880 --> 00:31:58,760 Speaker 13: seven is part of it. And mister President, thank you 582 00:31:59,280 --> 00:32:01,160 Speaker 13: for having the current to do it and leading away 583 00:32:01,160 --> 00:32:01,520 Speaker 13: for all. 584 00:32:01,400 --> 00:32:03,480 Speaker 9: Of our fires. Thank you very much, Pete. 585 00:32:03,760 --> 00:32:06,080 Speaker 11: One of the things I will say, but the general 586 00:32:06,680 --> 00:32:09,080 Speaker 11: generals are going to speak, and just a couple of seconds, 587 00:32:09,160 --> 00:32:13,200 Speaker 11: but this plane flies with drones. It flies with many, 588 00:32:13,200 --> 00:32:15,960 Speaker 11: many drones, as many as you want. And it's a 589 00:32:16,040 --> 00:32:19,840 Speaker 11: technology that's new. But it doesn't fly by itself. It 590 00:32:19,920 --> 00:32:23,640 Speaker 11: flies five with many drones as many as we want, 591 00:32:23,720 --> 00:32:26,200 Speaker 11: and that's something that no other plane can do. 592 00:32:26,720 --> 00:32:27,400 Speaker 9: So I'd like to. 593 00:32:27,400 --> 00:32:30,600 Speaker 11: Introduce, if I my Air Force Chief of Staff, General 594 00:32:30,800 --> 00:32:35,400 Speaker 11: David Olvin, and also General Dale White, to incredible people 595 00:32:35,400 --> 00:32:37,360 Speaker 11: that I've known over the years, but I got to 596 00:32:37,400 --> 00:32:38,200 Speaker 11: know really well. 597 00:32:38,080 --> 00:32:40,640 Speaker 9: Over the last few months. And would you say a 598 00:32:40,680 --> 00:32:42,160 Speaker 9: few words please, Jenneral. 599 00:32:42,080 --> 00:32:44,680 Speaker 14: Thank you very much, mister President, Miss President, Miss Sectary, 600 00:32:45,600 --> 00:32:49,800 Speaker 14: thank you so much for your unwavering committed to our military. 601 00:32:50,720 --> 00:32:52,480 Speaker 14: I will say this is a big day. This is 602 00:32:52,520 --> 00:32:54,640 Speaker 14: a big day for a United States Air Force as well. 603 00:32:55,320 --> 00:32:58,880 Speaker 14: You know, air dominance is not a birth rate, but 604 00:32:58,960 --> 00:33:02,760 Speaker 14: it's become synonymous with American airpower. But air dominance needs 605 00:33:02,800 --> 00:33:05,400 Speaker 14: to be earned every single day. And since the earliest 606 00:33:05,440 --> 00:33:08,760 Speaker 14: days of area of warfare, brave American airmen have jumped 607 00:33:08,800 --> 00:33:11,040 Speaker 14: into their machines, taken to the air and they've cleared 608 00:33:11,080 --> 00:33:13,920 Speaker 14: the skies. And whether that be clearing the sky so 609 00:33:13,960 --> 00:33:16,480 Speaker 14: we can rain down destruction on our enemies from above, 610 00:33:17,520 --> 00:33:19,800 Speaker 14: or we can clear the path the ground forces below. 611 00:33:20,480 --> 00:33:22,840 Speaker 14: That's been our commitment to the fight and that's really 612 00:33:22,840 --> 00:33:27,360 Speaker 14: been our promise to American and with this at forty seven, 613 00:33:27,400 --> 00:33:30,720 Speaker 14: as the Crown Jewel in the next generation air dominance 614 00:33:30,760 --> 00:33:33,040 Speaker 14: family of systems. We're going to be able to keep 615 00:33:33,080 --> 00:33:36,720 Speaker 14: that promise well into the future. I also want to 616 00:33:36,720 --> 00:33:40,760 Speaker 14: thank everyone from industry and with the government, our engineers 617 00:33:41,000 --> 00:33:43,880 Speaker 14: who have put work tirelessly on this program. 618 00:33:43,520 --> 00:33:45,120 Speaker 8: To bring it where we are right now today. 619 00:33:45,640 --> 00:33:49,000 Speaker 14: This shows that American talent, American skill, and American determination 620 00:33:49,040 --> 00:33:53,280 Speaker 14: are second to none, because this platform is second to none. 621 00:33:53,600 --> 00:33:58,440 Speaker 14: So we believe that this provides more lethality, It provides 622 00:33:58,480 --> 00:34:01,720 Speaker 14: more capability, more modernized capability in a way that is 623 00:34:01,760 --> 00:34:06,520 Speaker 14: built to adapt. This along with our collaborative combat aircraft 624 00:34:06,520 --> 00:34:10,120 Speaker 14: the President talked about with drones. This is allowing us 625 00:34:10,560 --> 00:34:13,880 Speaker 14: to look into the future and unlock the magic that 626 00:34:14,040 --> 00:34:16,680 Speaker 14: is human machine teaming. And as we do that, we're 627 00:34:16,719 --> 00:34:20,400 Speaker 14: going to write the next generation of modern aerial warfare 628 00:34:20,480 --> 00:34:20,960 Speaker 14: with this. 629 00:34:20,960 --> 00:34:22,200 Speaker 8: This enables us to do this. 630 00:34:23,360 --> 00:34:25,640 Speaker 14: The manner in which we put this program together puts 631 00:34:25,719 --> 00:34:28,480 Speaker 14: more control in the hands of the government, so we 632 00:34:28,520 --> 00:34:30,839 Speaker 14: can update and adapt at the speed of relevance, at 633 00:34:30,840 --> 00:34:32,640 Speaker 14: the speed of technology, not at the speed of beer. 634 00:34:32,640 --> 00:34:33,000 Speaker 9: Honors. 635 00:34:34,040 --> 00:34:37,360 Speaker 8: This is more air force, This is more options for 636 00:34:37,400 --> 00:34:37,920 Speaker 8: the President. 637 00:34:38,960 --> 00:34:40,799 Speaker 14: We say, as our mission in the United States, Air 638 00:34:40,800 --> 00:34:44,440 Speaker 14: force is to fly, fight and win airpower anytime, anywhere. 639 00:34:44,480 --> 00:34:46,040 Speaker 14: If you want to go anywhere, you have to have 640 00:34:46,040 --> 00:34:47,440 Speaker 14: a platform that gets you anywhere. 641 00:34:47,640 --> 00:34:50,360 Speaker 8: This provides the options from. 642 00:34:50,200 --> 00:34:54,400 Speaker 14: The very one end, which is a quick response, and 643 00:34:54,400 --> 00:34:56,040 Speaker 14: then we can get right back into fight and stance 644 00:34:56,080 --> 00:34:58,640 Speaker 14: without having to deploy troops that are going to take 645 00:34:58,840 --> 00:35:00,760 Speaker 14: maybe months in cost more lives. 646 00:35:00,920 --> 00:35:02,400 Speaker 8: We can move back and find stance and maybe we 647 00:35:02,480 --> 00:35:03,000 Speaker 8: restore that de. 648 00:35:03,040 --> 00:35:05,759 Speaker 14: Terms all the way to decisive victory as part of 649 00:35:05,760 --> 00:35:08,160 Speaker 14: a joint force that is the most lethal and capable 650 00:35:08,200 --> 00:35:11,759 Speaker 14: military every own history. That's what we provide now, and 651 00:35:11,800 --> 00:35:13,400 Speaker 14: this provide allows us to relate. 652 00:35:13,320 --> 00:35:17,920 Speaker 8: Into the future. It's more deterrence, more capability. It's what 653 00:35:18,000 --> 00:35:20,040 Speaker 8: piece to strength looks like in the future. Mis President. 654 00:35:20,200 --> 00:35:21,319 Speaker 8: That's what we're very proud of that. 655 00:35:21,400 --> 00:35:23,400 Speaker 14: And all we can say is on behalf of us, 656 00:35:23,400 --> 00:35:26,040 Speaker 14: and I says Air Force, let's deliver it. 657 00:35:26,400 --> 00:35:28,719 Speaker 9: Thank you very much, Thank you, Jim, you like you 658 00:35:28,760 --> 00:35:31,200 Speaker 9: to say anything. I'll just don't want to chase that. 659 00:35:31,280 --> 00:35:34,840 Speaker 9: This is what to do generally, had the mook. 660 00:35:37,239 --> 00:35:38,040 Speaker 8: A questions. 661 00:35:38,520 --> 00:35:40,359 Speaker 9: Thanks, Thank you very much. Great job. 662 00:35:40,680 --> 00:35:42,680 Speaker 11: We've worked together long and heart of it and this 663 00:35:42,880 --> 00:35:45,560 Speaker 11: was a big secret in fact, we don't show too 664 00:35:45,640 --> 00:35:45,920 Speaker 11: much of it. 665 00:35:46,120 --> 00:35:48,680 Speaker 2: Well, there we have it, President Trump, along with Secretary 666 00:35:48,719 --> 00:35:51,320 Speaker 2: of Defense Pete hag Seth. Also we heard from David Alvin, 667 00:35:51,440 --> 00:35:54,279 Speaker 2: chief of Staff of the Air Force, getting quite a 668 00:35:54,280 --> 00:35:58,799 Speaker 2: few headlines on this story. The Army, or President Trump, 669 00:35:58,840 --> 00:36:01,719 Speaker 2: i should say, has said that the F forty seven 670 00:36:01,760 --> 00:36:04,719 Speaker 2: will be built during his administration. The US Air Force 671 00:36:04,760 --> 00:36:07,680 Speaker 2: has proceeded with the F forty seven fighter jet. The 672 00:36:07,760 --> 00:36:10,880 Speaker 2: US Air Force will award that jet contract to Boeing. 673 00:36:10,920 --> 00:36:13,440 Speaker 2: In response, we did see shares of Boeing higher on 674 00:36:13,480 --> 00:36:16,839 Speaker 2: the news. Shares of Lockheed Martin are falling. He did 675 00:36:16,920 --> 00:36:19,880 Speaker 2: also say that this experimental version of the F forty 676 00:36:19,920 --> 00:36:24,000 Speaker 2: seven has been flying for almost five years and that 677 00:36:24,040 --> 00:36:28,240 Speaker 2: it will be built during his administration. This next generation 678 00:36:28,440 --> 00:36:31,160 Speaker 2: fighter jet, he did also say, will fly with drones, 679 00:36:31,640 --> 00:36:34,440 Speaker 2: and it's already experiencing interest from our allies. From more, 680 00:36:34,520 --> 00:36:37,399 Speaker 2: we bring in Bloomberg News as Tyler Kendall, she joins 681 00:36:37,480 --> 00:36:42,800 Speaker 2: us this afternoon from Washington, DCO. This morning, I should say, Tyler, good. 682 00:36:42,600 --> 00:36:43,040 Speaker 8: To see you. 683 00:36:43,239 --> 00:36:45,640 Speaker 2: What do we know about this F forty seven and 684 00:36:45,680 --> 00:36:48,520 Speaker 2: the technology that allows it to fly with drones? 685 00:36:49,840 --> 00:36:52,279 Speaker 15: Well, Tim Bloomberg News reporting that the Air Force has 686 00:36:52,320 --> 00:36:55,640 Speaker 15: allocated at least twenty billion dollars around the research and 687 00:36:55,680 --> 00:36:58,640 Speaker 15: development for this effort. You said it, they're Boeing beating 688 00:36:58,640 --> 00:37:01,280 Speaker 15: out Lockey Martin for the contract that could be worth 689 00:37:01,600 --> 00:37:04,759 Speaker 15: multi billions of dollars, and this was a two year 690 00:37:04,800 --> 00:37:07,400 Speaker 15: bidding process for these companies to try to put forward 691 00:37:07,400 --> 00:37:10,719 Speaker 15: that full scale proposal for this new generation of fighter 692 00:37:10,800 --> 00:37:13,239 Speaker 15: jets that will work in tandem with drones. You heard 693 00:37:13,239 --> 00:37:16,360 Speaker 15: President Trump emphasizing there that that's how critically important that 694 00:37:16,440 --> 00:37:19,279 Speaker 15: is is they try to move to this next generation. Now, 695 00:37:19,360 --> 00:37:21,600 Speaker 15: not a lot about this program is known. It's classified 696 00:37:21,680 --> 00:37:24,760 Speaker 15: or reporting indicating that it's meant to replace that Lockie 697 00:37:24,800 --> 00:37:28,120 Speaker 15: Martins F twenty two Raptor stealth jets that are currently 698 00:37:28,160 --> 00:37:30,480 Speaker 15: in the sky and flying. The goal is to have 699 00:37:30,640 --> 00:37:34,279 Speaker 15: this operational by twenty thirty. Now, you mentioned our allies there. 700 00:37:34,320 --> 00:37:36,640 Speaker 15: That was something important that President Trump mentioned because we 701 00:37:36,680 --> 00:37:38,680 Speaker 15: know a lot of this is gearing up in our 702 00:37:38,719 --> 00:37:41,200 Speaker 15: competition with China. Like many of the proposals that we've 703 00:37:41,239 --> 00:37:45,359 Speaker 15: seen from the Trump administration, particularly in recent weeks, try 704 00:37:45,400 --> 00:37:49,000 Speaker 15: to bulk up, particularly when it comes militarily against China. 705 00:37:49,080 --> 00:37:51,000 Speaker 15: I also would like to flag one other headline that 706 00:37:51,000 --> 00:37:53,640 Speaker 15: we were seeing today. Elon Musk at the Pentagon are 707 00:37:53,680 --> 00:37:57,320 Speaker 15: reporting indicating that this program in particular, there might have 708 00:37:57,400 --> 00:37:59,920 Speaker 15: been some budget constraints there as Elon Musk looks full 709 00:38:00,000 --> 00:38:04,120 Speaker 15: forward to his DOGE cost cutting efforts. Just yesterday, Secretary 710 00:38:04,120 --> 00:38:07,120 Speaker 15: of Defense Pete Heigseth announced that five hundred and eighty 711 00:38:07,200 --> 00:38:10,160 Speaker 15: million dollars worth of programs will be cut at the 712 00:38:10,200 --> 00:38:12,640 Speaker 15: Department of Defense. Of course, that fails in comparison to 713 00:38:12,680 --> 00:38:15,000 Speaker 15: the numbers that we're talking about for this program here, 714 00:38:15,120 --> 00:38:17,440 Speaker 15: but it does bring the DoD's cost cutting measures to 715 00:38:17,520 --> 00:38:20,560 Speaker 15: eight hundred million dollars. Since Pete Hegseth was sworn in 716 00:38:20,600 --> 00:38:22,480 Speaker 15: as Defense Secretary, Tyler. 717 00:38:22,200 --> 00:38:24,480 Speaker 2: You've done a lot of reporting on the weapons of 718 00:38:24,520 --> 00:38:31,200 Speaker 2: the future. These companies Palanteer, SpaceX, Boeing is a traditional 719 00:38:31,760 --> 00:38:35,160 Speaker 2: old school defense contractor. Where does this fit in with 720 00:38:35,200 --> 00:38:37,520 Speaker 2: the modernization of the armed forces? 721 00:38:38,640 --> 00:38:41,399 Speaker 15: Well, tim the defense industrial base has actually shrunk by 722 00:38:41,480 --> 00:38:44,880 Speaker 15: forty percent over the last decade. That's according to the 723 00:38:44,880 --> 00:38:46,759 Speaker 15: Department of Defense, which says that they want to try 724 00:38:46,800 --> 00:38:50,160 Speaker 15: to get in those smaller contractors who compete with the 725 00:38:50,160 --> 00:38:53,000 Speaker 15: big defense primes. They're referencing some reporting that I did 726 00:38:53,560 --> 00:38:55,360 Speaker 15: a few months ago where I had the chance to 727 00:38:55,360 --> 00:38:58,480 Speaker 15: sit down with the Chief of Staff of the Army, 728 00:38:58,680 --> 00:39:02,120 Speaker 15: General Randy George. He's the highest ranking military official in 729 00:39:02,520 --> 00:39:05,480 Speaker 15: the Army, and he is trying to put forward this 730 00:39:05,560 --> 00:39:08,480 Speaker 15: path that would make the acquisition process easier. It would 731 00:39:08,560 --> 00:39:11,799 Speaker 15: instead look to these short term contracts instead of these 732 00:39:11,880 --> 00:39:15,480 Speaker 15: multi decade contracts in order to get these more nimble 733 00:39:15,520 --> 00:39:17,920 Speaker 15: companies in particularly when it comes to drone makes it 734 00:39:17,960 --> 00:39:21,120 Speaker 15: easier for them to do business because oftentimes he's told 735 00:39:21,120 --> 00:39:23,719 Speaker 15: me that they will put in these purchase orders, but 736 00:39:23,760 --> 00:39:25,080 Speaker 15: then at the end of the day, by the time 737 00:39:25,120 --> 00:39:28,520 Speaker 15: those weapons get on the battlefield, they end up being obsolete. 738 00:39:28,920 --> 00:39:31,520 Speaker 15: That appears to encounter with this. Of course, this is 739 00:39:31,600 --> 00:39:34,640 Speaker 15: going to be a decade long, multi billion dollar project 740 00:39:34,960 --> 00:39:36,960 Speaker 15: that the defense primes had been competing for. 741 00:39:38,080 --> 00:39:42,680 Speaker 2: All Right, Bloomberg, Tyler Kendall joining us from Washington, d C. Tyler, thanks, 742 00:39:42,680 --> 00:39:46,600 Speaker 2: do appreciate that well. Sticking with what's happening in Washington, DC. 743 00:39:46,640 --> 00:39:49,920 Speaker 2: Earlier this week, President Trump fired too democratic members of 744 00:39:49,960 --> 00:39:53,080 Speaker 2: the FTC. Questions had already been raised about how much 745 00:39:53,120 --> 00:39:55,960 Speaker 2: influenced the White House might expect or exert over the 746 00:39:55,960 --> 00:39:58,839 Speaker 2: agency and its actions toward big tech. Joining us now 747 00:39:59,000 --> 00:40:02,400 Speaker 2: is William Covese. He's professor at the George Washington School 748 00:40:02,440 --> 00:40:05,160 Speaker 2: of Law. Bill, good to have you with us. How 749 00:40:05,200 --> 00:40:07,799 Speaker 2: did you look at these firings earlier this week? I 750 00:40:07,840 --> 00:40:11,560 Speaker 2: know it alarmed certain folks who watch this agency closely. 751 00:40:13,640 --> 00:40:17,080 Speaker 16: As far as the FTC goes, there was an inevitability 752 00:40:17,160 --> 00:40:20,400 Speaker 16: that the Republicans were going to get control of the FTC. 753 00:40:20,800 --> 00:40:24,600 Speaker 16: There is a nominee pending, Daniel Metterer, who's likely to 754 00:40:24,600 --> 00:40:27,399 Speaker 16: get a vote in the Congress relatively soon, so that 755 00:40:27,560 --> 00:40:30,480 Speaker 16: in a short time there would be a working majority 756 00:40:30,520 --> 00:40:33,239 Speaker 16: of three Republicans that would have the votes to do 757 00:40:33,280 --> 00:40:38,120 Speaker 16: what they wanted. The larger message, though, for the regulatory process, 758 00:40:38,280 --> 00:40:41,040 Speaker 16: is that the White House is determined to get more 759 00:40:41,080 --> 00:40:44,520 Speaker 16: control over how these agencies operate and to bend their 760 00:40:44,560 --> 00:40:48,440 Speaker 16: programs more in the direction that the President prefers. At 761 00:40:48,680 --> 00:40:51,440 Speaker 16: The agency leadership has said, we do want to press 762 00:40:51,440 --> 00:40:54,040 Speaker 16: a ad with the big tech cases that are running now. 763 00:40:54,480 --> 00:40:57,560 Speaker 16: We want to have an active program involving mergers. But 764 00:40:57,640 --> 00:40:59,759 Speaker 16: at the same time they've said, we do want to 765 00:40:59,800 --> 00:41:02,640 Speaker 16: create an environment that's going to be more favorable for 766 00:41:02,719 --> 00:41:06,120 Speaker 16: deal making because we're going to tolerate settlements. We're going 767 00:41:06,200 --> 00:41:09,600 Speaker 16: to establish a timeline that is more predictable and reliable. 768 00:41:10,080 --> 00:41:13,040 Speaker 16: So this is part of a larger effort across the 769 00:41:13,040 --> 00:41:16,239 Speaker 16: government for the White House to achieve greater control over 770 00:41:16,239 --> 00:41:20,400 Speaker 16: how the regulatory process operates, including for big tech and 771 00:41:20,440 --> 00:41:21,040 Speaker 16: any trust. 772 00:41:21,560 --> 00:41:23,880 Speaker 2: Well, explain the nuance there, because what I heard is 773 00:41:23,920 --> 00:41:26,440 Speaker 2: two different things. One is that Okay, we're going to 774 00:41:26,480 --> 00:41:29,480 Speaker 2: continue with you know, for lack of a better term, 775 00:41:29,480 --> 00:41:31,719 Speaker 2: of crackdown on big tech. Are going hard on big tech. 776 00:41:32,840 --> 00:41:35,160 Speaker 2: I guess some observers would would point that out. Some 777 00:41:35,160 --> 00:41:38,000 Speaker 2: people might not agree with that statement. But the other 778 00:41:38,040 --> 00:41:40,200 Speaker 2: part is we want a friendly or regulatory environment, and 779 00:41:40,200 --> 00:41:43,720 Speaker 2: we want to communicate a friendly regulatory environment that opens 780 00:41:43,800 --> 00:41:46,360 Speaker 2: up more m and a How do those things co exist? 781 00:41:47,320 --> 00:41:51,840 Speaker 16: Yeah, here's one way that you can reconcile them. The 782 00:41:52,000 --> 00:41:55,520 Speaker 16: Biden administration adopted the position on mergers that was very 783 00:41:55,520 --> 00:41:59,400 Speaker 16: skeptical about settlements is a way to resolve problems settlements 784 00:41:59,440 --> 00:42:04,840 Speaker 16: that would involve divestitures or conduct related solutions. The leadership 785 00:42:04,840 --> 00:42:07,400 Speaker 16: of the Federal Trade Commission and the incoming leadership of 786 00:42:07,440 --> 00:42:11,080 Speaker 16: the Department of Justice Anti Trust Division have said settlements 787 00:42:11,120 --> 00:42:14,160 Speaker 16: belong in the solution set that where the parties can 788 00:42:14,200 --> 00:42:18,319 Speaker 16: come forward with a divestiture package that we regard as acceptable. 789 00:42:18,680 --> 00:42:22,400 Speaker 16: When they offer us conduct related solutions to specific problems, 790 00:42:22,719 --> 00:42:24,800 Speaker 16: we are going to be more willing to accept those. 791 00:42:25,160 --> 00:42:28,840 Speaker 16: That opens up a wider path for deal makers to 792 00:42:28,920 --> 00:42:32,680 Speaker 16: come forward with solutions to problems that might otherwise have 793 00:42:32,840 --> 00:42:36,600 Speaker 16: led the agencies to go directly into court. So there's 794 00:42:36,840 --> 00:42:39,600 Speaker 16: a commitment to bear down on any competitive mergers, but 795 00:42:40,360 --> 00:42:44,480 Speaker 16: a greater willingness to accept solutions that the previous administration 796 00:42:44,640 --> 00:42:45,759 Speaker 16: tried to slam the door on. 797 00:42:46,920 --> 00:42:50,279 Speaker 2: It's interesting because we've heard in the past, even during 798 00:42:50,320 --> 00:42:54,359 Speaker 2: the election that Vice President jd Vance thought Lena Kahn 799 00:42:54,760 --> 00:42:57,840 Speaker 2: was actually doing a great job. It raises the question 800 00:42:58,200 --> 00:43:03,799 Speaker 2: of continuation of policy between her FTC and Andrew Ferguson's. 801 00:43:04,239 --> 00:43:07,040 Speaker 2: So do you expect that the FTC and I guess 802 00:43:07,040 --> 00:43:09,400 Speaker 2: also the DOJ is going to continue to move forward 803 00:43:09,680 --> 00:43:12,320 Speaker 2: with the cases against Google, Apple, Meta, and Amazon. 804 00:43:13,360 --> 00:43:16,400 Speaker 16: I expect it will continue. And it's been interesting to 805 00:43:16,440 --> 00:43:22,279 Speaker 16: watch how Andrew Ferguson, the FTC chair, especially, has emphasized 806 00:43:22,320 --> 00:43:25,400 Speaker 16: that many of these initiatives began at the end of 807 00:43:25,480 --> 00:43:29,720 Speaker 16: the first Trump presidency. The case involving Google Search began 808 00:43:30,080 --> 00:43:34,439 Speaker 16: at the end of the President Trump's first term. The 809 00:43:34,520 --> 00:43:38,880 Speaker 16: FTC's case against Meta for monopolization began in twenty twenty. 810 00:43:39,480 --> 00:43:42,960 Speaker 16: The investigation of Apple began in twenty twenty. So one 811 00:43:43,000 --> 00:43:46,000 Speaker 16: message that's come from the leadership is that we're the 812 00:43:46,000 --> 00:43:48,960 Speaker 16: ones who started this, We're the ones who brought this 813 00:43:49,200 --> 00:43:51,799 Speaker 16: scrutiny to bear, and we're going to carry forward with 814 00:43:51,840 --> 00:43:55,120 Speaker 16: those In a way, it's an effort to claim credit 815 00:43:55,239 --> 00:43:58,479 Speaker 16: for the development of the newer approach to competition law. 816 00:43:58,840 --> 00:44:02,239 Speaker 16: At the same time, CHERF Ferguson makes a point of 817 00:44:02,280 --> 00:44:07,000 Speaker 16: saying the Biden Harris antitrust era at the FTC is over, 818 00:44:07,400 --> 00:44:09,840 Speaker 16: the con chairmanship and policy is over. 819 00:44:10,239 --> 00:44:11,040 Speaker 8: I think what they. 820 00:44:10,920 --> 00:44:13,440 Speaker 16: Mean to be saying there is that we are going 821 00:44:13,480 --> 00:44:17,480 Speaker 16: to be more willing to consider solutions to mergers that 822 00:44:17,680 --> 00:44:21,000 Speaker 16: stop short of absolute prohibitions. We're going to provide more 823 00:44:21,080 --> 00:44:24,680 Speaker 16: clarity and certainty about the duration of the merger review process. 824 00:44:25,040 --> 00:44:28,240 Speaker 16: We're not going to game the system of process to 825 00:44:28,280 --> 00:44:32,440 Speaker 16: stretch out the timeline to give companies more pause and 826 00:44:32,600 --> 00:44:34,400 Speaker 16: considering whether they want to go ahead. 827 00:44:34,960 --> 00:44:35,600 Speaker 9: So it is. 828 00:44:35,920 --> 00:44:38,000 Speaker 16: It's a mixture of saying we're going to continue to 829 00:44:38,000 --> 00:44:41,799 Speaker 16: be tough with respect to tech in particular, but at 830 00:44:41,840 --> 00:44:45,000 Speaker 16: the same time saying that we aren't going to create 831 00:44:45,040 --> 00:44:47,800 Speaker 16: an environment that is so demanding as it was before. 832 00:44:48,000 --> 00:44:51,800 Speaker 16: So there're going to be possibilities for for more mergers. 833 00:44:52,040 --> 00:44:54,160 Speaker 16: And I think both of the leaders face something that 834 00:44:54,239 --> 00:44:58,840 Speaker 16: a Republican nominee to these agencies always face. A conventional 835 00:44:58,920 --> 00:45:01,880 Speaker 16: story in academics me are part of creating that right. 836 00:45:02,440 --> 00:45:06,480 Speaker 16: The eventual story is Republicans are going to open the gates. 837 00:45:06,800 --> 00:45:08,640 Speaker 16: They want to say things at the beginning to say 838 00:45:08,719 --> 00:45:09,400 Speaker 16: not so fast. 839 00:45:10,800 --> 00:45:14,560 Speaker 2: William Covisich GW law Professor Bill, good to see you. 840 00:45:14,560 --> 00:45:16,160 Speaker 9: Thanks for joining us. Do appreciate it. 841 00:45:16,520 --> 00:45:18,600 Speaker 2: Hey, do you want to bring in Bloomberg's Ryan Vistellica 842 00:45:18,680 --> 00:45:20,440 Speaker 2: to wrap up this week in market? It's certainly a 843 00:45:20,440 --> 00:45:24,320 Speaker 2: big focus being news out of Nvidia's GtC event. Ryan, 844 00:45:24,520 --> 00:45:27,880 Speaker 2: it doesn't look like this was the catalyst that Nvidia 845 00:45:28,000 --> 00:45:31,200 Speaker 2: investors wanted to see, and also that the greater tech 846 00:45:31,280 --> 00:45:35,040 Speaker 2: industry wanted to see. What is the consequence of that? 847 00:45:36,480 --> 00:45:37,719 Speaker 17: Hey, thanks for having me on. 848 00:45:37,840 --> 00:45:38,359 Speaker 7: So you're right. 849 00:45:38,400 --> 00:45:39,960 Speaker 17: I think if you talk to a lot of analysts 850 00:45:40,000 --> 00:45:42,320 Speaker 17: and investors in Nvidia, there was a lot of optimism 851 00:45:42,360 --> 00:45:45,360 Speaker 17: about their product pipeline, their roadmap going forward, but it 852 00:45:45,400 --> 00:45:47,279 Speaker 17: wasn't really enough to avert some of the week. As 853 00:45:47,360 --> 00:45:49,680 Speaker 17: we've seen in the stock there continues to be a 854 00:45:49,680 --> 00:45:52,880 Speaker 17: lot of uncertainty about policies. There continues to be a 855 00:45:52,920 --> 00:45:56,800 Speaker 17: lot of uncertainty about tariffs, the outlook for the economy. 856 00:45:56,880 --> 00:45:59,920 Speaker 17: All of this stuff has been weighing on tech in particular, 857 00:46:00,040 --> 00:46:02,400 Speaker 17: although losses have been pretty widespread. But a couple of 858 00:46:02,480 --> 00:46:05,879 Speaker 17: stats caught my attention earlier today. This is on track 859 00:46:06,000 --> 00:46:09,000 Speaker 17: d the fifth straight weekly drop for the Nastik one hundred. 860 00:46:09,040 --> 00:46:12,320 Speaker 17: That's its longest since May twenty twenty two. Microsoft is 861 00:46:12,360 --> 00:46:14,759 Speaker 17: on track for its eight straight weekly drop. That's its 862 00:46:14,760 --> 00:46:18,040 Speaker 17: longest since February two thousand and eight. So certainly a 863 00:46:18,200 --> 00:46:21,200 Speaker 17: kind of level of historic selling they're here that we're 864 00:46:21,200 --> 00:46:23,759 Speaker 17: seeing today. We've seen the mag seven index fall into 865 00:46:23,800 --> 00:46:26,120 Speaker 17: a correction, We've seen the Nastik one hundred fall into 866 00:46:26,160 --> 00:46:29,360 Speaker 17: a correction. There's been just a lot of broad based weakness. However, 867 00:46:29,640 --> 00:46:31,760 Speaker 17: I do think we might start to see some people 868 00:46:31,800 --> 00:46:34,759 Speaker 17: start buying the dip here. Valuations have really come off 869 00:46:34,760 --> 00:46:36,719 Speaker 17: with their minds and we might be building a sort 870 00:46:36,719 --> 00:46:37,040 Speaker 17: of face. 871 00:46:37,920 --> 00:46:40,239 Speaker 2: All right, that's the question. Hey, Ryan, have a great weekend. 872 00:46:40,280 --> 00:46:43,200 Speaker 2: That's Bloomberg's Ryan Estealica. Thanks so much. That is going 873 00:46:43,280 --> 00:46:45,880 Speaker 2: to do it for this edition of Bloomberg Technology. Do 874 00:46:46,000 --> 00:46:47,960 Speaker 2: not forget to check out our podcast. You can find 875 00:46:47,960 --> 00:46:50,920 Speaker 2: it on the terminal as well as online at Apple, Spotify, 876 00:46:51,000 --> 00:46:56,000 Speaker 2: and iHeart. This is Bloomberg Technology.