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Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of

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Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.

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Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

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Speaker 2: Live from New York and San Francisco. This is Bloomberg Technology.

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Speaker 2: The trade war between the US and China it continues,

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Speaker 2: China raising its own tariffs on all US goods from

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Speaker 2: eighty four percent to one hundred and twenty five percent

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Speaker 2: starting tomorrow, after the US raised tariffs to one hundred

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Speaker 2: and forty five percent on China. China saying your tariffs

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Speaker 2: are a joke. United States, It's no joke to investors.

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Speaker 2: What an extraordinary week we have had. We are are

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Speaker 2: currently up almost six percent over the course of the

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Speaker 2: past five trading days ed on the NASDAP. But it

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Speaker 2: really doesn't paint the picture of the extent of the

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Speaker 2: whiplash that we've seen throughout that week as you pull

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Speaker 2: back on tariffs towards other nations. Look at what we've

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Speaker 2: done on the month, though, this context is needed sure

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Speaker 2: up on the week. On the downside, for the course

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Speaker 2: of April the trading month were off five percent on

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Speaker 2: the nast like one hundred dig into the details.

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Speaker 3: ED.

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Speaker 4: Yeah, I'm looking at the chip sector and across semi conductors.

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Speaker 4: There's divergence in the session between fad less names, those

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Speaker 4: American companies that design chips that don't make them, and

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Speaker 4: those with domestic operations in the US. And buried among

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Speaker 4: the headlines overnight was the Chinese regulator and industry body saying,

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Speaker 4: by the way, when we think about tariffs on US

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Speaker 4: goods imposed by China, this is how we'll define it

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Speaker 4: you and are going to get into that throughout the

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Speaker 4: course of the show. We have to talk about Apple.

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Speaker 4: I feel like Bloomberg Technology as a show was early

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Speaker 4: to this discussion on Monday. Will the US build an

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Speaker 4: iPhone in the future five days we're higher, but it's

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Speaker 4: been so volatile and the analysis from different corners of

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Speaker 4: the market is so different. I think we should get

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Speaker 4: into it.

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Speaker 2: Carry we should because we've been debating time and time again.

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Speaker 2: A made in America iPhone is the goal that President

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Speaker 2: Trump believes could be a reality ED. But replicating China's

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Speaker 2: advanced supply chain it's skilled labor in the United States

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Speaker 2: will prove nigh on impossible for the tech giant and

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Speaker 2: rak Rana of Blue meg Intelligence joins us, You've got

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Speaker 2: a new note out just talking about the implications of

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Speaker 2: taris on the margin of Apple. But what would it

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Speaker 2: do to the margin of Apple if they ever brought

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Speaker 2: production for the iPhone to the United States?

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Speaker 5: Anag see, I think a lot would depend on our

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Speaker 5: materials that go there, the component costs, the labor cost,

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Speaker 5: and I think it'll be very hard for Apple to

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Speaker 5: you know, let's say, raise the price of the phone

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Speaker 5: to two x and then make it in the US.

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Speaker 5: It has to be done in a way that actually

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Speaker 5: keeps the cost down and at that point, I mean

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Speaker 5: keeps their margins. The reason why Apple shines compares to

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Speaker 5: any of the consumer electronics companies because it has very

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Speaker 5: high gross margins compared to you know, let's say somebody

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Speaker 5: who just sells an Android phone in Asia, for example.

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Speaker 4: But those margins run the threats heem. Let's bring up

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Speaker 4: Anaag's research that published I think about thirty minutes ago,

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Speaker 4: twenty minutes ago. I'm just going to read it. Our

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Speaker 4: analysis suggests a margin impact of one hundred to one

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Speaker 4: hundred and seventy basis points for every ten percent tariff

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Speaker 4: increase on China manufactured products. Apple could mitigate some of

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Speaker 4: the impact through price increases. You've been talking about price

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Speaker 4: increases a week. The key question seems to beware and

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Speaker 4: you think that will be on the services side, not

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Speaker 4: on the handsets.

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Speaker 5: Because as I said, it's you know, it's very difficult

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Speaker 5: to take a thousand dollars phone and double it up

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Speaker 5: two thousand, but it's slightly easier to take a you know,

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Speaker 5: two ninety nine dollars to ninety nine nicloud plan and

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Speaker 5: let's say make it up to five or seven dollars.

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Speaker 5: And also remember some of those you know, revenue streams.

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Speaker 5: When it comes to the services business, especially cloud services,

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Speaker 5: they have very high incremental margins. These are products with

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Speaker 5: seventy five, eighty percent or margins much much more than

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Speaker 5: the product side of it. And it doesn't really pinch

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Speaker 5: the consumer that much. And you know, they could praise

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Speaker 5: it as it's only going to be done you know,

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Speaker 5: over the next six months or the time period when

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Speaker 5: the tabs are and then they can scale it back.

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Speaker 5: I think from a consumer point of view, it is less,

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Speaker 5: you know, it hurts them less. But again, you know,

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Speaker 5: that's just one service.

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Speaker 6: I talk about.

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Speaker 5: They could be others as well, but I feel very,

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Speaker 5: you know, strongly that I don't think they can raise

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Speaker 5: the price of a phone up by you know, fifty

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Speaker 5: sixty percent, maybe maybe slightly, maybe five percent, ten percent

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Speaker 5: or so, but anything above that, you know, I think

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Speaker 5: destructs demand.

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Speaker 4: Aner Rana Bloomberg Intelligence, thank you very much. They stick

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Speaker 4: with Apple and the impact of tariffs on technology. Tony

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Speaker 4: one trow Price, science and Tech equity portfolio manager joins us.

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Speaker 4: Now Apple the number one holding a tro Price is

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Speaker 4: Science and Tech fund that Tony oversees. Tony, when I

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Speaker 4: was learning about the technology industry and the markets and

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Speaker 4: making my way through Bloomberg Televisions newsroom, I was always

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Speaker 4: told that Apple and names like it had an entrench

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Speaker 4: market position, strong balance sheet, and in crises or recession,

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Speaker 4: that's where they would survive and thrive. But I think

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Speaker 4: right now, you can't necessarily look back at history and precedent.

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Speaker 4: How on earth are you modeling the future of this company?

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Speaker 7: Yeah, well it's a great question.

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Speaker 8: Obviously, it's historically been a kind of a balancing name.

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Speaker 8: Just that whether a real kind of stock market storm,

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Speaker 8: I'd say here, you know, I think that there is

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Speaker 8: a lot of fear in the market and concerns amount

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Speaker 8: of trade war and what deglobalization could possibly do to

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Speaker 8: kind of Apple's manufacturing advantage in China. And so you know,

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Speaker 8: when I take a step back, they do have diversified

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Speaker 8: supply chains.

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Speaker 7: I think they are.

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Speaker 8: They do have the ability to move around, and they

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Speaker 8: do produce iPhones.

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Speaker 7: In India, and when we think.

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Speaker 8: About the US, the consumption of iPhones is roughly twenty

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Speaker 8: five or thirty percent, and so I expect that there's

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Speaker 8: some flexibility to move some of that production to India

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Speaker 8: more and therefore diversify that risk a bit. And you know,

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Speaker 8: at the end of the day, I think that it

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Speaker 8: is about like, you know, how much of a staple

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Speaker 8: the iPhone is, and so there's price you know, kind

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Speaker 8: of sensitively among the customer to actually you'll pay up.

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Speaker 7: For the iPhone. I think that actually could be bullish

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Speaker 7: for the stock.

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Speaker 8: That just demonstrates more of a it's more of a

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Speaker 8: staple than people appreciate. But here I do think that

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Speaker 8: there is a lot of fear there and so generally,

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Speaker 8: you know, historically you've been a reward for leaning into weakness.

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Speaker 2: Then in this weakness Tony. Yes, on the day Apple

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Speaker 2: is trading somewhat higher. On the week it is too,

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Speaker 2: but on the course of the month it's down fourteen percent.

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Speaker 9: Have you been adding to your number one holding?

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Speaker 2: Has it at any point looked attract him to get

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Speaker 2: back in with more addition, I think, you know, the.

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Speaker 8: Company's still really well positioned over the long term. You

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Speaker 8: look at like the ecosystem they built, the quality of

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Speaker 8: the product, and then you're also an iPhone upgrade cycle coming,

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Speaker 8: and you know, a placement cycle has been elongated, and

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Speaker 8: if you get a new form factor, I think that

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Speaker 8: could be like really attractive.

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Speaker 7: And you know, at the end of the day, like

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Speaker 7: the evaluation has become more.

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Speaker 8: Attractive, especially at these levels versus where they were, you know,

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Speaker 8: six and nine months ago. You know, in addition, it

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Speaker 8: is one of the Max seven that hasn't been spending

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Speaker 8: a ton on large language models.

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Speaker 7: So the capital intensity.

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Speaker 8: And the free cash flow quality of the company is

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Speaker 8: still very, very high quality.

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Speaker 2: Go there, Tony for a moment, Because people were ringing

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Speaker 2: their hands about Apple before the trade war because of

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Speaker 2: a lack of urgency on AI, the implementation within Siri,

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Speaker 2: this distraction that Tariff's cause does it set them back

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Speaker 2: even further about upgrading the product from an AI perspective.

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Speaker 8: Well, I think that they are, you know, constantly optimizing

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Speaker 8: their supply chains. Obviously it's additional work on their their plate,

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Speaker 8: but I don't think that they are standing still on

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Speaker 8: the AI front. I think they're besting more actually, and

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Speaker 8: you see that, you know some news are them purchasing

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Speaker 8: more GPUs And you know, when I when I think

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Speaker 8: about the space, there's just a lot of things evolving

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Speaker 8: and what we thought a year ago.

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Speaker 7: Uh has has kind of changed in a lot.

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Speaker 8: Of ways in terms of, you know, who can participate

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Speaker 8: in AI and like what these large language models can

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Speaker 8: cost and which one is the best. So every time,

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Speaker 8: like it feels like every month, there's a new headline

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Speaker 8: of who is in the lead. And so it could

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Speaker 8: be prudent of Apple to kind of, you know, focus

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Speaker 8: on what they're really good at, what their competitive vantage is,

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Speaker 8: which is designing really high quality products that fit into

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Speaker 8: our lives, that can be incorporated elegantly. And at the

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Speaker 8: end of they do own that kind of ecosystem and

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Speaker 8: you know, over time, I think they can you know,

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Speaker 8: drive value from that for their shareholders.

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Speaker 4: Tony, let's end this conversation on Apple with a yes

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Speaker 4: or no. Does Apple manufacturer and assemble an iPhone in

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Speaker 4: the United States in the future.

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Speaker 8: I think it's possible in the very kind of long

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Speaker 8: term future. I think in the near term. And you

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Speaker 8: look at kind of what it takes the man manufacturing iPhone.

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Speaker 8: I mean, you know, there's thousands of people that are

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Speaker 8: living at the factory that can be woken up, you know,

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Speaker 8: anytime the hour to make a change. And so you know,

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Speaker 8: I think that in the long term that could be

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Speaker 8: possible with additional advancements and robotics and AI.

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Speaker 7: But I don't think it's going to be a next

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Speaker 7: year kind of thing, right.

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Speaker 4: I saw a headline overnight that we think is a

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Speaker 4: critical right, which is China Semiconductor Industry Association issue this

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Speaker 4: emergency notice and they clarified that in the context of tariffs,

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Speaker 4: they define point of origin where a semiconductor is taped out,

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Speaker 4: in other words, where the electronic instruction set is formulated

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Speaker 4: before it goes to the fab And if you think

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Speaker 4: about the fabulous US names, many of which you have

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Speaker 4: big holdings in, they use TSMC or maybe Samsung. So

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Speaker 4: the tape out happens in those countries as well. How

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Speaker 4: much insulation do you think that gives them from the

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Speaker 4: heavy China tariffs on US products.

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Speaker 8: Yeah, well, I think that if you take a step back, right,

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Speaker 8: like the two countries have been trying to disentangle them

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Speaker 8: each other from major kind of supply chains and you know,

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Speaker 8: areas of where if you could substitute a domestic product

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Speaker 8: that would be preferred.

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Speaker 7: And that's nothing new over the past few years.

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Speaker 8: And I think that you know, this kind of the

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Speaker 8: latest piece of news is further kind of a step

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Speaker 8: in that direction, where you know, it doesn't make sense to.

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Speaker 7: Hurt yourself by kind of terrifying.

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Speaker 8: The only source that you have, and so like in

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Speaker 8: terms of stuff made in TSMC, like both countries need that,

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Speaker 8: so it makes a little bit less sense to put

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Speaker 8: a high tariff on that when it's when it's sole source.

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Speaker 8: So that's kind of my perspective. That's a continuation of

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Speaker 8: industrial policy that kind of kind of makes sense.

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Speaker 2: Let's talk about the others though, that are exposed now.

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Speaker 2: I'm interested as to whether you have holdings in those

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Speaker 2: that are manufacturing in the United States or looking to

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Speaker 2: even more with the cost money coming from federal government

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Speaker 2: wanting them made in the US, and what that does

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Speaker 2: to the business model if they ship to Asia to

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Speaker 2: China specifically, Tony, do you have to get out of

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Speaker 2: intels and Texas instruments?

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Speaker 8: Well, I think that over the long term, it's more

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Speaker 8: about the technology and the differentiation and what you can

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Speaker 8: the value add that you can. So if you have

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Speaker 8: leadership products, I think that's still number one, you know,

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Speaker 8: I think number two. I think that divers sized supply chains,

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Speaker 8: like serving the local industry that it's based out of

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Speaker 8: or the region is probably going to be a good thing.

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Speaker 8: And so at the end of the day, I think

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Speaker 8: it's those two things, like some flexibility manufacturing, but like

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Speaker 8: the main thing is the product, leadership and the seculor

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Speaker 8: trend that a company is kind of, you know, kind

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Speaker 8: of positioned to capitalize on.

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Speaker 4: Tony, like all technology investors, you have had to digest

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Speaker 4: and understand communication from policymakers. How would you rate and

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Speaker 4: rank what you've heard from the President, Treasury, Secretary best

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Speaker 4: and others.

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Speaker 8: Well, I'm a tech investor, so you know, geopolitics is

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Speaker 8: above my pay grade obviously, but you know, at the

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Speaker 8: end of the day, I think that the US leap

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Speaker 8: administration and the leaders that we have acted, you know,

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Speaker 8: they will do what's best for the country for companies

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Speaker 8: here in the US. So I think that we need

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Speaker 8: to trust them and they do. You know, I think

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Speaker 8: they are trend trying their best, and you know, at

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Speaker 8: the end of the day, I think that they will

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Speaker 8: protect American interest and what's most important is keeping US

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Speaker 8: technology at the forefront. And you know, that's that's what's

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Speaker 8: what I look for as an investor.

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Speaker 9: Tony one, thank you so much of trow price.

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Speaker 2: So important to have the investor take today and after

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Speaker 2: one long week Chinese social media and giant bite dance,

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Speaker 2: it saw its revenue jump twenty nine percent last year.

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Speaker 2: It was driven by the global expansion of you guessed at.

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Speaker 9: TikTok.

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Speaker 2: International sales grew thirty nine billion dollars, contributing about a

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Speaker 2: quarter of the company's revenue.

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Speaker 9: It's all according to people.

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Speaker 2: Briefed on the numbers, now that as the Chinese business slowed. Now,

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Speaker 2: of course, tensions between Washington and Beijing expect to impact

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Speaker 2: both the global economy possible sale of TikTok in the

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Speaker 2: United States.

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Speaker 9: We've got to get to it.

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Speaker 6: All.

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Speaker 2: Mitchell Green, founder, managing partner of lead Edge Capital, longtime

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Speaker 2: investor in names like Byte Dances with us. Mitchell, have

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Speaker 2: you been adding to Byte Dance. What do you make

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Speaker 2: of where we stand in terms of TikTok in the

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Speaker 2: United States?

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Speaker 10: Yeah, and hey, Carolyn, thanks so much for having me on.

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Speaker 10: What do I think we can talk about that for

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Speaker 10: a while. The company continues to see you very well.

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Speaker 10: As we've said past, in the grand scheme of things,

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Speaker 10: you know, uncertainty kills deals. I wish I could tell

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Speaker 10: you exactly where things stand in this negotiation between the

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Speaker 10: White House, White Dance, the Chinese government.

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Speaker 6: Discussions are on tariffs.

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Speaker 10: Look, we've always had frankly questions on the on the

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Speaker 10: US TikTok uh. You know, again, as I've mentioned in

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Speaker 10: the past, we model out TikTok usa to be worth zero.

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Speaker 10: I suspect something will come of it. I don't know

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Speaker 10: if it's in a month from now, three months, or

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Speaker 10: now from six months or now.

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Speaker 6: We shall see.

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Speaker 10: It is obviously a very valuable business that a lot

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Speaker 10: of constituents want to figure out, not only board members

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Speaker 10: and shareholders and the CEO of Bite Dance, but we

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Speaker 10: now have this giant taraph war going on between the

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Speaker 10: US and China, So.

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Speaker 6: It's all going to get dragged into it and play

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Speaker 6: out together.

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Speaker 2: Mitchell, you've been on the secondary market picking up Byte

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Speaker 2: Dance in recent months. Would you want exposure to us

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Speaker 2: TikTok if it was indeed extricated out of bite ants

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Speaker 2: and had US ownership.

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Speaker 10: Absolutely, And we have also not bought any Byte Dance

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Speaker 10: shares this year. There's been some there's been some changes

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Speaker 10: with Sippius.

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Speaker 6: A lot of people don't know about this publicly known

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Speaker 6: that Syphius came out and put some.

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Speaker 10: Restrictions on what kinds of companies you could buy globally

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Speaker 10: related t if the AI model speed was fast enough

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Speaker 10: or not. It's a questionable area if White Dance falls

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Speaker 10: into this or not. But in order to just stay

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Speaker 10: conservative and be on the right side, you know, we

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Speaker 10: have not bought anymore of the last several months.

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Speaker 6: We do on it.

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Speaker 10: What I like, What would I like to own TikTok Usa? Absolutely,

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Speaker 10: if you know, if they're allowed existing investors, and again

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Speaker 10: about sixty percent of investors in the company are non

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Speaker 10: Chinese investors. If we could add to our position, obviously

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Speaker 10: it depends on price.

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Speaker 6: You know, we could be quite interested, Mitchell.

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Speaker 4: Starting Monday night into Tuesday morning, I started getting phone

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Speaker 4: calls that there was quite a lot of activity on

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Speaker 4: the secondary's market for byte dance valuation range two eighty

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Speaker 4: to three hundred and twenty billion, depending on the offer

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Speaker 4: lot size.

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Speaker 11: Right.

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Speaker 4: But to your point, what I was told is a

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Speaker 4: lot of that activity was from Asia, right, China, maybe Singapore.

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Speaker 4: But it followed the President on Sunday night. You may

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Speaker 4: have seen the clip on Air Force one saying that

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Speaker 4: if it weren't for tariffs that he'd put in place,

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Speaker 4: they had a deal. How do you interpret that trading?

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Speaker 4: You know, if the outlook for the deal is poor,

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Speaker 4: but you see private market investors in Asia trying to

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Speaker 4: get more of a foothold.

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Speaker 10: Oh, the Chinese business is doing phenomenally well, which is

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Speaker 10: absolutely incredible, given I don't think the Chinese economy is

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Speaker 10: like rowing right now, and I don't know if it's

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Speaker 10: far apart, but I mean it's just it's been unique.

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Speaker 10: And you can look at some of the other ecomerce

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Speaker 10: businesses across China and so, actually, how are the performances

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Speaker 10: in right answers doing in China is strong. I wouldn't

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Speaker 10: read into I have no clue if the deal is

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Speaker 10: almost done or close to done or whatever.

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Speaker 6: I have. When it comes to politics.

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Speaker 10: I tend to just listen and not really make opinions

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Speaker 10: and I don't really know.

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Speaker 6: Yeah, well, we'll see it again again. There's a handful

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Speaker 6: of people that need to be involved. Chi President of

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Speaker 6: the United States had.

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Speaker 10: The CEO bite dance, and I can't say any of

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Speaker 10: them are good friends of mine.

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Speaker 4: So if they do telephone you, you let us know.

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Speaker 6: I'll let you know if she calls me die.

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Speaker 4: There is a there is a technology conversation here right.

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Speaker 4: I go back to when I was at CEES and

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Speaker 4: at GtC very recently, and Jensen Wong's point the CEO

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Speaker 4: of and Video that basically more than fifty percent of

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Speaker 4: all the computer scientists in the world working on artificial

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Speaker 4: intelligence are doing so in China or they are from China.

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Speaker 4: What kind of future is there to sort of work

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Speaker 4: with that country on technology and founding new companies.

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Speaker 10: I strongly believe whether it's technology transfer, technology exports, imports.

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Speaker 6: Like the trade trade is global, we all need to

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Speaker 6: figure out how to work together. China plus the us

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Speaker 6: working together is a good thing.

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Speaker 10: I am a strong believer in like the education system

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Speaker 10: in China, the entrepreneurship in China as well as in

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Speaker 10: the United States as well. But again, like for instance,

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Speaker 10: we I've talked about this another I think I'm Bloomberg

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Speaker 10: and other sessions.

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Speaker 6: Chinese regulate social media.

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Speaker 10: You know, in the United States, kids go on TikTok

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Speaker 10: and post ridiculous videos about all kinds of stupid stuff.

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Speaker 10: In China, they learn about science and math on TikTok.

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Speaker 10: I think maybe we should ask should we be regulating

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Speaker 10: this stuff more?

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Speaker 6: Should we be.

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Speaker 10: Repeeling some of these laws that don't hold social media

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Speaker 10: companies accountable by the.

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Speaker 6: Way that gets does in China? And so I think

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Speaker 6: there are things that we should be learning at. And

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Speaker 6: some of those things that are happening in China and

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Speaker 6: applying to the United.

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Speaker 2: States interesting tat Mitchell and I want to go there

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Speaker 2: because you have exposure, not just to China. We bring

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Speaker 2: you on because you've been so long in the names

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00:19:13,320 --> 00:19:15,560
Speaker 2: like Ali Baba, you're an aunt, you're in byte Dance,

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Speaker 2: long term investor, understanding that economy. We look at the

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Speaker 2: rest of your old portfolio. You know, well, us exposure

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00:19:21,760 --> 00:19:26,359
Speaker 2: too uber bumble, you know, Europe with Spotify. How difficult

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00:19:26,560 --> 00:19:28,920
Speaker 2: is it to remain committed to China right now when

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Speaker 2: Sophius is changing up the rules, When you are unable

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Speaker 2: to commit capital and the way you'd like to, it's complicated.

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Speaker 10: And again, most of our business is actually North America

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Speaker 10: and Western Europe. You know, we have a team of

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Speaker 10: eighteen associates that are twenty two to twenty four years

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Speaker 10: old that you know, speak about nine thousand companies a year,

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Speaker 10: and we all you know, we might speak to ten

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Speaker 10: to twenty companies and all across Stasia. So what we've

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Speaker 10: done in China is a very handful of some of

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Speaker 10: the largest businesses over there where they could effectively be there.

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Speaker 6: They are a to be public companies, it just happened

401
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Speaker 6: to be private. We tend to like to be contrarian,

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Speaker 6: you know.

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Speaker 10: And it was funny a year ago, nine months ago,

404
00:20:10,840 --> 00:20:14,400
Speaker 10: nobody liked wanted to invest anything in China. Yet then

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00:20:14,440 --> 00:20:17,320
Speaker 10: you saw stocks like Ali Baba go from once, you know,

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Speaker 10: from sixty seventy dollars a share, it's like one hundred

407
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Speaker 10: and thirty hundred and twenty. Now people were liking China

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Speaker 10: again because they saw Chi and Jack ma. I think

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Speaker 10: it's some conference together and I don't know where all

410
00:20:27,200 --> 00:20:29,240
Speaker 10: about this today. Maybe it's back at one hundred a share.

411
00:20:29,320 --> 00:20:31,240
Speaker 10: So this stuff is so volatile, but we find that

412
00:20:31,320 --> 00:20:34,200
Speaker 10: you buy China when the rest of the world hates it,

413
00:20:34,480 --> 00:20:36,200
Speaker 10: you can tend to make lots of money. But again,

414
00:20:36,200 --> 00:20:38,800
Speaker 10: most of the stuff we invest in is right back

415
00:20:38,840 --> 00:20:42,600
Speaker 10: in in the United States and right now. Look, I

416
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Speaker 10: think in the terriff situation, I can have an opinion

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00:20:46,200 --> 00:20:48,280
Speaker 10: of it today, it'll probably change.

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Speaker 6: In a week, a month, and six months.

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Speaker 10: But uncertainty is what actually slows down the economy, right

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Speaker 10: And you know, our portfolio has made the high high

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Speaker 10: margin software companies that don't have direct you know, inputs

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00:21:00,640 --> 00:21:02,679
Speaker 10: coming overseas and things being chipped in.

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Speaker 6: With that being said, if.

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Speaker 10: You sell airline software, are you sell software manufacturing companies?

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Speaker 10: And those companies are nervous about what's going to happen

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Speaker 10: in their businesses. They might start to pull back on

427
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Speaker 10: spending and the whole thing kind of like unravels on itself.

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Speaker 2: And if there's cuts to R and D in healthcare

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00:21:19,640 --> 00:21:21,800
Speaker 2: research and you're in a name like Benchling, which is

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00:21:21,840 --> 00:21:25,040
Speaker 2: all about community of scientists. I'm really interested in Mitchell

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00:21:25,080 --> 00:21:28,119
Speaker 2: ultimately how difficult this environment is when some of the

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Speaker 2: companies that we thought were going to go public now

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Speaker 2: can't or don't want to. How is that impacting the

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Speaker 2: way in which you raise the next fund for example?

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00:21:35,880 --> 00:21:39,400
Speaker 6: Yeah, so we were so, we were very We don't.

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00:21:39,200 --> 00:21:43,359
Speaker 10: Talk about performance on obviously and pull me or anything

437
00:21:43,440 --> 00:21:50,520
Speaker 10: like that, but you know, we believe that investor funds

438
00:21:50,960 --> 00:21:55,359
Speaker 10: that took advantage of getting the quidity and what's called DPI.

439
00:21:56,240 --> 00:21:57,960
Speaker 10: It's so much money you've given back on a net

440
00:21:57,960 --> 00:22:00,960
Speaker 10: basis to your investors over the last few years, in

441
00:22:00,960 --> 00:22:03,080
Speaker 10: the last five years, is really going to matter for

442
00:22:03,160 --> 00:22:04,960
Speaker 10: funds as they go forward graating money.

443
00:22:05,520 --> 00:22:07,840
Speaker 6: We are we are going to everybody.

444
00:22:07,400 --> 00:22:10,199
Speaker 10: Thought two thousand and six, twenty twenty five is going

445
00:22:10,280 --> 00:22:12,000
Speaker 10: to be the year of the IPO. There was maybe

446
00:22:12,000 --> 00:22:14,879
Speaker 10: this giant IPO. Aa, Well that's dead, Like that's not

447
00:22:14,960 --> 00:22:16,800
Speaker 10: happening now.

448
00:22:16,800 --> 00:22:18,399
Speaker 6: Again. I think these companies could go public.

449
00:22:18,440 --> 00:22:20,520
Speaker 10: It's just the question of what valuation will could they

450
00:22:20,520 --> 00:22:21,800
Speaker 10: and will they then go public?

451
00:22:21,800 --> 00:22:23,679
Speaker 6: And you know, your guess is as good as mine.

452
00:22:23,760 --> 00:22:26,000
Speaker 10: But I think this liquidity drought is going to continue,

453
00:22:26,680 --> 00:22:29,120
Speaker 10: and I think as a result of liquidity drought, you're

454
00:22:29,119 --> 00:22:31,679
Speaker 10: going to have a lot of endowments and foundations and

455
00:22:31,760 --> 00:22:34,960
Speaker 10: other big institutional investors that are networks that are over

456
00:22:35,000 --> 00:22:39,200
Speaker 10: allocated to private equity, venture capital, growth equity, real estate,

457
00:22:39,280 --> 00:22:41,760
Speaker 10: private equity, everything that are going that are.

458
00:22:41,600 --> 00:22:44,359
Speaker 6: Going to unlock the secondary market. And the secondary market

459
00:22:44,359 --> 00:22:45,439
Speaker 6: has already been busy.

460
00:22:45,840 --> 00:22:49,800
Speaker 10: It is about to if this continues, call it six months,

461
00:22:49,880 --> 00:22:51,720
Speaker 10: nine months, and twelve months, you are about to see

462
00:22:51,800 --> 00:22:54,280
Speaker 10: a huge amount of institutions that are going to be

463
00:22:54,320 --> 00:22:57,000
Speaker 10: massively over allocated to private equity, that are going to

464
00:22:57,080 --> 00:22:59,360
Speaker 10: need to turn to the secondary markets and sell things

465
00:23:00,160 --> 00:23:02,440
Speaker 10: that for us will create a great opportunity. Did you

466
00:23:02,560 --> 00:23:05,600
Speaker 10: want to be buying from sellers that are forced to sell?

467
00:23:06,080 --> 00:23:10,360
Speaker 4: Mitchell Green, lead Edge Capital. Thank you really appreciated conversation, Caroline.

468
00:23:10,359 --> 00:23:11,399
Speaker 7: What you got a's time.

469
00:23:11,280 --> 00:23:14,320
Speaker 2: For talking tech head and first up, Logitech It withdrew

470
00:23:14,400 --> 00:23:16,800
Speaker 2: its full year twenty twenty six outlook due to quote

471
00:23:16,920 --> 00:23:19,040
Speaker 2: continuing uncertainties of the tariff environment.

472
00:23:19,160 --> 00:23:20,520
Speaker 9: Now Vonda Bell analysts.

473
00:23:20,160 --> 00:23:22,840
Speaker 2: Say this is a sensible move, but the company's margins

474
00:23:22,880 --> 00:23:24,679
Speaker 2: will certainly be challenged, and you saw the impact on

475
00:23:24,680 --> 00:23:27,800
Speaker 2: the shares plus Tesla, it stopped taking orders in China

476
00:23:27,880 --> 00:23:30,840
Speaker 2: for its model ES Sedans its model Export utility vehicles,

477
00:23:31,040 --> 00:23:33,920
Speaker 2: both of which are imported from the United States. That's

478
00:23:33,960 --> 00:23:36,120
Speaker 2: after the country has raised tariffs on one another. Of course,

479
00:23:36,160 --> 00:23:38,520
Speaker 2: this could be a setback to the company's already shaky

480
00:23:38,560 --> 00:23:42,359
Speaker 2: position in the Chinese market. Meanwhile, Ali Baba co founder

481
00:23:42,480 --> 00:23:45,320
Speaker 2: Jack Maer He's worn that AI shouldn't replace humans, but

482
00:23:45,359 --> 00:23:48,840
Speaker 2: work instead to meet their every need. The Chinese billionaire

483
00:23:48,880 --> 00:23:51,600
Speaker 2: who wants like an AI to love here hogued that

484
00:23:51,640 --> 00:23:55,119
Speaker 2: the technology should protect livelihoods and make lives better.

485
00:23:56,200 --> 00:23:59,679
Speaker 4: Okay, coming up analog devices, Texas instruments, big declines. We

486
00:23:59,720 --> 00:24:04,760
Speaker 4: take it deep dive into two a city's top semiconductor pigs.

487
00:24:04,960 --> 00:24:08,600
Speaker 4: The timing of that call very different from where the

488
00:24:08,640 --> 00:24:11,160
Speaker 4: stocks are heading right now. This has been bo Technology.

489
00:24:23,160 --> 00:24:25,359
Speaker 2: Welcome back to Bloomberg Technology and Caroline hid in New

490
00:24:25,440 --> 00:24:26,320
Speaker 2: York and.

491
00:24:26,200 --> 00:24:30,240
Speaker 4: I'm Ed Ludlow in San Francisco. San Francisco's mayor, Daniel Lurie,

492
00:24:30,280 --> 00:24:34,160
Speaker 4: is pledging an economic and tech revival, aiming to restore

493
00:24:34,400 --> 00:24:37,200
Speaker 4: the city's status as a global innovation hub. I sat

494
00:24:37,240 --> 00:24:39,879
Speaker 4: down with the mayor to discuss his growth strategy in

495
00:24:39,960 --> 00:24:40,920
Speaker 4: the face of tariffs.

496
00:24:41,960 --> 00:24:45,199
Speaker 11: First, we're the most beautiful city in the world. Second,

497
00:24:46,040 --> 00:24:49,080
Speaker 11: the horse power is here, the intellectual horsepower is here.

498
00:24:49,119 --> 00:24:53,680
Speaker 11: We have great universities, including UCSF around here, and young

499
00:24:53,720 --> 00:24:54,840
Speaker 11: people want to be in.

500
00:24:56,480 --> 00:24:57,440
Speaker 7: Urban environments.

501
00:24:57,480 --> 00:24:59,200
Speaker 4: They want to be in San Francisco.

502
00:24:59,280 --> 00:25:02,359
Speaker 11: That's been proven truth throughout history, and we're going to

503
00:25:02,400 --> 00:25:06,880
Speaker 11: prove that again. We have great arts and culture institutions.

504
00:25:06,880 --> 00:25:10,040
Speaker 11: We were just named the culinary capital of the country,

505
00:25:10,320 --> 00:25:13,280
Speaker 11: so we have so much to be proud of. And

506
00:25:13,640 --> 00:25:16,639
Speaker 11: we know that workers want to be here. Our CEOs

507
00:25:16,640 --> 00:25:20,560
Speaker 11: who were talking to they know that their employees want

508
00:25:20,600 --> 00:25:23,920
Speaker 11: to be in San Francisco. No offense to my friends

509
00:25:23,960 --> 00:25:28,760
Speaker 11: down in the Peninsula, but people live in San Francisco

510
00:25:28,880 --> 00:25:30,399
Speaker 11: and we want them to work here. And we do

511
00:25:30,480 --> 00:25:33,359
Speaker 11: have to get competitive, but it starts with safe and

512
00:25:33,480 --> 00:25:39,360
Speaker 11: clean streets. Our property crime rates have dropped thirty five percent,

513
00:25:39,720 --> 00:25:42,920
Speaker 11: Our violent crime has dropped fifteen percent. Car break ins

514
00:25:42,920 --> 00:25:46,960
Speaker 11: in February the lowest in twenty two years. This is

515
00:25:47,080 --> 00:25:51,320
Speaker 11: a safe American city and we want everybody coming back

516
00:25:51,359 --> 00:25:54,399
Speaker 11: to work here, to play here, and to live here.

517
00:25:56,400 --> 00:25:59,480
Speaker 4: Mis very how is the White House and is tariffs

518
00:25:59,520 --> 00:26:03,160
Speaker 4: Paulus going to impact your ability to do what you've

519
00:26:03,240 --> 00:26:06,639
Speaker 4: just outlined, bring more of the technology industry to the city.

520
00:26:07,800 --> 00:26:10,960
Speaker 11: Well, listen, we are all and you all are reporting

521
00:26:11,000 --> 00:26:16,080
Speaker 11: on it minute by minute. The uncertainty is impacting everybody

522
00:26:16,160 --> 00:26:18,359
Speaker 11: around the globe, and so we have to plan for

523
00:26:18,400 --> 00:26:21,680
Speaker 11: that here at city Hall. We're working with our department heads.

524
00:26:21,720 --> 00:26:24,359
Speaker 11: We have a big budget deficit. We inherited one of

525
00:26:24,359 --> 00:26:28,600
Speaker 11: the largest deficits in our city's history. So we're working

526
00:26:29,080 --> 00:26:32,760
Speaker 11: day and night to make sure that we tighten our belts,

527
00:26:33,040 --> 00:26:36,680
Speaker 11: we deliver core services to our taxpayers and to our residents,

528
00:26:36,720 --> 00:26:40,240
Speaker 11: making sure that we focus on public safety, focus on

529
00:26:40,320 --> 00:26:43,000
Speaker 11: the behavioral health crisis and the drug crisis that is

530
00:26:43,080 --> 00:26:47,600
Speaker 11: causing people to feel the disorder on our streets. But

531
00:26:47,720 --> 00:26:51,639
Speaker 11: that is all starting to improve. And so we can

532
00:26:51,920 --> 00:26:54,720
Speaker 11: only control what we can control here in San Francisco,

533
00:26:54,760 --> 00:26:58,399
Speaker 11: and that's our fifteen point nine billion dollar budget. We

534
00:26:58,440 --> 00:27:00,960
Speaker 11: have a one point one billion dollar budget deficit. Over

535
00:27:00,960 --> 00:27:04,159
Speaker 11: the next two years, we're going to get that under control.

536
00:27:04,200 --> 00:27:06,919
Speaker 11: We're going to fix our structure or budget deficit, and

537
00:27:07,240 --> 00:27:09,280
Speaker 11: I'm telling you we're then going to be off to

538
00:27:09,359 --> 00:27:10,119
Speaker 11: the races.

539
00:27:10,560 --> 00:27:11,679
Speaker 7: Data bricks knows it.

540
00:27:11,760 --> 00:27:15,359
Speaker 11: They just secured an office space one hundred and fifty

541
00:27:15,400 --> 00:27:19,480
Speaker 11: thousand square feet open AI just open new headquarters by

542
00:27:19,600 --> 00:27:24,399
Speaker 11: Chase Center. We are on the cusp of lift off

543
00:27:24,560 --> 00:27:26,720
Speaker 11: here in San Francisco, and we want everybody to come

544
00:27:26,760 --> 00:27:27,520
Speaker 11: be a part of it.

545
00:27:28,840 --> 00:27:31,399
Speaker 4: So that was my conversation with San Francisco Meytor, Daniel Lurie,

546
00:27:31,400 --> 00:27:34,080
Speaker 4: and Caro. Like the pitch to the technology industry seems

547
00:27:34,080 --> 00:27:37,840
Speaker 4: to be San Francisco is beautiful and it's full of nerds,

548
00:27:38,000 --> 00:27:41,159
Speaker 4: and that's not really a policy platform. But if you

549
00:27:41,160 --> 00:27:43,600
Speaker 4: think about how the history of Silicon Valley's works, right,

550
00:27:43,760 --> 00:27:46,760
Speaker 4: there are many tech people here in the city, and

551
00:27:46,800 --> 00:27:47,760
Speaker 4: what do they do each day?

552
00:27:47,840 --> 00:27:48,000
Speaker 7: Right?

553
00:27:48,040 --> 00:27:49,800
Speaker 4: Where are all the big tech companies that they.

554
00:27:49,680 --> 00:27:50,400
Speaker 7: Go to work at.

555
00:27:50,960 --> 00:27:55,240
Speaker 2: They're not an SF they reverse commute out to the valley.

556
00:27:55,440 --> 00:27:57,760
Speaker 2: But also what I wonder about is when we've got

557
00:27:57,800 --> 00:28:01,280
Speaker 2: an economic quandary coming from the United States, when advertising

558
00:28:01,320 --> 00:28:03,880
Speaker 2: dollars might be pulled back, when we've already got a

559
00:28:03,880 --> 00:28:07,200
Speaker 2: meta for example, that has been laying off people, how

560
00:28:07,200 --> 00:28:12,080
Speaker 2: does that affect in NEEF economy going forward. We'll have

561
00:28:12,160 --> 00:28:13,840
Speaker 2: to debate that a little bit more in terms of

562
00:28:13,880 --> 00:28:15,680
Speaker 2: what's happening over in San Francisco.

563
00:28:15,800 --> 00:28:17,600
Speaker 9: But we also want a little bit more in.

564
00:28:17,520 --> 00:28:21,240
Speaker 2: Context about what the global tech policies look like in

565
00:28:21,240 --> 00:28:24,400
Speaker 2: this current context. That meta has to navigate, that alphabet

566
00:28:24,400 --> 00:28:26,720
Speaker 2: has to navigate, that these SF giants have to navigate.

567
00:28:26,840 --> 00:28:30,080
Speaker 2: Liza Tobins with US Managin director at are not Global,

568
00:28:30,480 --> 00:28:33,360
Speaker 2: and Liza, I'm so interested in just your take right

569
00:28:33,400 --> 00:28:35,560
Speaker 2: now and where we stand in this so called tit

570
00:28:35,640 --> 00:28:38,880
Speaker 2: for tat that today China's leader came out and said,

571
00:28:39,240 --> 00:28:41,800
Speaker 2: it's a joke. We're going to stop raising to meet you.

572
00:28:41,880 --> 00:28:44,760
Speaker 2: But we stand at one hundred more than one one

573
00:28:44,800 --> 00:28:47,560
Speaker 2: hundred and twenty five percent tariff on US goods. The

574
00:28:47,640 --> 00:28:50,400
Speaker 2: US has one hundred and forty five percent tariff on

575
00:28:50,480 --> 00:28:51,360
Speaker 2: Chinese goods.

576
00:28:51,760 --> 00:28:52,720
Speaker 9: Where do we go from here?

577
00:28:54,160 --> 00:28:56,560
Speaker 12: Yeah, So, of course, about a week and a half ago,

578
00:28:56,680 --> 00:28:59,920
Speaker 12: President Trump declared a trade war on the entire world,

579
00:29:00,080 --> 00:29:03,160
Speaker 12: and then over the last couple of days it seems

580
00:29:03,160 --> 00:29:06,640
Speaker 12: to have kind of slipped into an isolate China strategy.

581
00:29:06,840 --> 00:29:10,200
Speaker 12: Clearly the president is torn between his deal making and

582
00:29:10,240 --> 00:29:13,240
Speaker 12: his decoupling instincts. He's hoping for a phone call with

583
00:29:13,360 --> 00:29:16,280
Speaker 12: Chi Jinping. But what we've learned really over the last

584
00:29:16,280 --> 00:29:19,880
Speaker 12: twenty years of US China relations is that US trade

585
00:29:19,920 --> 00:29:23,560
Speaker 12: negotiators are always disappointed with what Paiging brings to the table.

586
00:29:24,000 --> 00:29:27,000
Speaker 12: And I'm seeing things play out this week that remind

587
00:29:27,040 --> 00:29:28,680
Speaker 12: me of when I was in the White House in

588
00:29:28,720 --> 00:29:32,040
Speaker 12: twenty twenty, and that, of course was when President Trump

589
00:29:32,080 --> 00:29:34,960
Speaker 12: got his Phase one trade deal with the Chinese, and

590
00:29:35,000 --> 00:29:38,720
Speaker 12: then a couple months later he started getting seriously disappointed

591
00:29:38,760 --> 00:29:42,320
Speaker 12: and blaming Sheijinping for COVID, which of course tanked the

592
00:29:42,360 --> 00:29:46,560
Speaker 12: global economy and he felt ruined his electoral prospects, and

593
00:29:46,640 --> 00:29:49,160
Speaker 12: so in some of the President's comments just a few

594
00:29:49,200 --> 00:29:52,200
Speaker 12: days ago in a speech, he's talking about she He's

595
00:29:52,240 --> 00:29:54,840
Speaker 12: hoping for a phone call, but he's referring back to

596
00:29:54,880 --> 00:29:58,040
Speaker 12: COVID and saying, you know, I like Sheijinping, we get

597
00:29:58,080 --> 00:29:59,840
Speaker 12: along great, but COVID.

598
00:29:59,560 --> 00:30:01,400
Speaker 9: That was a bridge too far.

599
00:30:01,560 --> 00:30:03,880
Speaker 12: That's what the president's saying. So he seems to be

600
00:30:04,320 --> 00:30:08,680
Speaker 12: remembering the disappointment and the anger from twenty twenty, and

601
00:30:09,520 --> 00:30:12,800
Speaker 12: he seems to be shifting from deal making to decoupling.

602
00:30:13,600 --> 00:30:16,360
Speaker 2: We go to you because of your depth of expertise,

603
00:30:16,400 --> 00:30:18,600
Speaker 2: when you've worked with the CIA, when you've been in

604
00:30:18,640 --> 00:30:22,080
Speaker 2: the US Indo Pacific Command analysis for them as well, Liza,

605
00:30:22,160 --> 00:30:24,600
Speaker 2: not to mention what you've done over at the when

606
00:30:24,600 --> 00:30:28,720
Speaker 2: you're sc CP SCSP, I should call it, of course,

607
00:30:29,000 --> 00:30:32,040
Speaker 2: and I'm interested, Lisa therefore on where you go from,

608
00:30:32,360 --> 00:30:34,960
Speaker 2: who has the upper hand, where the TikTok's involved in

609
00:30:35,000 --> 00:30:37,760
Speaker 2: this negotiation. Just take us forward as to what plays

610
00:30:37,760 --> 00:30:40,240
Speaker 2: out next. If we are seeing a US president getting

611
00:30:40,280 --> 00:30:45,160
Speaker 2: more and more triggered by what happened in twenty twenty, right.

612
00:30:45,120 --> 00:30:49,000
Speaker 12: So I think we could potentially see some kind of

613
00:30:49,000 --> 00:30:52,040
Speaker 12: a deal. Clearly, the President still would like a deal,

614
00:30:52,080 --> 00:30:58,320
Speaker 12: perhaps involving some tariff concessions, maybe americanizing TikTok, although he's

615
00:30:58,360 --> 00:31:02,160
Speaker 12: already conceded that aging will retain the algorithm, which is

616
00:31:02,240 --> 00:31:06,600
Speaker 12: really the brain that controls TikTok and controls Americans media diet.

617
00:31:06,640 --> 00:31:08,200
Speaker 12: So we may or may not see that. But I

618
00:31:08,240 --> 00:31:11,680
Speaker 12: want to remind your audience not to over index on

619
00:31:11,760 --> 00:31:15,240
Speaker 12: the strategic importance of a deal, because we've always been

620
00:31:15,240 --> 00:31:19,440
Speaker 12: disappointed by how China actually implements that deal. So I

621
00:31:19,480 --> 00:31:22,000
Speaker 12: think if folks are looking for some kind of grand

622
00:31:22,040 --> 00:31:28,040
Speaker 12: bargain that really makes some goes beyond symbolism and short

623
00:31:28,120 --> 00:31:33,320
Speaker 12: term measures and really addresses the fundamental imbalances of Chinese economy,

624
00:31:33,320 --> 00:31:36,960
Speaker 12: this massive trade surplus, unfair trade practices. They're going to

625
00:31:36,960 --> 00:31:39,360
Speaker 12: be disappointed by that. So markets will react and go

626
00:31:39,440 --> 00:31:42,640
Speaker 12: up and down on news or rumors of a potential deal,

627
00:31:42,920 --> 00:31:45,240
Speaker 12: But a true grand bargain is really off the table.

628
00:31:45,240 --> 00:31:48,920
Speaker 4: I think, Liza, I'd like to hold you to account

629
00:31:48,920 --> 00:31:51,160
Speaker 4: on two points that you've made, or at least debate them.

630
00:31:51,680 --> 00:31:55,520
Speaker 4: One isolate China as an accidental strategy. And then the

631
00:31:55,640 --> 00:31:59,000
Speaker 4: data that you just flag the deficit between the United

632
00:31:59,000 --> 00:32:01,720
Speaker 4: States and China. So this is the ECTR function on

633
00:32:01,760 --> 00:32:05,280
Speaker 4: the Bloomberg terminal. It's twenty twenty three data showing the

634
00:32:05,280 --> 00:32:07,680
Speaker 4: deficit with China two hundred and sixty billion dollars. But

635
00:32:07,720 --> 00:32:10,120
Speaker 4: I think I'm right in saying prelim data showed the

636
00:32:10,160 --> 00:32:15,640
Speaker 4: deficit growing in twenty twenty four. Materially, when we think

637
00:32:15,680 --> 00:32:18,400
Speaker 4: about technology, what we're talking about is a country that

638
00:32:18,480 --> 00:32:22,640
Speaker 4: dominates the manufacturing of most of the world's consumer electronics

639
00:32:22,680 --> 00:32:26,200
Speaker 4: and other things. So forget numbers and tariffs and markets

640
00:32:26,200 --> 00:32:30,080
Speaker 4: and trade. Do you see the White House ever resulting

641
00:32:30,560 --> 00:32:33,600
Speaker 4: this policy in more of that stuff happening in America.

642
00:32:35,440 --> 00:32:38,640
Speaker 12: The President certainly wants to, and he and his advisors

643
00:32:38,640 --> 00:32:42,880
Speaker 12: that are constantly talking about reindustrialization. I mean, the problem

644
00:32:43,040 --> 00:32:46,560
Speaker 12: is the devils in the details here, and it does

645
00:32:46,720 --> 00:32:51,360
Speaker 12: it's unclear if President Trump really understands the details and

646
00:32:50,920 --> 00:32:55,080
Speaker 12: the extreme intricacies of these supply chains and what it

647
00:32:55,120 --> 00:32:59,560
Speaker 12: actually takes to reindustrialize. And of course there's big structural

648
00:32:59,640 --> 00:33:02,320
Speaker 12: challenge is like do we have the workforce for this.

649
00:33:03,120 --> 00:33:07,760
Speaker 12: The administration talks about manufacturing jobs coming back. Well, that's great,

650
00:33:07,800 --> 00:33:11,760
Speaker 12: but actually we have a shortage of skilled manufacturing workforce,

651
00:33:11,800 --> 00:33:15,800
Speaker 12: and advanced manufacturing is now a knowledge industry. This is

652
00:33:15,840 --> 00:33:19,400
Speaker 12: a highly skilled profession. It's more like software coding and

653
00:33:19,440 --> 00:33:23,040
Speaker 12: applying AI to the factory floor. And it's not yet

654
00:33:23,040 --> 00:33:27,000
Speaker 12: clear to me if that kind of advanced manufacturing is

655
00:33:27,040 --> 00:33:30,520
Speaker 12: front and center on the administration's agenda.

656
00:33:30,560 --> 00:33:31,840
Speaker 9: It's very much right.

657
00:33:31,640 --> 00:33:36,120
Speaker 12: Now a teriffs first, tax cuts, the regulation and energy

658
00:33:36,160 --> 00:33:38,800
Speaker 12: and those may be a great start, but they also

659
00:33:38,840 --> 00:33:41,800
Speaker 12: need to be kind of leaning into these more structural.

660
00:33:41,240 --> 00:33:43,840
Speaker 2: Issues suddenly if they want to make iPhones in the

661
00:33:43,880 --> 00:33:48,280
Speaker 2: United States. Pizeitoven, managing director of Ghano Global, was great

662
00:33:48,280 --> 00:33:50,600
Speaker 2: to have you join us. Thank you now Federal is

663
00:33:50,600 --> 00:33:53,120
Speaker 2: a bank of New York President John Williams. He expects

664
00:33:53,120 --> 00:33:57,160
Speaker 2: slow economic growth, high unemployment, and a pickup in inflation,

665
00:33:57,320 --> 00:33:59,120
Speaker 2: all of this due to the US tarris policy and

666
00:33:59,160 --> 00:34:01,920
Speaker 2: reduced immigration. Take listen to what he had to say

667
00:34:02,000 --> 00:34:02,640
Speaker 2: just moments ago.

668
00:34:03,800 --> 00:34:08,760
Speaker 3: Well uncertainly about the economic outlook reflects many factors. Effects

669
00:34:08,760 --> 00:34:11,600
Speaker 3: of tariffs and trade policy and the economy are certainly

670
00:34:11,680 --> 00:34:14,440
Speaker 3: at the top of the list. For example, my business

671
00:34:14,440 --> 00:34:17,719
Speaker 3: in financial market contacts highlight that this has made it

672
00:34:17,760 --> 00:34:40,120
Speaker 3: more difficult to plan for investments and for hiring.

673
00:34:43,480 --> 00:34:46,480
Speaker 4: Let's get right back to financial markets. It's Friday, at

674
00:34:46,480 --> 00:34:48,400
Speaker 4: the end of a long week. Basically flat on the

675
00:34:48,440 --> 00:34:50,839
Speaker 4: Nasdaq one hundred, but up more than five percent over

676
00:34:50,880 --> 00:34:53,640
Speaker 4: the course of the week. Basically flat on the Philadelphia

677
00:34:53,680 --> 00:34:56,839
Speaker 4: Semiconductor Index, down to tens percent, but up more than

678
00:34:56,880 --> 00:34:58,839
Speaker 4: seven percent on the course of the week. And Cara,

679
00:34:58,880 --> 00:35:01,200
Speaker 4: if you allow me to there was a really important

680
00:35:01,200 --> 00:35:03,920
Speaker 4: headline overnight that I think our audience needs to understand,

681
00:35:04,280 --> 00:35:09,480
Speaker 4: and it came from China's semiconductor industry body, basically citing

682
00:35:09,560 --> 00:35:13,200
Speaker 4: customs regulators that how are they going to define the

683
00:35:13,239 --> 00:35:17,080
Speaker 4: point of origin of a semiconductor right think about global

684
00:35:17,080 --> 00:35:19,640
Speaker 4: supply chains. And in the market right now you see

685
00:35:19,680 --> 00:35:22,759
Speaker 4: names like in video higher and Vidia doesn't manufacture its

686
00:35:22,800 --> 00:35:25,960
Speaker 4: own chips, names like Intel and Texas instruments that do

687
00:35:26,320 --> 00:35:29,640
Speaker 4: significantly lower. Here's what they said. The point of origin

688
00:35:29,760 --> 00:35:32,160
Speaker 4: for a chip in deciding whether to apply tariffs or

689
00:35:32,160 --> 00:35:34,719
Speaker 4: not will be the point it is taped out. And

690
00:35:34,760 --> 00:35:37,120
Speaker 4: what that means is when an American company, for example,

691
00:35:37,160 --> 00:35:40,040
Speaker 4: is done designing its chip in San Diego or here

692
00:35:40,040 --> 00:35:42,520
Speaker 4: in the Bay Area, it then needs to send the

693
00:35:42,600 --> 00:35:47,680
Speaker 4: designs to a contract manufacturer. We're talking TSMC and Korean

694
00:35:47,760 --> 00:35:51,880
Speaker 4: names like Samsung, but that happens locally, and so they're saying,

695
00:35:52,000 --> 00:35:54,839
Speaker 4: that's how we decide where your chip comes from. You

696
00:35:54,880 --> 00:35:56,560
Speaker 4: tell me the big story that we've learned in the

697
00:35:56,640 --> 00:35:59,200
Speaker 4: last two years about all these American chip makers. What

698
00:35:59,280 --> 00:36:00,200
Speaker 4: are they actually not?

699
00:36:01,080 --> 00:36:04,360
Speaker 2: Well, they're not makers of chips, but some of them

700
00:36:04,400 --> 00:36:05,880
Speaker 2: are trying to be. Some of them trying to be

701
00:36:05,920 --> 00:36:08,800
Speaker 2: contract makers of chips. Intel, for one, which is actually

702
00:36:08,880 --> 00:36:12,000
Speaker 2: expanding its presence of making chips in the United States.

703
00:36:12,000 --> 00:36:13,439
Speaker 9: What does that mean in terms of business model?

704
00:36:13,440 --> 00:36:15,120
Speaker 2: You've just got to take out China from the equation

705
00:36:15,440 --> 00:36:18,759
Speaker 2: and on the flip side. Of course, domestic chip makers

706
00:36:18,760 --> 00:36:21,760
Speaker 2: in China rallied hard. You saw the CSI three hundred

707
00:36:21,800 --> 00:36:23,880
Speaker 2: index up more than thirty percent on the day. This

708
00:36:24,000 --> 00:36:27,560
Speaker 2: had real tailwinds for Chinese local players and of cause

709
00:36:27,600 --> 00:36:29,320
Speaker 2: pressure on some of the local makers here in the

710
00:36:29,400 --> 00:36:29,879
Speaker 2: United States.

711
00:36:29,920 --> 00:36:32,279
Speaker 4: Said yeah, And the one thing I would say is

712
00:36:32,320 --> 00:36:35,160
Speaker 4: that it all comes back to the end market. What

713
00:36:35,239 --> 00:36:39,000
Speaker 4: does China do. It makes most electronics high end or

714
00:36:39,080 --> 00:36:41,840
Speaker 4: low end, And so that's why I've tracking this so closely.

715
00:36:41,960 --> 00:36:44,640
Speaker 4: But you're exactly right. But in some of the names

716
00:36:44,640 --> 00:36:47,360
Speaker 4: you've just mentioned, analysts are paying attention for other reasons.

717
00:36:47,440 --> 00:36:48,000
Speaker 9: They certainly are.

718
00:36:48,080 --> 00:36:50,359
Speaker 2: Let's get to one of those analysts calls because likes

719
00:36:50,400 --> 00:36:53,160
Speaker 2: of Aanamon Devices or Texas Instruments, as you say, pressure today.

720
00:36:53,160 --> 00:36:56,040
Speaker 2: But City named actually those two companies, and it's top

721
00:36:56,040 --> 00:36:59,520
Speaker 2: semiconductive picks amid tar of pressures and recession fears. Like

722
00:36:59,520 --> 00:37:03,399
Speaker 2: City manager director and semiconductor analyst Chris Stanley writing, high

723
00:37:03,480 --> 00:37:07,440
Speaker 2: end analog companies such as ADI and TXN have outperformed

724
00:37:07,640 --> 00:37:10,440
Speaker 2: during downturns. We would expect the same to occur in

725
00:37:10,480 --> 00:37:14,240
Speaker 2: a recession, with ADI performing best given higher margins. Nimas

726
00:37:14,320 --> 00:37:16,480
Speaker 2: rym Vstella can can break down some of the moves

727
00:37:16,680 --> 00:37:19,440
Speaker 2: on Semi got a fair few downgrades in terms of

728
00:37:19,440 --> 00:37:22,040
Speaker 2: price targets today as well on Semi meant to feel

729
00:37:22,040 --> 00:37:23,840
Speaker 2: more of headwind versus some of these players.

730
00:37:23,880 --> 00:37:27,280
Speaker 13: According to City, absolutely, I think people are still really

731
00:37:27,320 --> 00:37:29,640
Speaker 13: struggling to kind of figure out what this environment is

732
00:37:29,640 --> 00:37:31,719
Speaker 13: going to be like for different chip makers, depending on

733
00:37:31,719 --> 00:37:35,759
Speaker 13: their in market, depending on their manufacturing systems, their supply chains.

734
00:37:35,800 --> 00:37:38,200
Speaker 13: It's all very uncertain, very up in the air at

735
00:37:38,200 --> 00:37:41,480
Speaker 13: the moment. So beyond the naming TI on one of

736
00:37:41,520 --> 00:37:44,160
Speaker 13: its top picks, City also said it was taken out

737
00:37:44,160 --> 00:37:47,440
Speaker 13: the lawnmower. Those are exact words, cutting estimates by twenty

738
00:37:47,480 --> 00:37:50,200
Speaker 13: percent on average across the board for chip makers. That

739
00:37:50,320 --> 00:37:53,440
Speaker 13: just speaks to how much uncertainty there is when it

740
00:37:53,480 --> 00:37:55,439
Speaker 13: comes to this sector at this point in time.

741
00:37:56,600 --> 00:37:59,960
Speaker 4: They the firm City had this estimate a while ago

742
00:38:00,239 --> 00:38:03,319
Speaker 4: that the socks the index would drop twenty percent if

743
00:38:03,320 --> 00:38:05,040
Speaker 4: there were to be a recession, and I think I'm

744
00:38:05,080 --> 00:38:08,560
Speaker 4: right in saying that they now assume a recession is

745
00:38:08,600 --> 00:38:11,000
Speaker 4: a firm there's a lot happening in the market. You

746
00:38:11,040 --> 00:38:15,720
Speaker 4: also wrote about the takes out point of origin story

747
00:38:15,760 --> 00:38:18,600
Speaker 4: yourself this morning, just go back to explain some of

748
00:38:18,600 --> 00:38:20,560
Speaker 4: the moves of the market in the here and now.

749
00:38:21,239 --> 00:38:25,799
Speaker 13: Yeah, so absolutely, like you were saying before, companies like TI, Intel,

750
00:38:25,960 --> 00:38:30,520
Speaker 13: Global Foundries, Microchip, all these have sort of domestic manufacturing

751
00:38:30,560 --> 00:38:33,680
Speaker 13: plants for their products, and these are the stocks that

752
00:38:33,719 --> 00:38:36,800
Speaker 13: are really falling today. Other ones that do most of

753
00:38:36,840 --> 00:38:42,040
Speaker 13: their manufacturing are Broad Taiwan, Simi, Vidia, AMD, Qualcom, BROCM

754
00:38:42,120 --> 00:38:44,640
Speaker 13: all those names. They're probably higher in the morning. It's

755
00:38:44,680 --> 00:38:47,280
Speaker 13: obviously a very volatile situation. There's a lot of cross

756
00:38:47,280 --> 00:38:49,760
Speaker 13: currents going on right now, but certainly we are seeing

757
00:38:49,960 --> 00:38:54,880
Speaker 13: Texas instruments in particular weaker today, Intel particularly weaker today,

758
00:38:55,000 --> 00:38:57,560
Speaker 13: whereas companies like Nvidia are higher.

759
00:38:58,200 --> 00:39:00,319
Speaker 2: Let's go to Nvidia for a moment, because for an

760
00:39:00,320 --> 00:39:04,400
Speaker 2: analyst over at City has actually been downgrading in video

761
00:39:04,520 --> 00:39:08,719
Speaker 2: as well. Their key concern is that these hyperscalers, meta

762
00:39:08,760 --> 00:39:11,560
Speaker 2: alphabet you name them, are going to actually start to

763
00:39:11,719 --> 00:39:14,360
Speaker 2: curtail they're spending on AI data centers.

764
00:39:14,640 --> 00:39:17,120
Speaker 9: How much of an overhang is that for names.

765
00:39:16,880 --> 00:39:19,279
Speaker 2: Like whether you're a fablus or fab kind of a

766
00:39:19,320 --> 00:39:19,840
Speaker 2: chip maker.

767
00:39:20,840 --> 00:39:22,759
Speaker 13: Well, for Nvidia in particular, I had to go and

768
00:39:22,800 --> 00:39:24,640
Speaker 13: look but I think forty percent or so of their

769
00:39:24,640 --> 00:39:28,680
Speaker 13: revenue comes from just four companies, which is Microsoft, Meta, Alphabet,

770
00:39:28,719 --> 00:39:31,520
Speaker 13: and Amazon. So to the extent those companies pull back,

771
00:39:31,560 --> 00:39:33,680
Speaker 13: and I'll say Alphabet a couple of days ago it

772
00:39:33,760 --> 00:39:36,160
Speaker 13: had a bigger cloud conference and it did affirm its

773
00:39:36,160 --> 00:39:39,600
Speaker 13: CAPEX plans. Microsoft, you know, it affirmed its own plans

774
00:39:39,600 --> 00:39:41,919
Speaker 13: earlier this year. So right now, it seems like maybe

775
00:39:41,920 --> 00:39:43,839
Speaker 13: for the next twelve months, all those spending plants are

776
00:39:43,880 --> 00:39:46,960
Speaker 13: pretty intact. But if we get to twelve months from now,

777
00:39:47,000 --> 00:39:49,400
Speaker 13: and maybe especially if we're not seeing a huge ROI

778
00:39:49,480 --> 00:39:52,360
Speaker 13: on all this AI spending, especially if the cost picture

779
00:39:52,400 --> 00:39:55,560
Speaker 13: has changed dramatically due to tariffs, if the whole picture

780
00:39:55,560 --> 00:39:58,680
Speaker 13: has just changed because of weaker economic growth, all these

781
00:39:58,680 --> 00:40:01,160
Speaker 13: other kind of factors, it would not be super surprising

782
00:40:01,280 --> 00:40:04,600
Speaker 13: under those circumstances if these companies started pulling back on

783
00:40:04,640 --> 00:40:08,040
Speaker 13: their CAPEX, especially as it retains to their AI infrastructure,

784
00:40:08,280 --> 00:40:11,480
Speaker 13: which is at this point a lot of Nvidia products,

785
00:40:11,520 --> 00:40:13,600
Speaker 13: and what that means for them in terms of their growth,

786
00:40:13,600 --> 00:40:17,319
Speaker 13: in terms of their profitability. While just given its customer concentration,

787
00:40:17,400 --> 00:40:19,880
Speaker 13: that would be a pretty dramatic hit a company like

788
00:40:19,920 --> 00:40:21,040
Speaker 13: it in video.

789
00:40:21,160 --> 00:40:24,359
Speaker 4: Blimbo's Ryan vlastatica terrific, Thank you very much.

790
00:40:32,719 --> 00:40:36,120
Speaker 14: A single shipyard in China now produces more ships every

791
00:40:36,200 --> 00:40:40,279
Speaker 14: year than all of the American shipyards combined. Think of that,

792
00:40:40,880 --> 00:40:43,160
Speaker 14: and it was a business that we used to dominate.

793
00:40:44,040 --> 00:40:44,720
Speaker 9: President Trump.

794
00:40:44,719 --> 00:40:47,360
Speaker 2: There now one startup looking to manufacture ships in the

795
00:40:47,400 --> 00:40:48,040
Speaker 2: United States.

796
00:40:48,160 --> 00:40:50,520
Speaker 9: It's blue Water Autonomy, preparing.

797
00:40:50,160 --> 00:40:52,960
Speaker 2: To build large vessels able to travel between San Francisco

798
00:40:53,040 --> 00:40:56,880
Speaker 2: and Hawaii without a captain or a crew. Rdan Hamilton

799
00:40:57,000 --> 00:41:00,839
Speaker 2: as the CEO co founder of blue Water. Rather, you're

800
00:41:00,840 --> 00:41:03,120
Speaker 2: coming out of stell fourteen million dollars in the bank.

801
00:41:03,239 --> 00:41:07,040
Speaker 2: You've got vcs that batch your prior really successful companies.

802
00:41:07,080 --> 00:41:11,040
Speaker 2: You were in warehouse automation prior to this. How much

803
00:41:11,160 --> 00:41:16,040
Speaker 2: is the time now to be making automated ships? Suddenly

804
00:41:16,239 --> 00:41:18,600
Speaker 2: far more prevalent when we've got us China tensions.

805
00:41:18,800 --> 00:41:21,600
Speaker 15: The time is definitely now. If we hear the current administration,

806
00:41:21,640 --> 00:41:25,480
Speaker 15: they're talking about shipbuilding, shipbuilding and shipbuilding, and we're designing

807
00:41:25,480 --> 00:41:28,160
Speaker 15: and building autonomous ships. And when you make them autonomous,

808
00:41:28,400 --> 00:41:32,400
Speaker 15: you can remove the bridge, the birthing, the galley, the showers,

809
00:41:32,719 --> 00:41:34,520
Speaker 15: so you can make them a lot smaller. And because

810
00:41:34,560 --> 00:41:36,239
Speaker 15: they're smaller, you don't have to build them at the

811
00:41:36,239 --> 00:41:39,080
Speaker 15: big navy shipyards. So we should continue to build the

812
00:41:39,120 --> 00:41:42,400
Speaker 15: big warships, the guided missile destroyers, the aircraft carriers, the

813
00:41:42,440 --> 00:41:45,799
Speaker 15: submarines as quickly as possible. But our ship can be

814
00:41:45,840 --> 00:41:48,960
Speaker 15: built at all these mid tier shipyards that have capacity today.

815
00:41:49,480 --> 00:41:52,360
Speaker 2: Why is now the right time from a technology perspective

816
00:41:52,400 --> 00:41:55,279
Speaker 2: as well, what is going into making automation far more

817
00:41:55,320 --> 00:41:58,799
Speaker 2: easy or certainly not easy, but far more able to

818
00:41:59,000 --> 00:41:59,640
Speaker 2: enact ry now?

819
00:42:00,000 --> 00:42:01,160
Speaker 6: Well, this is a hard problem.

820
00:42:01,320 --> 00:42:03,359
Speaker 15: This is not easy because for designing ships that can

821
00:42:03,400 --> 00:42:05,880
Speaker 15: operate across the open ocean, and the last thing our

822
00:42:05,920 --> 00:42:07,719
Speaker 15: Navy needs is for these ships to be dead in

823
00:42:07,719 --> 00:42:09,800
Speaker 15: the water of the mill the ocean, and the ocean

824
00:42:09,880 --> 00:42:13,000
Speaker 15: is extreme. You're thinking about extreme temperatures and salt water.

825
00:42:13,239 --> 00:42:15,840
Speaker 15: In fact, ships get hit by lightning, and so we

826
00:42:15,880 --> 00:42:18,960
Speaker 15: need to build a very It happens as we did

827
00:42:19,000 --> 00:42:20,960
Speaker 15: research for this and we talked to the chief engineers

828
00:42:21,280 --> 00:42:23,840
Speaker 15: on some of the sort of workboats that operate around.

829
00:42:23,640 --> 00:42:24,200
Speaker 6: The United States.

830
00:42:24,239 --> 00:42:26,080
Speaker 15: They said, yeah, last week my ship got hit by

831
00:42:26,160 --> 00:42:29,480
Speaker 15: lightning and a fried all the electronics. And so there's

832
00:42:29,600 --> 00:42:32,200
Speaker 15: a ton of challenges to do this. But we feel

833
00:42:32,239 --> 00:42:34,080
Speaker 15: we have the team to do this because we've been

834
00:42:34,120 --> 00:42:37,160
Speaker 15: at some of the most successful robotic companies in the

835
00:42:37,239 --> 00:42:39,880
Speaker 15: United States, and two of my co founders include myself.

836
00:42:40,120 --> 00:42:41,480
Speaker 15: We were also in the Navy.

837
00:42:43,000 --> 00:42:46,800
Speaker 4: Ryland. The big picture is to modernize the maritime industry,

838
00:42:46,840 --> 00:42:50,480
Speaker 4: but this is a Navy application. As you just point out,

839
00:42:50,920 --> 00:42:55,919
Speaker 4: American dynamism, this big emphasis on the private sector's relationship

840
00:42:55,920 --> 00:42:59,040
Speaker 4: with the military industrial complex. What is it you actually

841
00:42:59,040 --> 00:43:02,279
Speaker 4: want the president to do to allow for you to

842
00:43:02,440 --> 00:43:03,560
Speaker 4: make this a success.

843
00:43:04,440 --> 00:43:06,440
Speaker 15: So we want to move fast, and we'll move as

844
00:43:06,480 --> 00:43:08,560
Speaker 15: fast as the Navy wants us to move. And so

845
00:43:08,640 --> 00:43:10,960
Speaker 15: we definitely want the president to continue to focus on

846
00:43:11,080 --> 00:43:15,400
Speaker 15: shipbuilding and innovation, especially around autonomous systems. And there are autonomous

847
00:43:15,320 --> 00:43:17,240
Speaker 15: systems that are in the air, that are on the surface,

848
00:43:17,280 --> 00:43:20,480
Speaker 15: and that are underwater. Our focus is on these autonomous

849
00:43:20,480 --> 00:43:23,080
Speaker 15: ships that can operate on the surface of the water

850
00:43:23,200 --> 00:43:25,440
Speaker 15: and have high endurance and range, the range that you

851
00:43:25,480 --> 00:43:26,640
Speaker 15: need for the Pacific Ocean.

852
00:43:27,880 --> 00:43:32,480
Speaker 4: Anderill picked Ohio for its skilled labor and for its

853
00:43:32,600 --> 00:43:36,520
Speaker 4: history and aviation. For example, where is your Ohio? Where

854
00:43:36,520 --> 00:43:38,120
Speaker 4: do you think you need to build these ships?

855
00:43:38,840 --> 00:43:40,719
Speaker 15: So we'll have more to announce later this year. But

856
00:43:40,760 --> 00:43:43,600
Speaker 15: we've definitely been looking for the perfect place to go

857
00:43:43,600 --> 00:43:45,359
Speaker 15: build these ships, and there are a lot of really

858
00:43:45,360 --> 00:43:47,400
Speaker 15: good options, whether it's on the East coast or the

859
00:43:47,400 --> 00:43:49,400
Speaker 15: West coast or sort of in the Gulf, and so

860
00:43:49,480 --> 00:43:51,000
Speaker 15: we'll make an announcement later this year.

861
00:43:51,360 --> 00:43:53,799
Speaker 2: You were early leader in Amazon Robotics. When you are

862
00:43:53,800 --> 00:43:58,120
Speaker 2: building six river systems. How good is US at manufacturing? Now?

863
00:43:58,160 --> 00:43:59,880
Speaker 9: Can we bring back what we want to bring that?

864
00:44:00,320 --> 00:44:03,319
Speaker 15: Yeah, so the US is actually really good at advanced manufacturing.

865
00:44:03,680 --> 00:44:06,520
Speaker 15: So early in my career I was at Amazon Robotics

866
00:44:06,520 --> 00:44:08,160
Speaker 15: when there are a couple thousand robots.

867
00:44:07,840 --> 00:44:08,239
Speaker 6: In the field.

868
00:44:08,600 --> 00:44:12,000
Speaker 15: They're now over a million robots in Amazon warehouses throughout

869
00:44:12,040 --> 00:44:14,600
Speaker 15: the world. That is amazing what that company has done

870
00:44:14,640 --> 00:44:16,840
Speaker 15: over the last ten years. So when it comes to

871
00:44:16,880 --> 00:44:18,960
Speaker 15: complex systems where you need to take sort of commercial

872
00:44:18,960 --> 00:44:21,200
Speaker 15: off the shelf components and put them together and then

873
00:44:21,239 --> 00:44:23,560
Speaker 15: write the software on top, we're amazing at that.

874
00:44:25,560 --> 00:44:28,520
Speaker 4: Rylan Hamilinson, CEO, co founder of blue Water Autonomy, you

875
00:44:28,600 --> 00:44:32,120
Speaker 4: have to come back when you announce the location rights.

876
00:44:32,200 --> 00:44:33,960
Speaker 4: That's how it works. That does it for this distion

877
00:44:34,000 --> 00:44:37,720
Speaker 4: of Bloomberg Technology. What a week? This is what markets

878
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Speaker 4: look like Caroline. I mean, it's kind of odd in

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Speaker 4: a way to give a snapshot of a session in

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Speaker 4: the moment and now's that one hundred higher by modestly

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Speaker 4: right pressure on US listed shares of Chinese names. Take

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Speaker 4: it away, what are you seeing.

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Speaker 2: What's extraordinary is we had a week where we're actually

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Speaker 2: more than five percent higher, but what a volatile five days.

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Speaker 2: The bond market has seen extraordinary moves, and then over

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Speaker 2: the course of the month that now's back, it's lower ed.

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Speaker 4: Happy weekend everyone, This is Bloomberg.

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Speaker 6: H