WEBVTT - Anticipating More Trump Tariffs, DOGE's Tesla Impact 0:00:02.520 --> 0:00:09.080 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.119 --> 0:00:14.880 where innovation, money and power collide in Silicon Valley and beyond. 0:00:15.280 --> 0:00:39.480 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:33.880 --> 0:00:35.879 Live from New York and Caroline Hyde and this is 0:00:35.880 --> 0:00:39.199 Bimberg Technology. Coming up. The Nasdaq whip soaring ahead of 0:00:39.200 --> 0:00:42.919 President Trump's tarifs. This week will discuss the global tech impact. 0:00:43.280 --> 0:00:46.320 Plus Elil Musk admits his role with those is taxing 0:00:46.400 --> 0:00:50.240 him and impacting his job as CEO of Tesla and SpaceX, 0:00:50.320 --> 0:00:52.680 and a crew of four passengers are set to embark 0:00:52.760 --> 0:00:56.000 on a journey around Earth's poles, so first time humans 0:00:56.000 --> 0:00:59.160 have flown such a mission. But first a check in 0:00:59.200 --> 0:01:01.920 on these markets, which are under pressure once again in 0:01:02.000 --> 0:01:03.480 sell off mode. As you see, we're off by one 0:01:03.520 --> 0:01:05.440 point six percent off of our lowers for the day 0:01:05.480 --> 0:01:07.960 on the Nasdaq one hundred from a points perspective, though 0:01:07.959 --> 0:01:10.000 it is the Magnificent seven that drag us the most. 0:01:10.200 --> 0:01:12.840 Apple is one name in the green, but otherwise it's 0:01:12.840 --> 0:01:17.200 in video, Microsoft, Amazon, Tesla, as well as Meta and Alphabet. 0:01:17.480 --> 0:01:19.839 Drill into the individual moves that push us a little 0:01:19.840 --> 0:01:21.520 bit lower, and we've got to shine a light on 0:01:21.520 --> 0:01:25.160 what's happening with Tesla. Once again, analysts really shining a 0:01:25.240 --> 0:01:28.640 light on the fact that this is politically entwined in 0:01:28.680 --> 0:01:33.200 many ways. The consumer reaction to one Elon Musk, we're 0:01:33.200 --> 0:01:35.280 off by five and a half percent. Again, they had 0:01:35.280 --> 0:01:38.320 outperformed when we first got those hints of auto tariffs. 0:01:38.440 --> 0:01:41.679 No how evs in particular, Tesla might be hurt less 0:01:41.760 --> 0:01:44.840 than competitors. But once again today in risk of sentiment, 0:01:44.840 --> 0:01:46.600 it's off by five and a half percent. And actually 0:01:46.640 --> 0:01:49.160 his Elon Musk over the weekend speaking at a town 0:01:49.200 --> 0:01:52.560 hall in Wisconsin about the dose impact on Tesla's share price. 0:01:53.360 --> 0:01:55.440 It's costing me a lot to be in this job. 0:01:55.680 --> 0:01:59.200 What they're trying to do is put massive pressure on me, 0:01:59.360 --> 0:02:03.880 and I guess to to you know, I don't stop 0:02:04.000 --> 0:02:06.240 stop doing this. But you know, my Teslis stock and 0:02:06.280 --> 0:02:08.480 the stock of everyone who Holst Tess has gone went 0:02:08.560 --> 0:02:10.360 roughly in half. I mean, it's a big deal. 0:02:11.000 --> 0:02:13.880 Let's get you analysis in Meg's Max Chafkin joins us 0:02:13.919 --> 0:02:18.040 now host of elon Ing podcast and just intertwined with 0:02:18.120 --> 0:02:21.079 his movements. And it was interesting that at a political 0:02:21.160 --> 0:02:23.160 rally he's admitting some of the knock on effects here. 0:02:23.600 --> 0:02:25.919 Yeah, I mean, well, it's been pretty dramatic. We've seen 0:02:25.960 --> 0:02:29.399 these huge drops in sales in Europe, where of course 0:02:29.440 --> 0:02:33.200 Elon Musk has also been uh been stirring the pop politically, 0:02:33.280 --> 0:02:37.600 to say the least. And we've seen sales declines going 0:02:37.639 --> 0:02:40.560 on for some time now, and that and those declines 0:02:40.639 --> 0:02:43.120 are colliding with a business that also has all these 0:02:43.120 --> 0:02:46.480 other struggles, so you throw, you know, Elon Musk's kind 0:02:46.520 --> 0:02:50.240 of controversial branding, these these kind of provocations that he's 0:02:50.280 --> 0:02:53.680 been doing almost on the daily with actual struggles with 0:02:53.720 --> 0:02:56.760 the business as well as you know, all the uncertainty 0:02:56.760 --> 0:02:59.639 around tariffs and the economy in general. And it's it's 0:02:59.639 --> 0:03:02.519 really like a perfect storm. It's a bunch of things 0:03:02.520 --> 0:03:04.920 that are all kind of working together to hurt what 0:03:05.080 --> 0:03:08.040 had been just a company that had been soaring, you know, 0:03:08.120 --> 0:03:09.240 even a couple of months ago. 0:03:09.520 --> 0:03:13.080 Soaring on vibes. Many would say often this stock is 0:03:13.120 --> 0:03:16.760 not related to fundamentals of the business. Even when earnings disappoints, 0:03:16.800 --> 0:03:21.079 sales disappoint we've actually seen sale shares push higher. Can 0:03:21.200 --> 0:03:23.480 he restore vibes or do we start to look at 0:03:23.480 --> 0:03:25.679 the fundamental issues of the business. Well, that's the thing. 0:03:25.760 --> 0:03:27.840 I mean, the vibes were based on this idea that 0:03:27.919 --> 0:03:31.960 Elon Musk is this kind of amazing business superhero. He 0:03:32.040 --> 0:03:34.960 can do things that nobody else can do. And so 0:03:35.040 --> 0:03:37.240 much of that brand was built on Elon Musk as 0:03:37.240 --> 0:03:40.120 an innovator, as somebody who invents new products, particularly new 0:03:40.120 --> 0:03:43.520 products that are you know, involved with alternative energy, and 0:03:43.560 --> 0:03:46.320 that kind of flatter the sensibilities of a certain kind 0:03:46.320 --> 0:03:49.400 of consumer. Now, what we've seen over the last couple 0:03:49.440 --> 0:03:51.640 of years, and in a much more intense way over 0:03:51.680 --> 0:03:54.760 the past couple of months, is just Elon Musk subverting 0:03:54.760 --> 0:03:57.200 that brand, taking that brand and essentially throwing it out 0:03:57.240 --> 0:03:59.520 the window and presenting a new brand, which is Elon 0:03:59.640 --> 0:04:03.040 Musk as a you know, cost cutter, as this vehicle 0:04:03.080 --> 0:04:06.640 of trolling austerity. It is very, very different from the 0:04:06.680 --> 0:04:08.480 story that he had been telling before, and I think 0:04:08.480 --> 0:04:10.800 that is going to make it harder to write the ship. 0:04:11.280 --> 0:04:13.480 But does that give a new source of demand for 0:04:13.560 --> 0:04:18.279 those that loathe the new version? Many love it. Many 0:04:18.560 --> 0:04:21.040 like the fact that there's a rebalancing in austerity, that 0:04:21.080 --> 0:04:23.840 perhaps there's a new source of buyer who wants to 0:04:23.839 --> 0:04:25.800 get out there in Tesla who hadn't automatically looks in 0:04:25.880 --> 0:04:28.359 it from an evy environmental perspective. 0:04:28.680 --> 0:04:32.200 Well, this is something we've heard from some people who 0:04:32.240 --> 0:04:34.120 have sort of defended some of these moves as well 0:04:34.120 --> 0:04:35.680 as you know, if you kind of squint, you could 0:04:35.680 --> 0:04:38.640 see while he's trying to sell pickup trucks. So maybe 0:04:38.640 --> 0:04:41.920 it makes sense to signal more to the right. What 0:04:41.960 --> 0:04:44.640 we've seen from Elon Musk, I'd say goes way beyond 0:04:44.720 --> 0:04:47.960 signaling to the right. I mean, he's you know, you know, 0:04:48.160 --> 0:04:51.600 saying things that are racially tinged. He's making gestures that 0:04:51.600 --> 0:04:54.360 to many people look like, you know, he's saluting Hitler 0:04:54.400 --> 0:04:57.920 at a Trump rally. These are not things that even Republicans, 0:04:57.960 --> 0:05:00.200 even a whi of Trump supporters, are not necessarily going 0:05:00.240 --> 0:05:03.200 to be comfortable with these moves. So I think that's 0:05:03.200 --> 0:05:05.920 one issue. The other issue is the cyber truck has 0:05:05.960 --> 0:05:09.480 just not performed as a pickup. It is not competing 0:05:09.560 --> 0:05:11.400 well with you know, the likes of the Ford f 0:05:11.400 --> 0:05:14.040 one fifty. I think sales have really disappointed. It's become 0:05:14.080 --> 0:05:16.880 a great way to signal your support of Donald Trump, 0:05:17.240 --> 0:05:21.680 not necessarily winning fans in the kind of truck driving class. 0:05:22.279 --> 0:05:25.680 Always great to catch up with Max Chafkin, go listen 0:05:25.960 --> 0:05:28.400 to all things elon K as well. Meanwhile, let's stick 0:05:28.440 --> 0:05:32.120 with enel Musk, his artificial intelligence startup Xai, when it's 0:05:32.160 --> 0:05:34.960 just purchased the social media platform X and an all 0:05:34.960 --> 0:05:37.520 stock deal, the values of combined businesses at one hundred 0:05:37.520 --> 0:05:40.880 million dollars. For more, let's bringing Kurt Wagner enol Musk, 0:05:41.040 --> 0:05:44.520 very busy man and one of his startups buying another one. 0:05:44.600 --> 0:05:49.440 And there's a big well boying for the X shareholders 0:05:49.480 --> 0:05:52.720 ecty or debt in many ways, I. 0:05:52.680 --> 0:05:54.440 Think so I think they're the biggest winners in this 0:05:54.520 --> 0:05:56.640 whole thing, right, I mean, because you think about what 0:05:56.839 --> 0:05:59.200 happened over the last two and a half years since 0:05:59.240 --> 0:06:02.680 Elon walked in in the Twitter offices with that sync, right, 0:06:02.720 --> 0:06:05.440 there's been a ton of uncertainty. We've seen advertisers flee, 0:06:05.480 --> 0:06:08.560 we've seen users flee, We've seen the value of that company, 0:06:08.600 --> 0:06:12.440 by some measures, basically cut in half, if not more. 0:06:12.839 --> 0:06:16.080 And so if you are an ex investor today, a 0:06:16.120 --> 0:06:18.880 week ago, you were owning shares in this very struggling 0:06:18.960 --> 0:06:22.960 social networking business with a small advertising arm. Now you 0:06:23.120 --> 0:06:26.919 own shares in an AI startup that's worth double the 0:06:26.960 --> 0:06:29.919 price and growing, and so I think this is a 0:06:29.960 --> 0:06:33.279 big win for them, more so than pretty much anybody else. 0:06:33.560 --> 0:06:38.960 There were initial analyst reactions saying this makes sense. Will Research, 0:06:39.000 --> 0:06:42.760 for example, immediately putting out feeling that the combination makes 0:06:42.760 --> 0:06:46.279 strategic sense, but many also questioning why they needed to 0:06:46.279 --> 0:06:49.080 do it at all. Already Grock was deeply infused with 0:06:49.560 --> 0:06:52.200 in X, Why do they need to make the tie up? 0:06:52.240 --> 0:06:54.560 And other more questions and answers In many. 0:06:54.440 --> 0:06:57.719 Ways, Yeah, I mean, this is my biggest question here 0:06:57.839 --> 0:07:01.240 is that on paper, yes, this makes sense, right, an 0:07:01.279 --> 0:07:04.560 AI company buying a social network like X, getting you know, 0:07:04.640 --> 0:07:08.960 exclusive access to that proprietary data, getting the distribution of 0:07:09.360 --> 0:07:12.080 a GROC to millions of people via X, right, Like 0:07:12.160 --> 0:07:14.080 all those things make sense on paper. 0:07:14.480 --> 0:07:15.760 But the difference here is that. 0:07:15.680 --> 0:07:19.040 Elon already owns both companies, right, So there was no 0:07:19.240 --> 0:07:21.600 fear that X was going to go out and strike 0:07:21.640 --> 0:07:24.520 some exclusive deal with a competitor. You know, they were 0:07:24.560 --> 0:07:28.240 already using X's data to train GROC and work on 0:07:28.280 --> 0:07:32.280 their AI models, so like they had the relationship sort 0:07:32.320 --> 0:07:35.440 of already. And so that's why I don't really understand 0:07:35.440 --> 0:07:38.080 why they needed to spend you know, thirty three billion 0:07:38.280 --> 0:07:41.239 or forty five billion including debt to buy this company 0:07:41.240 --> 0:07:43.880 that they pretty much had all of what they needed 0:07:43.880 --> 0:07:44.680 from it already. 0:07:45.120 --> 0:07:47.640 A key question mark for me as well, Kat not 0:07:47.720 --> 0:07:51.000 only who leads x going forward and what Linda aki 0:07:51.120 --> 0:07:53.960 Yakarino's future looks like, but is how he got an 0:07:54.000 --> 0:07:57.840 eighty billion dollar valuation on Xai. There was no new 0:07:57.840 --> 0:07:59.480 funding here. It seems to be a number that was 0:07:59.560 --> 0:08:03.080 kind of plucked out of the air exactly. 0:08:03.200 --> 0:08:07.120 And so the last time Xai had a funding round 0:08:07.200 --> 0:08:10.000 was in November. I believe it was valued right around 0:08:10.000 --> 0:08:12.960 fifty billion at that time. There's been no new rays 0:08:13.000 --> 0:08:16.400 for Xai since then until this deal, and suddenly Xai 0:08:16.520 --> 0:08:19.360 is worth eighty billion, right, And so this is what happens, Caroline, 0:08:19.360 --> 0:08:22.440 when you have two privately held companies. They're owned by 0:08:22.440 --> 0:08:25.400 the same person, they're represented by the same bank, right, 0:08:25.480 --> 0:08:28.200 Like he is able to essentially, you know, make up 0:08:28.240 --> 0:08:31.320 these valuations and say, you know, I think x is 0:08:31.360 --> 0:08:33.680 worth this, and that means that Xai is now worth 0:08:33.679 --> 0:08:37.120 that and boil that's done, right as long as shareholders 0:08:37.440 --> 0:08:41.359 are not you know, essentially revolting at these these decisions. 0:08:41.600 --> 0:08:44.320 I think Elon has a lot of sort of latitudes 0:08:44.360 --> 0:08:48.040 here to you know, value these things where he wants 0:08:48.080 --> 0:08:49.319 them to be valued. 0:08:49.840 --> 0:08:53.400 Number go up, Kat Wagner, thanks so much joining us. 0:08:53.559 --> 0:08:56.880 Coming up preparing for Trump's reciprocal tariffs. More on the 0:08:56.960 --> 0:09:00.199 global tariff impact on a tech sector. That's next as 0:09:00.200 --> 0:09:13.080 a blombg technology markets. They are in cell off mode 0:09:13.120 --> 0:09:15.640 ahead of President Trump's reciprocal tariff set to begin at 0:09:15.679 --> 0:09:18.439 this Wednesday. Now this is course is he says he's 0:09:18.480 --> 0:09:21.240 prepared to enact secondary tariffs on buyers of Russian oil 0:09:21.280 --> 0:09:24.199 if Putin refuses to cease far US with the Ukraine. 0:09:24.360 --> 0:09:27.800 For more, Bloomberg's Kaylee lines joins us with a macro focus, 0:09:27.840 --> 0:09:29.319 and we want to whickle it a bit more down 0:09:29.360 --> 0:09:33.040 to technology. But Kayley, there's a lot of angst quite 0:09:33.360 --> 0:09:34.920 evidently so today. 0:09:35.880 --> 0:09:38.079 Yeah, a lot of anks because there's a lot of uncertainty, 0:09:38.160 --> 0:09:40.800 Caroline Frankly, at this point, two days ahead of this 0:09:40.960 --> 0:09:43.880 so called Liberation Day announcement the President is planning to make, 0:09:43.880 --> 0:09:45.720 there is a real lack of clarity as to what 0:09:45.800 --> 0:09:48.840 exactly these reciprocal tariffs are going to look like. What 0:09:48.920 --> 0:09:51.240 the rates will be, who will be placed on, and 0:09:51.280 --> 0:09:53.400 whether or not there will be any exemptions, and what 0:09:53.840 --> 0:09:56.560 it will take to get those exemptions. The President over 0:09:56.600 --> 0:09:59.360 the weekend told reporters that this will initially start out 0:09:59.360 --> 0:10:01.599 with our country. That does throw a little bit of 0:10:01.679 --> 0:10:04.000 cold water on the idea that he may have made 0:10:04.000 --> 0:10:07.120 some exceptions right from the jump, that he also is 0:10:07.160 --> 0:10:11.079 suggesting that it's not so much about ten or fifteen countries. 0:10:11.080 --> 0:10:12.760 He said he hadn't heard that rum or, even though 0:10:12.760 --> 0:10:14.719 that it's actually something that was floated by his very 0:10:14.720 --> 0:10:18.280 own Treasury Secretary Scott Bessen, who suggested there is a 0:10:18.360 --> 0:10:22.520 dirty fifteen and according to Bloomberg Economics analyst analysis of 0:10:22.559 --> 0:10:25.400 what those fifteen countries actually are, nine of them that 0:10:25.440 --> 0:10:28.880 have the largest trade deficits with the US are in Asia. 0:10:28.920 --> 0:10:33.120 A lot of components like semiconductors, for example, could be impacted, 0:10:33.160 --> 0:10:35.520 and that is just keeping in mind that whatever reciprocal 0:10:35.600 --> 0:10:37.600 levies are put on, there is always the chance that 0:10:37.679 --> 0:10:39.800 even more tariffs are layered on top of that. The 0:10:39.840 --> 0:10:44.000 President has floated semiconductor specific tariffs at some point in 0:10:44.040 --> 0:10:46.920 the future, as well as on things like pharmaceuticals. Is 0:10:46.960 --> 0:10:49.520 just unclear what exactly that timeline will be and how 0:10:49.520 --> 0:10:51.120 all of these work in conjunction. 0:10:51.200 --> 0:10:51.960 Is he's also. 0:10:51.760 --> 0:10:55.080 Talking about, as you mentioned, Caroline, secondary tariffs on purchasers 0:10:55.320 --> 0:10:57.480 of Russian oil if he doesn't like the way Vladimir 0:10:57.480 --> 0:11:01.720 Putin is conducting seasfire negotiations between the US and of 0:11:01.760 --> 0:11:04.320 course Ukraine, and the big buyers of Russian oil at 0:11:04.360 --> 0:11:07.760 least right now are China and India, both of which, 0:11:07.760 --> 0:11:10.240 of course, in China's case, already have tariffs in place. 0:11:10.280 --> 0:11:12.520 In India could be very threatened given the high levees 0:11:12.559 --> 0:11:15.920 it has on US imports with higher reciprocal terror frates 0:11:15.920 --> 0:11:16.400 as well. 0:11:16.480 --> 0:11:19.559 Kenney, you point us towards the semiconductor effect. We've also 0:11:19.720 --> 0:11:22.160 got to take an account the deadline that comes to 0:11:22.200 --> 0:11:24.400 the end of this week around TikTok as well. Vac 0:11:24.480 --> 0:11:29.760 too embroiled in this geopolitics right now. Yeah, it absolutely is. 0:11:29.760 --> 0:11:32.200 When the President was asked about this last week, Caroline, 0:11:32.200 --> 0:11:35.280 the deadline coming up, he actually suggested that if China 0:11:35.360 --> 0:11:38.520 and the Chinese Communist Party would agree to acquiesce to 0:11:38.600 --> 0:11:41.440 a sale of TikTok's US operations, that that actually could 0:11:41.480 --> 0:11:44.840 result potentially in a lower teriff rate, suggesting once again 0:11:44.880 --> 0:11:47.880 he sees trade policy as a mechanism for negotiating really 0:11:47.960 --> 0:11:50.559 unrelated things. And he also said that if that can't 0:11:50.559 --> 0:11:52.720 be done by Saturday, which of course is the deadline 0:11:52.840 --> 0:11:55.560 April fifth, that he could always just extend it, as 0:11:55.640 --> 0:11:58.040 we saw him do at the very beginning of his term, 0:11:58.080 --> 0:12:00.400 extending at seventy five days, which is why the liners 0:12:00.440 --> 0:12:03.439 this weekend rather than being back in January. But as 0:12:03.440 --> 0:12:06.120 for the actual details of what a deal could look like, 0:12:06.160 --> 0:12:08.640 who that ultimate purchaser could be, and how much control 0:12:08.679 --> 0:12:10.800 they have though, we're not just the operations, but the 0:12:10.840 --> 0:12:13.960 algorithm specifically, very much amadeom question. And we only have 0:12:14.200 --> 0:12:15.920 a few days to go here, Caroline. 0:12:15.679 --> 0:12:18.320 Katie Lions bringing us up to speed, Thank you so much. Meanwhile, 0:12:18.320 --> 0:12:19.800 we've just had some breaking news, as you can see 0:12:19.800 --> 0:12:23.679 across your screens. More ECB European Central Bank officials appear 0:12:23.720 --> 0:12:27.960 ready to accept an April rate pause, basically ending the 0:12:28.000 --> 0:12:30.880 cutting cycle that we have currently seen. It's importantly to 0:12:30.920 --> 0:12:32.760 do with the fears around the fallout from tariffs, the 0:12:32.800 --> 0:12:36.880 inflationary effects. Let's just go more deeply into the global 0:12:36.920 --> 0:12:39.360 tariff impact right now. Ben Harburg's with US, no A 0:12:39.400 --> 0:12:42.440 Capital managing partner and core values Alpha portfolio Manager, No 0:12:42.520 --> 0:12:44.960 A capital. Look, it's a private firm managing over more 0:12:45.000 --> 0:12:48.040 than two billion assets and under management your core values. 0:12:48.320 --> 0:12:52.040 That brings particular exposure to Chinese companies. You're the perfect voice, Ben. 0:12:52.520 --> 0:12:55.400 Are you struggling with a lack of clarity or do 0:12:55.400 --> 0:12:57.160 you feel that you can invest in this moment? 0:12:58.720 --> 0:13:00.880 Well, I think from a Chinese person active, actually the 0:13:00.880 --> 0:13:03.760 country is pretty well positioned. China has been bearing the 0:13:03.800 --> 0:13:08.480 brunt of US tariffs and threats of tariffs for years 0:13:08.520 --> 0:13:12.920 now across both administrations, and so China started much earlier 0:13:12.960 --> 0:13:16.000 than any of other American trade partners and starting to 0:13:16.000 --> 0:13:18.720 think about offshoring, friend shoring, near shoring. 0:13:19.840 --> 0:13:23.240 You know, investors were threatened with sixty percent. 0:13:23.040 --> 0:13:27.080 Tariffs prior to Trump selection, and so actually a lot 0:13:27.120 --> 0:13:30.720 of those kind of very high noise numbers are already 0:13:30.800 --> 0:13:33.520 baked into two people's estimations. And so I think you've 0:13:33.520 --> 0:13:37.280 seen actually the Chinese market outperforming this year relative to 0:13:37.360 --> 0:13:38.720 its US counterparts. 0:13:38.760 --> 0:13:41.240 It's also been outperforming in large part because of the 0:13:41.320 --> 0:13:44.480 Generator AI wave of news. The fact that innovation seems 0:13:44.480 --> 0:13:46.720 to be backfront and center is that something you've been 0:13:46.760 --> 0:13:50.000 betting on to then, innovation was always there. 0:13:50.040 --> 0:13:53.520 I think the issue was that global investors, particularly Western investors, 0:13:53.520 --> 0:13:57.600 didn't price it correctly. That Chinese market was fundamentally undervalued 0:13:58.160 --> 0:14:01.640 for the last few years. You know, Chinese equivalents of 0:14:01.679 --> 0:14:05.600 their American companies valued at many multiples lower. And I 0:14:05.600 --> 0:14:11.960 think some of these more visceral, understandable, concrete actions like 0:14:12.000 --> 0:14:15.679 the Deep Seak kind of Sputnik moment, I think awakened 0:14:15.800 --> 0:14:20.239 global investors to really re evaluating these businesses on their fundamentals, 0:14:20.280 --> 0:14:22.600 and they recognize that actually there was huge amounts of 0:14:22.600 --> 0:14:24.880 innovation going on in China, particularly in the AI. 0:14:24.760 --> 0:14:27.240 Space, where China was always neck and neck with the US. 0:14:27.280 --> 0:14:30.240 And it's not just Deep Seak, it's Alibaba, It's ten Cents. 0:14:30.280 --> 0:14:32.680 So I think people kind of woke up out of 0:14:32.680 --> 0:14:36.000 their sleep and recognize that the market was fundamental innervalue. 0:14:36.400 --> 0:14:39.120 Well, then what about innovation in the United States? As 0:14:39.120 --> 0:14:41.120 we see taris take an impact, is it her? 0:14:42.800 --> 0:14:43.480 I don't think so. 0:14:43.520 --> 0:14:49.360 I mean the American innovative spirit remains intact. Global top 0:14:49.560 --> 0:14:53.200 minds still flocked to the United States and are integrated 0:14:53.240 --> 0:14:55.760 through our universities, into the American workforce, most of them 0:14:55.760 --> 0:15:00.440 becoming Green color holders or US citizens. This same kind 0:15:00.440 --> 0:15:02.560 of query was asked the Chinese when they were kind 0:15:02.560 --> 0:15:06.600 of taking their steps to kind of rein in entrepreneurs 0:15:06.640 --> 0:15:08.440 a couple of years ago. You know, when we saw 0:15:08.600 --> 0:15:11.840 the anti trust measures taken against Ali Baba and Mayitwan, 0:15:12.640 --> 0:15:14.720 it was a similar narrative, was innovation and. 0:15:14.840 --> 0:15:17.480 Entrepreneurship being hurt. So I don't think that's the case. 0:15:17.520 --> 0:15:19.760 And if anything, America is going to put foot on 0:15:19.800 --> 0:15:21.160 the gas on innovation over. 0:15:21.040 --> 0:15:22.160 The Trump era. 0:15:22.560 --> 0:15:24.760 We will see, you know, a lowering of a lot 0:15:24.760 --> 0:15:28.200 of the red tape, the regulatory hindrances, bureaucracy that was 0:15:28.240 --> 0:15:32.960 getting in the way, more tax support, more kind of 0:15:33.000 --> 0:15:36.840 integrated thinking across departments to support innovation. So I expect 0:15:36.840 --> 0:15:39.239 actually a boom in the US innovation, not a decline. 0:15:39.480 --> 0:15:42.120 Then you are close to the administration, we understand that 0:15:42.960 --> 0:15:46.000 when you're trying to give advice to those currently over 0:15:46.040 --> 0:15:48.360 in Washington or any other investor trying to search for 0:15:48.400 --> 0:15:52.840 clarity right now, do help people ultimately eat their vegetables 0:15:52.880 --> 0:15:55.960 with what might longer term be an innovation boost. There 0:15:56.040 --> 0:15:59.440 must be pressure on certain particular parts of innovation when 0:15:59.440 --> 0:16:02.320 it comes to robotics, when it comes to semiconductive access, 0:16:02.360 --> 0:16:02.960 for example. 0:16:04.200 --> 0:16:06.560 Well, so first I think you know, we're things aren't 0:16:06.560 --> 0:16:10.000 as valuats or unpredictable as people think. We're essentially doing 0:16:10.000 --> 0:16:11.720 what the President said he would do. So if you 0:16:11.760 --> 0:16:14.120 want to know where we're going, read what he said. 0:16:14.200 --> 0:16:17.000 Watch what he said. Uh, this is not a huge 0:16:17.000 --> 0:16:19.840 surprise to anyone who was following him over the last 0:16:20.200 --> 0:16:22.240 not not just over the campaign trail, but over the 0:16:22.280 --> 0:16:23.040 last decades. 0:16:24.080 --> 0:16:25.880 And then you know, certainly there is going to be 0:16:25.880 --> 0:16:26.680 short term pain. 0:16:26.760 --> 0:16:29.600 A lot of the key inputs to our supply chain, 0:16:29.640 --> 0:16:34.120 be it automotive, robotics, you know, the rare earth materials 0:16:34.160 --> 0:16:37.640 that come across all kinds of different core inputs. All 0:16:37.680 --> 0:16:39.680 of those are are going to be hit in the 0:16:39.680 --> 0:16:42.880 short term, which will mean some pain. But ultimately we 0:16:43.040 --> 0:16:45.360 have to find a way to wean ourselves off dependence 0:16:45.400 --> 0:16:49.000 on particularly obviously Chinese inputs. We need to either on 0:16:49.160 --> 0:16:52.160 shore those supply chains or near shore friendshore those with 0:16:52.240 --> 0:16:54.720 countries that we know we can rely on for decades 0:16:54.760 --> 0:16:55.080 to come. 0:16:55.680 --> 0:16:57.480 And I think this will ultimately. 0:16:57.160 --> 0:17:00.840 Sell to protect America. America's supply chain and ensure that 0:17:00.920 --> 0:17:03.960 it is not going to be vulnerable to a geopolitical 0:17:04.000 --> 0:17:05.560 adversary over the coming years. 0:17:05.920 --> 0:17:08.760 And what about some of the winners twenty twenty three, 0:17:08.800 --> 0:17:11.240 twenty twenty four in video comes to mind, of course 0:17:11.240 --> 0:17:13.840 some of the key chip makers, which now many are 0:17:13.880 --> 0:17:16.639 worried through regulation won't be able to access some of 0:17:16.680 --> 0:17:20.080 their end demand points. Geopolitics getting in the way of 0:17:20.080 --> 0:17:22.400 that too. Is that the sacrifice it's worth it? 0:17:23.480 --> 0:17:24.600 Well, that's not new again. 0:17:24.680 --> 0:17:26.240 I mean, you know, we were we were already seeing 0:17:26.320 --> 0:17:29.760 chip bands and coming particularly out of the Biden administration 0:17:29.840 --> 0:17:32.840 over the last four years, exporting those chips into China. 0:17:32.840 --> 0:17:34.879 And of course many of the American chip manufacturers and. 0:17:34.960 --> 0:17:37.720 Video side saw thirty to forty percent of all their 0:17:37.760 --> 0:17:40.960 exports going into China. And China's obviously done incredibly well 0:17:41.440 --> 0:17:46.000 building you know, five and ultimately six G hardware mobile handsets, 0:17:46.000 --> 0:17:48.480 and so it is a huge demand market for those 0:17:48.800 --> 0:17:50.520 for those consumers. So what we have to find do 0:17:50.800 --> 0:17:53.159 a way to do is continue to do business with 0:17:53.280 --> 0:17:55.760 China without giving there our most cutting edge chips, so 0:17:55.840 --> 0:17:59.520 ensure that you know, Chinese consumption is still helping to 0:17:59.560 --> 0:18:04.200 understand underlie and fund American art research and development and innovation, 0:18:04.720 --> 0:18:07.639 but make sure we're still ahead on the kind of 0:18:07.680 --> 0:18:09.720 most cutting edge chips. And so that's where these chip 0:18:09.760 --> 0:18:11.560 bands come into effect. And we've got to ensure obviously 0:18:11.600 --> 0:18:14.639 that those aren't being circumvented by third party countries. 0:18:14.280 --> 0:18:17.920 As well, big investor in China, investor in innovation, investor 0:18:18.040 --> 0:18:21.159 in soccer as well, which I think is behind the 0:18:21.200 --> 0:18:23.200 background that we currently see with you at the moment, 0:18:23.240 --> 0:18:25.960 Ben ben Harberg, another capital and anymore, we thank you 0:18:33.359 --> 0:18:36.200 time now for talking tech and first our France has 0:18:36.240 --> 0:18:38.840 fined Apple one hundred and sixty two million dollars over 0:18:38.920 --> 0:18:42.800 iOS data consent rules. Now antitrust regulators say Apple's app 0:18:42.840 --> 0:18:46.320 tracking transparency system does not allow developers to comply with 0:18:46.400 --> 0:18:50.240 Europe's GDPR priphacy rules. Instead, it forces apps to display 0:18:50.359 --> 0:18:53.679 multiple pop ups. Apple said it was disappointed in the decision, 0:18:53.680 --> 0:18:56.679 while similar investigations are actually underway in Germany, Poland, Italy 0:18:56.720 --> 0:19:00.960 and Romania. Plus Nokia and Amazon have settled a global 0:19:01.000 --> 0:19:04.560 patent dispute over its streaming technologies. Nokia had alleged that 0:19:04.560 --> 0:19:08.080 Amazon used its tech in streaming services and devices without authorization. 0:19:08.359 --> 0:19:12.159 The settlement results all patent litigations globally. The terms are 0:19:12.160 --> 0:19:15.840 not disclosed, and Japan is preparing as much as five 0:19:15.880 --> 0:19:18.760 point four billion dollars an additional aid for chip startup 0:19:18.880 --> 0:19:21.439 Rapidness is the latest move by the country to bolster 0:19:21.520 --> 0:19:25.199 its semiconductor industry during heightened US China tensions. Now that 0:19:25.240 --> 0:19:28.680 brings Japan's total public funding of advanced chips to nearly 0:19:28.720 --> 0:19:31.760 eleven and a half billion dollars. And let's just now 0:19:31.880 --> 0:19:35.000 take a look at those US China tentions with a 0:19:35.040 --> 0:19:38.080 focus on Huawei reporting a nine and a half percent 0:19:38.160 --> 0:19:40.639 rise in revenue in the December quarter according to Bloomberg's 0:19:40.640 --> 0:19:43.840 calculations based on annual results. There's also posted a net 0:19:43.920 --> 0:19:46.720 loss and more than forty million dollars due to aggressive 0:19:46.760 --> 0:19:49.159 spending on research into development. Let's talk about it with 0:19:49.200 --> 0:19:52.360 Peter Elstrom. And the point here is China is all 0:19:52.400 --> 0:19:54.600 in on R and D in large part because the 0:19:54.640 --> 0:19:58.840 limitations to access to chips from the US. Yeah, that's 0:19:58.880 --> 0:19:59.560 exactly right. 0:19:59.800 --> 0:20:03.160 This this is a pretty remarkable financial report from Huawei. 0:20:03.680 --> 0:20:07.439 As you mentioned, Huawei's revenue grew almost ten percent to 0:20:07.480 --> 0:20:09.960 about thirty eight billion dollars. The company has been growing 0:20:10.000 --> 0:20:15.080 quite quickly recently. That's largely because of big gains in 0:20:15.119 --> 0:20:18.920 their smartphone business, in particular in their cloud computing business. 0:20:19.160 --> 0:20:21.439 As you may recall, Huawei was largely out of the 0:20:21.480 --> 0:20:24.359 smartphone business because of this US ban on them getting 0:20:24.400 --> 0:20:27.240 the access to the most advanced chips. They weren't able 0:20:27.240 --> 0:20:30.240 to compete with Apple and even their domestic competitors. They've 0:20:30.280 --> 0:20:32.040 now been able to get access to those and the 0:20:32.040 --> 0:20:33.560 smartphone business is growing again. 0:20:33.600 --> 0:20:34.960 Cloud computing is growing again. 0:20:35.160 --> 0:20:38.199 But as you say, really the headline number here is 0:20:38.240 --> 0:20:40.879