WEBVTT - Apple CEO Transition: Hardware, AI, China 0:00:02.520 --> 0:00:13.360 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.400 --> 0:00:17.240 from coast to coast with Caroline Hyde in New York 0:00:17.520 --> 0:00:21.520 and ever Low in Sent Francisco. 0:00:23.239 --> 0:00:26.599 Welcome to a special edition of Bloomberg Tech. Tim Cook 0:00:26.640 --> 0:00:29.800 is stepping down as CEO of Apple on September first, 0:00:29.840 --> 0:00:34.480 after fifteen years leading the company. He will become executive chairman. 0:00:34.400 --> 0:00:37.080 Taking over as CEO John Turnus. 0:00:37.400 --> 0:00:40.440 He's been Apple's head of hardware engineering since twenty twenty one, 0:00:40.600 --> 0:00:43.760 is for twenty five years at the company focused on 0:00:43.840 --> 0:00:44.720 product development. 0:00:44.840 --> 0:00:48.360 Over the next hour, a breakdown Cook's legacy, Apple's performance, 0:00:48.360 --> 0:00:51.000 and what will change under new leadership, all things that 0:00:51.080 --> 0:00:53.479 investors are trying to price in. We'll also look at 0:00:53.520 --> 0:00:57.160 Cook's next role working with policymakers and get reaction from 0:00:57.280 --> 0:01:00.240 markets and lists and our team of reporters. 0:01:00.080 --> 0:01:02.640 And joining us first as Bloomberg Senior tech headder Daniel 0:01:02.640 --> 0:01:05.600 Olman in New York, who helps lead out consumer tech coverage, 0:01:05.680 --> 0:01:08.800 which of course reported earlier this year that Turnus was 0:01:08.800 --> 0:01:09.600 the heir apparent. 0:01:09.959 --> 0:01:11.440 Mark German has an. 0:01:11.400 --> 0:01:14.640 Extraordinary way of for seeing Apple's future as always, but 0:01:15.080 --> 0:01:17.759 who is John turnas so. 0:01:17.800 --> 0:01:21.720 He really has spent most of his professional career at Apple. 0:01:21.760 --> 0:01:25.080 He joined just four years after graduating college, so he 0:01:25.160 --> 0:01:27.920 really has grown up there professionally. He came there as 0:01:28.240 --> 0:01:31.839 a recent mechanical engineering grad and as you said, really 0:01:31.880 --> 0:01:35.600 has that background on the product side. So he really 0:01:35.680 --> 0:01:38.880 is a hardware guy, and as we've reported here at 0:01:38.920 --> 0:01:44.840 Bloomberg more recently, has been consolidating power and responsibility on 0:01:44.920 --> 0:01:51.040 the hardware side, presumably in preparation for this CEO transition. 0:01:51.880 --> 0:01:56.360 Overnight, Bloomberg published the full memos that Tim Cook and 0:01:56.440 --> 0:01:59.000 John Turner shared with Apple's staff. And I'm just pointing 0:01:59.000 --> 0:02:02.240 that out to our audience because right now there's basically 0:02:02.240 --> 0:02:04.440 a company wide all hands going on, so we're on 0:02:04.440 --> 0:02:06.240 the watch for any news that comes out of that. 0:02:06.760 --> 0:02:09.480 What else are we learning. The read on this from 0:02:09.480 --> 0:02:13.280 our reporting and the comments from Tim Kirk is that 0:02:13.320 --> 0:02:16.280 he has a new role, but he's not really going anywhere. 0:02:16.440 --> 0:02:17.960 What are we expecting him to do? 0:02:18.480 --> 0:02:20.880 So he's going to be transitioning to an executive chairman 0:02:21.040 --> 0:02:25.519 role and really focusing on diplomacy, both at a corporate 0:02:25.600 --> 0:02:28.640 level at almost geopolitical level, just given where Apple sits 0:02:28.680 --> 0:02:33.200 at the intersection of US policy and US relations with 0:02:36.560 --> 0:02:41.560 countries like China. So, according to our reporting, at least 0:02:41.560 --> 0:02:44.560 as much as John Turnis was ready to assume the 0:02:44.639 --> 0:02:48.240 role of CEO, wasn't quite ready to take on this 0:02:48.919 --> 0:02:51.720 more geopolitical role of negotiating on behalf of the company 0:02:51.760 --> 0:02:53.240 in a really high stakes way. 0:02:53.800 --> 0:02:55.720 That is the core of the story and what you 0:02:55.760 --> 0:02:58.280 need to know about Apple Bloomberg's day in a woman 0:02:58.280 --> 0:03:01.280 who leads consumer tech. Thank you. Let's get more on 0:03:01.440 --> 0:03:05.120 Wall Streets take on the industry's take with Ben veteran 0:03:05.560 --> 0:03:09.840 creative strategy CEO and principal analysts. He his coverage includes 0:03:09.880 --> 0:03:14.959 consumer technology, personal computing devices, semiconductors, and with respect, Ben, 0:03:15.000 --> 0:03:17.280 you've been at this for a very long time, pretty 0:03:17.320 --> 0:03:20.560 much the same amount of time that John Turnus has 0:03:20.639 --> 0:03:24.160 been at Apple. He is a hardware guy, He's an 0:03:24.200 --> 0:03:28.160 engineering guy. How do you see this changing Apple going forward? 0:03:29.280 --> 0:03:31.560 Yeah, I think there's a lot of excitement just coming 0:03:31.639 --> 0:03:36.600 from a now hardware maybe more engineering centric CEO. It's 0:03:36.640 --> 0:03:38.800 obviously been a while right since that has happened for 0:03:38.880 --> 0:03:41.960 someone who I think both the company and then the 0:03:41.960 --> 0:03:46.040 outsiders believe would have a more distinct point of view 0:03:46.120 --> 0:03:47.040 on the hardware side. 0:03:47.080 --> 0:03:47.480 Of things. 0:03:47.640 --> 0:03:50.240 I think there's also just a cultural dynamic, right working 0:03:50.320 --> 0:03:53.320 for an engineer, having a CEO who can speak your language, 0:03:53.320 --> 0:03:55.960 who can be in that room on product development, maybe 0:03:56.040 --> 0:03:59.480 work through some of the real hard engineering challenges for 0:03:59.600 --> 0:04:01.960 Apple's roadmap. And then more importantly, I think, you know, 0:04:02.000 --> 0:04:03.920 the next phase of Apple's growth is still going to 0:04:03.960 --> 0:04:07.840 be very hardware centric, with existing categories getting more aggressive 0:04:07.840 --> 0:04:10.240 as they launched more products for family as well as 0:04:10.240 --> 0:04:12.720 a whole slew of new hardware category. So I think 0:04:12.760 --> 0:04:15.240 there's a lot of optimism there. You know, we've heard 0:04:15.240 --> 0:04:17.359 he's well liked. I know, you know, Mark German and 0:04:17.440 --> 0:04:19.680 you guys have said the same thing. So I think 0:04:19.680 --> 0:04:21.719 there's there's a lot of positivity and I think the 0:04:21.720 --> 0:04:25.520 street will respond well. I think the market will like him. 0:04:25.560 --> 0:04:28.400 And then obviously, with Tim Cook not going away, there's 0:04:28.560 --> 0:04:30.960 the you know, the calming presence there that maybe Tim 0:04:31.000 --> 0:04:33.520 Cook can still do some of the geopolitical stuff that 0:04:33.600 --> 0:04:36.320 needs to happen and let John you know, just continue 0:04:36.320 --> 0:04:38.480 to focus on execution at Apple. 0:04:38.960 --> 0:04:42.440 Then how surprised were you either by the timing or 0:04:42.960 --> 0:04:44.240 that it happened as tool. 0:04:45.960 --> 0:04:49.640 No, not surprised by Mark German and I've been talking 0:04:49.640 --> 0:04:51.600 about this for probably two years. 0:04:52.440 --> 0:04:52.640 You know. 0:04:52.880 --> 0:04:56.080 I think the reality is that we had felt that 0:04:56.240 --> 0:04:58.720 Tim Cook would want to get past the fiftieth anniversary, 0:04:58.839 --> 0:05:00.760 which is what he did lead You know, you now 0:05:00.800 --> 0:05:03.080 have a couple more quarters where Tim could will still 0:05:03.120 --> 0:05:06.520 be on earnings calls to help ease that transition, and 0:05:06.960 --> 0:05:09.200 I would expect John Turnas to be involved as well. 0:05:09.760 --> 0:05:10.719 You know, we had. 0:05:10.600 --> 0:05:13.039 Felt that it would be this year, but really because 0:05:13.600 --> 0:05:15.560 I feel like the market just wanted to know, like 0:05:15.600 --> 0:05:17.760 the industry to as well, just wanted to know who's 0:05:17.800 --> 0:05:20.400 going to lead Apple for the next ten to fifteen years. 0:05:20.440 --> 0:05:22.760 And I think that there was angst around that, and 0:05:22.839 --> 0:05:25.320 it's good that they did this post fiftieth and now 0:05:25.360 --> 0:05:27.440 we now know who will be at the helm and 0:05:27.480 --> 0:05:29.279 I think, you know, again, it's a good decision. 0:05:30.320 --> 0:05:30.719 All of this. 0:05:30.880 --> 0:05:34.520 Does it signal confidence that the AI strategy is coming, 0:05:34.880 --> 0:05:38.440 that the right building blocks are in place for WWDC 0:05:38.720 --> 0:05:41.520 for September the first to be often to the races 0:05:41.800 --> 0:05:43.080 for John Turners. 0:05:43.960 --> 0:05:44.359 I think so. 0:05:44.440 --> 0:05:46.320 And I think that's a great point just in terms 0:05:46.360 --> 0:05:48.960 of right, if it wasn't right, if there was any hiccups, 0:05:49.040 --> 0:05:51.520 or could we be worried about a delay. Is there 0:05:51.920 --> 0:05:54.200 lack of confidence in what they're doing? Right, this would 0:05:54.279 --> 0:05:56.880 not be the right time. So I do think that 0:05:56.960 --> 0:06:00.320 there's a lot of things are in place. Timko is 0:06:00.320 --> 0:06:02.600 happy with the direction that the company is in. I 0:06:02.640 --> 0:06:06.400 think he's happy again with the stewardship of the culture 0:06:06.440 --> 0:06:08.640 of Apple that he was then tasked with after Steve 0:06:08.720 --> 0:06:11.599 Jobs died, and now John Turners will be responsible for 0:06:11.600 --> 0:06:14.960 carrying that culture forward as well. So I think right 0:06:15.960 --> 0:06:16.919 there was a lot of intention. 0:06:17.080 --> 0:06:17.240 Right. 0:06:17.520 --> 0:06:19.400 I don't expect Tim Cook would have done. 0:06:19.360 --> 0:06:23.120 Any of this in haste or by any sort of pressure. 0:06:23.160 --> 0:06:24.840 I think he just felt it was the right time. 0:06:25.120 --> 0:06:27.480 Apple's in good hands and in a good position in 0:06:27.560 --> 0:06:29.479 terms of all of their strategies, and now it's again 0:06:29.760 --> 0:06:31.720 it's a time for you know, John to drive the 0:06:31.760 --> 0:06:34.040 next leg of growth for Apple. 0:06:34.760 --> 0:06:38.640 An engineering brain is how Tim Cook described John Turners, 0:06:38.680 --> 0:06:41.440 but with an innovator's heart. So talk about the innovation 0:06:41.600 --> 0:06:43.720 you started to see and we understand how much adoption 0:06:43.800 --> 0:06:46.960 of AI that John has brought to his own team internally. 0:06:47.320 --> 0:06:49.760 But he's also working on the hardware as well to 0:06:49.839 --> 0:06:51.560 bring us the future of AI within Apple. 0:06:52.800 --> 0:06:55.799 Yeah, I think the innovation side, even the invention side, 0:06:55.800 --> 0:06:58.200 where you know you've got somebody who can be in 0:06:58.240 --> 0:07:00.920 again that room, who can be a fast adopter, who 0:07:00.920 --> 0:07:03.200 can push the limits of technology, and who can have 0:07:03.480 --> 0:07:06.240 high expectations and high demands of the engineers, which is 0:07:06.279 --> 0:07:08.120 really one of the things that you know, when Steve 0:07:08.200 --> 0:07:11.720 Jobs was there, he's constantly challenging people making them be better, 0:07:12.120 --> 0:07:13.360 and he came at it from like. 0:07:13.320 --> 0:07:16.520 A what was possible, right, what was possible with product 0:07:16.680 --> 0:07:19.000 and with technology. So I think you know, John Turnis 0:07:19.040 --> 0:07:19.560 is going to have that. 0:07:19.600 --> 0:07:21.680 He's obviously, as you pointed out right, been at Apple 0:07:21.880 --> 0:07:24.600 a really long time and you know, more importantly been 0:07:24.760 --> 0:07:27.960 involved in some of the biggest product launches that Apple 0:07:28.000 --> 0:07:30.560 has had, So I think he's well suited for this. 0:07:31.120 --> 0:07:33.320 There's obviously a lot of very key decisions that he'll 0:07:33.360 --> 0:07:34.760 have to make, and I think people will want to 0:07:34.800 --> 0:07:37.600 see how he handles that, you know, things relative to 0:07:37.640 --> 0:07:40.880 their AI software strategy. As good as there are strategy 0:07:40.960 --> 0:07:43.040 is just knowing where they're going to land in software 0:07:43.040 --> 0:07:45.800 partners that they'll make there, so it'll be you know, 0:07:45.880 --> 0:07:48.680 interesting to see and evaluate that. But like I said, 0:07:48.720 --> 0:07:52.840 I think coming from the engineering side. When Apple's going 0:07:52.880 --> 0:07:55.920 to need to be in a hardware growth cycle for 0:07:56.480 --> 0:07:59.120 the foreseeable future is a good spot and I think 0:07:59.160 --> 0:08:03.600 he'll bring a lot of expertise to that, to those conversations. 0:08:03.080 --> 0:08:06.440 And Maharon have creative strategies, great analysis analysis that maybe 0:08:06.440 --> 0:08:08.200 the market still wants to wrap its head around. Let's 0:08:08.200 --> 0:08:10.600 look at the market reaction because Apple is lower today. 0:08:10.600 --> 0:08:12.960 In fact, it's the biggest points drag on the NASDAT 0:08:12.960 --> 0:08:14.800 one hundred. We're of by two and a half percent. 0:08:15.200 --> 0:08:18.280 Now we're seeing what therefore ninety eight billion dollars wiped 0:08:18.280 --> 0:08:21.320 off the market capitalization of this company. Still it's worth 0:08:21.320 --> 0:08:23.720 three point nine trullion ed, but there is some questioning. 0:08:23.800 --> 0:08:25.720 Yeah, it took time to get to this decline for 0:08:25.760 --> 0:08:28.080 the market to make itself up when the major indices 0:08:28.080 --> 0:08:31.720 are flat, basically a lot amidst many headlines coming up. 0:08:31.880 --> 0:08:34.640 Tim Cook maybe stepping down a CEO, but his skills 0:08:34.679 --> 0:08:38.280 in corporate diplomacy will still be a hand for Apple. 0:08:38.400 --> 0:08:48.079 More on that next. This is Bloomberg Tech. Welcome back 0:08:48.080 --> 0:08:50.400 to a special edition of Bloomberg Tech. We check in 0:08:50.440 --> 0:08:53.000 on Apple because it is the biggest points drag today. 0:08:53.040 --> 0:08:55.960 We're seeing its worst performance well in a couple of 0:08:55.960 --> 0:09:00.319 months February, the twenty seventh new leadership a CEO transition 0:09:00.440 --> 0:09:01.760 Tim Cook to John Turnas. 0:09:01.920 --> 0:09:03.080 Tim Cook added. 0:09:03.000 --> 0:09:06.560 Two thousand percent or thereabouts to the stock market valuation 0:09:06.640 --> 0:09:08.839 of this company over his fifteen year tenure ed. 0:09:09.120 --> 0:09:12.400 One of Tim Cook's challenges has been managing Apple's relationship 0:09:12.400 --> 0:09:15.559 with the White House. The outgoing Apple CEO has navigated 0:09:15.600 --> 0:09:18.960 global tariffs and supplying chain disruptions, while on the whole 0:09:19.400 --> 0:09:22.120 staying in President Trump's good graces over the course of 0:09:22.160 --> 0:09:25.520 two administrations. That was evident in today's post from the 0:09:25.559 --> 0:09:29.880 President describing Cook's quote amazing career and calling him, quote 0:09:29.920 --> 0:09:32.520 an incredible guy. Let's get more on the Cook Trump 0:09:32.600 --> 0:09:36.360 dynamic with Bloomberg senior tech editor out of Washington, Mike Shephard, 0:09:36.720 --> 0:09:39.760 This was a focus for Cook and it will continue 0:09:39.800 --> 0:09:41.280 to be, shep What do we need to know? 0:09:41.400 --> 0:09:43.679 So it certainly will be. And you know when we 0:09:43.760 --> 0:09:48.160 talk about the Apple statement pointing to his new job 0:09:48.320 --> 0:09:53.959 engaging with global policy makers. Naturally, that means continuing work 0:09:54.000 --> 0:09:58.160 with officials in China to ensure that their presence there 0:09:58.320 --> 0:10:02.280 is unfettered and that they can continue to produce there, 0:10:02.400 --> 0:10:05.720 and that their expansion into India to bolster the supply 0:10:05.840 --> 0:10:09.480 chain there for the company is proceeding a pace as well. 0:10:09.520 --> 0:10:12.679 But there is no other relationship more important right now 0:10:12.760 --> 0:10:15.600 than the one with President Donald Trump. And Cook was 0:10:15.679 --> 0:10:19.480 really a pioneer among the tech industry when it came 0:10:19.520 --> 0:10:22.840 to engaging with the President. He really built that tie 0:10:23.080 --> 0:10:25.920 all the way back in twenty seventeen, shortly after Trump 0:10:25.960 --> 0:10:28.920 took office in his first term, and the two began 0:10:29.000 --> 0:10:32.200 exchanging phone calls and really having this kind of dialogue 0:10:32.240 --> 0:10:35.280 that the President alluded to in his truth Social post, 0:10:35.320 --> 0:10:38.360 and he even talked about how Cook would go to 0:10:38.400 --> 0:10:41.640 the White House and to him specifically as president, seeking 0:10:41.720 --> 0:10:45.640 certain things, seeking relief from impositions by the government. And 0:10:45.679 --> 0:10:49.320 we know that he was able to persuade the first 0:10:49.360 --> 0:10:52.679 Trump administration to layoff on some terifts that would have 0:10:52.720 --> 0:10:56.800 hit iPhones and AirPods and other Apple devices. And more 0:10:56.840 --> 0:10:59.880 recently since the President returned to office, we have seen 0:11:00.080 --> 0:11:03.680 that same level of engagement and really the same payoff 0:11:03.720 --> 0:11:05.920 for Apple in terms of relief from some of the 0:11:05.960 --> 0:11:10.079 President's tariffs. In this role will take on continued importance, 0:11:10.120 --> 0:11:14.240 of course, with lingering tensions between the US and China 0:11:14.280 --> 0:11:18.240 over trade, and of course now with the geopolitical friction 0:11:18.600 --> 0:11:22.360 rising touched off by the war in Iran, and so 0:11:22.400 --> 0:11:24.720 we're going to have to see how Tim Cook places 0:11:24.720 --> 0:11:27.520 this out. How much he is continuing to be a 0:11:27.600 --> 0:11:31.160 frequent interlocutor with Trump and a frequent visitor here to 0:11:31.320 --> 0:11:32.199 Washington too. 0:11:32.400 --> 0:11:34.720 Mags, Mike Shepherd is always wrapping things up in Washington. 0:11:34.960 --> 0:11:35.320 Thank you. 0:11:35.400 --> 0:11:38.200 Let's get more on the political global dynamics. Tim Cook 0:11:38.240 --> 0:11:41.000 has navigated and will continue to Jason Oxman's with our 0:11:41.040 --> 0:11:43.640 CEO of the Information Technology Industry Council. It's a tech 0:11:43.920 --> 0:11:46.400 trade association, a global one, which Apple is of course 0:11:46.400 --> 0:11:50.520 a member. So Jason, how important will Tim Cook's senior 0:11:50.600 --> 0:11:53.160 role executive chair remain for the company? 0:11:53.920 --> 0:11:54.199 Well. 0:11:54.280 --> 0:11:57.120 Tim's role and his leadership in the tech industry has 0:11:57.240 --> 0:12:01.000 been incredible, but as Mike noted, his work on the 0:12:01.520 --> 0:12:06.160 geopolitical government diplomacy front has been even more impactful. 0:12:06.480 --> 0:12:07.199 I think Tim. 0:12:07.040 --> 0:12:11.120 Cook really set the stage for the tech industry's engagement 0:12:11.160 --> 0:12:14.080 with the Trump administration. He developed, as we've been talking about, 0:12:14.320 --> 0:12:17.120 a personal relationship with the President, but he also helped 0:12:17.160 --> 0:12:20.520 inform the president's decision making in a variety of ways, 0:12:20.559 --> 0:12:22.599 and I think the US China relationship is really of 0:12:22.679 --> 0:12:24.720 the center of that. So I'm pleased and the tech 0:12:24.760 --> 0:12:27.400 industry has certainly pleased that Tim Cook will continue to 0:12:27.440 --> 0:12:30.520 play this role going forward. I think it's important for 0:12:30.600 --> 0:12:34.600 the administration to understand the business impact of the political 0:12:34.640 --> 0:12:37.800 and governmental decisions that are made, and that US China 0:12:37.880 --> 0:12:39.840 relationship is at the core of that. 0:12:39.920 --> 0:12:41.080 I also think Apple has. 0:12:40.920 --> 0:12:45.199 Been a leader in investing in the United States in manufacturing, 0:12:45.280 --> 0:12:48.000 hundreds of billions of dollars of investment made there. But 0:12:48.080 --> 0:12:51.320 also reminding the administration that supply chains are global. So 0:12:51.440 --> 0:12:53.880 as Apple and the rest of the tech industry continue 0:12:53.880 --> 0:12:56.719 to invest in manufacturing in the United States, they need 0:12:56.760 --> 0:12:59.800 access to critical components and need access, of course to 0:12:59.840 --> 0:13:02.319 the ninety five percent of the world's population that doesn't 0:13:02.320 --> 0:13:05.679 live in the United States as customers for American technology. 0:13:05.720 --> 0:13:07.640 So I think that role has been important will continue 0:13:07.640 --> 0:13:08.680 to be important going forward. 0:13:08.760 --> 0:13:12.720 It's worth remembering Tim Cook's supply chain prowess. We have 0:13:12.800 --> 0:13:16.640 seen supply chain changes from China into India non for Apple, 0:13:16.880 --> 0:13:20.079 what's number one? Therefore, for Tim Cook to address September 0:13:20.120 --> 0:13:21.480 the first and continue to do so. 0:13:21.480 --> 0:13:23.480 As the role of CEO. Is it more Iran or 0:13:23.520 --> 0:13:24.200 is it more China. 0:13:24.880 --> 0:13:26.880 Well, I think China is at the center for the 0:13:26.920 --> 0:13:31.640 technology industry of the discussion, because although the relationship between 0:13:31.880 --> 0:13:36.200 US and China is complicated, to say the least, they 0:13:36.240 --> 0:13:38.960 are the two largest players in the global supply chain. 0:13:39.120 --> 0:13:41.920 But we're of course very much looking forward to President 0:13:41.960 --> 0:13:44.880 Trump's visit to China. I think the discussions there will 0:13:44.920 --> 0:13:49.200 be productive. And Apple has definitely demonstrated, as other technology 0:13:49.200 --> 0:13:53.680 companies have, that manufacturing is global. So as manufacturing happens 0:13:53.679 --> 0:13:55.840 in the US, it happens in China, it happens in India. 0:13:56.120 --> 0:13:58.640 The rest of Southeast Asia of course is a manufacturing 0:13:58.760 --> 0:13:59.720 hub as well. 0:14:00.000 --> 0:14:00.760 So I think that. 0:14:00.720 --> 0:14:05.840 Geopolitical relationship is enormously important, and early milestones and signs 0:14:06.400 --> 0:14:09.560 of the warming relationship between the US and China are 0:14:09.640 --> 0:14:13.360 obviously very positive. Continuing that relationship going forward will be 0:14:13.480 --> 0:14:16.040 crucial for the tech industry. Look when you look at 0:14:16.120 --> 0:14:18.800 supply chains and critical minerals, a lot of things that 0:14:18.920 --> 0:14:21.680 just aren't available in the United States are available in China, 0:14:21.880 --> 0:14:25.280 and we need those supply chains globally to remain active. 0:14:25.680 --> 0:14:28.320 Let's end the discussion by remembering what happens. The President 0:14:28.360 --> 0:14:31.280 put pressure on Apple last summer. He wanted them to 0:14:31.280 --> 0:14:33.600 build the iPhone in the United States, and he talked 0:14:33.600 --> 0:14:37.600 about tariffs. In August, Apple announced over four years a 0:14:37.640 --> 0:14:41.280 six hundred billion dollar commitment to manufacture more things in 0:14:41.320 --> 0:14:45.560 the United States. Was that fully resolved that request from 0:14:45.600 --> 0:14:47.520 the White House and how Apple responded to it. 0:14:49.080 --> 0:14:52.800 I think Apple's response was enormously positive. We saw the 0:14:52.840 --> 0:14:57.760 President and senior members of the administration visiting Apple manufacturing facilities. 0:14:58.240 --> 0:15:00.560 We saw a very positive reaction of the White House 0:15:00.600 --> 0:15:02.760 about the moving to the United States of a lot 0:15:02.760 --> 0:15:06.640 of manufacturing capability. Look, can all manufacturing happen in the 0:15:06.760 --> 0:15:09.960 United States, No, of course not. We need to continue 0:15:10.000 --> 0:15:12.920 to advance manufacturing in the United States in parallel with 0:15:13.000 --> 0:15:16.120 manufacturing happening around the world, in the same way that 0:15:16.160 --> 0:15:19.520 no American company can succeed only investing in the United 0:15:19.560 --> 0:15:21.960 States market for customers. Because only five percent of the 0:15:21.960 --> 0:15:24.720 global population lives in the United States. You need access 0:15:24.760 --> 0:15:25.600 to the rest of the world. 0:15:25.760 --> 0:15:27.920 So I think it is a balance. 0:15:28.440 --> 0:15:30.920 I think Apple has done a phenomenal job of investing 0:15:31.000 --> 0:15:34.360 significantly in the United States in order to be responsive 0:15:34.360 --> 0:15:36.680 to the administration's goals, and I think the rest of 0:15:36.680 --> 0:15:40.080 the tech ecosystem is doing the same. The second day 0:15:40.120 --> 0:15:43.280 of the Trump administration, the very first announcement was about 0:15:43.320 --> 0:15:46.160 data center investments in the United States, and that's happening apace. 0:15:46.560 --> 0:15:48.400 But at the same time, I think we need to 0:15:49.640 --> 0:15:51.840 recognize that the rest of the world economy and the 0:15:51.840 --> 0:15:53.960 rest of the world's supply chains are global, and we 0:15:54.000 --> 0:15:55.560 need to focus on that as well. 0:15:55.720 --> 0:15:59.120 Jason Oxman, CEO of the Information Tech Industry Council Thank 0:15:59.160 --> 0:16:03.240 You Apple navigates a leadership transition. Amazon is doubling down 0:16:03.240 --> 0:16:06.840 on AI. Amazon, already one of Anthropic's biggest backers, is 0:16:06.880 --> 0:16:10.280 investing in additional five billion dollars in the company, securing 0:16:10.320 --> 0:16:13.240 a one hundred billion dollar cloud commitment in return. The 0:16:13.280 --> 0:16:17.280 news broke within minutes of the Tim Cook announcement. Bloombos 0:16:17.320 --> 0:16:19.760 Matt Day has more. Last night was chaos. This was 0:16:19.760 --> 0:16:22.040 a big deal in move markets. What do we need to. 0:16:21.960 --> 0:16:24.760 Know, so we need to know is that there really 0:16:24.800 --> 0:16:28.000 aren't any questions anymore about how much scale Amazon is 0:16:28.040 --> 0:16:29.800 going to have in the AI business. You roll the 0:16:29.800 --> 0:16:31.400 clock back a couple of years and they were a 0:16:31.440 --> 0:16:33.120 little bit at c in this new market. 0:16:33.360 --> 0:16:33.520 You know. 0:16:33.560 --> 0:16:35.800 Now they've got one hundred billion dollar plus commitments from 0:16:35.800 --> 0:16:38.640 Anthropic as well as Open Ai, so it seems they've 0:16:38.640 --> 0:16:40.280 really kind of found a seat at the table here 0:16:40.800 --> 0:16:42.200 empowering these AI models. 0:16:42.720 --> 0:16:45.760 How much are we still seeing this circularity? Is the 0:16:45.800 --> 0:16:49.040 market likes to call it the equity being given to Amazon, 0:16:49.040 --> 0:16:51.680 but the promise towards AWS is that just inevitable the 0:16:51.680 --> 0:16:52.400 way these deals go. 0:16:53.400 --> 0:16:55.280 It sure seems to be so last night's commitment. The 0:16:55.280 --> 0:16:58.840 details are five billion from Amazon to Entthropic now up 0:16:58.840 --> 0:17:01.680 to twenty billion dollars sometime in the future depending on 0:17:01.680 --> 0:17:04.600 certain commercial arrangements. Then on the other side of that, 0:17:05.040 --> 0:17:07.600 Anthropic is going to spend somewhere north of one hundred 0:17:07.640 --> 0:17:10.639 billion on Amazon services over over ten years. So a 0:17:10.680 --> 0:17:12.320 lot of money gone back and forth, and that. 0:17:12.359 --> 0:17:14.920 Deale struck at that valuation of three hundred and fifty 0:17:14.960 --> 0:17:15.639 billion dollars. 0:17:16.080 --> 0:17:16.879 We appreciate you. 0:17:17.000 --> 0:17:25.159 Bloomberg's Matt Day on all things Anthropic and Amazon. Welcome 0:17:25.160 --> 0:17:27.120 back to a special edition of Bloomberg Tech. We check 0:17:27.119 --> 0:17:28.680 in on the markets and then as that one hundred 0:17:28.760 --> 0:17:31.199 doing very little of anything today, we're currently trading flat 0:17:31.320 --> 0:17:33.879 by about tenth of a percent lower. Of course, geopolitical 0:17:33.880 --> 0:17:37.320 headwind still buttress the entire market. We have the wash hearing, 0:17:37.320 --> 0:17:40.520 and we of course have still questions over negotiations between 0:17:40.640 --> 0:17:43.520 us in Iran. But the key story in technology is 0:17:43.520 --> 0:17:45.680 one we can continue to be fixated upon. 0:17:46.119 --> 0:17:48.040 Apple is your biggest points. 0:17:47.720 --> 0:17:49.879 Drag on the Nasdaq one hundred to day, having the 0:17:49.920 --> 0:17:51.679 worst day in a couple of months, and end of 0:17:51.680 --> 0:17:55.239 February of by two point six percent. This as we 0:17:55.280 --> 0:17:57.639 hear of a changing of the guard after fifteen years, 0:17:58.040 --> 0:18:00.440 Tim Cook is handing over the rains come September. 0:18:00.520 --> 0:18:03.280 The first ed yeah to John turnus a hardware guy, 0:18:03.400 --> 0:18:07.600 an engineering guy. Apple may be going for continuity in 0:18:07.680 --> 0:18:10.320 its choice of new CEO, but Tim Cook's left a 0:18:10.400 --> 0:18:13.120 lasting legacy and impression on the company that he ran 0:18:13.359 --> 0:18:17.800 for fifteen years. Bloomberg's senior executive editor for Tech, Tom Giles, 0:18:17.840 --> 0:18:20.880 is with us, and that's what we've been reflecting on. Tom. 0:18:21.040 --> 0:18:23.480 You know, you can measure it in a number of ways. One, 0:18:24.000 --> 0:18:26.800 when Tim Cook became CEO, Apple had a market cap 0:18:26.800 --> 0:18:29.600 for three hundred and fifty billion dollars. It's breached the 0:18:29.640 --> 0:18:33.639 four trillion dollar market cap mark, how else would we 0:18:33.720 --> 0:18:36.840 measure the era that was Tim Cook's CEO of Apple. 0:18:37.200 --> 0:18:40.919 So many ways he oversaw such a massive expansion in 0:18:41.040 --> 0:18:44.800 terms of their footprint, in terms of where they operate 0:18:45.080 --> 0:18:48.960 and how deeply they penetrate markets like China, for example, 0:18:49.160 --> 0:18:51.720 based on a foundation that he really laid in terms 0:18:51.760 --> 0:18:56.320 of bringing Apple into China and expanding it there in 0:18:56.400 --> 0:19:00.000 terms of the number of stores, the number of products, 0:18:59.680 --> 0:19:02.640 and it's just its reach at a time when other 0:19:02.840 --> 0:19:06.920 US companies, most other US big tech companies saved Tesla, 0:19:07.119 --> 0:19:11.680 could not make any headway in that country. Massive legacy 0:19:11.880 --> 0:19:16.480 other numbers. To think about eight x increase in profits 0:19:16.720 --> 0:19:20.680 over his ten uere a massive increase in the number 0:19:20.680 --> 0:19:24.320 of stores to five hundred and forty three point sixty 0:19:24.400 --> 0:19:28.639 six trillion dollars in market cap, as you alluded to earlier. 0:19:28.720 --> 0:19:32.320 And that's just a testament to the ways that he 0:19:32.800 --> 0:19:38.359 really made Apple so much more interwoven into our everyday lives. 0:19:38.640 --> 0:19:42.439 Jam packing the iPhone with more features and then adding 0:19:42.480 --> 0:19:48.040 peripheral devices like the watch and like the AirPods, not 0:19:48.119 --> 0:19:51.760 to mention expansions and things like the Mac and the iPad. 0:19:52.040 --> 0:19:55.960 It was just a matter of really expanding Apple's reach 0:19:56.320 --> 0:19:59.920 geographically and deeper and deeper into the lives of concer 0:20:00.040 --> 0:20:01.040 uomers around the world. 0:20:01.080 --> 0:20:04.040 Tom like more than two and a half billion active devices, 0:20:04.520 --> 0:20:08.280 but not many of them are the VR headsets, and 0:20:08.400 --> 0:20:10.080 certainly none of them ended up being a car. 0:20:10.119 --> 0:20:12.120 There have been a couple of missteps along the way. 0:20:12.320 --> 0:20:16.600 Absolutely there were things that Apple spent a lot of 0:20:16.640 --> 0:20:19.760