June 30, 2025 • 38 mins
Watch Bloomberg Businessweek Daily every day on YouTube: http://bit.ly/3vTiACF.
Apple Inc. is considering using artificial intelligence technology from Anthropic PBC or OpenAI to power a new version of Siri, sidelining its own in-house models in a potentially blockbuster move aimed at turning around its flailing AI effort.
The iPhone maker has talked with both companies about using their large language models for Siri, according to people familiar with the discussions. It has asked them to train versions of their models that could run on Apple’s cloud infrastructure for testing, said the people, who asked not to be identified discussing private deliberations.
If Apple ultimately moves forward, it would represent a monumental reversal. The company currently powers most of its AI features with homegrown technology that it calls Apple Foundation Models and had been planning a new version of its voice assistant that runs on that technology for 2026.
A switch to Anthropic’s Claude or OpenAI’s ChatGPT models for Siri would be an acknowledgment that the company is struggling to compete in generative AI — the most important new technology in decades. Apple already allows ChatGPT to answer web-based search queries in Siri, but the assistant itself is powered by Apple.
Today's show features:
- Bloomberg News Managing Editor for Global Consumer Tech Mark Gurman on Apple considering using artificial intelligence technology from Anthropic PBC or OpenAI to power a new version of Siri
- Ed Price, Senior Non-Resident Fellow at New York University and former British trade official on the latest from Ukraine and expectations for ongoing US trade negotiations
- Trish Damkroger, Chief Product Officer, SVP & General Manger of High Performance Computing and AI of HPE
- Bloomberg News Congressional Reporter Erik Wasson on the latest tax bill negotiations within the US Senate
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
This is Bloomberg Business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business finance
and tech news as it happens. The Bloomberg Business Weekdaily
Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 3 (00:32):
What is I think one of the most read stories
on the Bloomberg right now or second or so, and
that has to do with Apple, which rallied on news
that Apple is considering using artificial intelligence technology from Anthropic
or open AI to basically power a new version of series.
So it's a big deal because it means maybe possibly
(00:53):
sidelining its own in house models. The story a Bloomberg exclusive.
It's buyer own. Mark. He's, of course, Bloomberg Newsmaging editor
for Global Consumer Technology. I'm convinced he never sleeps because
he's constantly putting out exclusives and breaking news stories. All right, Mark,
take it away. What's up at Apple?
Speaker 4 (01:14):
So Apple, right, their strategy for artificial intelligence that they
unveiled last year was twofold in house models that run
on the phone and in house models that run on
the cloud. Right, that competes with chat GPT, with Claude,
with Gemini, with the market, and Apple has figured out
pretty quickly they're not very good, right. So Apple is
(01:35):
now evaluating for the first time using a third party model,
either Claude from Anthropic or chat GPT from OpenAI to
power Siri. Obviously, as we all know and experience in
our day to day lives, Siri is not very good.
And Apple had been working on an overhaul of Siri
using its own large language models for next spring. Now
(01:55):
it's exploring maybe using Claude or chat GPT instead in
order to get new features the door more quickly and
make the voice assistant more appealing. So it is a
pretty big development. And you see that Apple stocks spiked
on the news because if they do indeed go down
this road, which by the way, is not for certain
by any means, it's going to me and Apple is
going to be a real AI player for the first time.
Speaker 5 (02:17):
How much time do they have, mark I mean, I
guess I feel like any company that wants to compete
has to have a successful AI offering. On the other hand,
this is a company that already has us kind of
hook line and sinker. Right, we have own me and
(02:38):
my family exactly, and me and my family as well. Right,
I can't imagine living without the genius of their products,
and I really feel like an emotional connection to Apple.
On the other hand, they have utterly failed in this sense.
Carol reminded me that Siri is now fourteen years old,
and she is more incapable than my four year old
(03:00):
m You.
Speaker 4 (03:01):
Guys are very focused on your current setup. You're focused
on the current generation of consumers. You're concerned about your families. Right,
what Apple's concern is and what my concern is and
the market's concern is the next generation of consumer. They're
going to lose a whole bunch of people that are
new to the smartphones. There are people born every day,
There are people who buy their first smartphone every day.
(03:23):
There are families getting their first smartphones every day, right,
and those people have a decision make to make about
which ecosystem they want to enter. And right now, all
the talk is about how Apple's AI is completely behind
the times, and so that decision, right is a lot
easier when you realize that the Android ecosystem is a
(03:43):
big step ahead and what is perceived as the future
of technology.
Speaker 3 (03:47):
What does they say about Apple as a company like
this would be a real big shift right in strategy
or are you help me out here?
Speaker 6 (03:53):
Right?
Speaker 4 (03:54):
Apple likes to go in house for core technologies. Like
I've said many times before, AI is as cores technology
for the future of hardware, as the touchscreen has been
for technology over the past twenty years.
Speaker 7 (04:05):
Right.
Speaker 4 (04:06):
Apple owns the technology and the patents and everything behind
touchscreen and multi touch, those gestures that we all take
for granted today. With AI, Apple has tried to do
something similar, build those models in house and own the
core tech like they own the touch screen, like they
own some of the camera tech, like they own with
their processors and all their products. Now, but what are
you supposed to do If it's not very good. You
(04:26):
have to find an alternative. You have to go outside
and use a partner. They tried to go in house,
it didn't work. They're going to pull back, in my view,
go external, use external partner, and maybe one day do
a brain transplant. When you're lms that you're building internally
are good enough for primetime, but something's got to give. Interestingly,
they are working concurrently on a new serie LM project
(04:49):
that uses in house models, and so there's still many
debates internally and options being poured over to decide if
they're going to go with anthropic, Open AI or Apple
Foundation models for this REVAM coming next spring.
Speaker 5 (05:01):
By the way, are there AI companies that are in
the lead, Like is open ai doing better work at
least in terms of the products that we can access
now than Anthropic, than Google, than Facebook.
Speaker 4 (05:17):
You talk to a bunch of people in the industry,
you're going to get different opinions. I would say the
top two are Entropic or open Ai, Google and third
and if you want to talk about the big companies
metaphor and rounded out with Apple. If you're going just
for the top five biggest companies that have some meaningful
share of the space, you talk to people at Apple, though,
(05:38):
the word on the street there is it's all about Nthropic,
and so Anthropic is really the focus of Apple for
this new generation of Siri. They're using Ententropic to power
a lot of their internal AI technology. But again, as
I say in my story, Nthropic wants billions of dollars
at a scale that doubles annually for series to be
powered by Claude, And so Apple is now taking a
(05:59):
close look at open as well, which has historically given
Apple extraordinarily favorable terms.
Speaker 3 (06:04):
It's not a desperation or smart move in terms of
what Apple's doing.
Speaker 4 (06:08):
It's a smart move in response to desperation.
Speaker 5 (06:12):
Interesting also that they could end up working with open
ai at the same time as open ai works with
Johnny Ive to build what may be like an iPhone killer,
right mark, You've.
Speaker 4 (06:26):
Seen Apple go down this road before, like the company
that Apple detests more than any other. Like if you
were to take Apple executives in a room and say
who do you hate the most in the whole world,
they would say Qualcom. When the five G transition happened
five years ago, Apple was an inflection point like they
are today with AI. Are we going to partner with
(06:48):
Qualcom who we detest, or are we going to miss
out on five G and risk really upsetting customers and
losing market share? And so they bit their tongue partner
with Qualcom, and behind the scenes they've been working on
a replacement for Qualcom and they've just started rolling that out.
So you'll see something's happen similar with AI believe.
Speaker 3 (07:06):
Pretty wild stuff. All right, Thank you as always, Mark,
We really appreciate it. Mark German, of course, joining us
here with the latest on Apple. As we mentioned, Mark
also reminding us the stock was up about two percent
here at the close on his reporting, the stock is
down eighteen percent year to date. But read all about it,
all the details. Mark again a Bloomberg exclusive on Apple.
(07:29):
Joining us. Mark is Bien, Managing editor for Global Consumer Technology.
Joining us out there from the West Coast.
Speaker 1 (07:36):
You're listening to the Bloomberg Business Week Daily podcast. Catch
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Speaker 3 (07:51):
Can you believe it was about a week ago that
we were focusing on the Middle East in the US
strek on our rout list?
Speaker 6 (07:56):
Yeah, it was tretty intense.
Speaker 5 (07:58):
I actually heard Tim go through the whole timeline on Friday,
which I thought was a fascinating replay because we're right
back to where we started, right. Oil shot up to
eighty one dollars a barrel on Sunday night, and we're
back at like sixty seven right now.
Speaker 3 (08:10):
Yeah, I'm just like kind of amazing the trip that
we've already taken and here we are today talking a
lot about what's going on in Washington. We also had
the NATO meeting of leaders last week. The Middle East, tariffs,
military spending, and the Russia Ukraine wore were certainly some
of the things that came up there. The war between
Russian and Ukraine it is now in its third year,
Ukraine saying Russia fired a record five hundred and thirty
(08:32):
seven missiles and drones and a massive attack overnight. We
also had a headline just a little while ago a
story crossing the Bloomberg that President TRUMPI was signed an
executive order today terminating the US sanctions program against Syria.
That is, according to White House spokeswoman Caroline Levitt, so
a lot going on geopolitically. We wanted to broaden out
a little bit today. So delighted to have back with US.
(08:54):
Ed Price, former British trade official now non resident Senior
Fellow at NYU, New York University. He has advised members
of the European also British Parliament's a former British trade official,
and he writes often about politics, economic policy, and more.
He's with us remotely from upstate New York. Good to
have you here with madd and me on this Monday.
I want to jump right to there's so much going on,
(09:16):
but you write in barns, President Barons, excuse me. President
Donald Trump's efforts to reshape the nation have roots in
Richard Nixon's unfinished presidency.
Speaker 7 (09:26):
How so so well, high end, happy Monday. It's because
of two dates, nineteen seventy one and nineteen seventy four.
Nineteen seventy one was, of course the Nixon Shock, which
was effectively the transition from a dollar that made reference
to gold to a dollar that didn't, which is fiat currency.
And nineteen seventy four is when Richard Nixon's presidential career
(09:49):
came to an end. Of course, in that year he
resigned after Watergate. And so what I mean by that
is that the two underlying currents behind today's news would
intend at home are effectively a dollar story and a
fiat dollar story. And on the other hand, the centralization
of presidential authority and power that Nixon attempted and failed at,
(10:12):
but that it seems Trump so far has had a
better run at.
Speaker 5 (10:15):
Right, Nixon said, if the president does it, that means
it's not illegal. And Trump has certainly said that in
various ways over the past eight years. What about Nixon's resignation,
I mean, it seems that Trump has gone the other way, right,
Nixon was caught doing something illegal and kicked and screamed
(10:39):
and left, and Trump has been sort of kicking and
screaming and turning into something that was okay if you look,
for example, at January sixth.
Speaker 7 (10:47):
Yes, January sixth was egregious, and yet it stands. And
I think that that hints at how if Watergate happens today,
nobody would blink, right, I mean, somebody busting a safe
open in line about it simply wouldn't make the news.
Speaker 6 (11:02):
Not even I mean they would celebrate it.
Speaker 7 (11:05):
Right, Well, they probably would, depending on their political views.
I would caution everybody, including myself, because I'm so guilty
of this of always sort of looking to Trump as
the independent variable in all cases.
Speaker 3 (11:18):
Well, I want to jump in for a moment because
I was just thinking at as you were talking what
you were saying, is it more about the US public
has changed, and that they wouldn't bark at a Watergate
today versus what they did during the Nixon administration. Does
it say more about the US citizens at large or
(11:38):
many of them, versus an individual president or individual administration.
Speaker 7 (11:44):
Well, Ultimately, American politics are a subfunction of the American people,
as you rightly point out, and every couple of years
we have a major election and the views of the
people are thereafter represented in our government via those elections.
So yes, I would say that the American people have
moved from, you know, for want of a better word,
(12:04):
a puritanical view of the world to something a little
less puritanical in say, the last twenty or so years.
But it's also a function of the Supreme Court because,
as Matt just mentioned, when you know, Trump says that
his own version of if it's not if the president
does it, it's not illegal, the Supreme Court has effectively
said that for him too, when it rules that anything
(12:25):
within his official remit is not subject to prosecution. So
there's a there's a shift I think in the presidency,
the people, and the Supreme Court.
Speaker 5 (12:33):
You know, I wonder how you feel about the in
a sense, the state and local tax deduction debate, as
as an outsider looking at the balance that the US
founders intended between state and federal power. My reading of this,
because admittedly I don't like paying this much money, is
that it's federal overreach. Undo federal overreach to cap the
(12:57):
state and local tax deduction because they're in pining on states'
rights to sort of taxation autonomy. But no one else
seems to talk about this at all. Do you see
the power shifting to Washington and away from state capitals?
Speaker 7 (13:15):
I do, as a broad theme, And I know you
enjoy paying taxes, Matt, so I'm sorry to hit that's
I'm sorry to hit that an ongoing problem for you. Yes,
there is a centralization of power in the American body politic.
That is one theme that I think Nixon introduced perhaps
and that people like Dick Cheney tried to theorize with
(13:36):
the with you know, his vice presidency and the unitary executive.
But there's another theme pushing back at that, which is,
as you just mentioned, states rights, liberty, individual rights, and
so on. And these two strands are bumping up against
each other constantly in American history, but it seems that
in twenty twenty five they're bumping into each other with
ever more friction.
Speaker 3 (13:59):
You know what I wonder too. I mean, the US
is by far still the largest economy in the world,
and I know that is the current situation. Those mantles
can change, but it is still significant, even you know,
significantly still above the second largest, which is China. So
I understand that its prospects could be dimming based on
the actions of the current administration, at least some might
(14:20):
say that. But I do wonder because of that and
still having the most liquid markets, or you know, you
think about the treasury market's still very liquid, and I
know you've got some very significant thoughts about the diminishing
of the dollar. And we saw the dollar eyeing its
longest monthly slide since twenty seventeen as we wrap up
the month of June. I mean, does that, just by
(14:42):
size alone, ed though, continue to make the United States
a pretty dominant presence in the global economy, and not
just economically but politically.
Speaker 7 (14:52):
Well, yes, and no, I mean it's not just a
monthly slide. The dollar has had its weakest start to
a year since nineteen seventy three, losing over ten percent
that in the ft this morning, and in seventy three,
I think it was fifteen percent so there are signs
in the data and anecdotal reports of a weakening demand
for the dollar. But that's a double edged sword, because,
(15:12):
as you rightly say, the US is present in the world,
it is primarily present through the dollar. That was Nixon's decision.
He was faced with the choice between continuing to supply
the dollar as accords global demand and that required a
feac currency or not, and pulling back into sort of
a dollar supply that would be more appropriate for the
US economy. He chose the former. But that's good until
(15:34):
it's bad, right, And we don't know the horizon at
which investors, other countries, sovereigns, pension funds, central banks will
really take a look at the dollar itself and say
we don't buy it as a store of value anymore
because it's over supplied. So that over supply does keep
the global economy ticking, It keeps Uncle Sam's presence all
over the world. But there is a day not too
(15:55):
far in the future where inevitably a preponderance of people
will really scratch the head about whether the dollar is
actually worth what it says it is.
Speaker 5 (16:03):
I will say that if you back out and look
at the dollar as measured by either the DXY or
the Bloomberg Dollar Index.
Speaker 6 (16:09):
Over the last say, twenty five years.
Speaker 5 (16:11):
We're still well above the average and at relatively high levels.
But I see this in treasuries as well. You know,
as FED Federal Reserve independence is threatened. And maybe Donald
Trump can't do anything to Jerome Powell, but Paul Tudor
Jones told us last week that he expects Donald Trump
to put the yesest yes man in charge of the
(16:34):
Fed as soon as he can. In twenty twenty six.
The market doesn't care. They're still buying treasuries and the
tenure yield is back down to four and a quarter.
Speaker 7 (16:43):
Well, I guess it's like a dualism, isn't it, Because
while the good times are rolling, the good times are rolling,
this is Hyman Minsky. But as they're rolling, the bad
times are storing up. And if people still look at
the dollar and say everything's tikety boo, will keep buying it.
It's still the best game in town, then day it
is because it's reflexive and that's what they're doing, and
(17:03):
they're creating their own reality. But I mean, we would
be very silly to look at Trump's antics with regard
to Jerome Powell and see anything other than an assault
on central bank independence. And frankly, if I was in
the FED, I'd be hopping mad because they've just pulled
off the soft landing. Admittedly they haven't, you know, they
haven't got inflation under control in a way that they
(17:24):
might like, but they did a pretty good job with
soft landing. And then along comes so called Liberation Day
in all these other announcements that are really the sending
minds racing as to what the future of US economic
data is. But I can see your point. The dollar
is the dollar. It is doing well now, it will continue,
but at some point something's going to happen.
Speaker 3 (17:43):
One thing I do want to ask you and is
still happening now, and it's third years of war between
Russia and Ukraine. Ukraine's saying that Russia fired a record
five hundred and thirty seven missiles and drones in massive
overnight attacks. It keeps going on, and I always get
worried a little bit ed, you know, as we kind
of run from the shiny new old thing to the
(18:05):
other shiny new old thing. And we kind of are
doing that a lot, especially I know in terms of
our coverage. Sometimes it's domestic new termes, it's geopolitics, trade
terrors top of mind for you as we continue to
see this war unwined, and it does feel like the
world is growing a bit weary in terms of supporting it.
Speaker 7 (18:25):
Yes, this war was Putin's choice. The fact that there
is a war in Ukraine was Putin's choice. The fact
that the war continues is not his choice. It's the
selection of other countries. It's been the selection of Iran
that helped him build his own domestic drone program. It's
been the selection of China and North Korea, who have
respectively helped him with material and now men and I'm
(18:48):
afraid to say that it's also the selection of the
United States and Europe because we were in a position
earlier in this war to take a different strategic approach,
to provide long range weapons, for example, to Ukraine, perhaps
even just send peacekeepers. I know I'll get some emails
for having said that on your show, but it's an
international agreement to let this thing continue and to let
(19:10):
Ukraine bleed out. And I, for the life of me,
don't understand why A Biden accepted the nuclear threats and
framing of Putin and the President Trump doesn't seem to
want to end it the way he could.
Speaker 3 (19:21):
We never have enough time. Hey, great to check in
with you. Ed Price, former British Trade official, non resident
Senior Fellow at NYU, joining us on this Monday book.
Speaker 2 (19:30):
This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 3 (19:48):
I just want to mention shares of HPE healle the
Packard Enterprise rallying in fact top performer the S and
P five hundred, followed by Juniper, the second best stock
in the S and P five hundred. This on news
at the Justice departm settled its lawsuit challenging Hulett Packard
Enterprises thirteen billion dollar takeover of Juniper, less than two
weeks before our trial was set to start. The deal
requires the combined company to sell HPEES instant on wireless
(20:12):
networking business, and auction off a license to Juniper's competing
missed business. So just wanted to lay that out. We're
watching that. There is a lot overall that going on
at HPE, including like many companies, I should say, in
the tech space, it also includes a focus on supporting
the big build out that is artificial intelligence. So let's
get into that with our next guest with us as
(20:32):
Trich Trish dam Kroger. She is chief Product Officer, Senior
vice president and general manager of High Performance Computing and
AI over at HPE. She joins us from Portland, Oregon. Trisch,
by the way, former Deputy Associate Director of Computations at
the Used Department of Energies Lawrence Livermore National Layer Laboratory.
She led a group of more than one thousand engineers
and scientists focusing on supercomputing efforts. Trish, good to have
(20:57):
you here. A lot to get to. I want to
ask you, though, pure anything you can share with us
in our audience, our Bloomberg audience about the news today
about the Justice Department lawsuit being settled. The stock is
up in a big way, just big broad macro anything
we should know.
Speaker 8 (21:16):
I just We're happy and I'm sure more will be
coming out.
Speaker 3 (21:20):
Oh, okay, to be continued, all right, look forward to
that let's talk about your world and what's going on
in AI. First of all, set the picture in terms
of what you guys are seeing and your understanding of
what's going on in certainly kind of the supercomputing LLM world.
How much the AI demand and ramp up is. How
would you describe it today? How has it changed in
(21:42):
the last few months? Is it more, is it less?
Is it the same? Give us some kind of context.
Speaker 8 (21:48):
Yeah, So I think over the last two years we've
seen this huge growth and interest in AI, especially the
large language model builders and we all know who those are,
you know, and topics, the open AI, the grocks of
so there, we've definitely been seeing that. I would say
that I wouldn't say that we've had a market increase
(22:12):
over loss. It's been kind of a very steady growth
rate of you know, anywhere from depending upon the segment,
of forty percent down to twenty percent. So lovely growth
for this market. People building up the infrastructure.
Speaker 5 (22:29):
But interesting, So you don't see massive are you saying
you don't see growth in adoption of these platforms? Do
you not see your colleagues using them like exponentially more
for work?
Speaker 8 (22:42):
So I definitely see that yes, I think that the
enterprise market is still trying out a lot of this,
but on average, they're saying about five hours per week.
People are using them for the repetitive task. I mean,
I definitely use it for help with email and transcript
and so a lot of those repetitive things. I still
(23:03):
think there's some killer apps that will be coming along
that will get more widely adopted. What I see the
main spend right now is the Tier one and Neo
clouds that are spinning to develop the models.
Speaker 3 (23:19):
So does that mean okay, and forgive me, I'm going
to bunce around a little bit. But Salesforce CEO Mark
Benioff talk to our own Emily Chang for one of
the episodes of the Circuit and he said that AI
is doing thirty percent to fifty percent of the work
at Salesforce, and just talked about how much work is
being done. I feel like there's momentum around it. Do
(23:41):
you think it's not going to be as dramatic in
terms of the impact on workers in the workforce?
Speaker 8 (23:46):
You know, it's that's a great conversation and I've had
it with many different segments when we talk about this.
I do think it's going to impact certain areas more
and more, right those you know, even as my daughter
who's a software developer, right, is she going to be
out of a job. For those entry level we're still
(24:09):
I mean, AI is now helping her code, not replacing her.
And will it come to that maybe and you know,
maybe five years or something, but we're still just it's
definitely an aid and not a replacement for a lot
of the work that we're seeing. I do think more
(24:29):
of the manual labor. AI will definitely start replacing that
and is replacing that.
Speaker 5 (24:36):
But in terms of your job, you're in charge of
high performance computing effectively. And I guess the idea here
is that HPE has a supercomputer or some sort of
computing system that is more efficient than others. And you know,
because as Carol says, we talk about the energy usage
(24:58):
of this all the time.
Speaker 6 (25:00):
Are like, wow, you know, one.
Speaker 5 (25:01):
Server uses as much energy as Atlanta. You're working to
try and cut the energy needs by making your systems
more efficient, right, right, So.
Speaker 8 (25:15):
Let's just go back. HPE acquired Gray over five years ago,
and Cray is the leader in supercomputing, so we have
the top three fastest supercomputers in the world. El Capitan
is an example at Lawrence Suburban National Lab where I
came from. So these are great examples of very dense
(25:38):
parallel compute. It just turns out that AI needs the
same exact compute. Put us in a really good place
because we've been doing this for fifty years, and we've
been doing liquid cooling for fifty years and have a
ton of IP in this space and truly the experts
in the world. So we have taken that expertise and
(26:01):
we are helping it to accelerate the infrastructure build out
of our customers, getting them to where with our one
hundred percent funlysts direct liquid cooling that means everything's cool,
not just the GPUs and CPUs, but the switch, is
the memory, every component is cool. That reduces the energy
(26:23):
needs by over ninety percent. So that's a huge win
for As you talk about the increase need of power,
we're talking gigawat data centers, not megawatts, and what we
can do to help our customers reduce their power built.
Speaker 3 (26:41):
And in terms of development and constantly looking to create
products that make this much much more sustainable. I'm assuming
you guys are seeing that it'll even be better, I
don't know, in the next year, two years, Like talk
to us about that kind of evolutionary process, because it
does kind of blow my mind that I feel like
the stories when from AI companies and chat you know,
(27:03):
touchipt and so on and so forth, to all of
a sudden, all the power demands as Matt mentioned too,
and it's gone to Okay, So how do we make
it happen? I mean, Alpha Metz Google agreed to purchase
two hundred megawats of power from Commonwealth Fusion Systems Plan
first commercial Plan, which is expected to begin delivering electricity
to the grid in the early twenty thirties. I mean,
these guys are thinking not about today, next week, next month,
(27:28):
but what power they're going to need, you know, five
ten years from now.
Speaker 8 (27:34):
And you know, I was at Davos a year and
a half ago and I came home, I'm like, Babe,
we've got to invest in small nuclear reactors because I mean,
it was so clear that that was going to be
where everything needed to go. But when we look at that,
we're also bringing in our expertise, so new technology to
(27:54):
kind of help. So one of the things is just
power management. So through software turning things off when you
don't need them, you know, just basic management monitoring is
going to be core and what is needed. The other
thing is we have are working with different companies to
look at heat reuse, so taking that the hot water
(28:16):
that comes out of your supercomputing and using it to
heat buildings. We do this with a number of our customers.
We're also doing some.
Speaker 5 (28:25):
That is cool either that's very cool, so you basically
use the energy. Yeah, after you've cooled the system, you
use the energy that's essentially left over to achieve some
other tasks like hitting the building.
Speaker 8 (28:40):
Right. That's happening up in louis and Finland. We're working
with a company in Quebec and they're they're growing tomatoes
in the greenhouse with that energy. So this is I
think going to be a great opportunity to not you know,
just maybe waste that energy. We're also looking we're working
(29:01):
with Nrail, a Department of Energy lab to do R
and D of what more can we do. So we
have some strategic programs and then a lot of our
customers are also using the supercomputers or AI machines to
look at future. We work with this small startup in
(29:25):
the US that's looking at how to use AI to
make to get small nuclear reactors or nuclear actors to
the market faster by decreasing the needs of the regulatory
not the needs, but how to get through that system faster.
Or some of my favorite start stories are from the supercomputers,
where there's a National Agnition facility at Lawrence Livermore National
(29:49):
Labs where they've used AI to come up with the
design for the pellet for fusion energy, which could be
a holy grail of energy.
Speaker 3 (30:00):
For got a long way off still.
Speaker 8 (30:03):
Yeah, you know, I mean you talked to different people,
but yeah, that one's going to be longer, but definitely
I think the small nuclear actors, micro nuclear reactors are closer. Yeah,
and then there's you know, different different compute whether you
talk about quantum computing and those kind of things that
I also think are a little bit further out. But
(30:24):
maybe in between that, fusion and the nuclear's cool.
Speaker 6 (30:27):
Stuff, very cool stuff.
Speaker 5 (30:29):
I'm actually what positively surprised you said when Carol told me.
Speaker 6 (30:34):
She's like, we're going to talk about the energy. You
need to.
Speaker 5 (30:36):
Say, I know, but this is really fascinating stuff.
Speaker 6 (30:41):
I'm so glad we had you on my pleasure.
Speaker 8 (30:44):
I love talking about this.
Speaker 3 (30:45):
Yeah, we can talk. We can tell come back soon.
I really appreciate it. Okay, Trisha dan Kroger, she is
chief Product Offer so senior vice president, General manager of
High Performance Computing at AI of HPE.
Speaker 6 (30:57):
That's serious stuff, solid German name too.
Speaker 1 (31:00):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five ys during
this listen on Applecarplay and Android Otto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 3 (31:15):
All right, so called big and beautiful, but what we
do know is that it is indeed a massive tax
and spending package, a lynchpin of President Trump's campaign promises.
It's making its way through the congressional process amid Republican
internal fighting and Democrats launching attacks to exploit the divisions.
Do you want to point out that last night Republican
Tom Tillis he warned Republicans were at risk of a
(31:37):
backlash by failing to keep President Trump's healthcare promises. The
Congressional Budget Office estimates that eleven point eight million people
could lose health coverage over the next decade as a
result of the bill. Here's Senator Tillis.
Speaker 9 (31:48):
I'm telling the President that you have been misinformed.
Speaker 6 (31:54):
You supporting the Senate.
Speaker 9 (31:55):
Mark will hurt people who are eligible and qualified for MEDICAI.
We're gonna make sure that we fulfill the promise and
then we can feel I can feel good about a
bill that I'm willing to vote for, but until that time,
I will be withholding my vote.
Speaker 3 (32:13):
All right, little heated there that of course North Carolina
Senator Tom Tillis last night on the Senate floor. Whoever
said governing was easy? Let's get more this process. What's
next for President Trump's marque piece of legislation joining US
As Bloomberg News congressional reporter Eric Walston, he's up there
at the US Capitol in DC. All right, Eric, where
are we in this process that's already been a bit
(32:34):
long in the tooth.
Speaker 10 (32:35):
Well since nine thirty am. Democrats have been throwing amendments
at this bill to try to highlight the divisions among Republicans.
None of the amendments are succeeding, and nor are they
likely to, but it will make Majority Leader John Thune's
job of wrangling what are really eight key holdouts for
the bill even harder. We have Susan Collins and Lisa Murkowski,
(32:56):
sort of the moderate wing of the party, who were
concerned about the cutst to medic had food stamps and
renewal energy. And we have another group Rick Scott, Ron Johnson,
Cynthi Alumus, and Mike Lee who are conservatives and want
much deeper cuts to medicaid. They have an amendment that
would potentially remove twenty million people, and they have another
three hundred and fifty billion dollars in order to cut
(33:17):
the federal match for Medicaid. That's amendment is going to
be brought and as an attempt by leadership to get
them on board. It's not clear what would happen if
that does fail, if the likes of Susan Collins, Murkowski
and the Democrats bring it down. So Thune has this
work cut out for us. We're expecting this bill to
go late into tonight before it can pass, and then
there's an open question of whether it can pass the House.
(33:38):
We know Speaker Mike Johnson's been meeting with President Trump.
There are people on the right and left of the
GOP in the House that are worried about the Senate bill,
who could very well see what I've been calling a
hot tack summer of the bill bouncing back and forth
between the chambers throughout July.
Speaker 5 (33:53):
I just don't understand how this gets through it all,
to be honest, Eric, I mean, everybody seems so sure that,
even though people have issues on both sides, it's going
to pass.
Speaker 6 (34:06):
But you know, on the.
Speaker 5 (34:07):
Salt Caucus, how could they capitulate and still expect to
win anything ever again in New York, New Jersey or California.
And then in terms of deficit hawks, I mean, Scott
Bessen was on Bloomberg Television this morning saying he's a Hawk,
but they're going to have to raise the deficit ceiling dramatically.
Speaker 7 (34:28):
Yeah.
Speaker 10 (34:28):
Well, two issues there. The Sawcaucus mostly has capitulated already
except for Nick Loloda. The rest of the Salcax is
on board with this deal. It's a forty thousand dollars
cap for five years and instead of permanently, and it
did basically allows or sort of bless a work around
by some path through businesses in order to claim unlimited salt.
That's the deal right now. Nick lo Looda is dug
(34:49):
in as a no vote and that really matters because
of the slim majority in the House. We already have
Thomas Massey, a libertarian from Kentucky who's a dedicated no
Nick Loloda. Add to that, that really makes the math
very hard for Mike Johnson, the Speaker, who could probably
only lose three or four people depending on dem absences.
As far as the deficit hawk issue is concerned, we
saw a very interesting development here in the Senate where
(35:10):
they change the rules essentially to allow a new form
of accounting that would count current policy as the baseline
for measuring bills. Basically, they're changing the measuring stick midway
and calling the extension of the Trump tax cuts free,
costing zero dollars instead of the three point eight trillion
dollars it would cost well at the same time, including
a bunch of temporary tax breaks like the salt deduction,
(35:32):
like tax, no tax on tips or overtime. This is
basically creative accounting, and it seems to be winning over
at least the votes of most of the deficit hawks
in the park.
Speaker 5 (35:41):
But it doesn't change the need to raise the debt ceiling, right,
because what you're talking about is an accounting gimmick. At
the end, of the day. We're going to have to
spend more money.
Speaker 10 (35:51):
Right, Yes, the destitally has to be raised. A lot
of that's money that's already been appropriated, not directly caused
by this bill. It's going to be raised by five
trillion dollars under the Senate bill, and something has to
be done to avoid a US payment to fault as
soon as August. You know, there are amendments that are
pending from Mike Lee and others that would raise it
as little as two trillion or even five hundred billion.
(36:12):
I don't think that's likely to pass because basically Republicans
and Donald Trump have concluded they need to raise this
debt ceiling to get them through the midterm election, to
not deal with it again right before voters have to
go to the polls.
Speaker 3 (36:23):
All right, So we're going to dig into this a
little bit more in just a moment, but I want
to just put it out to you, Eric. I mean,
it's so easy as we cover something like this to
get caught up in the process, the congressional process and
the fighting and that kind of stuff that's going on
to get this massive legislation passed. Having said that, you
know who wins who loses rich poor, big companies versus small,
(36:44):
North versus six Blue versus Red. I mean, does America
come out better on the other side of this, It
doesn't sound so if we're going to have a much
bigger deficit.
Speaker 10 (36:53):
Well, I can point to the Yale budget lab which
is very credible. It says it's basically a very regressive bill.
You're seeing the in net income of poor people, people
who depend on Medicaid and food stamps going down, well,
the net income of the very rich going up. This
is a key talking point for Democrats and they're hoping
to make political gold of it in the next election.
Republicans on the other hand, and say that, look, these
(37:15):
most of the Trump's tax cuts are going to expire if
you don't do anything, if there's just gridlock, you see
a four trillion dollar tax increase that would hit the economy,
which is already you know, experiencing turbulence from Trump's tariffs, etc.
So there's an argument to be be there on either side.
Speaker 3 (37:30):
All right, we're gonna leave it on that note. Listen,
we so appreciate it, of course. Bloomberg News congressional reporter
Eric Wilson with us from the US Capital in DC.
Speaker 2 (37:38):
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(37:59):
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Speaker 5 (38:08):
MHM
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Speaker 2 (00:08):
This is Bloomberg Business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business finance
and tech news as it happens. The Bloomberg Business Weekdaily
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Speaker 3 (00:32):
What is I think one of the most read stories
on the Bloomberg right now or second or so, and
that has to do with Apple, which rallied on news
that Apple is considering using artificial intelligence technology from Anthropic
or open AI to basically power a new version of series.
So it's a big deal because it means maybe possibly
(00:53):
sidelining its own in house models. The story a Bloomberg exclusive.
It's buyer own. Mark. He's, of course, Bloomberg Newsmaging editor
for Global Consumer Technology. I'm convinced he never sleeps because
he's constantly putting out exclusives and breaking news stories. All right, Mark,
take it away. What's up at Apple?
Speaker 4 (01:14):
So Apple, right, their strategy for artificial intelligence that they
unveiled last year was twofold in house models that run
on the phone and in house models that run on
the cloud. Right, that competes with chat GPT, with Claude,
with Gemini, with the market, and Apple has figured out
pretty quickly they're not very good, right. So Apple is
(01:35):
now evaluating for the first time using a third party model,
either Claude from Anthropic or chat GPT from OpenAI to
power Siri. Obviously, as we all know and experience in
our day to day lives, Siri is not very good.
And Apple had been working on an overhaul of Siri
using its own large language models for next spring. Now
(01:55):
it's exploring maybe using Claude or chat GPT instead in
order to get new features the door more quickly and
make the voice assistant more appealing. So it is a
pretty big development. And you see that Apple stocks spiked
on the news because if they do indeed go down
this road, which by the way, is not for certain
by any means, it's going to me and Apple is
going to be a real AI player for the first time.
Speaker 5 (02:17):
How much time do they have, mark I mean, I
guess I feel like any company that wants to compete
has to have a successful AI offering. On the other hand,
this is a company that already has us kind of
hook line and sinker. Right, we have own me and
(02:38):
my family exactly, and me and my family as well. Right,
I can't imagine living without the genius of their products,
and I really feel like an emotional connection to Apple.
On the other hand, they have utterly failed in this sense.
Carol reminded me that Siri is now fourteen years old,
and she is more incapable than my four year old
(03:00):
m You.
Speaker 4 (03:01):
Guys are very focused on your current setup. You're focused
on the current generation of consumers. You're concerned about your families. Right,
what Apple's concern is and what my concern is and
the market's concern is the next generation of consumer. They're
going to lose a whole bunch of people that are
new to the smartphones. There are people born every day,
There are people who buy their first smartphone every day.
(03:23):
There are families getting their first smartphones every day, right,
and those people have a decision make to make about
which ecosystem they want to enter. And right now, all
the talk is about how Apple's AI is completely behind
the times, and so that decision, right is a lot
easier when you realize that the Android ecosystem is a
(03:43):
big step ahead and what is perceived as the future
of technology.
Speaker 3 (03:47):
What does they say about Apple as a company like
this would be a real big shift right in strategy
or are you help me out here?
Speaker 6 (03:53):
Right?
Speaker 4 (03:54):
Apple likes to go in house for core technologies. Like
I've said many times before, AI is as cores technology
for the future of hardware, as the touchscreen has been
for technology over the past twenty years.
Speaker 7 (04:05):
Right.
Speaker 4 (04:06):
Apple owns the technology and the patents and everything behind
touchscreen and multi touch, those gestures that we all take
for granted today. With AI, Apple has tried to do
something similar, build those models in house and own the
core tech like they own the touch screen, like they
own some of the camera tech, like they own with
their processors and all their products. Now, but what are
you supposed to do If it's not very good. You
(04:26):
have to find an alternative. You have to go outside
and use a partner. They tried to go in house,
it didn't work. They're going to pull back, in my view,
go external, use external partner, and maybe one day do
a brain transplant. When you're lms that you're building internally
are good enough for primetime, but something's got to give. Interestingly,
they are working concurrently on a new serie LM project
(04:49):
that uses in house models, and so there's still many
debates internally and options being poured over to decide if
they're going to go with anthropic, Open AI or Apple
Foundation models for this REVAM coming next spring.
Speaker 5 (05:01):
By the way, are there AI companies that are in
the lead, Like is open ai doing better work at
least in terms of the products that we can access
now than Anthropic, than Google, than Facebook.
Speaker 4 (05:17):
You talk to a bunch of people in the industry,
you're going to get different opinions. I would say the
top two are Entropic or open Ai, Google and third
and if you want to talk about the big companies
metaphor and rounded out with Apple. If you're going just
for the top five biggest companies that have some meaningful
share of the space, you talk to people at Apple, though,
(05:38):
the word on the street there is it's all about Nthropic,
and so Anthropic is really the focus of Apple for
this new generation of Siri. They're using Ententropic to power
a lot of their internal AI technology. But again, as
I say in my story, Nthropic wants billions of dollars
at a scale that doubles annually for series to be
powered by Claude, And so Apple is now taking a
(05:59):
close look at open as well, which has historically given
Apple extraordinarily favorable terms.
Speaker 3 (06:04):
It's not a desperation or smart move in terms of
what Apple's doing.
Speaker 4 (06:08):
It's a smart move in response to desperation.
Speaker 5 (06:12):
Interesting also that they could end up working with open
ai at the same time as open ai works with
Johnny Ive to build what may be like an iPhone killer,
right mark, You've.
Speaker 4 (06:26):
Seen Apple go down this road before, like the company
that Apple detests more than any other. Like if you
were to take Apple executives in a room and say
who do you hate the most in the whole world,
they would say Qualcom. When the five G transition happened
five years ago, Apple was an inflection point like they
are today with AI. Are we going to partner with
(06:48):
Qualcom who we detest, or are we going to miss
out on five G and risk really upsetting customers and
losing market share? And so they bit their tongue partner
with Qualcom, and behind the scenes they've been working on
a replacement for Qualcom and they've just started rolling that out.
So you'll see something's happen similar with AI believe.
Speaker 3 (07:06):
Pretty wild stuff. All right, Thank you as always, Mark,
We really appreciate it. Mark German, of course, joining us
here with the latest on Apple. As we mentioned, Mark
also reminding us the stock was up about two percent
here at the close on his reporting, the stock is
down eighteen percent year to date. But read all about it,
all the details. Mark again a Bloomberg exclusive on Apple.
(07:29):
Joining us. Mark is Bien, Managing editor for Global Consumer Technology.
Joining us out there from the West Coast.
Speaker 1 (07:36):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five e's. During
that listen on Applecarplay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 3 (07:51):
Can you believe it was about a week ago that
we were focusing on the Middle East in the US
strek on our rout list?
Speaker 6 (07:56):
Yeah, it was tretty intense.
Speaker 5 (07:58):
I actually heard Tim go through the whole timeline on Friday,
which I thought was a fascinating replay because we're right
back to where we started, right. Oil shot up to
eighty one dollars a barrel on Sunday night, and we're
back at like sixty seven right now.
Speaker 3 (08:10):
Yeah, I'm just like kind of amazing the trip that
we've already taken and here we are today talking a
lot about what's going on in Washington. We also had
the NATO meeting of leaders last week. The Middle East, tariffs,
military spending, and the Russia Ukraine wore were certainly some
of the things that came up there. The war between
Russian and Ukraine it is now in its third year,
Ukraine saying Russia fired a record five hundred and thirty
(08:32):
seven missiles and drones and a massive attack overnight. We
also had a headline just a little while ago a
story crossing the Bloomberg that President TRUMPI was signed an
executive order today terminating the US sanctions program against Syria.
That is, according to White House spokeswoman Caroline Levitt, so
a lot going on geopolitically. We wanted to broaden out
a little bit today. So delighted to have back with US.
(08:54):
Ed Price, former British trade official now non resident Senior
Fellow at NYU, New York University. He has advised members
of the European also British Parliament's a former British trade official,
and he writes often about politics, economic policy, and more.
He's with us remotely from upstate New York. Good to
have you here with madd and me on this Monday.
I want to jump right to there's so much going on,
(09:16):
but you write in barns, President Barons, excuse me. President
Donald Trump's efforts to reshape the nation have roots in
Richard Nixon's unfinished presidency.
Speaker 7 (09:26):
How so so well, high end, happy Monday. It's because
of two dates, nineteen seventy one and nineteen seventy four.
Nineteen seventy one was, of course the Nixon Shock, which
was effectively the transition from a dollar that made reference
to gold to a dollar that didn't, which is fiat currency.
And nineteen seventy four is when Richard Nixon's presidential career
(09:49):
came to an end. Of course, in that year he
resigned after Watergate. And so what I mean by that
is that the two underlying currents behind today's news would
intend at home are effectively a dollar story and a
fiat dollar story. And on the other hand, the centralization
of presidential authority and power that Nixon attempted and failed at,
(10:12):
but that it seems Trump so far has had a
better run at.
Speaker 5 (10:15):
Right, Nixon said, if the president does it, that means
it's not illegal. And Trump has certainly said that in
various ways over the past eight years. What about Nixon's resignation,
I mean, it seems that Trump has gone the other way, right,
Nixon was caught doing something illegal and kicked and screamed
(10:39):
and left, and Trump has been sort of kicking and
screaming and turning into something that was okay if you look,
for example, at January sixth.
Speaker 7 (10:47):
Yes, January sixth was egregious, and yet it stands. And
I think that that hints at how if Watergate happens today,
nobody would blink, right, I mean, somebody busting a safe
open in line about it simply wouldn't make the news.
Speaker 6 (11:02):
Not even I mean they would celebrate it.
Speaker 7 (11:05):
Right, Well, they probably would, depending on their political views.
I would caution everybody, including myself, because I'm so guilty
of this of always sort of looking to Trump as
the independent variable in all cases.
Speaker 3 (11:18):
Well, I want to jump in for a moment because
I was just thinking at as you were talking what
you were saying, is it more about the US public
has changed, and that they wouldn't bark at a Watergate
today versus what they did during the Nixon administration. Does
it say more about the US citizens at large or
(11:38):
many of them, versus an individual president or individual administration.
Speaker 7 (11:44):
Well, Ultimately, American politics are a subfunction of the American people,
as you rightly point out, and every couple of years
we have a major election and the views of the
people are thereafter represented in our government via those elections.
So yes, I would say that the American people have
moved from, you know, for want of a better word,
(12:04):
a puritanical view of the world to something a little
less puritanical in say, the last twenty or so years.
But it's also a function of the Supreme Court because,
as Matt just mentioned, when you know, Trump says that
his own version of if it's not if the president
does it, it's not illegal, the Supreme Court has effectively
said that for him too, when it rules that anything
(12:25):
within his official remit is not subject to prosecution. So
there's a there's a shift I think in the presidency,
the people, and the Supreme Court.
Speaker 5 (12:33):
You know, I wonder how you feel about the in
a sense, the state and local tax deduction debate, as
as an outsider looking at the balance that the US
founders intended between state and federal power. My reading of this,
because admittedly I don't like paying this much money, is
that it's federal overreach. Undo federal overreach to cap the
(12:57):
state and local tax deduction because they're in pining on states'
rights to sort of taxation autonomy. But no one else
seems to talk about this at all. Do you see
the power shifting to Washington and away from state capitals?
Speaker 7 (13:15):
I do, as a broad theme, And I know you
enjoy paying taxes, Matt, so I'm sorry to hit that's
I'm sorry to hit that an ongoing problem for you. Yes,
there is a centralization of power in the American body politic.
That is one theme that I think Nixon introduced perhaps
and that people like Dick Cheney tried to theorize with
(13:36):
the with you know, his vice presidency and the unitary executive.
But there's another theme pushing back at that, which is,
as you just mentioned, states rights, liberty, individual rights, and
so on. And these two strands are bumping up against
each other constantly in American history, but it seems that
in twenty twenty five they're bumping into each other with
ever more friction.
Speaker 3 (13:59):
You know what I wonder too. I mean, the US
is by far still the largest economy in the world,
and I know that is the current situation. Those mantles
can change, but it is still significant, even you know,
significantly still above the second largest, which is China. So
I understand that its prospects could be dimming based on
the actions of the current administration, at least some might
(14:20):
say that. But I do wonder because of that and
still having the most liquid markets, or you know, you
think about the treasury market's still very liquid, and I
know you've got some very significant thoughts about the diminishing
of the dollar. And we saw the dollar eyeing its
longest monthly slide since twenty seventeen as we wrap up
the month of June. I mean, does that, just by
(14:42):
size alone, ed though, continue to make the United States
a pretty dominant presence in the global economy, and not
just economically but politically.
Speaker 7 (14:52):
Well, yes, and no, I mean it's not just a
monthly slide. The dollar has had its weakest start to
a year since nineteen seventy three, losing over ten percent
that in the ft this morning, and in seventy three,
I think it was fifteen percent so there are signs
in the data and anecdotal reports of a weakening demand
for the dollar. But that's a double edged sword, because,
(15:12):
as you rightly say, the US is present in the world,
it is primarily present through the dollar. That was Nixon's decision.
He was faced with the choice between continuing to supply
the dollar as accords global demand and that required a
feac currency or not, and pulling back into sort of
a dollar supply that would be more appropriate for the
US economy. He chose the former. But that's good until
(15:34):
it's bad, right, And we don't know the horizon at
which investors, other countries, sovereigns, pension funds, central banks will
really take a look at the dollar itself and say
we don't buy it as a store of value anymore
because it's over supplied. So that over supply does keep
the global economy ticking, It keeps Uncle Sam's presence all
over the world. But there is a day not too
(15:55):
far in the future where inevitably a preponderance of people
will really scratch the head about whether the dollar is
actually worth what it says it is.
Speaker 5 (16:03):
I will say that if you back out and look
at the dollar as measured by either the DXY or
the Bloomberg Dollar Index.
Speaker 6 (16:09):
Over the last say, twenty five years.
Speaker 5 (16:11):
We're still well above the average and at relatively high levels.
But I see this in treasuries as well. You know,
as FED Federal Reserve independence is threatened. And maybe Donald
Trump can't do anything to Jerome Powell, but Paul Tudor
Jones told us last week that he expects Donald Trump
to put the yesest yes man in charge of the
(16:34):
Fed as soon as he can. In twenty twenty six.
The market doesn't care. They're still buying treasuries and the
tenure yield is back down to four and a quarter.
Speaker 7 (16:43):
Well, I guess it's like a dualism, isn't it, Because
while the good times are rolling, the good times are rolling,
this is Hyman Minsky. But as they're rolling, the bad
times are storing up. And if people still look at
the dollar and say everything's tikety boo, will keep buying it.
It's still the best game in town, then day it
is because it's reflexive and that's what they're doing, and
(17:03):
they're creating their own reality. But I mean, we would
be very silly to look at Trump's antics with regard
to Jerome Powell and see anything other than an assault
on central bank independence. And frankly, if I was in
the FED, I'd be hopping mad because they've just pulled
off the soft landing. Admittedly they haven't, you know, they
haven't got inflation under control in a way that they
(17:24):
might like, but they did a pretty good job with
soft landing. And then along comes so called Liberation Day
in all these other announcements that are really the sending
minds racing as to what the future of US economic
data is. But I can see your point. The dollar
is the dollar. It is doing well now, it will continue,
but at some point something's going to happen.
Speaker 3 (17:43):
One thing I do want to ask you and is
still happening now, and it's third years of war between
Russia and Ukraine. Ukraine's saying that Russia fired a record
five hundred and thirty seven missiles and drones in massive
overnight attacks. It keeps going on, and I always get
worried a little bit ed, you know, as we kind
of run from the shiny new old thing to the
(18:05):
other shiny new old thing. And we kind of are
doing that a lot, especially I know in terms of
our coverage. Sometimes it's domestic new termes, it's geopolitics, trade
terrors top of mind for you as we continue to
see this war unwined, and it does feel like the
world is growing a bit weary in terms of supporting it.
Speaker 7 (18:25):
Yes, this war was Putin's choice. The fact that there
is a war in Ukraine was Putin's choice. The fact
that the war continues is not his choice. It's the
selection of other countries. It's been the selection of Iran
that helped him build his own domestic drone program. It's
been the selection of China and North Korea, who have
respectively helped him with material and now men and I'm
(18:48):
afraid to say that it's also the selection of the
United States and Europe because we were in a position
earlier in this war to take a different strategic approach,
to provide long range weapons, for example, to Ukraine, perhaps
even just send peacekeepers. I know I'll get some emails
for having said that on your show, but it's an
international agreement to let this thing continue and to let
(19:10):
Ukraine bleed out. And I, for the life of me,
don't understand why A Biden accepted the nuclear threats and
framing of Putin and the President Trump doesn't seem to
want to end it the way he could.
Speaker 3 (19:21):
We never have enough time. Hey, great to check in
with you. Ed Price, former British Trade official, non resident
Senior Fellow at NYU, joining us on this Monday book.
Speaker 2 (19:30):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Apple car
Play and Android Auto with the Bloomberg Business App. You
can also listen live on Amazon Alexa from our flagship
New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 3 (19:48):
I just want to mention shares of HPE healle the
Packard Enterprise rallying in fact top performer the S and
P five hundred, followed by Juniper, the second best stock
in the S and P five hundred. This on news
at the Justice departm settled its lawsuit challenging Hulett Packard
Enterprises thirteen billion dollar takeover of Juniper, less than two
weeks before our trial was set to start. The deal
requires the combined company to sell HPEES instant on wireless
(20:12):
networking business, and auction off a license to Juniper's competing
missed business. So just wanted to lay that out. We're
watching that. There is a lot overall that going on
at HPE, including like many companies, I should say, in
the tech space, it also includes a focus on supporting
the big build out that is artificial intelligence. So let's
get into that with our next guest with us as
(20:32):
Trich Trish dam Kroger. She is chief Product Officer, Senior
vice president and general manager of High Performance Computing and
AI over at HPE. She joins us from Portland, Oregon. Trisch,
by the way, former Deputy Associate Director of Computations at
the Used Department of Energies Lawrence Livermore National Layer Laboratory.
She led a group of more than one thousand engineers
and scientists focusing on supercomputing efforts. Trish, good to have
(20:57):
you here. A lot to get to. I want to
ask you, though, pure anything you can share with us
in our audience, our Bloomberg audience about the news today
about the Justice Department lawsuit being settled. The stock is
up in a big way, just big broad macro anything
we should know.
Speaker 8 (21:16):
I just We're happy and I'm sure more will be
coming out.
Speaker 3 (21:20):
Oh, okay, to be continued, all right, look forward to
that let's talk about your world and what's going on
in AI. First of all, set the picture in terms
of what you guys are seeing and your understanding of
what's going on in certainly kind of the supercomputing LLM world.
How much the AI demand and ramp up is. How
would you describe it today? How has it changed in
(21:42):
the last few months? Is it more, is it less?
Is it the same? Give us some kind of context.
Speaker 8 (21:48):
Yeah, So I think over the last two years we've
seen this huge growth and interest in AI, especially the
large language model builders and we all know who those are,
you know, and topics, the open AI, the grocks of
so there, we've definitely been seeing that. I would say
that I wouldn't say that we've had a market increase
(22:12):
over loss. It's been kind of a very steady growth
rate of you know, anywhere from depending upon the segment,
of forty percent down to twenty percent. So lovely growth
for this market. People building up the infrastructure.
Speaker 5 (22:29):
But interesting, So you don't see massive are you saying
you don't see growth in adoption of these platforms? Do
you not see your colleagues using them like exponentially more
for work?
Speaker 8 (22:42):
So I definitely see that yes, I think that the
enterprise market is still trying out a lot of this,
but on average, they're saying about five hours per week.
People are using them for the repetitive task. I mean,
I definitely use it for help with email and transcript
and so a lot of those repetitive things. I still
(23:03):
think there's some killer apps that will be coming along
that will get more widely adopted. What I see the
main spend right now is the Tier one and Neo
clouds that are spinning to develop the models.
Speaker 3 (23:19):
So does that mean okay, and forgive me, I'm going
to bunce around a little bit. But Salesforce CEO Mark
Benioff talk to our own Emily Chang for one of
the episodes of the Circuit and he said that AI
is doing thirty percent to fifty percent of the work
at Salesforce, and just talked about how much work is
being done. I feel like there's momentum around it. Do
(23:41):
you think it's not going to be as dramatic in
terms of the impact on workers in the workforce?
Speaker 8 (23:46):
You know, it's that's a great conversation and I've had
it with many different segments when we talk about this.
I do think it's going to impact certain areas more
and more, right those you know, even as my daughter
who's a software developer, right, is she going to be
out of a job. For those entry level we're still
(24:09):
I mean, AI is now helping her code, not replacing her.
And will it come to that maybe and you know,
maybe five years or something, but we're still just it's
definitely an aid and not a replacement for a lot
of the work that we're seeing. I do think more
(24:29):
of the manual labor. AI will definitely start replacing that
and is replacing that.
Speaker 5 (24:36):
But in terms of your job, you're in charge of
high performance computing effectively. And I guess the idea here
is that HPE has a supercomputer or some sort of
computing system that is more efficient than others. And you know,
because as Carol says, we talk about the energy usage
(24:58):
of this all the time.
Speaker 6 (25:00):
Are like, wow, you know, one.
Speaker 5 (25:01):
Server uses as much energy as Atlanta. You're working to
try and cut the energy needs by making your systems
more efficient, right, right, So.
Speaker 8 (25:15):
Let's just go back. HPE acquired Gray over five years ago,
and Cray is the leader in supercomputing, so we have
the top three fastest supercomputers in the world. El Capitan
is an example at Lawrence Suburban National Lab where I
came from. So these are great examples of very dense
(25:38):
parallel compute. It just turns out that AI needs the
same exact compute. Put us in a really good place
because we've been doing this for fifty years, and we've
been doing liquid cooling for fifty years and have a
ton of IP in this space and truly the experts
in the world. So we have taken that expertise and
(26:01):
we are helping it to accelerate the infrastructure build out
of our customers, getting them to where with our one
hundred percent funlysts direct liquid cooling that means everything's cool,
not just the GPUs and CPUs, but the switch, is
the memory, every component is cool. That reduces the energy
(26:23):
needs by over ninety percent. So that's a huge win
for As you talk about the increase need of power,
we're talking gigawat data centers, not megawatts, and what we
can do to help our customers reduce their power built.
Speaker 3 (26:41):
And in terms of development and constantly looking to create
products that make this much much more sustainable. I'm assuming
you guys are seeing that it'll even be better, I
don't know, in the next year, two years, Like talk
to us about that kind of evolutionary process, because it
does kind of blow my mind that I feel like
the stories when from AI companies and chat you know,
(27:03):
touchipt and so on and so forth, to all of
a sudden, all the power demands as Matt mentioned too,
and it's gone to Okay, So how do we make
it happen? I mean, Alpha Metz Google agreed to purchase
two hundred megawats of power from Commonwealth Fusion Systems Plan
first commercial Plan, which is expected to begin delivering electricity
to the grid in the early twenty thirties. I mean,
these guys are thinking not about today, next week, next month,
(27:28):
but what power they're going to need, you know, five
ten years from now.
Speaker 8 (27:34):
And you know, I was at Davos a year and
a half ago and I came home, I'm like, Babe,
we've got to invest in small nuclear reactors because I mean,
it was so clear that that was going to be
where everything needed to go. But when we look at that,
we're also bringing in our expertise, so new technology to
(27:54):
kind of help. So one of the things is just
power management. So through software turning things off when you
don't need them, you know, just basic management monitoring is
going to be core and what is needed. The other
thing is we have are working with different companies to
look at heat reuse, so taking that the hot water
(28:16):
that comes out of your supercomputing and using it to
heat buildings. We do this with a number of our customers.
We're also doing some.
Speaker 5 (28:25):
That is cool either that's very cool, so you basically
use the energy. Yeah, after you've cooled the system, you
use the energy that's essentially left over to achieve some
other tasks like hitting the building.
Speaker 8 (28:40):
Right. That's happening up in louis and Finland. We're working
with a company in Quebec and they're they're growing tomatoes
in the greenhouse with that energy. So this is I
think going to be a great opportunity to not you know,
just maybe waste that energy. We're also looking we're working
(29:01):
with Nrail, a Department of Energy lab to do R
and D of what more can we do. So we
have some strategic programs and then a lot of our
customers are also using the supercomputers or AI machines to
look at future. We work with this small startup in
(29:25):
the US that's looking at how to use AI to
make to get small nuclear reactors or nuclear actors to
the market faster by decreasing the needs of the regulatory
not the needs, but how to get through that system faster.
Or some of my favorite start stories are from the supercomputers,
where there's a National Agnition facility at Lawrence Livermore National
(29:49):
Labs where they've used AI to come up with the
design for the pellet for fusion energy, which could be
a holy grail of energy.
Speaker 3 (30:00):
For got a long way off still.
Speaker 8 (30:03):
Yeah, you know, I mean you talked to different people,
but yeah, that one's going to be longer, but definitely
I think the small nuclear actors, micro nuclear reactors are closer. Yeah,
and then there's you know, different different compute whether you
talk about quantum computing and those kind of things that
I also think are a little bit further out. But
(30:24):
maybe in between that, fusion and the nuclear's cool.
Speaker 6 (30:27):
Stuff, very cool stuff.
Speaker 5 (30:29):
I'm actually what positively surprised you said when Carol told me.
Speaker 6 (30:34):
She's like, we're going to talk about the energy. You
need to.
Speaker 5 (30:36):
Say, I know, but this is really fascinating stuff.
Speaker 6 (30:41):
I'm so glad we had you on my pleasure.
Speaker 8 (30:44):
I love talking about this.
Speaker 3 (30:45):
Yeah, we can talk. We can tell come back soon.
I really appreciate it. Okay, Trisha dan Kroger, she is
chief Product Offer so senior vice president, General manager of
High Performance Computing at AI of HPE.
Speaker 6 (30:57):
That's serious stuff, solid German name too.
Speaker 1 (31:00):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five ys during
this listen on Applecarplay and Android Otto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 3 (31:15):
All right, so called big and beautiful, but what we
do know is that it is indeed a massive tax
and spending package, a lynchpin of President Trump's campaign promises.
It's making its way through the congressional process amid Republican
internal fighting and Democrats launching attacks to exploit the divisions.
Do you want to point out that last night Republican
Tom Tillis he warned Republicans were at risk of a
(31:37):
backlash by failing to keep President Trump's healthcare promises. The
Congressional Budget Office estimates that eleven point eight million people
could lose health coverage over the next decade as a
result of the bill. Here's Senator Tillis.
Speaker 9 (31:48):
I'm telling the President that you have been misinformed.
Speaker 6 (31:54):
You supporting the Senate.
Speaker 9 (31:55):
Mark will hurt people who are eligible and qualified for MEDICAI.
We're gonna make sure that we fulfill the promise and
then we can feel I can feel good about a
bill that I'm willing to vote for, but until that time,
I will be withholding my vote.
Speaker 3 (32:13):
All right, little heated there that of course North Carolina
Senator Tom Tillis last night on the Senate floor. Whoever
said governing was easy? Let's get more this process. What's
next for President Trump's marque piece of legislation joining US
As Bloomberg News congressional reporter Eric Walston, he's up there
at the US Capitol in DC. All right, Eric, where
are we in this process that's already been a bit
(32:34):
long in the tooth.
Speaker 10 (32:35):
Well since nine thirty am. Democrats have been throwing amendments
at this bill to try to highlight the divisions among Republicans.
None of the amendments are succeeding, and nor are they
likely to, but it will make Majority Leader John Thune's
job of wrangling what are really eight key holdouts for
the bill even harder. We have Susan Collins and Lisa Murkowski,
(32:56):
sort of the moderate wing of the party, who were
concerned about the cutst to medic had food stamps and
renewal energy. And we have another group Rick Scott, Ron Johnson,
Cynthi Alumus, and Mike Lee who are conservatives and want
much deeper cuts to medicaid. They have an amendment that
would potentially remove twenty million people, and they have another
three hundred and fifty billion dollars in order to cut
(33:17):
the federal match for Medicaid. That's amendment is going to
be brought and as an attempt by leadership to get
them on board. It's not clear what would happen if
that does fail, if the likes of Susan Collins, Murkowski
and the Democrats bring it down. So Thune has this
work cut out for us. We're expecting this bill to
go late into tonight before it can pass, and then
there's an open question of whether it can pass the House.
(33:38):
We know Speaker Mike Johnson's been meeting with President Trump.
There are people on the right and left of the
GOP in the House that are worried about the Senate bill,
who could very well see what I've been calling a
hot tack summer of the bill bouncing back and forth
between the chambers throughout July.
Speaker 5 (33:53):
I just don't understand how this gets through it all,
to be honest, Eric, I mean, everybody seems so sure that,
even though people have issues on both sides, it's going
to pass.
Speaker 6 (34:06):
But you know, on the.
Speaker 5 (34:07):
Salt Caucus, how could they capitulate and still expect to
win anything ever again in New York, New Jersey or California.
And then in terms of deficit hawks, I mean, Scott
Bessen was on Bloomberg Television this morning saying he's a Hawk,
but they're going to have to raise the deficit ceiling dramatically.
Speaker 7 (34:28):
Yeah.
Speaker 10 (34:28):
Well, two issues there. The Sawcaucus mostly has capitulated already
except for Nick Loloda. The rest of the Salcax is
on board with this deal. It's a forty thousand dollars
cap for five years and instead of permanently, and it
did basically allows or sort of bless a work around
by some path through businesses in order to claim unlimited salt.
That's the deal right now. Nick lo Looda is dug
(34:49):
in as a no vote and that really matters because
of the slim majority in the House. We already have
Thomas Massey, a libertarian from Kentucky who's a dedicated no
Nick Loloda. Add to that, that really makes the math
very hard for Mike Johnson, the Speaker, who could probably
only lose three or four people depending on dem absences.
As far as the deficit hawk issue is concerned, we
saw a very interesting development here in the Senate where
(35:10):
they change the rules essentially to allow a new form
of accounting that would count current policy as the baseline
for measuring bills. Basically, they're changing the measuring stick midway
and calling the extension of the Trump tax cuts free,
costing zero dollars instead of the three point eight trillion
dollars it would cost well at the same time, including
a bunch of temporary tax breaks like the salt deduction,
(35:32):
like tax, no tax on tips or overtime. This is
basically creative accounting, and it seems to be winning over
at least the votes of most of the deficit hawks
in the park.
Speaker 5 (35:41):
But it doesn't change the need to raise the debt ceiling, right,
because what you're talking about is an accounting gimmick. At
the end, of the day. We're going to have to
spend more money.
Speaker 10 (35:51):
Right, Yes, the destitally has to be raised. A lot
of that's money that's already been appropriated, not directly caused
by this bill. It's going to be raised by five
trillion dollars under the Senate bill, and something has to
be done to avoid a US payment to fault as
soon as August. You know, there are amendments that are
pending from Mike Lee and others that would raise it
as little as two trillion or even five hundred billion.
(36:12):
I don't think that's likely to pass because basically Republicans
and Donald Trump have concluded they need to raise this
debt ceiling to get them through the midterm election, to
not deal with it again right before voters have to
go to the polls.
Speaker 3 (36:23):
All right, So we're going to dig into this a
little bit more in just a moment, but I want
to just put it out to you, Eric. I mean,
it's so easy as we cover something like this to
get caught up in the process, the congressional process and
the fighting and that kind of stuff that's going on
to get this massive legislation passed. Having said that, you
know who wins who loses rich poor, big companies versus small,
(36:44):
North versus six Blue versus Red. I mean, does America
come out better on the other side of this, It
doesn't sound so if we're going to have a much
bigger deficit.
Speaker 10 (36:53):
Well, I can point to the Yale budget lab which
is very credible. It says it's basically a very regressive bill.
You're seeing the in net income of poor people, people
who depend on Medicaid and food stamps going down, well,
the net income of the very rich going up. This
is a key talking point for Democrats and they're hoping
to make political gold of it in the next election.
Republicans on the other hand, and say that, look, these
(37:15):
most of the Trump's tax cuts are going to expire if
you don't do anything, if there's just gridlock, you see
a four trillion dollar tax increase that would hit the economy,
which is already you know, experiencing turbulence from Trump's tariffs, etc.
So there's an argument to be be there on either side.
Speaker 3 (37:30):
All right, we're gonna leave it on that note. Listen,
we so appreciate it, of course. Bloomberg News congressional reporter
Eric Wilson with us from the US Capital in DC.
Speaker 2 (37:38):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business App.
You can also watch us live every weekday on YouTube
(37:59):
and always in the Bloomberg Terminal
Speaker 5 (38:08):
MHM
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