September 18, 2025 • 39 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
President Donald Trump said US broadcast networks should face scrutiny over their licenses if they’re too critical of him, in what amounts to his furthest-reaching threat to media freedoms.
“When you have a network and you have evening shows, and all they do is hit Trump,” Trump told reporters aboard Air Force One on Thursday. “I would think maybe their license should be taken away.”
The president was defending ABC’s decision to suspend Jimmy Kimmel’s show indefinitely over the late-night host’s remarks about the death of conservative activist Charlie Kirk.
Trump’s latest comments came days after he filed a $15 billion lawsuit against the New York Times. The president and his Republican allies have long complained that America’s mainstream media is biased against conservatives. Trump has repeatedly called for CBS, ABC and NBC to get rid of late night comedy hosts who are frequently critical of his administration.
On Wednesday, Walt Disney Co.’s ABC network said it is taking Jimmy Kimmel Live! off the air indefinitely following a backlash from conservatives over the late-night host’s comments about Kirk. Earlier Thursday, Trump backed ABC’s decision to remove Kimmel amid pressure from network affiliates who had said they were pulling the show.
Today's show features:
- Katie Fallow, Deputy Litigation Director for the Knight First Amendment Institute at Columbia University, on Walt Disney’s ABC network taking Jimmy Kimmel Live! off the air indefinitely following the comedian’s comments about Charlie Kirk
- Bloomberg Tech Co-Host Ed Ludlow on Nvidia’s $5 billion investment in Intel
- Chris Miller, Professor of International History at The Fletcher School at Tufts University, on the geopolitical forces shaping the global ecosystem for semiconductors
- Aaron Kennon, CEO of Clear Harbor Asset Management, on the outlook for the market and US monetary policy
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business
Weekdaily 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
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
Now onto One of the most read stories on the
Bloomberg Terminal, Jimmy Kimmel is off air in definitely amid
a backlash to remarks the late night hosts made about
the killing of Republican activist Charlie Kirk. President Trump weigh
in on this. He had this to say about the
late night host earlier from the UK.
Speaker 3 (00:50):
Well, Jimmy Kimmel was fired because he had been ratings
more than anything else, and he said a horrible thing
about a great gentleman known as Charlie Kirk. And Jimmy
Kimmel is not a talent person. He had very bad
ratings and they should have fired him a long time ago.
So you know, you can call that free speech or not.
He was fired for lack of talent.
Speaker 2 (01:08):
So that was the President earlier today later Carol on
his way back. He's still on his way back from
the UK. He made comments on Air Force one that
got a lot of attention. He said that US broadcast
network should face scrutiny over their licenses if they're too
critical of him. The President also backed ABC's decision to
remove Jimmy Kimmel, amid pressure from network affiliates who had
(01:32):
said they were pulling the show over Kimmel's comments about
conservative activist Charlie Cook. The President's comments represent and break
with the nation's long standing traditions of freedom of speech
and the press that are enshrined in the USS Constitution.
FCC chair Brendan Carr was on CNBC this morning. He
weighed in on ABC's decision.
Speaker 4 (01:52):
Jimmy Kimmel has no Johnny Carson, and the issue that
arose here where lots and lots of people were upset,
was not a joke. It was not you know, making
fun or pillaring can me or the administration for the president.
It was appearing to directly mislead the American public about
a significant fact that probably one of the most significant
(02:12):
political events we've had in a long time. It's really
most significant political assassination we've seen in a long time.
Speaker 5 (02:19):
All Right.
Speaker 6 (02:20):
That again, of course was FCC Chair Brendan Carr earlier
on CNBC. Hey, we wanted to turn more kind of
dig into this and kind of get a feel of
what's really here at threat and what's that issue. Katie
Fallow is Deputy Litigation director at the night First Amendment
Institute at Columbia University, where she focuses on threats to
free speech at a free press in the digital aide
(02:42):
she joins us right here in New York City. Katie
is free speech under threat? Is the first amendment under threat?
Speaker 5 (02:50):
Absolutely?
Speaker 7 (02:51):
I think since the beginning of this second Trump administration,
the President and his advisors have taken a number of
steps to use sort of every lever of power at
their disposal to control the speech of private individuals, private companies,
and private institutions. And I think the Brendan Carr's statements
(03:16):
on Wednesday is just the latest example of this administration
using threats of regulatory oversight, denial of mergers, and things
like that to essentially coerce private companies into censoring speech
that the administration doesn't like.
Speaker 2 (03:35):
So what is the recourse here? You have a long
history of working in this field. You were one of
the litigators, the lead litigator on that landmark case back
in the first Trump administration where the president blocked people
on his social media account, the real Donald Trump Twitter account,
So you have a lot of experience with this.
Speaker 7 (03:54):
What is the recourse here, Well, the recourse typically and
certainly over many decades of our history is to sue
in the courts under the First Amendment and to challenge
government action that violates the First Amendment. And that is
important both for the speakers that are affected by government censorship,
(04:15):
but also important for everybody else, for the courts to
confirm that the First Amendment protects all kinds of speech,
including speech that many people or even most people find
very offensive. And it also protects speech on broadcast stations,
on cable news, on social media, etc. And So what
(04:39):
the main step to get relief here, other than public
opinion and political change, obviously, is to get courts to
rule that this is unconstitutional, and it plainly is the
problem is that, at least we've seen in the Trump administration,
a number of private institutions and companies, even if they
(04:59):
have a very strong First Amendment claim essentially folding and
caving before actually litigating or vindicating their rights.
Speaker 6 (05:09):
So wait, so then when you look at this and
let's let's roll on top of this, I mean, you know,
Walt Disney taking Jimmy Kimmel live off the air indefinitely.
It was said amid a backlash to remarks that he
made about the killing of Republican activist Charlie Kirk.
Speaker 5 (05:26):
So amid a backlash, and.
Speaker 6 (05:28):
Then the move was really brought about by Next Star
Media Group, which owns dozens of ABC TV affiliates, saying
it would pull the show from its stations over remarks
that were quote offensive and insensitive. So when we think
about free speech, does Jimmy Kimmel have the right to
say what he was doing that it was within the
parameters of.
Speaker 5 (05:48):
What free speech is?
Speaker 6 (05:50):
Does Nextstar Media, if there's a backlash of people who
also have free speech right to say we didn't like this,
have the ability to say that.
Speaker 5 (05:59):
Does next our media have the right.
Speaker 6 (06:02):
To say we run a business and we want to
change what we carry or maybe not like. Help me
understand free speech in all its you know, wonderment, if
you will, but it also maybe how it's a little
tough to kind of figure out what it exactly is.
Speaker 7 (06:21):
Yeah, I mean it's absolutely complex. I mean, the First
Amendment only applies to actions by the government, meaning the
government cannot censor speech. But you know, private companies, private institutions,
private individuals can suppress speech or you know, decide that
they don't want to speak in certain ways. If they
(06:42):
don't want to, that's absolutely fine. But I also think
it's important to see the context here, which is that, yes,
this affiliates or these local broadcast stations said they weren't
going to carry the Jimmy Kimmel Show, but they also
said that after the chairman of the Federal Communications Commission
(07:03):
made a statement that said called on Disney and ABC
to take action against Kimmel or else, the FCC was
going to look into whether these broadcast licensees were broadcasting
in the public interest. So that's a direct threat of
government censorship. So while you know, ABC could make its
(07:24):
own decision, but I think there's a real concern here
and direct evidence that the government is using the threat
of regulatory investigations and possibly you know, by the way,
these local broadcasters are seeking approval by the FCC of
a potential merger, and so, you know, I think you
(07:44):
can connect the dots and see that the FCC chairman
statements played a significant role here. Even if we don't
know for sure, it certainly raises the troubling specter that
the government is using threats to coerce price its speech
and that is unconstitutional.
Speaker 6 (08:04):
So what about like a news organization or an entity
like Disney ABC who also has a fiduciary responsibility. I
know that this may not be your area, but a
fiduciary responsibility to shareholders that if if there are deals
that don't happen and things don't happen, it changes their
financial picture. And I guess I'm just trying to understand
(08:25):
that do they have a right too to say, well,
this isn't in the best interests of the company. And
so even if it's kind of you know, dampen somebody's
free speech or removes.
Speaker 5 (08:38):
It, do they have a right? Yeah, I know that's
a right, but is it No?
Speaker 7 (08:45):
They might have a right, but is that the long
term best way to go? Is that in the long
term best interests of the company. I mean, if you're
going to have companies constantly bowing to pressures from the
government censorship pressures, including him you just saw the president
or you played the clip of the President saying on
(09:06):
Air Force one, I think you should revoke the licenses
anytime a broadcaster carries a show that criticizes me, you know,
is essentially what he's saying. Long term, I think that
is not in the best interest of broadcasters that want
to air programs that the entire country watches. And you know,
(09:27):
presumably these broadcasters and certainly Disney and ABC have many
viewers that are upset about Jimmy Kimmel being suspended based on,
you know, a pushback from the Trump administration.
Speaker 2 (09:42):
So how do you view this as going through the courts? Like,
does Jimmy Kimmel have a case here? Does somebody have
a case here that they could bring to the court
that could ultimately go to the Supreme Court and be
a test for the First Amendment of the Constitution.
Speaker 5 (10:00):
I think it could be.
Speaker 7 (10:01):
Just last year in a case involving the National Rifle Association,
So certainly not An entity on the left brought a
lawsuit against a New York regulator, saying that the regulator
had brought pressure onto insurance companies not to cover the
NRA and the NRA brought a lawsuit, and the Supreme
(10:22):
Court said, if that regulator uses its authority to pressure
other banks or insurers not to do business with the NRA,
that violates the First Based on viewpoint, that violates the
First Amendment. So under that case, I think Jimmy Kimmel
could bring a lawsuit against the government saying Brending car
(10:43):
and the Trump administration sought to exert pressure and through
threats of coercion, and then the result was that ABC
canceled or suspended the show. There are some complexities in
terms of the remedy that he could seek, but I
think at the very lead, you know, you could ask
for a declaration and an injunction saying the government can't
(11:05):
do this. So it wouldn't be a lawsuit against ABC.
It would be a lawsuit against the government.
Speaker 5 (11:10):
That's what I'm thinking, right too.
Speaker 6 (11:11):
Yeah, that's it would be his own loss without the
backing of his network.
Speaker 2 (11:16):
I'm just wondering, I mean.
Speaker 7 (11:17):
That, yeah, exactly, Well, yeah, okay, we could get into Yeah,
I mean that is sort of what I was thinking,
and that I think he would have a good claim,
But of course it's complex. There are questions about remedy,
and I think you know, overhanging this is of whether
it would eventually reach the Supreme Court, is all the
sort of other financial considerations that are motivating the various
(11:41):
actors that are involved in this issue.
Speaker 2 (11:44):
I'm curious about the non legal implications of this, and
just in your view, as somebody who focuses on the
freedom of the press, what the implications are of an
administration that seems to target negative news about him, news
that's critical. For example, the President this week sue The
New York Times for fifteen billion dollars, claiming it has
(12:04):
an agenda against him. Last year, Disney paid fifteen million
dollars to settle a defamation lawsuit that was brought on
by President Donald Trump over comments made by host George Stephanopolis.
What is the effect of that, not the legal ramifications,
not the legal ramifications, but the effect of that, justin
in your view on a free press, I.
Speaker 7 (12:23):
Think it's deeply scary. And adding to the examples you gave,
also the FCC's actions against CBS and the ultimate settlement
over sixty minutes airing a particular edited version of its
interview with Kamala Harris. So I think the message that
it sends to journalists and to media companies is if
(12:48):
you criticize the president or his administration, you do so
at great risk. And that should be frightening to all
of us, and including should be frightening to people on
the left, because if we accept that that's how these
things should proceed, then if there's a democratic president in power,
that person could use you know, the same kind of
(13:11):
threats and coercion against you know, Fox News or right
wing media entities, and we would all be the poorer
for it. And from a free speech perspective.
Speaker 5 (13:22):
Last question.
Speaker 6 (13:23):
All right, so everybody in media is listening and paying attention,
but what about American citizens more broadly? I mean, free
speech is just something we take for granted right and
gold standard, if you will.
Speaker 5 (13:37):
I think around the world, like what could be?
Speaker 6 (13:41):
You know, should we be worried that it's not just
about media, it's just it's about everybody in terms of
what they said.
Speaker 7 (13:46):
Absolutely, I do think we are the gold standard, and
for good reason, or we have been. But you know,
I've been practicing First Amendment law for a long time
and I've never seen such like frontal salt on basic
First Amendment principles, things that I thought were well established
and things that we all benefit from. And so right
(14:09):
now it's being you know, waged against, you know, members
of the media. But we also see the Trump administration
essentially taking all these steps to decide for the American
people what their colleges can teach, what their media, you know,
what their comedians, their favorite comedians can say. And you know,
(14:31):
I think that that can be used just increasingly to
crack down on free speech, and we should all be
very concerned about.
Speaker 5 (14:39):
That, Katie. Yes or no?
Speaker 6 (14:40):
Does this potentially the issue of free speech First Amendment
go all the way up to the Supreme Court at
some point?
Speaker 5 (14:46):
Yes or no?
Speaker 7 (14:47):
I think it will at some point.
Speaker 6 (14:49):
Okay, Katie, thank you so much, super super appreciative. Katie Fallow,
Tiputy Litigation Director at the Night First Amendment Institute at
Columbia University.
Speaker 2 (15:00):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (15:08):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five eas during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us.
Speaker 5 (15:20):
Live on YouTube. That's exactly where we start.
Speaker 6 (15:24):
That agreement or deal for Nvidia to invest five billion.
Intel and Vidia CEO Jensen Wan called it a historic
collaboration that together they will lay the foundation for the
next era of computing.
Speaker 5 (15:35):
President Trump also weighing in from.
Speaker 6 (15:38):
The UK, were he and the UK Prime Minister Keir
Starmer unveiled a new technology partnership to deepen ties on
AI and digital assets.
Speaker 3 (15:46):
So we're taking the next logical step with a historic
agreement on science and technology partnerships, and this will create
new government, academic and private sector cooperation in areas such
as AI.
Speaker 5 (15:58):
Which is the world.
Speaker 3 (16:01):
I'm looking at you, guys, you're taking.
Speaker 8 (16:04):
Over the world, Jensen. I don't know what you're doing here.
I hope you're right. Well, I can, says, we both
hope you're right. But it's pretty amazing.
Speaker 2 (16:15):
That was President Trump earlier from the UK, with more
on the global backdrop when it comes to the industry
and has a role in with making so much of
our world. Tich, we are talking semiconductors. Of course, I
want to bring in Bloomberg. Bloomberg tv B Tech co
host ed Ludlow joining us from San Francisco ahead just
off the phone, with Jensen Wong and lit Bhutan, CEO
of Intel, and of course Jensen the CEO of Nvidia.
(16:38):
Ed what did they tell you? What did you find?
Speaker 9 (16:40):
Yeah, I mean, the main takeaway is that the president
and the administration were not involved in the brokering of
this partnership and deal. It predates more recent events with
both companies in the Trump administration. The way that they both.
Speaker 5 (16:54):
Explained it is do you believe Yeah, Well, well.
Speaker 9 (16:58):
I'm so, I'm so glad that you did that. So
let's get into it, you know. That was what they said, Okay,
And what I find interesting is that they claimed that
twelve months ago or more engineering teams started meeting and
working together. Now, that would not only pre date the
sort of more recent relationship between Jensen Wong and the
president and lit Bhutan's relationship with the president, but I
(17:21):
also point out that Litbutan was not CEO of Intel
twelve months ago. He was on the board. So this
is a kind of legacy thing if they're to be believed. Now,
to your point, the equity stake and the investment of
five billion dollars of in video into Intel, how do
we interpret that? The way that Jensen Huang answered, it
is why wouldn't we invest if we believe in the
success of the products that we're working on together, because
(17:44):
they'll realize an excellent return. But nobody in this briefing
that I participated in, asked Jensen if the investment itself
was catalyzed or proposed by the administration.
Speaker 2 (17:56):
Yeah, I mean, just the cynic in me would say,
this looks really good for InVideo to make this investment
in a company that is partially owned by the US taxpayer,
partially owned by the US government, and show his support,
show in Vidia's support for this company. I want to
think about this in.
Speaker 5 (18:12):
The broader context.
Speaker 2 (18:13):
I mean Pat Gelsinger, ed was the CEO at the time,
and I think it was notable back in gosh, January
of this year. I think it was when in Video
had that big decline as a result of the deep
Seek news. Pat Gelsinger essentially coming out and saying that
he was going to buy some of the InVID in
Nvidia stock on LinkedIn. He said that that was a
really big deal because these two companies were seen as
(18:34):
rivals even then. Are they still seen as rivals right now?
Speaker 9 (18:38):
Guys? If I jump in my car right now, and
I go twenty five miles down the one oh one,
and I park up at Intel and climb onto the roof,
and I look back across the freeway, I'll see in
Video's headquarters, and funnily enough, if I look the other way,
I'll see AMD's headquarters. In the context of technology history,
we've not seen something like this since way back when
Microsoft kind of bailed out, which like is a moment
(19:01):
in history long forgotten. The way they explain it, and
you know, you tell me if you want to get
into then any gritty of it is that it's a
simple technology story. You know, the architecture that Intel CPUs
are based on still dominate the data center market, so
all the cpuser going data centers. You know, Intel has
a good hold in that market, and Nvidia sees an
(19:24):
opportunity to leverage that to their advantage.
Speaker 5 (19:27):
I'm trying to understand.
Speaker 6 (19:28):
So Vida invest five billion, the US took a roughly
ten percent stake and Intel in August, and that investment
so far paying off pretty nicely. Japan's SoftBank Group are
committed to investing a lot in US chip making. They
made a surprise two billion dollar investment last month in Intel,
It's a rather notable group of investors. How should one
read that? What is Intel becoming? Is this a step
(19:51):
toward Nvidia buying Intel? What's Is there a grand takeaway here?
Speaker 9 (19:56):
The way to interpret it is that Intel still needs cash.
So litbou Tan was very honest that he's still focusing
on shoring up Intel's balance sheet. You know, the difference
between Microsoft investing in Apple way way way back when
is that Apple was facing bankruptcy. Intel's not, but it's
(20:17):
profit has been eroded or obliterated, and Gelsinger's kind of
thing was to try and get back on a product roadmap.
Litbou Tans is like, I'm going to cut back. I'm
going to cut down to profit, get the balance sheet strong.
But on paper, Intel also represents everything that this administration wants.
A US company with heavy footprint in the United States
(20:39):
and on paper can do more manufacturing. The problem is
this in video agreement has nothing to do with manufacturing.
Speaker 6 (20:45):
Really well, our next guest was given us Hanson ques
several years ago about the chip wars, and so we're
going to talk a bit more about it with Chris Miller.
But you set us up so well as you always do,
ed Ludlow Blueberg TVB Tech co host, joining us there
from San Francisco. All right, so let's get to Chris Miller.
He wrote Chip War, The Fight for World's Most Critical Technology.
Speaker 5 (21:07):
It was written in twenty twenty two.
Speaker 6 (21:08):
That book made us all sit up and take notice
of the importance of semiconductors to the world, to the
most developed nations when it comes to economic growth, national security,
and so much more.
Speaker 2 (21:19):
Chris is Professor of International History at the Fletcher School
at Tufts University. He does consulting, but he has not
consulted for Intel or for Invidia. He joins us from
Palo Alto, California. Chris the book laying it out for
us three years ago. America's edge is slipping, undermined by
competitors in Taiwan, Korea, Europe, and above all China.
Speaker 5 (21:37):
Should we be.
Speaker 2 (21:38):
Shocked by a partnership such as this strange bedfellows in
a previous life, No.
Speaker 10 (21:44):
Well, I think from the perspective of ten years ago,
this would have been a pretty surprising pair up. But
today there's a real logic for it, and Video is
a leader in ai chips. Intel has been trying to
catch up when it comes to AI. But also Intel's
got a lot of unique know how when it comes
to building processor chips, which AI servers still require. So
(22:05):
certainly on the chip design side, there's differing areas of
expertise that both of these companies can bring together, all right,
but just.
Speaker 5 (22:13):
All of it together.
Speaker 6 (22:15):
The US taking that ten percent, approximately ten percent stake
in Intel over this summer, you've got SoftBank, there are
two billion dollar investment now in Nvidia.
Speaker 5 (22:25):
What is this?
Speaker 6 (22:25):
I mean, is this what you thought would happened need
to happen to ensure US remain a dominant player in
the semispace.
Speaker 10 (22:35):
Well, I think we're going to need to wait and
see what implication this announcement has, if any, for Intel's
manufacturing business. I think there's no doubt that Intel's going
to be an important chip designer in the future. Perhaps
smaller than it used to be, but they've got a
unique position in the market on the chip design side.
But from a national perspective, what really matters is Intel's
manufacturing arm and that's where Intel has really struggled the
(22:58):
last couple of years to stay at the cutting edge
technologically and also to win customers away from TSMC, the
Taiwanese market rival, and today in Vidia produces almost all
of its most advanced ships with TSMC. There's been a
big push from Washington to get companies like in Vidia
to diversify their supply and to try to help Intel
(23:19):
become a more successful manufacturer of chips for other companies.
The announcement today doesn't really say anything about that, but
I think a lot of people will ask whether this
is a stepping stone for other US companies in video
or some of its peers to bring more of their
manufacturing business to Intel's manufacturing arm.
Speaker 5 (23:37):
So chip war it is on? Or where are we?
Is it the beginning of the chip war?
Speaker 6 (23:42):
And I'm just curious, are you starting to think about
I don't know, another book and.
Speaker 5 (23:46):
Where it goes from here? Give us your thought here?
Speaker 10 (23:50):
Well, I think we're in the thick of the chip
war right now. Next to this news about in Nvidia
and Intel, there's a big debate going on in Beijing
and in Washington about which company should be allowed to
buy which type of the AI accelerators that Nvidia specializes
in designing that are almost exclusively today produced in Taiwan.
(24:12):
And so you've got these competitive commercial dynamics intersecting with
high geopolitics, and today you can't really separate the chip
industry from the decisions of President Trump or from Chairman
she Well.
Speaker 2 (24:23):
That's a really good point and kind of brings me
to my question about Intel specifically in the US taking
this unprecedented stake in this chip maker earlier this year.
What did you think of that, Chris.
Speaker 10 (24:36):
Well, I think the US has been pretty clear in
its desire, going all the way back to the first
Trump administration through the Bide administration, as well as both
Houses of Congress, both parties, that it sees Intel's success
in manufacturing as important for US national security. Right now,
most of the world's advanced processor chips are produced by
(24:57):
one company in one country, Taiwan, and the US want
some more diversified base of manufacturing these ultra critical chips
that are key both for smartphones and computers, but especially
for ai and Intel is one of the three companies
in the world, alongside Samsung and TSMC, that can produce
these cutting edge chips, and it's the only US company,
the only company with a major US footprint at least
(25:20):
right now, and so that's why the US government has
been trying to find ways to help Intel out.
Speaker 5 (25:24):
So what wouldations get going?
Speaker 2 (25:26):
Well, what would it take for Intel to be able
to compete with TSMC? I mean it got money from
the US government. It got money. It's getting money from
Intel here, as Carol always says, the devil's in the details.
And you said, we need to see exactly where this
money goes. But what do we need to see to say, Okay,
this company, this US company is now competing with TSMC.
Speaker 10 (25:47):
So there's no doubt that Intel needs money, and it's
raised some money from soft bank and the US government,
but the key thing that it needs is customers for
its advanced manufacturing processes. You only prove whether or not
they work if you've got at least sized, but ideally
large scale customers that are going to let you produce thousands,
tens of thousands, eventually millions of chips on your manufacturing process.
(26:08):
You can't scale up without customers, and right now, Intel's
got a couple of smaller customers for its manufacturing business,
but it's thus far failed to win a very large
scale customer. And Nvidia's one example of a company. There
are others that could provide a really large contract that
would let Intel test out its cutting edge manufacturing. And
right now I think the entire ecosystem is waiting to
(26:29):
see will it win some big customers that lets it
complete that scale out and testing of its cutting edge manufacturing.
Speaker 6 (26:36):
All right, So we're talking about Chris Miller, Professor of
International History at the Fletcher School at Tufts University, author
of Chip War, The Fight for the World's Most Critical Technology. Hey, Chris,
one thing I want to ask you, and I want
to go back to China. There was a storare was
reading this morning by our Javier bloss an opinion please piece,
and it was asking why is China stockpiling so much
surp plus oil? And one of there were like five
(26:57):
or six different reason and one of it was does
China fear an interruption and supply beyond US and European sanctions?
Speaker 5 (27:04):
Oil traders who traffic and intrigue at are only one
word Taiwan?
Speaker 6 (27:09):
Do you believe that there is a strong possibility that
there will be a conflict involving Taiwan? And what does
that mean for TSMC, who is so crucial in terms
of the global chip supply chain. What could that potentially
mean for the United States, the global economy.
Speaker 5 (27:30):
I mean, can you play that out and what the
likelihood is.
Speaker 10 (27:34):
Well, there's no doubt it's a possibility. Nobody knows for
certain what the likelihood is, but I think the magnitude
of impact is so large that even if you think
it's only five or ten percent likely, you've got to
take steps to prepare. All of the biggest, most valuable
companies in the United States require silicon that today can
in some cases only be sourced from Taiwan. That's true
(27:54):
for Nvidia, Troo, for Apple, for Google, Troop, for Microsoft, Proof,
for Meta. The entire US tech ecosystem relies on Taiwan's expertise,
and that's why there's been this push for the last
couple of years to find ways to diversify the US
from being so centrally exposed to China's decisions about war
and peace and the Taiwan Straits.
Speaker 6 (28:15):
And the reality is that the US is still very,
very exposed, correct because of how much TSMC still produces.
Speaker 1 (28:24):
That's right.
Speaker 10 (28:24):
I think the US has made a bit of progress,
but there's still a long way to go. And it's
a long way to go because TSMC is an extraordinarily
capable company in the entire Taiwan's ecosystem is just so
central to producing the semiconductor hardware that our tech firms
and aifirms depend on.
Speaker 2 (28:40):
What do you think of the politics of this and
the fact that TSMC has this facility in Arizona and
is working to increase its presence here in the United States,
does it put that at risk?
Speaker 5 (28:54):
No, I don't think so.
Speaker 10 (28:55):
I think TSMC has got a strong signal from its
customers that they wants space production. It's it's uncertainty created
by the tariffs that incentivizes more investment in the United States,
and it's got a signal from the US government again
across multiple administrations both parties, that they're going to keep
pushing for a bigger US footprint. But I think the
(29:16):
challenge that TSMC faces is twofold. First, all of its
keyr and D remains in Taiwan and will be in
Taiwan as far as we can see in the future.
So Arizona is helpful and diversifying today's manufacturing, but it
doesn't really get you diversification of the next generation. The
second thing is that the ecosystem in Arizona is still
less developed than it is in Taiwan, and so sourcing
(29:37):
the gases and the materials and all the spare parts
and specialized equipment you need for a cutting edge chip plant,
it's still harder and more expensive in Arizona than in Taiwan.
And that's going to be the case for some time
until we keep building out the scale of Arizona. And
all of that means that Taiwan's going to stay very,
very important where our Techi ecosystem for many years to come.
Speaker 6 (29:58):
Chris really quickly thirty seve seconds here, I mean, was
President Trump wright in his increasing tensions on China. It
started his first term and ramped up in the second.
Was he right, especially when you think about semiconductors, and
just quickly if you could.
Speaker 10 (30:11):
Well, I think the key driver of tensions in this
sector is actually China's desire to become self sufficient. We
were in a pretty stable gulibrium in twenty fifteen before
the Made in China twenty twenty five plan was released.
That happened before any of the US policies to support
its own ship industry, and that was really the catalyst
for introducing geopolitical tension as a central facet in the
(30:33):
chip industry.
Speaker 5 (30:34):
All right, so glad we could get some time with you.
Speaker 6 (30:36):
So relevant as always, Chris Miller, author of Chip War
and professor of International History at the Fletcher School at
Tufts University.
Speaker 2 (30:43):
Stay with us. More from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (30:49):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
Android Otto with the Bloomberg Business app. Also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa Play Bloomberg eleven thirty.
Speaker 6 (31:08):
We're looking at a day where we could potentially see
records across four major averages. We're talking about S and
P five hundred, Doubt, Nasdaq one hundred, and Russell two thousand.
If this happens, it would be the first time since
twenty twenty one.
Speaker 5 (31:22):
But we'll see whether or not we get there.
Speaker 6 (31:24):
In the meantime, curious to see what our next guest
has to say about the market environment. He's Aaron Kennon,
co founder and chief executive officer of Clear Harbor Asset Management,
about two billion in assets under management, joining us once
again from Stanford Connecticut. A lot of Zoe's Aaron coming
at us. We're more than twenty four hours from that
last FED decision. I don't know, what do you think
(31:46):
is the constructive conversation right now to have about the
equity markets, in particular valuations and what seems.
Speaker 5 (31:56):
To be kind of continued moves to the upside.
Speaker 11 (32:00):
Yeah, we've had quite a run, Carol, And you know,
as you mentioned, the S andp's up historic levels today,
and yet we look across the pond and emerging markets
are up twenty eight percent versus the SMPS fourteen, and
Europe's up eighteen versus the S and P fourteen. So
it hasn't just been a US story.
Speaker 5 (32:17):
I think that's an important.
Speaker 11 (32:18):
Narrative for at least our clients to understand. And certainly,
valuations are not cheap. We're trading at sort of top
quartile levels and most equity indicies other than the small
cap area, which is relatively cheap here. And yet we
also know that elevated valuations do not always or never
(32:42):
really augur bear markets. Usually there's some economic shock that ensues,
and so we're mindful of the valuations, but it's not
sort of putting up the cautionary flag too significantly for
us here, so we remain reasonably constructive here. Particularly now
the FED is starting to cut rates, and we think
they'll can and you to cut rates even though they
were quite cautious.
Speaker 2 (33:02):
Yeah, okay, so let's talk about that. Why are you
convinced that they'll continue to cut rates.
Speaker 11 (33:08):
Well, if you look at the FED, they always want
to be a little more optimistic tim as it pertains
the sort of the economic outlook. And this transcends this
FED chair yelling Bernanky Green Span have all done it.
You know, they don't want to sound gloom and doomy.
(33:28):
But you know, I would argue that there's still some
normalization to occur as it relates to just sort of
the FED funds rate and its relationship to inflation. I
also think too that you know, we have a FED
that's going to be leaning more towards supporting employment than
pulling down the last fifty basis points or seventy five
(33:49):
basis points of inflation. I think there's a sense that
there's more of a prerogative to do that to ensure
that we have a healthy employment market. So and then
of course you look at the FED fund's futures, which
is what the market thinks, and the market's calling for
five to six rate cuts between now and your in
maybe it will not be that aggressive. And we heard,
of course Chairman poly yesterdays say, well, we're on a
(34:11):
meeting to meeting basis, so we have we don't have
any insight. We're just going to look at the data.
Speaker 6 (34:17):
Yeah right, I mean just that dot plot. And of
course that's never set in stone. It can change and
it will change. But it's just a reminder that there
are a lot of different views being discussed there at
the Central Bank.
Speaker 5 (34:29):
So what do you do with new money in this
market environment?
Speaker 11 (34:31):
Erin, Well, I think we want to start with the
foundational framework of you know, what's the objective of the client,
what is their risk tolerance, whether it's an individual, family
or an institution, how much liquidy do they need? And
then we look at the you know, the where we're
allocating capital around the world, where there are opportunities to
maybe stick our next out a bit. We still believe
(34:54):
in the US equity story for the long run. We
still think the AI growth story is a is A
is in the earlier innings that we've got we're going
to go from picks and shovels to you know, a
broader you know, opportunity set within software, within AI. And
we think, of course, the tariff picture in the US
is probably going to mean more reshoring, more investment in
(35:17):
the United States going forward, but we also think there's
opportunity in places like Europe and emerging markets. In fact,
I think what's interesting right now is you have a
country like China that is historically selling to the developed world,
the United States and Europe. We've put up terrafs and
they can't flood our markets any longer with a good
portion of their goods, and so they're looking at places
(35:39):
where they can do that, and I think they're going
to be selling more and more of their goods to
emerging markets. It could push up emerging market currencies and
actually boost capital markets further in those regions. So we're thinking,
you know, about asset class level allocation as well as
uh you know, even within the equity asset class, sector level,
and then geographic levels.
Speaker 5 (35:59):
So there's a lot to talk about there. There is.
Speaker 2 (36:02):
I'm curious about your view on the US consumer. We
got news yesterday that the average FICO score slipped to
seven to fifteen in April from seven to seventeen a
year earlier. It's the second consecutive year over year drop.
It's essentially the fastest rate that credit scores have fallen
since two thousand and nine. We're also seeing some inflation
(36:22):
in some places as a result of tariffs or other
things as well, like beef prices. Beef prices moving higher,
which certainly affects consumers. How is the consumer doing in
your view.
Speaker 11 (36:33):
I think it's a tale of two stories, Tam. I
think you just alluded to half the country which doesn't
own financial assets, unfortunately haven't been able to sort of
hedge this rising inflationary price price that we've seen over
the last five years or so. And you have a
retail sales recently that indicated relatively robust numbers. But then
(36:57):
when you look beneath the hood to your question, where
is the retail sales growth really happening at the unit level,
It's happening at the upper quartile, upper decile of the
economic stratum in the United States. The lower half.
Speaker 5 (37:10):
They have credit card debt, they have auto loans.
Speaker 11 (37:12):
If they're lucky, they have a mortgage. But that's all
liability that's not asset, and so we have this sort
of bifurcation and the consumption pattern in the US.
Speaker 5 (37:22):
I think it's one reason why the.
Speaker 11 (37:23):
Fed's leaning towards the Dubvish side, why they cut rates
and they'll continue to cut them.
Speaker 6 (37:27):
So my sister had shared something with me a little
while ago, and forgive me, I'm trying to find out
who the individual, but it was essentially I think it
was a European CEO or something who basically said, I
don't want to be a rich man in a poor country.
And I just think this kind of resonates with me.
And we've talked about this case shaped recovery and economy.
(37:48):
So people who are in the market and have a
good job and doing well and own a house, so
many who don't. And you kind of laid it out
for us. I mean, isn't that a problem? Isn't that
a problem today? Continues to be a problem, And I
don't know something that ultimately is going to be playing
out like in our economy, in our markets. And forgive me,
(38:08):
it's a serious question, Aaron, I'm giving you about forty seconds.
Speaker 11 (38:12):
Yeah, Well, we have a widening mald distribution of wealth.
But if you look at where we were fifty years ago,
where we were one hundred years ago, and even where
we were thirty years ago, you know, it's sometimes easy
to think that, you know, we have it worse today
among large cohorts than we did fifty years ago. But
(38:35):
the rising wealth boat has lifted almost all tides. It's
just that the maldistribution of existing wealth has widened. And
so I think that the base level of sort of
quality of life has improved dramatically for the lower quartile
of Americans relative to fifty seventy five one hundred years ago.
And I think, you know, it's good to keep that
(38:57):
in mind.
Speaker 5 (38:58):
Always good also to get some time with you.
Speaker 6 (39:00):
Aaron Kennon, co founder CEO of Clear Harbor Asset Management.
Speaker 1 (39:04):
This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
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(39:25):
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Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business
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ahead with insight on the people, companies, and trends shaping
today's complex economy. Plus global business finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
Now onto One of the most read stories on the
Bloomberg Terminal, Jimmy Kimmel is off air in definitely amid
a backlash to remarks the late night hosts made about
the killing of Republican activist Charlie Kirk. President Trump weigh
in on this. He had this to say about the
late night host earlier from the UK.
Speaker 3 (00:50):
Well, Jimmy Kimmel was fired because he had been ratings
more than anything else, and he said a horrible thing
about a great gentleman known as Charlie Kirk. And Jimmy
Kimmel is not a talent person. He had very bad
ratings and they should have fired him a long time ago.
So you know, you can call that free speech or not.
He was fired for lack of talent.
Speaker 2 (01:08):
So that was the President earlier today later Carol on
his way back. He's still on his way back from
the UK. He made comments on Air Force one that
got a lot of attention. He said that US broadcast
network should face scrutiny over their licenses if they're too
critical of him. The President also backed ABC's decision to
remove Jimmy Kimmel, amid pressure from network affiliates who had
(01:32):
said they were pulling the show over Kimmel's comments about
conservative activist Charlie Cook. The President's comments represent and break
with the nation's long standing traditions of freedom of speech
and the press that are enshrined in the USS Constitution.
FCC chair Brendan Carr was on CNBC this morning. He
weighed in on ABC's decision.
Speaker 4 (01:52):
Jimmy Kimmel has no Johnny Carson, and the issue that
arose here where lots and lots of people were upset,
was not a joke. It was not you know, making
fun or pillaring can me or the administration for the president.
It was appearing to directly mislead the American public about
a significant fact that probably one of the most significant
(02:12):
political events we've had in a long time. It's really
most significant political assassination we've seen in a long time.
Speaker 5 (02:19):
All Right.
Speaker 6 (02:20):
That again, of course was FCC Chair Brendan Carr earlier
on CNBC. Hey, we wanted to turn more kind of
dig into this and kind of get a feel of
what's really here at threat and what's that issue. Katie
Fallow is Deputy Litigation director at the night First Amendment
Institute at Columbia University, where she focuses on threats to
free speech at a free press in the digital aide
(02:42):
she joins us right here in New York City. Katie
is free speech under threat? Is the first amendment under threat?
Speaker 5 (02:50):
Absolutely?
Speaker 7 (02:51):
I think since the beginning of this second Trump administration,
the President and his advisors have taken a number of
steps to use sort of every lever of power at
their disposal to control the speech of private individuals, private companies,
and private institutions. And I think the Brendan Carr's statements
(03:16):
on Wednesday is just the latest example of this administration
using threats of regulatory oversight, denial of mergers, and things
like that to essentially coerce private companies into censoring speech
that the administration doesn't like.
Speaker 2 (03:35):
So what is the recourse here? You have a long
history of working in this field. You were one of
the litigators, the lead litigator on that landmark case back
in the first Trump administration where the president blocked people
on his social media account, the real Donald Trump Twitter account,
So you have a lot of experience with this.
Speaker 7 (03:54):
What is the recourse here, Well, the recourse typically and
certainly over many decades of our history is to sue
in the courts under the First Amendment and to challenge
government action that violates the First Amendment. And that is
important both for the speakers that are affected by government censorship,
(04:15):
but also important for everybody else, for the courts to
confirm that the First Amendment protects all kinds of speech,
including speech that many people or even most people find
very offensive. And it also protects speech on broadcast stations,
on cable news, on social media, etc. And So what
(04:39):
the main step to get relief here, other than public
opinion and political change, obviously, is to get courts to
rule that this is unconstitutional, and it plainly is the
problem is that, at least we've seen in the Trump administration,
a number of private institutions and companies, even if they
(04:59):
have a very strong First Amendment claim essentially folding and
caving before actually litigating or vindicating their rights.
Speaker 6 (05:09):
So wait, so then when you look at this and
let's let's roll on top of this, I mean, you know,
Walt Disney taking Jimmy Kimmel live off the air indefinitely.
It was said amid a backlash to remarks that he
made about the killing of Republican activist Charlie Kirk.
Speaker 5 (05:26):
So amid a backlash, and.
Speaker 6 (05:28):
Then the move was really brought about by Next Star
Media Group, which owns dozens of ABC TV affiliates, saying
it would pull the show from its stations over remarks
that were quote offensive and insensitive. So when we think
about free speech, does Jimmy Kimmel have the right to
say what he was doing that it was within the
parameters of.
Speaker 5 (05:48):
What free speech is?
Speaker 6 (05:50):
Does Nextstar Media, if there's a backlash of people who
also have free speech right to say we didn't like this,
have the ability to say that.
Speaker 5 (05:59):
Does next our media have the right.
Speaker 6 (06:02):
To say we run a business and we want to
change what we carry or maybe not like. Help me
understand free speech in all its you know, wonderment, if
you will, but it also maybe how it's a little
tough to kind of figure out what it exactly is.
Speaker 7 (06:21):
Yeah, I mean it's absolutely complex. I mean, the First
Amendment only applies to actions by the government, meaning the
government cannot censor speech. But you know, private companies, private institutions,
private individuals can suppress speech or you know, decide that
they don't want to speak in certain ways. If they
(06:42):
don't want to, that's absolutely fine. But I also think
it's important to see the context here, which is that, yes,
this affiliates or these local broadcast stations said they weren't
going to carry the Jimmy Kimmel Show, but they also
said that after the chairman of the Federal Communications Commission
(07:03):
made a statement that said called on Disney and ABC
to take action against Kimmel or else, the FCC was
going to look into whether these broadcast licensees were broadcasting
in the public interest. So that's a direct threat of
government censorship. So while you know, ABC could make its
(07:24):
own decision, but I think there's a real concern here
and direct evidence that the government is using the threat
of regulatory investigations and possibly you know, by the way,
these local broadcasters are seeking approval by the FCC of
a potential merger, and so, you know, I think you
(07:44):
can connect the dots and see that the FCC chairman
statements played a significant role here. Even if we don't
know for sure, it certainly raises the troubling specter that
the government is using threats to coerce price its speech
and that is unconstitutional.
Speaker 6 (08:04):
So what about like a news organization or an entity
like Disney ABC who also has a fiduciary responsibility. I
know that this may not be your area, but a
fiduciary responsibility to shareholders that if if there are deals
that don't happen and things don't happen, it changes their
financial picture. And I guess I'm just trying to understand
(08:25):
that do they have a right too to say, well,
this isn't in the best interests of the company. And
so even if it's kind of you know, dampen somebody's
free speech or removes.
Speaker 5 (08:38):
It, do they have a right? Yeah, I know that's
a right, but is it No?
Speaker 7 (08:45):
They might have a right, but is that the long
term best way to go? Is that in the long
term best interests of the company. I mean, if you're
going to have companies constantly bowing to pressures from the
government censorship pressures, including him you just saw the president
or you played the clip of the President saying on
(09:06):
Air Force one, I think you should revoke the licenses
anytime a broadcaster carries a show that criticizes me, you know,
is essentially what he's saying. Long term, I think that
is not in the best interest of broadcasters that want
to air programs that the entire country watches. And you know,
(09:27):
presumably these broadcasters and certainly Disney and ABC have many
viewers that are upset about Jimmy Kimmel being suspended based on,
you know, a pushback from the Trump administration.
Speaker 2 (09:42):
So how do you view this as going through the courts? Like,
does Jimmy Kimmel have a case here? Does somebody have
a case here that they could bring to the court
that could ultimately go to the Supreme Court and be
a test for the First Amendment of the Constitution.
Speaker 5 (10:00):
I think it could be.
Speaker 7 (10:01):
Just last year in a case involving the National Rifle Association,
So certainly not An entity on the left brought a
lawsuit against a New York regulator, saying that the regulator
had brought pressure onto insurance companies not to cover the
NRA and the NRA brought a lawsuit, and the Supreme
(10:22):
Court said, if that regulator uses its authority to pressure
other banks or insurers not to do business with the NRA,
that violates the First Based on viewpoint, that violates the
First Amendment. So under that case, I think Jimmy Kimmel
could bring a lawsuit against the government saying Brending car
(10:43):
and the Trump administration sought to exert pressure and through
threats of coercion, and then the result was that ABC
canceled or suspended the show. There are some complexities in
terms of the remedy that he could seek, but I
think at the very lead, you know, you could ask
for a declaration and an injunction saying the government can't
(11:05):
do this. So it wouldn't be a lawsuit against ABC.
It would be a lawsuit against the government.
Speaker 5 (11:10):
That's what I'm thinking, right too.
Speaker 6 (11:11):
Yeah, that's it would be his own loss without the
backing of his network.
Speaker 2 (11:16):
I'm just wondering, I mean.
Speaker 7 (11:17):
That, yeah, exactly, Well, yeah, okay, we could get into Yeah,
I mean that is sort of what I was thinking,
and that I think he would have a good claim,
But of course it's complex. There are questions about remedy,
and I think you know, overhanging this is of whether
it would eventually reach the Supreme Court, is all the
sort of other financial considerations that are motivating the various
(11:41):
actors that are involved in this issue.
Speaker 2 (11:44):
I'm curious about the non legal implications of this, and
just in your view, as somebody who focuses on the
freedom of the press, what the implications are of an
administration that seems to target negative news about him, news
that's critical. For example, the President this week sue The
New York Times for fifteen billion dollars, claiming it has
(12:04):
an agenda against him. Last year, Disney paid fifteen million
dollars to settle a defamation lawsuit that was brought on
by President Donald Trump over comments made by host George Stephanopolis.
What is the effect of that, not the legal ramifications,
not the legal ramifications, but the effect of that, justin
in your view on a free press, I.
Speaker 7 (12:23):
Think it's deeply scary. And adding to the examples you gave,
also the FCC's actions against CBS and the ultimate settlement
over sixty minutes airing a particular edited version of its
interview with Kamala Harris. So I think the message that
it sends to journalists and to media companies is if
(12:48):
you criticize the president or his administration, you do so
at great risk. And that should be frightening to all
of us, and including should be frightening to people on
the left, because if we accept that that's how these
things should proceed, then if there's a democratic president in power,
that person could use you know, the same kind of
(13:11):
threats and coercion against you know, Fox News or right
wing media entities, and we would all be the poorer
for it. And from a free speech perspective.
Speaker 5 (13:22):
Last question.
Speaker 6 (13:23):
All right, so everybody in media is listening and paying attention,
but what about American citizens more broadly? I mean, free
speech is just something we take for granted right and
gold standard, if you will.
Speaker 5 (13:37):
I think around the world, like what could be?
Speaker 6 (13:41):
You know, should we be worried that it's not just
about media, it's just it's about everybody in terms of
what they said.
Speaker 7 (13:46):
Absolutely, I do think we are the gold standard, and
for good reason, or we have been. But you know,
I've been practicing First Amendment law for a long time
and I've never seen such like frontal salt on basic
First Amendment principles, things that I thought were well established
and things that we all benefit from. And so right
(14:09):
now it's being you know, waged against, you know, members
of the media. But we also see the Trump administration
essentially taking all these steps to decide for the American
people what their colleges can teach, what their media, you know,
what their comedians, their favorite comedians can say. And you know,
(14:31):
I think that that can be used just increasingly to
crack down on free speech, and we should all be
very concerned about.
Speaker 5 (14:39):
That, Katie. Yes or no?
Speaker 6 (14:40):
Does this potentially the issue of free speech First Amendment
go all the way up to the Supreme Court at
some point?
Speaker 5 (14:46):
Yes or no?
Speaker 7 (14:47):
I think it will at some point.
Speaker 6 (14:49):
Okay, Katie, thank you so much, super super appreciative. Katie Fallow,
Tiputy Litigation Director at the Night First Amendment Institute at
Columbia University.
Speaker 2 (15:00):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (15:08):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five eas during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us.
Speaker 5 (15:20):
Live on YouTube. That's exactly where we start.
Speaker 6 (15:24):
That agreement or deal for Nvidia to invest five billion.
Intel and Vidia CEO Jensen Wan called it a historic
collaboration that together they will lay the foundation for the
next era of computing.
Speaker 5 (15:35):
President Trump also weighing in from.
Speaker 6 (15:38):
The UK, were he and the UK Prime Minister Keir
Starmer unveiled a new technology partnership to deepen ties on
AI and digital assets.
Speaker 3 (15:46):
So we're taking the next logical step with a historic
agreement on science and technology partnerships, and this will create
new government, academic and private sector cooperation in areas such
as AI.
Speaker 5 (15:58):
Which is the world.
Speaker 3 (16:01):
I'm looking at you, guys, you're taking.
Speaker 8 (16:04):
Over the world, Jensen. I don't know what you're doing here.
I hope you're right. Well, I can, says, we both
hope you're right. But it's pretty amazing.
Speaker 2 (16:15):
That was President Trump earlier from the UK, with more
on the global backdrop when it comes to the industry
and has a role in with making so much of
our world. Tich, we are talking semiconductors. Of course, I
want to bring in Bloomberg. Bloomberg tv B Tech co
host ed Ludlow joining us from San Francisco ahead just
off the phone, with Jensen Wong and lit Bhutan, CEO
of Intel, and of course Jensen the CEO of Nvidia.
(16:38):
Ed what did they tell you? What did you find?
Speaker 9 (16:40):
Yeah, I mean, the main takeaway is that the president
and the administration were not involved in the brokering of
this partnership and deal. It predates more recent events with
both companies in the Trump administration. The way that they both.
Speaker 5 (16:54):
Explained it is do you believe Yeah, Well, well.
Speaker 9 (16:58):
I'm so, I'm so glad that you did that. So
let's get into it, you know. That was what they said, Okay,
And what I find interesting is that they claimed that
twelve months ago or more engineering teams started meeting and
working together. Now, that would not only pre date the
sort of more recent relationship between Jensen Wong and the
president and lit Bhutan's relationship with the president, but I
(17:21):
also point out that Litbutan was not CEO of Intel
twelve months ago. He was on the board. So this
is a kind of legacy thing if they're to be believed. Now,
to your point, the equity stake and the investment of
five billion dollars of in video into Intel, how do
we interpret that? The way that Jensen Huang answered, it
is why wouldn't we invest if we believe in the
success of the products that we're working on together, because
(17:44):
they'll realize an excellent return. But nobody in this briefing
that I participated in, asked Jensen if the investment itself
was catalyzed or proposed by the administration.
Speaker 2 (17:56):
Yeah, I mean, just the cynic in me would say,
this looks really good for InVideo to make this investment
in a company that is partially owned by the US taxpayer,
partially owned by the US government, and show his support,
show in Vidia's support for this company. I want to
think about this in.
Speaker 5 (18:12):
The broader context.
Speaker 2 (18:13):
I mean Pat Gelsinger, ed was the CEO at the time,
and I think it was notable back in gosh, January
of this year. I think it was when in Video
had that big decline as a result of the deep
Seek news. Pat Gelsinger essentially coming out and saying that
he was going to buy some of the InVID in
Nvidia stock on LinkedIn. He said that that was a
really big deal because these two companies were seen as
(18:34):
rivals even then. Are they still seen as rivals right now?
Speaker 9 (18:38):
Guys? If I jump in my car right now, and
I go twenty five miles down the one oh one,
and I park up at Intel and climb onto the roof,
and I look back across the freeway, I'll see in
Video's headquarters, and funnily enough, if I look the other way,
I'll see AMD's headquarters. In the context of technology history,
we've not seen something like this since way back when
Microsoft kind of bailed out, which like is a moment
(19:01):
in history long forgotten. The way they explain it, and
you know, you tell me if you want to get
into then any gritty of it is that it's a
simple technology story. You know, the architecture that Intel CPUs
are based on still dominate the data center market, so
all the cpuser going data centers. You know, Intel has
a good hold in that market, and Nvidia sees an
(19:24):
opportunity to leverage that to their advantage.
Speaker 5 (19:27):
I'm trying to understand.
Speaker 6 (19:28):
So Vida invest five billion, the US took a roughly
ten percent stake and Intel in August, and that investment
so far paying off pretty nicely. Japan's SoftBank Group are
committed to investing a lot in US chip making. They
made a surprise two billion dollar investment last month in Intel,
It's a rather notable group of investors. How should one
read that? What is Intel becoming? Is this a step
(19:51):
toward Nvidia buying Intel? What's Is there a grand takeaway here?
Speaker 9 (19:56):
The way to interpret it is that Intel still needs cash.
So litbou Tan was very honest that he's still focusing
on shoring up Intel's balance sheet. You know, the difference
between Microsoft investing in Apple way way way back when
is that Apple was facing bankruptcy. Intel's not, but it's
(20:17):
profit has been eroded or obliterated, and Gelsinger's kind of
thing was to try and get back on a product roadmap.
Litbou Tans is like, I'm going to cut back. I'm
going to cut down to profit, get the balance sheet strong.
But on paper, Intel also represents everything that this administration wants.
A US company with heavy footprint in the United States
(20:39):
and on paper can do more manufacturing. The problem is
this in video agreement has nothing to do with manufacturing.
Speaker 6 (20:45):
Really well, our next guest was given us Hanson ques
several years ago about the chip wars, and so we're
going to talk a bit more about it with Chris Miller.
But you set us up so well as you always do,
ed Ludlow Blueberg TVB Tech co host, joining us there
from San Francisco. All right, so let's get to Chris Miller.
He wrote Chip War, The Fight for World's Most Critical Technology.
Speaker 5 (21:07):
It was written in twenty twenty two.
Speaker 6 (21:08):
That book made us all sit up and take notice
of the importance of semiconductors to the world, to the
most developed nations when it comes to economic growth, national security,
and so much more.
Speaker 2 (21:19):
Chris is Professor of International History at the Fletcher School
at Tufts University. He does consulting, but he has not
consulted for Intel or for Invidia. He joins us from
Palo Alto, California. Chris the book laying it out for
us three years ago. America's edge is slipping, undermined by
competitors in Taiwan, Korea, Europe, and above all China.
Speaker 5 (21:37):
Should we be.
Speaker 2 (21:38):
Shocked by a partnership such as this strange bedfellows in
a previous life, No.
Speaker 10 (21:44):
Well, I think from the perspective of ten years ago,
this would have been a pretty surprising pair up. But
today there's a real logic for it, and Video is
a leader in ai chips. Intel has been trying to
catch up when it comes to AI. But also Intel's
got a lot of unique know how when it comes
to building processor chips, which AI servers still require. So
(22:05):
certainly on the chip design side, there's differing areas of
expertise that both of these companies can bring together, all right,
but just.
Speaker 5 (22:13):
All of it together.
Speaker 6 (22:15):
The US taking that ten percent, approximately ten percent stake
in Intel over this summer, you've got SoftBank, there are
two billion dollar investment now in Nvidia.
Speaker 5 (22:25):
What is this?
Speaker 6 (22:25):
I mean, is this what you thought would happened need
to happen to ensure US remain a dominant player in
the semispace.
Speaker 10 (22:35):
Well, I think we're going to need to wait and
see what implication this announcement has, if any, for Intel's
manufacturing business. I think there's no doubt that Intel's going
to be an important chip designer in the future. Perhaps
smaller than it used to be, but they've got a
unique position in the market on the chip design side.
But from a national perspective, what really matters is Intel's
manufacturing arm and that's where Intel has really struggled the
(22:58):
last couple of years to stay at the cutting edge
technologically and also to win customers away from TSMC, the
Taiwanese market rival, and today in Vidia produces almost all
of its most advanced ships with TSMC. There's been a
big push from Washington to get companies like in Vidia
to diversify their supply and to try to help Intel
(23:19):
become a more successful manufacturer of chips for other companies.
The announcement today doesn't really say anything about that, but
I think a lot of people will ask whether this
is a stepping stone for other US companies in video
or some of its peers to bring more of their
manufacturing business to Intel's manufacturing arm.
Speaker 5 (23:37):
So chip war it is on? Or where are we?
Is it the beginning of the chip war?
Speaker 6 (23:42):
And I'm just curious, are you starting to think about
I don't know, another book and.
Speaker 5 (23:46):
Where it goes from here? Give us your thought here?
Speaker 10 (23:50):
Well, I think we're in the thick of the chip
war right now. Next to this news about in Nvidia
and Intel, there's a big debate going on in Beijing
and in Washington about which company should be allowed to
buy which type of the AI accelerators that Nvidia specializes
in designing that are almost exclusively today produced in Taiwan.
(24:12):
And so you've got these competitive commercial dynamics intersecting with
high geopolitics, and today you can't really separate the chip
industry from the decisions of President Trump or from Chairman
she Well.
Speaker 2 (24:23):
That's a really good point and kind of brings me
to my question about Intel specifically in the US taking
this unprecedented stake in this chip maker earlier this year.
What did you think of that, Chris.
Speaker 10 (24:36):
Well, I think the US has been pretty clear in
its desire, going all the way back to the first
Trump administration through the Bide administration, as well as both
Houses of Congress, both parties, that it sees Intel's success
in manufacturing as important for US national security. Right now,
most of the world's advanced processor chips are produced by
(24:57):
one company in one country, Taiwan, and the US want
some more diversified base of manufacturing these ultra critical chips
that are key both for smartphones and computers, but especially
for ai and Intel is one of the three companies
in the world, alongside Samsung and TSMC, that can produce
these cutting edge chips, and it's the only US company,
the only company with a major US footprint at least
(25:20):
right now, and so that's why the US government has
been trying to find ways to help Intel out.
Speaker 5 (25:24):
So what wouldations get going?
Speaker 2 (25:26):
Well, what would it take for Intel to be able
to compete with TSMC? I mean it got money from
the US government. It got money. It's getting money from
Intel here, as Carol always says, the devil's in the details.
And you said, we need to see exactly where this
money goes. But what do we need to see to say, Okay,
this company, this US company is now competing with TSMC.
Speaker 10 (25:47):
So there's no doubt that Intel needs money, and it's
raised some money from soft bank and the US government,
but the key thing that it needs is customers for
its advanced manufacturing processes. You only prove whether or not
they work if you've got at least sized, but ideally
large scale customers that are going to let you produce thousands,
tens of thousands, eventually millions of chips on your manufacturing process.
(26:08):
You can't scale up without customers, and right now, Intel's
got a couple of smaller customers for its manufacturing business,
but it's thus far failed to win a very large
scale customer. And Nvidia's one example of a company. There
are others that could provide a really large contract that
would let Intel test out its cutting edge manufacturing. And
right now I think the entire ecosystem is waiting to
(26:29):
see will it win some big customers that lets it
complete that scale out and testing of its cutting edge manufacturing.
Speaker 6 (26:36):
All right, So we're talking about Chris Miller, Professor of
International History at the Fletcher School at Tufts University, author
of Chip War, The Fight for the World's Most Critical Technology. Hey, Chris,
one thing I want to ask you, and I want
to go back to China. There was a storare was
reading this morning by our Javier bloss an opinion please piece,
and it was asking why is China stockpiling so much
surp plus oil? And one of there were like five
(26:57):
or six different reason and one of it was does
China fear an interruption and supply beyond US and European sanctions?
Speaker 5 (27:04):
Oil traders who traffic and intrigue at are only one
word Taiwan?
Speaker 6 (27:09):
Do you believe that there is a strong possibility that
there will be a conflict involving Taiwan? And what does
that mean for TSMC, who is so crucial in terms
of the global chip supply chain. What could that potentially
mean for the United States, the global economy.
Speaker 5 (27:30):
I mean, can you play that out and what the
likelihood is.
Speaker 10 (27:34):
Well, there's no doubt it's a possibility. Nobody knows for
certain what the likelihood is, but I think the magnitude
of impact is so large that even if you think
it's only five or ten percent likely, you've got to
take steps to prepare. All of the biggest, most valuable
companies in the United States require silicon that today can
in some cases only be sourced from Taiwan. That's true
(27:54):
for Nvidia, Troo, for Apple, for Google, Troop, for Microsoft, Proof,
for Meta. The entire US tech ecosystem relies on Taiwan's expertise,
and that's why there's been this push for the last
couple of years to find ways to diversify the US
from being so centrally exposed to China's decisions about war
and peace and the Taiwan Straits.
Speaker 6 (28:15):
And the reality is that the US is still very,
very exposed, correct because of how much TSMC still produces.
Speaker 1 (28:24):
That's right.
Speaker 10 (28:24):
I think the US has made a bit of progress,
but there's still a long way to go. And it's
a long way to go because TSMC is an extraordinarily
capable company in the entire Taiwan's ecosystem is just so
central to producing the semiconductor hardware that our tech firms
and aifirms depend on.
Speaker 2 (28:40):
What do you think of the politics of this and
the fact that TSMC has this facility in Arizona and
is working to increase its presence here in the United States,
does it put that at risk?
Speaker 5 (28:54):
No, I don't think so.
Speaker 10 (28:55):
I think TSMC has got a strong signal from its
customers that they wants space production. It's it's uncertainty created
by the tariffs that incentivizes more investment in the United States,
and it's got a signal from the US government again
across multiple administrations both parties, that they're going to keep
pushing for a bigger US footprint. But I think the
(29:16):
challenge that TSMC faces is twofold. First, all of its
keyr and D remains in Taiwan and will be in
Taiwan as far as we can see in the future.
So Arizona is helpful and diversifying today's manufacturing, but it
doesn't really get you diversification of the next generation. The
second thing is that the ecosystem in Arizona is still
less developed than it is in Taiwan, and so sourcing
(29:37):
the gases and the materials and all the spare parts
and specialized equipment you need for a cutting edge chip plant,
it's still harder and more expensive in Arizona than in Taiwan.
And that's going to be the case for some time
until we keep building out the scale of Arizona. And
all of that means that Taiwan's going to stay very,
very important where our Techi ecosystem for many years to come.
Speaker 6 (29:58):
Chris really quickly thirty seve seconds here, I mean, was
President Trump wright in his increasing tensions on China. It
started his first term and ramped up in the second.
Was he right, especially when you think about semiconductors, and
just quickly if you could.
Speaker 10 (30:11):
Well, I think the key driver of tensions in this
sector is actually China's desire to become self sufficient. We
were in a pretty stable gulibrium in twenty fifteen before
the Made in China twenty twenty five plan was released.
That happened before any of the US policies to support
its own ship industry, and that was really the catalyst
for introducing geopolitical tension as a central facet in the
(30:33):
chip industry.
Speaker 5 (30:34):
All right, so glad we could get some time with you.
Speaker 6 (30:36):
So relevant as always, Chris Miller, author of Chip War
and professor of International History at the Fletcher School at
Tufts University.
Speaker 2 (30:43):
Stay with us. More from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (30:49):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
Android Otto with the Bloomberg Business app. Also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa Play Bloomberg eleven thirty.
Speaker 6 (31:08):
We're looking at a day where we could potentially see
records across four major averages. We're talking about S and
P five hundred, Doubt, Nasdaq one hundred, and Russell two thousand.
If this happens, it would be the first time since
twenty twenty one.
Speaker 5 (31:22):
But we'll see whether or not we get there.
Speaker 6 (31:24):
In the meantime, curious to see what our next guest
has to say about the market environment. He's Aaron Kennon,
co founder and chief executive officer of Clear Harbor Asset Management,
about two billion in assets under management, joining us once
again from Stanford Connecticut. A lot of Zoe's Aaron coming
at us. We're more than twenty four hours from that
last FED decision. I don't know, what do you think
(31:46):
is the constructive conversation right now to have about the
equity markets, in particular valuations and what seems.
Speaker 5 (31:56):
To be kind of continued moves to the upside.
Speaker 11 (32:00):
Yeah, we've had quite a run, Carol, And you know,
as you mentioned, the S andp's up historic levels today,
and yet we look across the pond and emerging markets
are up twenty eight percent versus the SMPS fourteen, and
Europe's up eighteen versus the S and P fourteen. So
it hasn't just been a US story.
Speaker 5 (32:17):
I think that's an important.
Speaker 11 (32:18):
Narrative for at least our clients to understand. And certainly,
valuations are not cheap. We're trading at sort of top
quartile levels and most equity indicies other than the small
cap area, which is relatively cheap here. And yet we
also know that elevated valuations do not always or never
(32:42):
really augur bear markets. Usually there's some economic shock that ensues,
and so we're mindful of the valuations, but it's not
sort of putting up the cautionary flag too significantly for
us here, so we remain reasonably constructive here. Particularly now
the FED is starting to cut rates, and we think
they'll can and you to cut rates even though they
were quite cautious.
Speaker 2 (33:02):
Yeah, okay, so let's talk about that. Why are you
convinced that they'll continue to cut rates.
Speaker 11 (33:08):
Well, if you look at the FED, they always want
to be a little more optimistic tim as it pertains
the sort of the economic outlook. And this transcends this
FED chair yelling Bernanky Green Span have all done it.
You know, they don't want to sound gloom and doomy.
(33:28):
But you know, I would argue that there's still some
normalization to occur as it relates to just sort of
the FED funds rate and its relationship to inflation. I
also think too that you know, we have a FED
that's going to be leaning more towards supporting employment than
pulling down the last fifty basis points or seventy five
(33:49):
basis points of inflation. I think there's a sense that
there's more of a prerogative to do that to ensure
that we have a healthy employment market. So and then
of course you look at the FED fund's futures, which
is what the market thinks, and the market's calling for
five to six rate cuts between now and your in
maybe it will not be that aggressive. And we heard,
of course Chairman poly yesterdays say, well, we're on a
(34:11):
meeting to meeting basis, so we have we don't have
any insight. We're just going to look at the data.
Speaker 6 (34:17):
Yeah right, I mean just that dot plot. And of
course that's never set in stone. It can change and
it will change. But it's just a reminder that there
are a lot of different views being discussed there at
the Central Bank.
Speaker 5 (34:29):
So what do you do with new money in this
market environment?
Speaker 11 (34:31):
Erin, Well, I think we want to start with the
foundational framework of you know, what's the objective of the client,
what is their risk tolerance, whether it's an individual, family
or an institution, how much liquidy do they need? And
then we look at the you know, the where we're
allocating capital around the world, where there are opportunities to
maybe stick our next out a bit. We still believe
(34:54):
in the US equity story for the long run. We
still think the AI growth story is a is A
is in the earlier innings that we've got we're going
to go from picks and shovels to you know, a
broader you know, opportunity set within software, within AI. And
we think, of course, the tariff picture in the US
is probably going to mean more reshoring, more investment in
(35:17):
the United States going forward, but we also think there's
opportunity in places like Europe and emerging markets. In fact,
I think what's interesting right now is you have a
country like China that is historically selling to the developed world,
the United States and Europe. We've put up terrafs and
they can't flood our markets any longer with a good
portion of their goods, and so they're looking at places
(35:39):
where they can do that, and I think they're going
to be selling more and more of their goods to
emerging markets. It could push up emerging market currencies and
actually boost capital markets further in those regions. So we're thinking,
you know, about asset class level allocation as well as
uh you know, even within the equity asset class, sector level,
and then geographic levels.
Speaker 5 (35:59):
So there's a lot to talk about there. There is.
Speaker 2 (36:02):
I'm curious about your view on the US consumer. We
got news yesterday that the average FICO score slipped to
seven to fifteen in April from seven to seventeen a
year earlier. It's the second consecutive year over year drop.
It's essentially the fastest rate that credit scores have fallen
since two thousand and nine. We're also seeing some inflation
(36:22):
in some places as a result of tariffs or other
things as well, like beef prices. Beef prices moving higher,
which certainly affects consumers. How is the consumer doing in
your view.
Speaker 11 (36:33):
I think it's a tale of two stories, Tam. I
think you just alluded to half the country which doesn't
own financial assets, unfortunately haven't been able to sort of
hedge this rising inflationary price price that we've seen over
the last five years or so. And you have a
retail sales recently that indicated relatively robust numbers. But then
(36:57):
when you look beneath the hood to your question, where
is the retail sales growth really happening at the unit level,
It's happening at the upper quartile, upper decile of the
economic stratum in the United States. The lower half.
Speaker 5 (37:10):
They have credit card debt, they have auto loans.
Speaker 11 (37:12):
If they're lucky, they have a mortgage. But that's all
liability that's not asset, and so we have this sort
of bifurcation and the consumption pattern in the US.
Speaker 5 (37:22):
I think it's one reason why the.
Speaker 11 (37:23):
Fed's leaning towards the Dubvish side, why they cut rates
and they'll continue to cut them.
Speaker 6 (37:27):
So my sister had shared something with me a little
while ago, and forgive me, I'm trying to find out
who the individual, but it was essentially I think it
was a European CEO or something who basically said, I
don't want to be a rich man in a poor country.
And I just think this kind of resonates with me.
And we've talked about this case shaped recovery and economy.
(37:48):
So people who are in the market and have a
good job and doing well and own a house, so
many who don't. And you kind of laid it out
for us. I mean, isn't that a problem? Isn't that
a problem today? Continues to be a problem, And I
don't know something that ultimately is going to be playing
out like in our economy, in our markets. And forgive me,
(38:08):
it's a serious question, Aaron, I'm giving you about forty seconds.
Speaker 11 (38:12):
Yeah, Well, we have a widening mald distribution of wealth.
But if you look at where we were fifty years ago,
where we were one hundred years ago, and even where
we were thirty years ago, you know, it's sometimes easy
to think that, you know, we have it worse today
among large cohorts than we did fifty years ago. But
(38:35):
the rising wealth boat has lifted almost all tides. It's
just that the maldistribution of existing wealth has widened. And
so I think that the base level of sort of
quality of life has improved dramatically for the lower quartile
of Americans relative to fifty seventy five one hundred years ago.
And I think, you know, it's good to keep that
(38:57):
in mind.
Speaker 5 (38:58):
Always good also to get some time with you.
Speaker 6 (39:00):
Aaron Kennon, co founder CEO of Clear Harbor Asset Management.
Speaker 1 (39:04):
This is the Bloomberg Business Weekdaily 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
(39:25):
and always on the Bloomberg terminal
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