July 8, 2025 • 40 mins
Bloomberg’s Caroline Hyde discusses Apple's latest AI talent loss as a key AI executive leaves for Meta. Plus, Amazon's Prime Day kicks off to a tepid start as retailers and shoppers feel the bite of tariffs. And a conversation with CoreWeave CEO Michael Intrator as they buy Core Scientific in a $9 billion deal.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Eva Though in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up. Another setback for Apple's
struggling AI efforts as one of its top executives leaves
for Meta Plus. Amazon Prime Day kicks off, but already
spending is down about fourteen percent.
Speaker 3 (00:34):
We'll bring you the latest and we sit.
Speaker 2 (00:36):
Down with the CEO of Core Weeve after the company's
big purchase of Core Scientific for nine billion dollars. But
first we take you to these publicly traded markets right here,
right now, just erasing earlier gains. We're now trading about
flat on the Nasdaq one hundred y Well. Clarity, it seems,
coming from President Trump on a truth social post saying
(00:57):
August the first, that is your deadline and will not
be extended for the impact to be.
Speaker 3 (01:02):
Felt of reciprocal tariffs. Remember, an awful.
Speaker 2 (01:05):
Lot of negotiation still to take place, it would seem
we also want to be digging into what's happening on
the individual stock level. I want to shine, like what's
happening in terms of Apple and Meta. We're up four
tens percent on Apple and down about three percent on Meta.
This all after once again, Meta juggernaut that is sucking
AI talent with promises of tens of millions of dollars,
takes a top executive, a top AI engineer from Apple.
(01:29):
Now we've already got some thoughts coming from lead investors
such as Kathy would just take a listen to what
she thought about the movement of talent to Meta.
Speaker 4 (01:39):
What we've seen there is one turnover of management teams
after another, and it's all you know, Autonomous driving is
an AI project, just the largest AI project on Earth,
we believe, and so losing the talent that it has,
and as I understand it lasts another one today to
(01:59):
Mark Zuckerberg's top fifty. So they've had a lot of
trouble in this regard, and I think the burden of
proof is on them.
Speaker 2 (02:09):
And she learned that from our own Mark German, who
broke the story of the Apple executive lead believing and
Mark just dig into whom mister Pang is and why
indeed he's left.
Speaker 5 (02:21):
Yes, so Roman Pang. He is the distinguished engineer and
manager of the company's Apple Foundation Models team, Now we
talk about all these AI features, we talk about all
these AI companies, but how does generative AI actually work well?
Large language models? These are the models that actually power
this technology, and so all of these companies are racing
(02:43):
to get the best engineers in the world who can
develop these models, and Pang is known as probably the
best of the best. He was the most respected AI
engineer at Apple, the most respected AI executive at Apple,
and one of the most respected model engineers in the
entire artificial intelligence research community. So this is a massive
(03:04):
swing for Meta, a major higher by Meta, and as
big as a hired is for Meta, it's probably even
a bigger loss for Apple. Yeah, in many ways, this
was one of the guys holding everything together there. We've
known their AI features have been struggling, we know their
models have been struggling. There's a lot of background, you
can read all my articles about this as to why
(03:25):
they've been struggling. But this is a pretty big loss
for Apple. And I'm told in order to get paying
into Meta, they had to offer him a multi year
package worth somewhere north of two hundred million dollars.
Speaker 2 (03:38):
That's an extraordinary amount mark and it paints a picture
of the commitment coming from Mark Zuckerberg, but painting the
picture of morale left over at Apple because more people
like you to leave the Foundations Model team.
Speaker 5 (03:51):
I'm told there are more people likely to leave the
Apple Foundation Models team. Obviously, Paying is the most significant
AI departure from Apple since the generator of AI boom
started a few years ago. His top engineer, Tom Gunter,
he last a couple of weeks ago from the Foundation
Models team, and now Pang is leaving as well. I'm
(04:12):
told he'll start at Meta in the coming days, and
informed Apple yesterday that he would be leaving to Zuckerberg's company.
This certainly is the beginning I think of more departures
to your points. Apple just does not compensate in the
same way as Open AI or Meta. And what this
(04:33):
has done is it's raised the idea within Apple that
their points to need to start paying more to retain
these people, and so far they've shown our reluctance to
doing so. I'm told they didn't really make the counter
offer to keep paying. They didn't do much to keep them.
And when your employees being offered north of two hundred
million dollars, there's really not much you can do. These
(04:55):
pay packages from Meta are nearing what CEO of the
biggest public companies we're getting, So you can't really do
that for a singular manager or engineer.
Speaker 3 (05:06):
Money talks, so does a vision to win.
Speaker 2 (05:08):
Mark Gurman, thanks so much extraordinary reporting as always.
Speaker 3 (05:12):
Meanwhile, let's get the investor. Take here.
Speaker 2 (05:13):
Jed Ellebrook's with us as portfolio manager at Argent Capital Management, and.
Speaker 3 (05:17):
I just want to go broader here.
Speaker 2 (05:19):
The commitment that we're seeing from certain companies, take Meta,
but also Microsoft and Google. The so called hyperscaler is
to invest with such certainty in winning the so called
superintelligence race. Is this the right thing you want to
be hearing and seeing?
Speaker 4 (05:34):
Yeah?
Speaker 6 (05:35):
I think it is.
Speaker 7 (05:36):
This is an exceptionally big money competition. It takes really
deep pockets to attract the engineering talent to get the
compute power. So the big companies are flexing their muscles
and showing great commitment, and they're seeing the demand signs
thus far that that effort is worthwhile. And I think
it's going to continue, and I think we're going to
(05:58):
get a really good indication of that here in a
few weeks when Microsoft reports their fiscal fourth quarter earnings,
they will announce CAPEX intentions for their next fiscal year,
and I think we're going to see another big increase,
probably not as big as last year, but still a
double digit percentage increase to a number that's north of
one hundred million dollars.
Speaker 2 (06:16):
So, before I dig more into the hyperscale in the
AI trade, jed with your more than two decades of
experience managing money here in large caps, is Apple just
one that you have to view in a different manner
now the way in which the company sees future growth.
Speaker 7 (06:32):
Yeah, Apple is a defensive tech business for investors. It
is not a dynamic growth business, hasn't been for some
time and won't be in the future. They're behind in
AI capabilities and talent and resources, and that is a
concern for investors. But I do think it was kind
of interesting that a week or two ago, when word
(06:54):
was got out that Apple was considering using anthropic and
a open AI models more for their customer interactions on
the phone, that the stock went up three or four
percent on that news. The market liked Apple de emphasizing
its own internal AI research.
Speaker 3 (07:11):
Effort, and that was Mark Guman's reporting as well.
Speaker 2 (07:14):
So Pivot therefore, to the companies that are committed that
are building the large language models. I know, in particular,
you think Amazon's a winner here.
Speaker 8 (07:21):
Why I do.
Speaker 7 (07:23):
I think that their AWS cloud computing business is very
well positioned to ride the wave of AI spending. Enterprises
are deploying AI tools on their cloud platforms, and I
think that AWS, Azure, and GCP all have really outstanding
growth prospects. And I guess we should throw Oracle in
(07:43):
there as well.
Speaker 2 (07:44):
Interesting that Oracle is also navigating a future of more
hurdles when it comes to accessing chips by the country.
You think of Oracle, which has been investing a lot
in Malaysia, for example, And we understand from reporting here
at Bloomberg that maybe the administration is going to make
it harder and get your own video chips into countries
such as this without licenses. But I'm also interested more
broadly about how any of these tech giants are navigating
(08:07):
the current trade environment. We've just had the latest headline
out of President Trump that August the first is where
he's sticking.
Speaker 7 (08:14):
Yeah, I think he said. I think he said the
opposite more or less yesterday. So it's hard to put
too much stock in one day's worth of comments from him.
But yeah, the big tech companies have incredible advantages. Their
balance sheets are incredibly strong, They're producing prodigious cash flow,
and they have you know, all the AI capabilities that
we listed earlier, So they're ready to flex those muscles.
(08:36):
They are ready to pivot and adjust, and I think
that they're all really well positioned to succeed. AI is
a big money game, and is.
Speaker 2 (08:45):
It one you want to commit more money to at
this moment? Jed, we're basically near record highes.
Speaker 5 (08:52):
Yeah.
Speaker 7 (08:52):
I think for some of them the answer is yes.
You know, meta valuation is higher than normal. I think
maybe that's one where you don't need to rush into
it right now. But I think others are you know,
fairly compelling. Amazon, like I said, is our personal favorite Microsoft.
Is that a huge run up here in the last
month and a half. Maybe no need to rush on
that one. In Nvidia, I think is pretty compelling, you know,
(09:14):
exceptionally strong competitive.
Speaker 6 (09:16):
Position with the GPU chips.
Speaker 7 (09:18):
They they just sent out Blackwell Ultra, the first one
into the wild last week.
Speaker 6 (09:24):
That's going to be.
Speaker 7 (09:24):
An incredibly compelling product for enterprises and hyper scalers to
put in their data center. So yeah, there are places,
I think where you can put money to work confidently
today in businesses that are AI beneficiaries.
Speaker 2 (09:35):
They said out into the world to call weave. And
we've got the core vav CEO coming on a little
bit later in the show. But Jen, last question for you.
Is it all about American exceptionalism here?
Speaker 3 (09:43):
Still?
Speaker 7 (09:45):
Yeah, it's such an interesting investing environment today. We have,
you know, I think a fairly moderate growth US economy,
but with an AI revolution over here on the side
that is very compelling is going to continue I think
for quite some time, both the investment and then you know,
the inference demand, the software deployment of these tools. So yeah,
(10:08):
I think I think that the outlook for US stock markets,
for tech stocks in particular, is pretty bright.
Speaker 2 (10:16):
Urgent Capital Management, Jed Eliver, it's been great having your perspective.
Speaker 3 (10:19):
Thank you.
Speaker 2 (10:20):
No, let's shift gears and look at what the shares
of Samsung currently doing trading in London as we speak ADRs,
and look they are down by eight ten percent. Profit
fell for the first time since twenty twenty three. In fact,
it plummeted fifty six percent. This is once again about
the chip maker not managing to win when it comes
to high bandwidth memory yet.
Speaker 3 (10:39):
But is this the bottom?
Speaker 2 (10:40):
Some analysts feeling that way, investors feeling that way, particularly
over at CLSA, and notably, we keep an eye on
how these companies perform out of their earnings.
Speaker 3 (10:48):
Meanwhile, coming up.
Speaker 2 (10:49):
President Trump unveils a wave of letters again threatening key
trading partners with high tariff rate impact on big tech
is coming up next for you.
Speaker 3 (10:57):
This is Greenberg Tech.
Speaker 2 (11:12):
Wednesday was the original tariff deadline, but less than a
handful of agreements are ready to announce, and President Trump
instead is now saying his new August first tariff deadline
will not be extended. Let's get to the latest bluegg's
Balance of Power host Kaylee Lines is with us taking
to truth social to well try and tell us this
commitment to this one.
Speaker 4 (11:33):
Yeah.
Speaker 9 (11:34):
This is after he was asked at the White House
yesterday Caroline if this was a firm deadline, and he
said yes, August versus firm, though not one hundred percent firm,
indicating some degree of flexibility. And it seems that's what
he's trying to course correct for with this true social
post today, saying that on August first, tariffs will start
being paid. He says, there has been no change to
that date, and there will be no change to that date.
(11:56):
I would just keep in mind that initially he had
suggested there wouldn't be a change to the July ninth
date either, and that is the action he signed yesterday
to extend the deadline from July ninth to August first
for various trading partners that we don't have trade deals
with yet. He of course, yesterday wrote fourteen letters and
sent them to the heads of fourteen different countries outlining
the tariff rate that they will start paying next month
(12:16):
in the absence of a deal, ranging from twenty five
percent for countries like Japan and South Korea up to
forty percent for countries like Mianmark and Laos. So he
did say in the letter that if countries would like
to open their financial markets eliminate tariff and non tariff barriers,
the tariff set out in the letter could be revisited,
so still leaving some wiggle room for negotiations here. The President,
(12:37):
also in on Tru's Social today, is saying additional letters
will be sent today, tomorrow and for the next short
period of time. So we do expect to get news
on new tariff rates that are set on various countries,
and we also could still see news on deals. Our
understanding is that deals are getting closer for countries like India,
for Taiwan, for the European Union as well. Signals that
(12:57):
there has been progress there. It's just not clear when
may be announced, in how robust they will be, or
whether or not. It's really just trade frameworks we're talking
about here, knowing that the team that the administration has
put together to work on these has struggled to make
progress in a lot of arenas, not only because it's
about the teri free countries could pay overall, but there's
also sectoral tariffs to contend with existing ones like tariffs
(13:20):
on autos and steel and aluminum, for example, but also
ones that have been threatened that have opened Section two
thirty two investigations into them, like semiconductors and pharmaceuticals, and
that could be a sticking point in all of these talks.
Speaker 2 (13:32):
Caroline, and of course semiconductor's key to this audience putting bags,
Kaylee lines, thank you so much. Now let's bring in
Michelle Guider now from more perspectives, she is the CEO
of the Kruck Institute for Tech Diplomacy over at Purdue.
You served as an Assistant Secretary of State for Global
Public Affairs under the first Trump administration that was twenty
eighteen to twenty twenty. And Michelle, what the big picture
(13:52):
we need to remind ourselves is what the ultimate goal
is here. Yes, they might have to push back deadlines,
but the aim is to have fairer trade.
Speaker 3 (14:00):
Oh, we actually be getting to that point.
Speaker 6 (14:03):
You're so right, Caroline. The big picture is really important here.
So let's remember that tariffs are a tool that are
a means to an end of a very big objective here,
and that is for America to both design and physically
build the technology infrastructure that is going to be the
backbone of the free world in the next century. And
so in order to do that, we have to build
(14:25):
and in some cases rebuild a lot of critical industries
here at home, and we have to rebalance the trade
ecosystem in order to do that, because the current system
right now disincentivises our leadership and critical industry. It rewards offshoring,
it punishes production here at home, and ultimately exports leadership
in a lot of really important industries to countries overseas,
(14:47):
and that can't be the case if we're going to
lead in the new technology era. And I'll give you
a really good example. For the AI revolution to happen,
we have to build a lot of data centers, and
in the pipeline at the end of twenty twenty four,
we had fifty two million square feet of data centers
that we have to build in the United States. Do
you know how much steel that that requires. It's billions
(15:07):
and billions of dollars of steel. How great for that
to be built by American companies with American workers, rather
than from artificially cheap steel from international partners overseas. So
that's what's at sake. It's American leadership in many critical
industries are going to be good for us, and it's
going to be good for our allies.
Speaker 2 (15:26):
Many would say, though, taking out of chips, looking at
defense for example, or indeed looking at magnets and electric
vehicles and the electrification of our economy here in the
United States, we yet need more clarity on ultimate demand
hearing time and time again than the defense tech startups
that they need the DoD to actually buy the stuff
(15:48):
commit to we're hearing time and time again that we
can't start extracting rare earth that we don't have access
to in the United States yet because there's not clarity
on whether the energy field will already transition the way
that they thought, particularly as you see the big beautiful
bill as so cooled, seeming to drown out some of
that movement to electrifications. So, Michelle, how did they garner
clarity and security here?
Speaker 6 (16:10):
Well, when it comes to clarity and it comes to certainty,
I don't think there was anything more certain than the
fact that tariffs were coming. When Donald Trump was re
elected president. It was a core pillar of his first administration.
When I served as Assistant secretary, Fair and reciprocal trade
was a core message that we were communicating to every
international partner in one hundred and eighty five missions across
the world. And you can even go back to nineteen
(16:32):
eighty eight. There's a interview that Donald Trump did with
Oprah Winfrey talking about how he would revamp US foreign policy,
and in that he talks about asking our allies to
pay their fair share, and he focuses on allies, he says,
because they're much easier to talk to than our enemies,
and he highlights what country. He highlights Japan, and he
(16:53):
talks about how they're dumping cars and dumping VCRs into
the American market. At the same time they're making it
really hard for Americans to do BIS. So this has
been a long time coming, but we're trying to rebalance
a trade system that's existed for fifty sixty, seventy, in
some cases eighty years across ninety countries. It's going to
take some time, and some deadlines are going to be pushed,
(17:13):
and it's going to be a little bit messy. But
at the end of this, if American America can come
out leading in critical industries, that'll give really good certainty
to our businesses in the long term.
Speaker 2 (17:25):
Should if we've got the talent to be able to
do the manufacturing here, particularly as we look at making
H one BVS is tougher, for example, I'd.
Speaker 6 (17:34):
Say yes, and we would benefit from all the brilliant
talent from across the world. The Crock Institute is based
at Purdue University. It is the largest engineering school in
the country, graduates more engineers than any other top university
in the countries. It's engineering excellence at scale that type
of talent is ready for national security jobs in commercial
(17:56):
industries and in defense industries that are going to matter
to our leadership in the twenty for a century, and
the same is true in many other places across the country.
So we have the talent. What we need to do
is incentivize the economic landscape and the trade landscape in
order to let them flourish.
Speaker 2 (18:11):
Michelle Geider, great to catch up with you at the
Crack Institute for Tech Dipromacy over at Purdue. Now coming up,
Amazon's Prime Day is kicked off, but shoppers they might
not see the heavy discounts like years prior. We're on
that next. This is Bloomberg Tech.
Speaker 3 (18:42):
Time.
Speaker 2 (18:42):
Now for talking tech and first up, your sensitive data
or should from today be safer? After a Justice Department
rule takes effect today after an end of a ninety
day grace period. Now companies across sectors must now comply
to the safeguard of bulk transfers and sensitive data from
countries the post of National Security risk, including China and Iran,
(19:02):
plus Epic Games. While it is settled an anti trust
case against Samsung alleging that the company was conspiring with
Google in blocking rival at marketplaces.
Speaker 3 (19:11):
By default, Epic dismissed all.
Speaker 2 (19:13):
Anti trust claims against Samsung and Google, but Google remains
defendant on several non anti trust claims. And some brands
and consumers are sitting out on this year's Amazon Prime Day.
Is President Trump's trade wark really rattles shopping sentiment? Some
mergents are actually unable to offer discounts due to increased
costs from tariffs. Some shoppers, well, they're planning to skip
(19:35):
Prime Day altogether.
Speaker 3 (19:36):
Prime Day spending has already fallen.
Speaker 2 (19:38):
It currently seems fourteen percent in early hours compared to
twenty twenty four. So let's get to it, Bloomberg, Spenser's
Soapa and give us the inside track.
Speaker 3 (19:46):
Is it all about tariff's here, Spencer?
Speaker 10 (19:49):
Yeah, tariffs are definitely a key factor. This is like
our first Prime Day, you know, since Trump's President Trump's
Liberation Day tariffs, and that really just created Even though
a lot of the tariffs are still on again, off
again and being negotiated, it's just this cloud of uncertainty
that has forced a lot of businesses to just be cautious.
You know, how much inventory do we have in the country.
(20:11):
Do we really want to discount it? That deeply if
we're trying to protect our margins from tires down the road.
So all of that stuff is kind of weighing down
on Prime Day this year.
Speaker 2 (20:19):
So why they're making it so long, such an extended period,
and what ultimately do you think they'll end up offering here.
Speaker 10 (20:26):
That's a really great question. So Prime Day started as
one day, you know, when they started in twenty fifteen,
and it gradually got longer. It was two days last year,
now it's four days this year. The best thing to
see is that like a lot of their competitors, like
Walmart has like a six day sale, and I think
Target has a week long sale that they might. Amazon's
likely looking at those and saying, okay, let's just extend
(20:48):
the number of days and prevent us from losing sale
to a lot of these competitors, and especially competitors like
Walmart and Target. The appetite is really strong for everyday
essentials things like snack packs for lunchboxes. So Amazon needs
to to fight them on the you know, the grocery
aisle as much as for electronics.
Speaker 2 (21:11):
Yeah, and when you think of electronics, you will immediately
think of China. Just more broadly, how have the companies
you speak to the SELVI Amazon been navigating me on again,
off again, feeling around tariffs.
Speaker 10 (21:23):
Well right now in terms of Prime Day, we're seeing
Apple is going very hard on discounts, you know, very
very deep discounts. I spoke with the Crazy Coupon Lady earlier.
They kind of track all of these deals, you know,
and they use They used Black Friday last year as
at benchmark, and they're seeing Apple kind of, you know,
going even less than some of their Black Friday deals
(21:44):
a year ago. They call that. One thing in particular,
like app the AirPods for you know, earbudds were discounted
very steeply, but then you contrast that with Amazon's own devices,
and the discounts on things like their echo speakers and
stuff were pretty soft. So well, we're seeing these these
companies react react differently, you know, to the tariff situation.
Speaker 2 (22:07):
And question is how the shopper reacts. We'll get the
data throughout the day. Spencer SOFA brilliant to have you.
Speaker 3 (22:12):
Thank you.
Speaker 2 (22:13):
Coming up, we're going to be speaking with the care
We've CEO Michael and Trader under the company's nine million
dollar purchase for Core Scientific. That's next, this is Blue
meg Tech. Welcome back to Blue meg Tech. Quick check
(22:38):
on these markets because we're being knocked around about by
the tariff headlines. The latest coming out of President Trump
is that August the first is hard and fast. You
will see those reciprocal tariffs put into force on that date.
We're currently just off by about a ten percent. On
the upside is the likes of Tesla and in video
from a point's perspective. On the downside, Amazon drags as
we see Prime Day off to a slow start. So
(23:00):
is Google and Microsoft on the red. But let's look
at Data Dog for a moment, because this is a
company that's about to enter the S and P five
hundred this week. We're off by three point eight percent.
This is as we get a key downgrade from Googenheim.
Why open ai optimization risks, So they say they cut
to a cell from neutral, worrying about the longevity of
that particular client. So it says Howard Marr, So keep
(23:20):
an eye on that company. But remember it's rallied hard
after the news that it will be entering the big
dogs for Data Dogs. Now, let's also take a look
at the shares a core weave and core Scientific that.
Speaker 3 (23:31):
Huge deal announced yesterday that.
Speaker 2 (23:33):
Core Weave is indeed acquiring core Scientific in a nine
billion dollar all stock deal. Now we're currently off by
two point four percent as you'll see on core Weave
just a bit. But all of this is about boosting
Corey's infrastructure to meet the insatiable AI demand. We get
the inside track with Michael and Tracho's the core We've
CEO now on hot off the heels on this particular deal.
(23:53):
Why Michael go vertically integrated?
Speaker 3 (23:55):
Explain it for us.
Speaker 11 (23:56):
Sure, thank you for having me and uh, the the
cloud marketing at large is going through this incredible inflection
point where the the scale of what needs to be built,
the type of infrastructure that needs to be built, the
software that's required to be able to build it, all
(24:19):
of those things are changing in a generational way. And
when we have talked about our company, when you know,
and I have now been shy about this, I believe
that there is an opportunity to U integrate so that vertically,
so that you can deliver the best solutions to your
(24:43):
clients that are the largest, most sophisticated consumers of this infrastructure.
And so we we you know earlier this year, you
saw us move up the stack with the acquisition of
weights and biases, where we an extension on the software
that we have right, so our software is like really
(25:06):
focused on orchestration and monitoring of the GBUS. As you
move up the stack into weights and bias, it connects
closer to the clients, and if you move down the stack,
you're down into the physical data centers, the power requirements,
all of those.
Speaker 2 (25:24):
I think people the investibate saw weights and biases as
margin a creative, as more able to really bring the
profitability to bear. But many worry and I cite for example,
Stifel downgrading the stocks. They seem positive on the long
term idea of this purchase of core scientific but a
vertical data center provider changes the valuation structure from their perspective.
(25:47):
Why go down the stack when perhaps it doesn't mean
you as profitable.
Speaker 11 (25:51):
Yeah, so I would I would take an issue with
that assessment. I think that there's enormous opportunities for us
to capture margin by insourcing the infrastructure component of it.
One number two is I think that in a market
that is as dynamic as this market, is the ability
(26:12):
to have more physical control over your ability to build
more control over your ability to deliver infrastructure is enormously
valuable to a company like ours. And what we're doing
by integrating with Core Scientific a company that we know
very very well. We have very long standing relationships with them.
(26:33):
Our first contract was in twenty eighteen.
Speaker 3 (26:36):
And you tried to buy them for about a billion
last year.
Speaker 11 (26:38):
R We did try to buy them for last year,
and during that period we've extended our relationship with them.
We've expanded our relationship with them, and we continue to think,
as they continue to think, that the integration of the
two companies is net positive for both investor groups. And
(27:00):
you know, over time, we believe that that will become
incredibly clear to the investing public at large.
Speaker 2 (27:07):
And let's talk about that over time perspective, because I
think Rubin roy over at Stiefel is saying, look, longer term,
he does get it, but we need to see material
margin accretion and growth benefits.
Speaker 3 (27:16):
What sort of time frame are you seeing that?
Speaker 11 (27:19):
Yeah, So, look, when when you insource a data center
that you have a hosting contract with where where you're
building your infrastructures, immediate right, because as soon as you
acquire them, you've moved the contract with which you're paying
them on a monthly basis into internalizing it, and so
(27:39):
you will see a margin and creative impact associated with
us purchasing them as soon as this deal closes. And
so once again I take issue with with with the
assessment that this is not going to be margin a cretive.
I actually think it's going to be enormously marginal and
creative for the combined companies. But I also think it's
(28:00):
going to be incredibly constructive for our ability to meet
the demands of the clients. And what gets lost in
this discussion sometimes is that you have a group of
clients that are moving so incredibly fast to build infrastructure
at enormous scale that they require to be able to
(28:20):
deliver artificial intelligence to the world, our ability to control
our destiny in terms of how we build, where we build,
when we build. By integrating the two companies, where we're
making huge strides in that direction.
Speaker 2 (28:35):
And you get one point three gigawats thereabouts of the
power that's going to be in the data centers. Just
talk to us a bit about say the Oracle open
AI reported deal four and a half gigawatts is what
they seeing promised to open AI in the longer term
is not achievable. That sort of measure of scale, of power,
of necessity to go into the data.
Speaker 11 (28:53):
Centers it is. It's going to take a lot of work.
It's going to take a lot of of investment. It's
going to take a lot of thought around how you
do that. And that once again leans back into the
idea that you want to vertically integrate so that you
can do it in the most efficient, most effective way.
Speaker 3 (29:12):
What's the hardest work.
Speaker 11 (29:14):
Oh, there's a lot of hard work here right, Like
you know, the the integration of two companies is always challenging.
The ability to continue to extend our capacity to deliver
infrastructure is always enormously challenging.
Speaker 3 (29:31):
Is energy that bottlening?
Speaker 11 (29:32):
That energy is a bottleneck. The you know, the pipeline
of projects within the core scientific portfolio positions us to
jointly be able to deliver infrastructure on the largest scale
in the world. And so when you when you look
back over the last several months, you know, we did
a twelve billion dollar contract, right or just under twelve
(29:57):
you saw the thirty billion dollar contract. The demand is voracious.
Speaker 2 (30:01):
And is it just coming from Microsoft? Is it coming
from more players.
Speaker 11 (30:04):
Now for you, it's coming from more players. I mean
during during our earnings, you know, you heard me talk
about the fact that we actually had a second hyperscaler
begin to come on board and use us as a
solution for building the highest quality infrastructure and delivering compute
to them. And so you're you're really starting to see
us broadening our client base, which is going to be
(30:26):
a work in progress for for for a long time
because there is concentration with these really large contracts. But
it's it's been a you know, incredibly important for the
whole company and for the investors in the company to
see the progress that we're making bringing on more and
more names, you know, across the enterprise space, more names
(30:48):
across the IDAI labs and the AI native, increasingly building
our footprint among the clouds. It's it's really been a
great indication of the demand for the product that we deliver,
and we're positioning ourselves to be able to deliver it
faster and larger.
Speaker 2 (31:08):
And the share price has rocketed off the back of
it since your IPO earlier this year. But I try
and understand a little bit about the acquisition play that
you're making the fact that looks as though you're im
boltant to do more.
Speaker 3 (31:19):
Where is it most important to do it? Is it
the downstack, is it hire and stack? Is it more
about the software and services?
Speaker 11 (31:26):
So we really do look at it from a long
term perspective, and it's what's allowed us to build a
company that is breaking the mold to an extent in
terms of launching the AI cloud, a new cloud, a
cloud that doesn't fit into the history of the Big
three right, and that's been based on the idea that
you're making decisions about what it takes to deliver the
(31:49):
highest quality infrastructure and products to your clients. You will
see us continue to build up the stack. This acquisition,
of course, Scientific is an example of us going down
the stack. We have other data centers that we are
building internal to the company. You know, it's part of
this strategy of how you get to scale, because only
(32:09):
by getting to scale are you relevant in this revolution
that's occurring within the cloud space. And this is an
important building block, an important step for us to be
able to ensure that we are able to continue to
participate in the scale building of this infrastructure.
Speaker 2 (32:27):
We loved hearing the Vision Mia Colent traitor, thanks for
coming on to join with us, is the CEO of
cour We've hot on the heels of that big deal. Meanwhile,
coming up start up Nothing is betting big on a
phone they designed to be used less then nothing, CEO,
He'll pay you.
Speaker 3 (32:41):
That's next, the say is blue Bag Tech. Let's take
(33:01):
a quick.
Speaker 2 (33:02):
Check in on Tesla shares now, because we're trying to
make up some lost ground today at least, but we
are still lower of the course of the last three
training days by more than four percent. After Elon Musk
announced he's forming a new political.
Speaker 3 (33:14):
Party over the weekend.
Speaker 2 (33:15):
Of course, now Ark in their CEO Kathy Wood joined
Bluemberg Surveillance earlier to weigh in on this, as some
analysts call for the company's board to get involved to
address masks politicking and whether it has hurt Tesla's standing
with car buyers.
Speaker 4 (33:30):
We've been dealing with controversy around Elon Musk in one
form or another since we first bought the stock when
the company was founded in twenty fourteen, and we owned
Tesla in it's one of the top holdings in three
of our ETF so arkk W and Q so we
are watching this like a haark, no question about it.
(33:51):
But with the experience over the last eleven years, we
turn around today and see Tesla really not an EV
manufacturer anymore. Moving into the robotaxi age, we believe successfully
and we believe it will scale much better than most
of its competitors. We see SpaceX really only ninety percent
(34:14):
of all of the satellites out there, neurally transforming lives
of paralyzed people, people with als, and probably most surprising
of all, XAI. Now we own all of those again
in our venture fund, following them very carefully. XAI is
on some benchmarks. It hit a point that three pro
(34:39):
hit in June, it hit it in February. So you know,
we are very focused on barriers to entry technology moats
and we believe that the moats that Elon has built,
and obviously this is not just Elon. He's attracting the
best and the brightest to help solve some of the
(34:59):
world's biggest problems. So again we do trust the board
and the board's instincts here and we stay out of politics.
Speaker 8 (35:11):
Well, we'd love your opinion on the current situation, just
on TESTA specifically, you mentioned some phenomenal companies doing some
incredible things for Tesla, though, do you believe that Elon
can pursue his political ambitions at the same time pursuing
the best interest of Tesla shareholders.
Speaker 4 (35:27):
One of the announcements Elon made recently is that he
is going to oversee sales in the US and in Europe.
And when he puts his mind on something, he usually gets.
Speaker 3 (35:39):
The job done.
Speaker 2 (35:42):
I confess CEO and CIO Kathy with them and let's
talk about nothing. It's the hardware startup taking aim at
the big smartphone makers like Apple, like Samsung is the
latest phone three is launching.
Speaker 3 (35:54):
With a design actually aimed to be used less.
Speaker 2 (35:57):
Joining us now is Carl Pai Nothing co founder CEO
are in New York over from London.
Speaker 3 (36:02):
Why do we need a smartphone that we use less?
Speaker 12 (36:06):
Smartphones used to be these tools that were supposed to
make us more creative and more productive, just like the
personal computer. Right, it was a bicycle for the mind.
But today on smartphones we just keep doing scrolling. And
we wanted to create a product that help people be
more in focus. Right, So if you put the phone down,
you can still be notified about the most important things.
That are happening without always checking your screen. I don't
(36:28):
know about you, but for me sometimes when I have
to respond to an important message, I just happened to
go into my social media and scroll a bit afterwards.
Speaker 3 (36:36):
Yeah, so it's keeping you engaged in the process.
Speaker 2 (36:38):
What's interesting is, well, it looks like nothing else really
on the market. People have loved that. The geeks in
particular have loved that. But what sort of scale you're
getting to now? Who is buying this?
Speaker 12 (36:49):
Yeah, so we're targeting a very different customer base. As
a startup, we're really focused on our users, the young
creatives today we are this year, we're doing about a
billion in revenue. Last year we did north of five
hundred millions. We're doubling this year and it's a good start,
but a long way to go.
Speaker 2 (37:08):
What are they trading in for because this is Android
operating system. Are people ditching their Samsungs? They ditching their apples?
Speaker 3 (37:14):
What are they doing?
Speaker 5 (37:14):
Yeah?
Speaker 12 (37:15):
Our users come from all over the industry. Actually, we
have two types of products. We have earbuds and smartphones.
For our earbuds, more than half of the users come
from iPhone, which is really surprising to us and our
phones come from all over the market, but we do
see a lot of iPhone users switching to US.
Speaker 3 (37:33):
Where are these being made?
Speaker 12 (37:35):
We manufacture most of our phones in India, but we
also have a site in China, and we have a
new site coming up soon as well.
Speaker 3 (37:41):
Where would that be to be announced? Okay?
Speaker 2 (37:45):
Interesting, because what do you you're a man who's you've
built companies before. Boy, have you built well over in China?
You sort of stuck in really in the Chinese smart
phone industry yourself, and now we're seeing this pushback in America,
in particular manufacturing in the United States.
Speaker 3 (38:02):
What do you make of.
Speaker 2 (38:03):
That ability, that capability to get the scale the talent
here in the US.
Speaker 12 (38:07):
It's not something that we thought about a lot because
we've been really focused on markets like Europe and India,
and we're manufacturing in India. Recently, we just started exploring
how to export from India to the rest of the
world with a phone three. Actually we're exporting from India
to the US.
Speaker 3 (38:22):
How hard is that with tariff's?
Speaker 12 (38:24):
Uh, it's it's okay. I mean, I don't think the
tarifts are that bad from India.
Speaker 2 (38:30):
Okay, So you don't think that a little bit of
a hit to what is a more expensive version of
the phones that you're now having? What is it sem
nine to nine as the price point for this particular phone.
Why go to that upscale level?
Speaker 3 (38:41):
You've been more of a mid range kind of.
Speaker 12 (38:45):
We always wanted to compete on the flagship level, but
we had to build a lot of our capabilities because
when we sell a product at eight hundred dollars, people
expect the best the best camera, the best screen, the
best of everything. And building a smartphone company is hard,
like all types of hardware is hard, but smartphones are
particularly hard. I think we finally got to a space
(39:05):
where our engineering capability is at the level where we
can take a shot at the flagship.
Speaker 2 (39:11):
You have that experience having helped build OnePlus now with nothing,
how much is there now? Focus on the AI integration
because that's where Apple seems to be stumbling.
Speaker 12 (39:19):
Yeah, we're super excited about AI. We're not really focused
on the large language models, but we're focused on how
to apply AI. And I believe that to win in
consumer AI, you need to own your own hardware. And
for me, the smartphone is the most exciting piece of
hardware because of two reasons. It's got the most scale,
right because more than one point two billions smartphones are
(39:41):
sold every year, and it's also got the most depth
in terms of what we do on our phones. We
do everything. So I think consumer AI needs both scale
and depth because we want to be able to really
understand the users, to then automate the smartphone use as
much as possible.
Speaker 2 (39:55):
For them to do all of that, and to get
more manufacturing footprint.
Speaker 3 (39:59):
You need money. Are you raising money? What sort of
scale do you need?
Speaker 12 (40:02):
We raised about two hundred and fifty million dollars so far.
We've been relatively capital efficient. We've done more than a
billion dollars in lifetime sales. We're doing a billion dollars
in sales this year. Of course, we're always entertaining conversations,
but we have nothing to announce right now.
Speaker 2 (40:17):
Please come back when you do call pay of nothing
great to have some time with him
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Eva Though in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up. Another setback for Apple's
struggling AI efforts as one of its top executives leaves
for Meta Plus. Amazon Prime Day kicks off, but already
spending is down about fourteen percent.
Speaker 3 (00:34):
We'll bring you the latest and we sit.
Speaker 2 (00:36):
Down with the CEO of Core Weeve after the company's
big purchase of Core Scientific for nine billion dollars. But
first we take you to these publicly traded markets right here,
right now, just erasing earlier gains. We're now trading about
flat on the Nasdaq one hundred y Well. Clarity, it seems,
coming from President Trump on a truth social post saying
(00:57):
August the first, that is your deadline and will not
be extended for the impact to be.
Speaker 3 (01:02):
Felt of reciprocal tariffs. Remember, an awful.
Speaker 2 (01:05):
Lot of negotiation still to take place, it would seem
we also want to be digging into what's happening on
the individual stock level. I want to shine, like what's
happening in terms of Apple and Meta. We're up four
tens percent on Apple and down about three percent on Meta.
This all after once again, Meta juggernaut that is sucking
AI talent with promises of tens of millions of dollars,
takes a top executive, a top AI engineer from Apple.
(01:29):
Now we've already got some thoughts coming from lead investors
such as Kathy would just take a listen to what
she thought about the movement of talent to Meta.
Speaker 4 (01:39):
What we've seen there is one turnover of management teams
after another, and it's all you know, Autonomous driving is
an AI project, just the largest AI project on Earth,
we believe, and so losing the talent that it has,
and as I understand it lasts another one today to
(01:59):
Mark Zuckerberg's top fifty. So they've had a lot of
trouble in this regard, and I think the burden of
proof is on them.
Speaker 2 (02:09):
And she learned that from our own Mark German, who
broke the story of the Apple executive lead believing and
Mark just dig into whom mister Pang is and why
indeed he's left.
Speaker 5 (02:21):
Yes, so Roman Pang. He is the distinguished engineer and
manager of the company's Apple Foundation Models team, Now we
talk about all these AI features, we talk about all
these AI companies, but how does generative AI actually work well?
Large language models? These are the models that actually power
this technology, and so all of these companies are racing
(02:43):
to get the best engineers in the world who can
develop these models, and Pang is known as probably the
best of the best. He was the most respected AI
engineer at Apple, the most respected AI executive at Apple,
and one of the most respected model engineers in the
entire artificial intelligence research community. So this is a massive
(03:04):
swing for Meta, a major higher by Meta, and as
big as a hired is for Meta, it's probably even
a bigger loss for Apple. Yeah, in many ways, this
was one of the guys holding everything together there. We've
known their AI features have been struggling, we know their
models have been struggling. There's a lot of background, you
can read all my articles about this as to why
(03:25):
they've been struggling. But this is a pretty big loss
for Apple. And I'm told in order to get paying
into Meta, they had to offer him a multi year
package worth somewhere north of two hundred million dollars.
Speaker 2 (03:38):
That's an extraordinary amount mark and it paints a picture
of the commitment coming from Mark Zuckerberg, but painting the
picture of morale left over at Apple because more people
like you to leave the Foundations Model team.
Speaker 5 (03:51):
I'm told there are more people likely to leave the
Apple Foundation Models team. Obviously, Paying is the most significant
AI departure from Apple since the generator of AI boom
started a few years ago. His top engineer, Tom Gunter,
he last a couple of weeks ago from the Foundation
Models team, and now Pang is leaving as well. I'm
(04:12):
told he'll start at Meta in the coming days, and
informed Apple yesterday that he would be leaving to Zuckerberg's company.
This certainly is the beginning I think of more departures
to your points. Apple just does not compensate in the
same way as Open AI or Meta. And what this
(04:33):
has done is it's raised the idea within Apple that
their points to need to start paying more to retain
these people, and so far they've shown our reluctance to
doing so. I'm told they didn't really make the counter
offer to keep paying. They didn't do much to keep them.
And when your employees being offered north of two hundred
million dollars, there's really not much you can do. These
(04:55):
pay packages from Meta are nearing what CEO of the
biggest public companies we're getting, So you can't really do
that for a singular manager or engineer.
Speaker 3 (05:06):
Money talks, so does a vision to win.
Speaker 2 (05:08):
Mark Gurman, thanks so much extraordinary reporting as always.
Speaker 3 (05:12):
Meanwhile, let's get the investor. Take here.
Speaker 2 (05:13):
Jed Ellebrook's with us as portfolio manager at Argent Capital Management, and.
Speaker 3 (05:17):
I just want to go broader here.
Speaker 2 (05:19):
The commitment that we're seeing from certain companies, take Meta,
but also Microsoft and Google. The so called hyperscaler is
to invest with such certainty in winning the so called
superintelligence race. Is this the right thing you want to
be hearing and seeing?
Speaker 4 (05:34):
Yeah?
Speaker 6 (05:35):
I think it is.
Speaker 7 (05:36):
This is an exceptionally big money competition. It takes really
deep pockets to attract the engineering talent to get the
compute power. So the big companies are flexing their muscles
and showing great commitment, and they're seeing the demand signs
thus far that that effort is worthwhile. And I think
it's going to continue, and I think we're going to
(05:58):
get a really good indication of that here in a
few weeks when Microsoft reports their fiscal fourth quarter earnings,
they will announce CAPEX intentions for their next fiscal year,
and I think we're going to see another big increase,
probably not as big as last year, but still a
double digit percentage increase to a number that's north of
one hundred million dollars.
Speaker 2 (06:16):
So, before I dig more into the hyperscale in the
AI trade, jed with your more than two decades of
experience managing money here in large caps, is Apple just
one that you have to view in a different manner
now the way in which the company sees future growth.
Speaker 7 (06:32):
Yeah, Apple is a defensive tech business for investors. It
is not a dynamic growth business, hasn't been for some
time and won't be in the future. They're behind in
AI capabilities and talent and resources, and that is a
concern for investors. But I do think it was kind
of interesting that a week or two ago, when word
(06:54):
was got out that Apple was considering using anthropic and
a open AI models more for their customer interactions on
the phone, that the stock went up three or four
percent on that news. The market liked Apple de emphasizing
its own internal AI research.
Speaker 3 (07:11):
Effort, and that was Mark Guman's reporting as well.
Speaker 2 (07:14):
So Pivot therefore, to the companies that are committed that
are building the large language models. I know, in particular,
you think Amazon's a winner here.
Speaker 8 (07:21):
Why I do.
Speaker 7 (07:23):
I think that their AWS cloud computing business is very
well positioned to ride the wave of AI spending. Enterprises
are deploying AI tools on their cloud platforms, and I
think that AWS, Azure, and GCP all have really outstanding
growth prospects. And I guess we should throw Oracle in
(07:43):
there as well.
Speaker 2 (07:44):
Interesting that Oracle is also navigating a future of more
hurdles when it comes to accessing chips by the country.
You think of Oracle, which has been investing a lot
in Malaysia, for example, And we understand from reporting here
at Bloomberg that maybe the administration is going to make
it harder and get your own video chips into countries
such as this without licenses. But I'm also interested more
broadly about how any of these tech giants are navigating
(08:07):
the current trade environment. We've just had the latest headline
out of President Trump that August the first is where
he's sticking.
Speaker 7 (08:14):
Yeah, I think he said. I think he said the
opposite more or less yesterday. So it's hard to put
too much stock in one day's worth of comments from him.
But yeah, the big tech companies have incredible advantages. Their
balance sheets are incredibly strong, They're producing prodigious cash flow,
and they have you know, all the AI capabilities that
we listed earlier, So they're ready to flex those muscles.
(08:36):
They are ready to pivot and adjust, and I think
that they're all really well positioned to succeed. AI is
a big money game, and is.
Speaker 2 (08:45):
It one you want to commit more money to at
this moment? Jed, we're basically near record highes.
Speaker 5 (08:52):
Yeah.
Speaker 7 (08:52):
I think for some of them the answer is yes.
You know, meta valuation is higher than normal. I think
maybe that's one where you don't need to rush into
it right now. But I think others are you know,
fairly compelling. Amazon, like I said, is our personal favorite Microsoft.
Is that a huge run up here in the last
month and a half. Maybe no need to rush on
that one. In Nvidia, I think is pretty compelling, you know,
(09:14):
exceptionally strong competitive.
Speaker 6 (09:16):
Position with the GPU chips.
Speaker 7 (09:18):
They they just sent out Blackwell Ultra, the first one
into the wild last week.
Speaker 6 (09:24):
That's going to be.
Speaker 7 (09:24):
An incredibly compelling product for enterprises and hyper scalers to
put in their data center. So yeah, there are places,
I think where you can put money to work confidently
today in businesses that are AI beneficiaries.
Speaker 2 (09:35):
They said out into the world to call weave. And
we've got the core vav CEO coming on a little
bit later in the show. But Jen, last question for you.
Is it all about American exceptionalism here?
Speaker 3 (09:43):
Still?
Speaker 7 (09:45):
Yeah, it's such an interesting investing environment today. We have,
you know, I think a fairly moderate growth US economy,
but with an AI revolution over here on the side
that is very compelling is going to continue I think
for quite some time, both the investment and then you know,
the inference demand, the software deployment of these tools. So yeah,
(10:08):
I think I think that the outlook for US stock markets,
for tech stocks in particular, is pretty bright.
Speaker 2 (10:16):
Urgent Capital Management, Jed Eliver, it's been great having your perspective.
Speaker 3 (10:19):
Thank you.
Speaker 2 (10:20):
No, let's shift gears and look at what the shares
of Samsung currently doing trading in London as we speak ADRs,
and look they are down by eight ten percent. Profit
fell for the first time since twenty twenty three. In fact,
it plummeted fifty six percent. This is once again about
the chip maker not managing to win when it comes
to high bandwidth memory yet.
Speaker 3 (10:39):
But is this the bottom?
Speaker 2 (10:40):
Some analysts feeling that way, investors feeling that way, particularly
over at CLSA, and notably, we keep an eye on
how these companies perform out of their earnings.
Speaker 3 (10:48):
Meanwhile, coming up.
Speaker 2 (10:49):
President Trump unveils a wave of letters again threatening key
trading partners with high tariff rate impact on big tech
is coming up next for you.
Speaker 3 (10:57):
This is Greenberg Tech.
Speaker 2 (11:12):
Wednesday was the original tariff deadline, but less than a
handful of agreements are ready to announce, and President Trump
instead is now saying his new August first tariff deadline
will not be extended. Let's get to the latest bluegg's
Balance of Power host Kaylee Lines is with us taking
to truth social to well try and tell us this
commitment to this one.
Speaker 4 (11:33):
Yeah.
Speaker 9 (11:34):
This is after he was asked at the White House
yesterday Caroline if this was a firm deadline, and he
said yes, August versus firm, though not one hundred percent firm,
indicating some degree of flexibility. And it seems that's what
he's trying to course correct for with this true social
post today, saying that on August first, tariffs will start
being paid. He says, there has been no change to
that date, and there will be no change to that date.
(11:56):
I would just keep in mind that initially he had
suggested there wouldn't be a change to the July ninth
date either, and that is the action he signed yesterday
to extend the deadline from July ninth to August first
for various trading partners that we don't have trade deals
with yet. He of course, yesterday wrote fourteen letters and
sent them to the heads of fourteen different countries outlining
the tariff rate that they will start paying next month
(12:16):
in the absence of a deal, ranging from twenty five
percent for countries like Japan and South Korea up to
forty percent for countries like Mianmark and Laos. So he
did say in the letter that if countries would like
to open their financial markets eliminate tariff and non tariff barriers,
the tariff set out in the letter could be revisited,
so still leaving some wiggle room for negotiations here. The President,
(12:37):
also in on Tru's Social today, is saying additional letters
will be sent today, tomorrow and for the next short
period of time. So we do expect to get news
on new tariff rates that are set on various countries,
and we also could still see news on deals. Our
understanding is that deals are getting closer for countries like India,
for Taiwan, for the European Union as well. Signals that
(12:57):
there has been progress there. It's just not clear when
may be announced, in how robust they will be, or
whether or not. It's really just trade frameworks we're talking
about here, knowing that the team that the administration has
put together to work on these has struggled to make
progress in a lot of arenas, not only because it's
about the teri free countries could pay overall, but there's
also sectoral tariffs to contend with existing ones like tariffs
(13:20):
on autos and steel and aluminum, for example, but also
ones that have been threatened that have opened Section two
thirty two investigations into them, like semiconductors and pharmaceuticals, and
that could be a sticking point in all of these talks.
Speaker 2 (13:32):
Caroline, and of course semiconductor's key to this audience putting bags,
Kaylee lines, thank you so much. Now let's bring in
Michelle Guider now from more perspectives, she is the CEO
of the Kruck Institute for Tech Diplomacy over at Purdue.
You served as an Assistant Secretary of State for Global
Public Affairs under the first Trump administration that was twenty
eighteen to twenty twenty. And Michelle, what the big picture
(13:52):
we need to remind ourselves is what the ultimate goal
is here. Yes, they might have to push back deadlines,
but the aim is to have fairer trade.
Speaker 3 (14:00):
Oh, we actually be getting to that point.
Speaker 6 (14:03):
You're so right, Caroline. The big picture is really important here.
So let's remember that tariffs are a tool that are
a means to an end of a very big objective here,
and that is for America to both design and physically
build the technology infrastructure that is going to be the
backbone of the free world in the next century. And
so in order to do that, we have to build
(14:25):
and in some cases rebuild a lot of critical industries
here at home, and we have to rebalance the trade
ecosystem in order to do that, because the current system
right now disincentivises our leadership and critical industry. It rewards offshoring,
it punishes production here at home, and ultimately exports leadership
in a lot of really important industries to countries overseas,
(14:47):
and that can't be the case if we're going to
lead in the new technology era. And I'll give you
a really good example. For the AI revolution to happen,
we have to build a lot of data centers, and
in the pipeline at the end of twenty twenty four,
we had fifty two million square feet of data centers
that we have to build in the United States. Do
you know how much steel that that requires. It's billions
(15:07):
and billions of dollars of steel. How great for that
to be built by American companies with American workers, rather
than from artificially cheap steel from international partners overseas. So
that's what's at sake. It's American leadership in many critical
industries are going to be good for us, and it's
going to be good for our allies.
Speaker 2 (15:26):
Many would say, though, taking out of chips, looking at
defense for example, or indeed looking at magnets and electric
vehicles and the electrification of our economy here in the
United States, we yet need more clarity on ultimate demand
hearing time and time again than the defense tech startups
that they need the DoD to actually buy the stuff
(15:48):
commit to we're hearing time and time again that we
can't start extracting rare earth that we don't have access
to in the United States yet because there's not clarity
on whether the energy field will already transition the way
that they thought, particularly as you see the big beautiful
bill as so cooled, seeming to drown out some of
that movement to electrifications. So, Michelle, how did they garner
clarity and security here?
Speaker 6 (16:10):
Well, when it comes to clarity and it comes to certainty,
I don't think there was anything more certain than the
fact that tariffs were coming. When Donald Trump was re
elected president. It was a core pillar of his first administration.
When I served as Assistant secretary, Fair and reciprocal trade
was a core message that we were communicating to every
international partner in one hundred and eighty five missions across
the world. And you can even go back to nineteen
(16:32):
eighty eight. There's a interview that Donald Trump did with
Oprah Winfrey talking about how he would revamp US foreign policy,
and in that he talks about asking our allies to
pay their fair share, and he focuses on allies, he says,
because they're much easier to talk to than our enemies,
and he highlights what country. He highlights Japan, and he
(16:53):
talks about how they're dumping cars and dumping VCRs into
the American market. At the same time they're making it
really hard for Americans to do BIS. So this has
been a long time coming, but we're trying to rebalance
a trade system that's existed for fifty sixty, seventy, in
some cases eighty years across ninety countries. It's going to
take some time, and some deadlines are going to be pushed,
(17:13):
and it's going to be a little bit messy. But
at the end of this, if American America can come
out leading in critical industries, that'll give really good certainty
to our businesses in the long term.
Speaker 2 (17:25):
Should if we've got the talent to be able to
do the manufacturing here, particularly as we look at making
H one BVS is tougher, for example, I'd.
Speaker 6 (17:34):
Say yes, and we would benefit from all the brilliant
talent from across the world. The Crock Institute is based
at Purdue University. It is the largest engineering school in
the country, graduates more engineers than any other top university
in the countries. It's engineering excellence at scale that type
of talent is ready for national security jobs in commercial
(17:56):
industries and in defense industries that are going to matter
to our leadership in the twenty for a century, and
the same is true in many other places across the country.
So we have the talent. What we need to do
is incentivize the economic landscape and the trade landscape in
order to let them flourish.
Speaker 2 (18:11):
Michelle Geider, great to catch up with you at the
Crack Institute for Tech Dipromacy over at Purdue. Now coming up,
Amazon's Prime Day is kicked off, but shoppers they might
not see the heavy discounts like years prior. We're on
that next. This is Bloomberg Tech.
Speaker 3 (18:42):
Time.
Speaker 2 (18:42):
Now for talking tech and first up, your sensitive data
or should from today be safer? After a Justice Department
rule takes effect today after an end of a ninety
day grace period. Now companies across sectors must now comply
to the safeguard of bulk transfers and sensitive data from
countries the post of National Security risk, including China and Iran,
(19:02):
plus Epic Games. While it is settled an anti trust
case against Samsung alleging that the company was conspiring with
Google in blocking rival at marketplaces.
Speaker 3 (19:11):
By default, Epic dismissed all.
Speaker 2 (19:13):
Anti trust claims against Samsung and Google, but Google remains
defendant on several non anti trust claims. And some brands
and consumers are sitting out on this year's Amazon Prime Day.
Is President Trump's trade wark really rattles shopping sentiment? Some
mergents are actually unable to offer discounts due to increased
costs from tariffs. Some shoppers, well, they're planning to skip
(19:35):
Prime Day altogether.
Speaker 3 (19:36):
Prime Day spending has already fallen.
Speaker 2 (19:38):
It currently seems fourteen percent in early hours compared to
twenty twenty four. So let's get to it, Bloomberg, Spenser's
Soapa and give us the inside track.
Speaker 3 (19:46):
Is it all about tariff's here, Spencer?
Speaker 10 (19:49):
Yeah, tariffs are definitely a key factor. This is like
our first Prime Day, you know, since Trump's President Trump's
Liberation Day tariffs, and that really just created Even though
a lot of the tariffs are still on again, off
again and being negotiated, it's just this cloud of uncertainty
that has forced a lot of businesses to just be cautious.
You know, how much inventory do we have in the country.
(20:11):
Do we really want to discount it? That deeply if
we're trying to protect our margins from tires down the road.
So all of that stuff is kind of weighing down
on Prime Day this year.
Speaker 2 (20:19):
So why they're making it so long, such an extended period,
and what ultimately do you think they'll end up offering here.
Speaker 10 (20:26):
That's a really great question. So Prime Day started as
one day, you know, when they started in twenty fifteen,
and it gradually got longer. It was two days last year,
now it's four days this year. The best thing to
see is that like a lot of their competitors, like
Walmart has like a six day sale, and I think
Target has a week long sale that they might. Amazon's
likely looking at those and saying, okay, let's just extend
(20:48):
the number of days and prevent us from losing sale
to a lot of these competitors, and especially competitors like
Walmart and Target. The appetite is really strong for everyday
essentials things like snack packs for lunchboxes. So Amazon needs
to to fight them on the you know, the grocery
aisle as much as for electronics.
Speaker 2 (21:11):
Yeah, and when you think of electronics, you will immediately
think of China. Just more broadly, how have the companies
you speak to the SELVI Amazon been navigating me on again,
off again, feeling around tariffs.
Speaker 10 (21:23):
Well right now in terms of Prime Day, we're seeing
Apple is going very hard on discounts, you know, very
very deep discounts. I spoke with the Crazy Coupon Lady earlier.
They kind of track all of these deals, you know,
and they use They used Black Friday last year as
at benchmark, and they're seeing Apple kind of, you know,
going even less than some of their Black Friday deals
(21:44):
a year ago. They call that. One thing in particular,
like app the AirPods for you know, earbudds were discounted
very steeply, but then you contrast that with Amazon's own devices,
and the discounts on things like their echo speakers and
stuff were pretty soft. So well, we're seeing these these
companies react react differently, you know, to the tariff situation.
Speaker 2 (22:07):
And question is how the shopper reacts. We'll get the
data throughout the day. Spencer SOFA brilliant to have you.
Speaker 3 (22:12):
Thank you.
Speaker 2 (22:13):
Coming up, we're going to be speaking with the care
We've CEO Michael and Trader under the company's nine million
dollar purchase for Core Scientific. That's next, this is Blue
meg Tech. Welcome back to Blue meg Tech. Quick check
(22:38):
on these markets because we're being knocked around about by
the tariff headlines. The latest coming out of President Trump
is that August the first is hard and fast. You
will see those reciprocal tariffs put into force on that date.
We're currently just off by about a ten percent. On
the upside is the likes of Tesla and in video
from a point's perspective. On the downside, Amazon drags as
we see Prime Day off to a slow start. So
(23:00):
is Google and Microsoft on the red. But let's look
at Data Dog for a moment, because this is a
company that's about to enter the S and P five
hundred this week. We're off by three point eight percent.
This is as we get a key downgrade from Googenheim.
Why open ai optimization risks, So they say they cut
to a cell from neutral, worrying about the longevity of
that particular client. So it says Howard Marr, So keep
(23:20):
an eye on that company. But remember it's rallied hard
after the news that it will be entering the big
dogs for Data Dogs. Now, let's also take a look
at the shares a core weave and core Scientific that.
Speaker 3 (23:31):
Huge deal announced yesterday that.
Speaker 2 (23:33):
Core Weave is indeed acquiring core Scientific in a nine
billion dollar all stock deal. Now we're currently off by
two point four percent as you'll see on core Weave
just a bit. But all of this is about boosting
Corey's infrastructure to meet the insatiable AI demand. We get
the inside track with Michael and Tracho's the core We've
CEO now on hot off the heels on this particular deal.
(23:53):
Why Michael go vertically integrated?
Speaker 3 (23:55):
Explain it for us.
Speaker 11 (23:56):
Sure, thank you for having me and uh, the the
cloud marketing at large is going through this incredible inflection
point where the the scale of what needs to be built,
the type of infrastructure that needs to be built, the
software that's required to be able to build it, all
(24:19):
of those things are changing in a generational way. And
when we have talked about our company, when you know,
and I have now been shy about this, I believe
that there is an opportunity to U integrate so that vertically,
so that you can deliver the best solutions to your
(24:43):
clients that are the largest, most sophisticated consumers of this infrastructure.
And so we we you know earlier this year, you
saw us move up the stack with the acquisition of
weights and biases, where we an extension on the software
that we have right, so our software is like really
(25:06):
focused on orchestration and monitoring of the GBUS. As you
move up the stack into weights and bias, it connects
closer to the clients, and if you move down the stack,
you're down into the physical data centers, the power requirements,
all of those.
Speaker 2 (25:24):
I think people the investibate saw weights and biases as
margin a creative, as more able to really bring the
profitability to bear. But many worry and I cite for example,
Stifel downgrading the stocks. They seem positive on the long
term idea of this purchase of core scientific but a
vertical data center provider changes the valuation structure from their perspective.
(25:47):
Why go down the stack when perhaps it doesn't mean
you as profitable.
Speaker 11 (25:51):
Yeah, so I would I would take an issue with
that assessment. I think that there's enormous opportunities for us
to capture margin by insourcing the infrastructure component of it.
One number two is I think that in a market
that is as dynamic as this market, is the ability
(26:12):
to have more physical control over your ability to build
more control over your ability to deliver infrastructure is enormously
valuable to a company like ours. And what we're doing
by integrating with Core Scientific a company that we know
very very well. We have very long standing relationships with them.
(26:33):
Our first contract was in twenty eighteen.
Speaker 3 (26:36):
And you tried to buy them for about a billion
last year.
Speaker 11 (26:38):
R We did try to buy them for last year,
and during that period we've extended our relationship with them.
We've expanded our relationship with them, and we continue to think,
as they continue to think, that the integration of the
two companies is net positive for both investor groups. And
(27:00):
you know, over time, we believe that that will become
incredibly clear to the investing public at large.
Speaker 2 (27:07):
And let's talk about that over time perspective, because I
think Rubin roy over at Stiefel is saying, look, longer term,
he does get it, but we need to see material
margin accretion and growth benefits.
Speaker 3 (27:16):
What sort of time frame are you seeing that?
Speaker 11 (27:19):
Yeah, So, look, when when you insource a data center
that you have a hosting contract with where where you're
building your infrastructures, immediate right, because as soon as you
acquire them, you've moved the contract with which you're paying
them on a monthly basis into internalizing it, and so
(27:39):
you will see a margin and creative impact associated with
us purchasing them as soon as this deal closes. And
so once again I take issue with with with the
assessment that this is not going to be margin a cretive.
I actually think it's going to be enormously marginal and
creative for the combined companies. But I also think it's
(28:00):
going to be incredibly constructive for our ability to meet
the demands of the clients. And what gets lost in
this discussion sometimes is that you have a group of
clients that are moving so incredibly fast to build infrastructure
at enormous scale that they require to be able to
(28:20):
deliver artificial intelligence to the world, our ability to control
our destiny in terms of how we build, where we build,
when we build. By integrating the two companies, where we're
making huge strides in that direction.
Speaker 2 (28:35):
And you get one point three gigawats thereabouts of the
power that's going to be in the data centers. Just
talk to us a bit about say the Oracle open
AI reported deal four and a half gigawatts is what
they seeing promised to open AI in the longer term
is not achievable. That sort of measure of scale, of power,
of necessity to go into the data.
Speaker 11 (28:53):
Centers it is. It's going to take a lot of work.
It's going to take a lot of of investment. It's
going to take a lot of thought around how you
do that. And that once again leans back into the
idea that you want to vertically integrate so that you
can do it in the most efficient, most effective way.
Speaker 3 (29:12):
What's the hardest work.
Speaker 11 (29:14):
Oh, there's a lot of hard work here right, Like
you know, the the integration of two companies is always challenging.
The ability to continue to extend our capacity to deliver
infrastructure is always enormously challenging.
Speaker 3 (29:31):
Is energy that bottlening?
Speaker 11 (29:32):
That energy is a bottleneck. The you know, the pipeline
of projects within the core scientific portfolio positions us to
jointly be able to deliver infrastructure on the largest scale
in the world. And so when you when you look
back over the last several months, you know, we did
a twelve billion dollar contract, right or just under twelve
(29:57):
you saw the thirty billion dollar contract. The demand is voracious.
Speaker 2 (30:01):
And is it just coming from Microsoft? Is it coming
from more players.
Speaker 11 (30:04):
Now for you, it's coming from more players. I mean
during during our earnings, you know, you heard me talk
about the fact that we actually had a second hyperscaler
begin to come on board and use us as a
solution for building the highest quality infrastructure and delivering compute
to them. And so you're you're really starting to see
us broadening our client base, which is going to be
(30:26):
a work in progress for for for a long time
because there is concentration with these really large contracts. But
it's it's been a you know, incredibly important for the
whole company and for the investors in the company to
see the progress that we're making bringing on more and
more names, you know, across the enterprise space, more names
(30:48):
across the IDAI labs and the AI native, increasingly building
our footprint among the clouds. It's it's really been a
great indication of the demand for the product that we deliver,
and we're positioning ourselves to be able to deliver it
faster and larger.
Speaker 2 (31:08):
And the share price has rocketed off the back of
it since your IPO earlier this year. But I try
and understand a little bit about the acquisition play that
you're making the fact that looks as though you're im
boltant to do more.
Speaker 3 (31:19):
Where is it most important to do it? Is it
the downstack, is it hire and stack? Is it more
about the software and services?
Speaker 11 (31:26):
So we really do look at it from a long
term perspective, and it's what's allowed us to build a
company that is breaking the mold to an extent in
terms of launching the AI cloud, a new cloud, a
cloud that doesn't fit into the history of the Big
three right, and that's been based on the idea that
you're making decisions about what it takes to deliver the
(31:49):
highest quality infrastructure and products to your clients. You will
see us continue to build up the stack. This acquisition,
of course, Scientific is an example of us going down
the stack. We have other data centers that we are
building internal to the company. You know, it's part of
this strategy of how you get to scale, because only
(32:09):
by getting to scale are you relevant in this revolution
that's occurring within the cloud space. And this is an
important building block, an important step for us to be
able to ensure that we are able to continue to
participate in the scale building of this infrastructure.
Speaker 2 (32:27):
We loved hearing the Vision Mia Colent traitor, thanks for
coming on to join with us, is the CEO of
cour We've hot on the heels of that big deal. Meanwhile,
coming up start up Nothing is betting big on a
phone they designed to be used less then nothing, CEO,
He'll pay you.
Speaker 3 (32:41):
That's next, the say is blue Bag Tech. Let's take
(33:01):
a quick.
Speaker 2 (33:02):
Check in on Tesla shares now, because we're trying to
make up some lost ground today at least, but we
are still lower of the course of the last three
training days by more than four percent. After Elon Musk
announced he's forming a new political.
Speaker 3 (33:14):
Party over the weekend.
Speaker 2 (33:15):
Of course, now Ark in their CEO Kathy Wood joined
Bluemberg Surveillance earlier to weigh in on this, as some
analysts call for the company's board to get involved to
address masks politicking and whether it has hurt Tesla's standing
with car buyers.
Speaker 4 (33:30):
We've been dealing with controversy around Elon Musk in one
form or another since we first bought the stock when
the company was founded in twenty fourteen, and we owned
Tesla in it's one of the top holdings in three
of our ETF so arkk W and Q so we
are watching this like a haark, no question about it.
(33:51):
But with the experience over the last eleven years, we
turn around today and see Tesla really not an EV
manufacturer anymore. Moving into the robotaxi age, we believe successfully
and we believe it will scale much better than most
of its competitors. We see SpaceX really only ninety percent
(34:14):
of all of the satellites out there, neurally transforming lives
of paralyzed people, people with als, and probably most surprising
of all, XAI. Now we own all of those again
in our venture fund, following them very carefully. XAI is
on some benchmarks. It hit a point that three pro
(34:39):
hit in June, it hit it in February. So you know,
we are very focused on barriers to entry technology moats
and we believe that the moats that Elon has built,
and obviously this is not just Elon. He's attracting the
best and the brightest to help solve some of the
(34:59):
world's biggest problems. So again we do trust the board
and the board's instincts here and we stay out of politics.
Speaker 8 (35:11):
Well, we'd love your opinion on the current situation, just
on TESTA specifically, you mentioned some phenomenal companies doing some
incredible things for Tesla, though, do you believe that Elon
can pursue his political ambitions at the same time pursuing
the best interest of Tesla shareholders.
Speaker 4 (35:27):
One of the announcements Elon made recently is that he
is going to oversee sales in the US and in Europe.
And when he puts his mind on something, he usually gets.
Speaker 3 (35:39):
The job done.
Speaker 2 (35:42):
I confess CEO and CIO Kathy with them and let's
talk about nothing. It's the hardware startup taking aim at
the big smartphone makers like Apple, like Samsung is the
latest phone three is launching.
Speaker 3 (35:54):
With a design actually aimed to be used less.
Speaker 2 (35:57):
Joining us now is Carl Pai Nothing co founder CEO
are in New York over from London.
Speaker 3 (36:02):
Why do we need a smartphone that we use less?
Speaker 12 (36:06):
Smartphones used to be these tools that were supposed to
make us more creative and more productive, just like the
personal computer. Right, it was a bicycle for the mind.
But today on smartphones we just keep doing scrolling. And
we wanted to create a product that help people be
more in focus. Right, So if you put the phone down,
you can still be notified about the most important things.
That are happening without always checking your screen. I don't
(36:28):
know about you, but for me sometimes when I have
to respond to an important message, I just happened to
go into my social media and scroll a bit afterwards.
Speaker 3 (36:36):
Yeah, so it's keeping you engaged in the process.
Speaker 2 (36:38):
What's interesting is, well, it looks like nothing else really
on the market. People have loved that. The geeks in
particular have loved that. But what sort of scale you're
getting to now? Who is buying this?
Speaker 12 (36:49):
Yeah, so we're targeting a very different customer base. As
a startup, we're really focused on our users, the young
creatives today we are this year, we're doing about a
billion in revenue. Last year we did north of five
hundred millions. We're doubling this year and it's a good start,
but a long way to go.
Speaker 2 (37:08):
What are they trading in for because this is Android
operating system. Are people ditching their Samsungs? They ditching their apples?
Speaker 3 (37:14):
What are they doing?
Speaker 5 (37:14):
Yeah?
Speaker 12 (37:15):
Our users come from all over the industry. Actually, we
have two types of products. We have earbuds and smartphones.
For our earbuds, more than half of the users come
from iPhone, which is really surprising to us and our
phones come from all over the market, but we do
see a lot of iPhone users switching to US.
Speaker 3 (37:33):
Where are these being made?
Speaker 12 (37:35):
We manufacture most of our phones in India, but we
also have a site in China, and we have a
new site coming up soon as well.
Speaker 3 (37:41):
Where would that be to be announced? Okay?
Speaker 2 (37:45):
Interesting, because what do you you're a man who's you've
built companies before. Boy, have you built well over in China?
You sort of stuck in really in the Chinese smart
phone industry yourself, and now we're seeing this pushback in America,
in particular manufacturing in the United States.
Speaker 3 (38:02):
What do you make of.
Speaker 2 (38:03):
That ability, that capability to get the scale the talent
here in the US.
Speaker 12 (38:07):
It's not something that we thought about a lot because
we've been really focused on markets like Europe and India,
and we're manufacturing in India. Recently, we just started exploring
how to export from India to the rest of the
world with a phone three. Actually we're exporting from India
to the US.
Speaker 3 (38:22):
How hard is that with tariff's?
Speaker 12 (38:24):
Uh, it's it's okay. I mean, I don't think the
tarifts are that bad from India.
Speaker 2 (38:30):
Okay, So you don't think that a little bit of
a hit to what is a more expensive version of
the phones that you're now having? What is it sem
nine to nine as the price point for this particular phone.
Why go to that upscale level?
Speaker 3 (38:41):
You've been more of a mid range kind of.
Speaker 12 (38:45):
We always wanted to compete on the flagship level, but
we had to build a lot of our capabilities because
when we sell a product at eight hundred dollars, people
expect the best the best camera, the best screen, the
best of everything. And building a smartphone company is hard,
like all types of hardware is hard, but smartphones are
particularly hard. I think we finally got to a space
(39:05):
where our engineering capability is at the level where we
can take a shot at the flagship.
Speaker 2 (39:11):
You have that experience having helped build OnePlus now with nothing,
how much is there now? Focus on the AI integration
because that's where Apple seems to be stumbling.
Speaker 12 (39:19):
Yeah, we're super excited about AI. We're not really focused
on the large language models, but we're focused on how
to apply AI. And I believe that to win in
consumer AI, you need to own your own hardware. And
for me, the smartphone is the most exciting piece of
hardware because of two reasons. It's got the most scale,
right because more than one point two billions smartphones are
(39:41):
sold every year, and it's also got the most depth
in terms of what we do on our phones. We
do everything. So I think consumer AI needs both scale
and depth because we want to be able to really
understand the users, to then automate the smartphone use as
much as possible.
Speaker 2 (39:55):
For them to do all of that, and to get
more manufacturing footprint.
Speaker 3 (39:59):
You need money. Are you raising money? What sort of
scale do you need?
Speaker 12 (40:02):
We raised about two hundred and fifty million dollars so far.
We've been relatively capital efficient. We've done more than a
billion dollars in lifetime sales. We're doing a billion dollars
in sales this year. Of course, we're always entertaining conversations,
but we have nothing to announce right now.
Speaker 2 (40:17):
Please come back when you do call pay of nothing
great to have some time with him
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