August 12, 2025 • 47 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss reports that China is urging its domestic companies to avoid using Nvidia H20 chips. Plus, Elon Musk accuses Apple of favoring OpenAI above other AI companies in its app store, even threatening possible legal action. And Circle CEO Jeremy Allaire discusses plans for new products as shares of the company soar following its earnings report.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and ever though in San Francisco.
Speaker 2 (00:23):
This is Bloomberg Tech coming up.
Speaker 3 (00:25):
Beijing urges local companies to avoid using Nvidia's H twenty processors.
Speaker 4 (00:31):
Plas e Lo Musk accuses Apple of favoring Open Ai
above other AI companies in.
Speaker 3 (00:36):
Its app store and stable coin issue a Circle's revenue
jump fifty three percent just two months after a splashy
public debut.
Speaker 2 (00:44):
We'll discuss with the CEO.
Speaker 4 (00:46):
First, we return to the public markets, not just Circle.
Speaker 5 (00:49):
But the broader indices. They're at record.
Speaker 4 (00:51):
Highs, the Nasdaq one hundred, the NASDAK, the S and
P five hundred.
Speaker 5 (00:54):
We're up six.
Speaker 4 (00:55):
It's been volatile trade as we digest the CPI number.
All importantly consumer price inflation coming in where the market anticipated.
It looks as if the market thinks still the Fed
has room to cut ed. But you are looking once
again at the semiconductor story.
Speaker 3 (01:10):
Yeah, Nvidia and AMD are off session lows. What happened
this morning was the Information reported that China's Internet regulator
had demanded that specific companies including Ali, Barba and ten
Cent cancel orders for H twenty. There's a lot to
unpack there, because, in particular, it is different from.
Speaker 2 (01:30):
What Bloomberg reported.
Speaker 3 (01:32):
Bloomberg reported that Chinese authorities had urged various Chinese entities
to hold off on ordering the technology.
Speaker 2 (01:40):
There's a difference of severity.
Speaker 3 (01:42):
They're hot on the heels of a big story twenty
four hours ago where the President cut a deal with
Nvidia ANDAMD to do a revenue split on a accelerator
sales in China.
Speaker 2 (01:52):
Let's get out to DC Carriac.
Speaker 4 (01:53):
Yeah, let's get that White House perspective. Josh Wingrove is
in the bowels of the White House as we speak,
and we thank you for joining us.
Speaker 2 (02:01):
Josh.
Speaker 4 (02:02):
Just what do you think the Teta tet means here
for the White House to see China's response in terms
of pushing back against age twenties.
Speaker 6 (02:11):
Yeah, thank you for having me. This is the glamour
of the press tows here at the White House. So
just in case you think it's it's all sunshine and
lollipop's down here, you know, we're we're in it. We're
in it, We're surviving. This is sort of I guess,
a tightening of the screws, and the sort of back
and forth between them, right, this question of will the
h twenties go at all? And then the report that
(02:34):
prom saying he asked for a twenty percent cut and
then Nvidian him settle at fifteen percent. And now that's
China saying, well, maybe we don't want those ships in
the first place. And you know, there's a few questions
swirling here. One of those is will the administration try
to do this on other products, whether chips or otherwise,
try to you know, leverage export controls for new government revenues.
(02:57):
It's unclear. They've been silent about it. Sure scene like
this is the model that Trump would like, So you know,
this sort of seems like it would be on the
table for things that, you know, where the working market
would bear it. Another one is, of course, whether companies
do actually heed what we're reporting, is the warning from
China or the request I guess from China to avoid
(03:18):
using these ships. Is that the big question is what
would ultimately the demand fall to if Chinese demand were
to fall on this. And then there's a question of, well,
what about the other chips? Right, Trump mused about even
selling more advanced chips, but a peared down version of them.
No one really knows what that would look like. Anyway,
might be open to that, again, it would seem with
(03:38):
some sort of cut. But a lot of analysts have said, well,
if you're just charging you know, premiums to send even
more advanced stuff to other nations, I mean that opens
the door to all kinds of things, including like, you know,
military sales or what have you. And so we're really
an uncharted territory here right now in a lot of
ways on this. But the bottom line is Trump likes
the idea of these chips moving, in part because he's
(03:59):
calling them obsolete. Of course they're not quite obsolete, but
it's so long as the US government is getting a cut.
Speaker 7 (04:05):
S in Prince.
Speaker 6 (04:06):
We don't know who actually is getting a cut. We
don't know if there's gone to general revenue or if
the Commerce Department was steered this summer.
Speaker 7 (04:11):
It's all so unclear.
Speaker 3 (04:13):
I think what the President was alluding to was Jensen
one coming to a meeting with him to talk about
a lower power version of Blackwell, which the market has
speculated is called B thirty, and Nvidia has never said
anything about the analyst community looked at this Chinese reaction
and said, it's a tactic in the broader US trade negotiations.
You've had a busy twenty four hours because Intel CEO
(04:35):
Bhutan also came to see the president.
Speaker 2 (04:38):
What's the latest there, Yeah, they.
Speaker 6 (04:41):
Had their meeting here yesterday. Trump sometimes calls in reporters
to these meetings that didn't happen yesterday. You know, there's
been a lot of to and fro between them of
whether that is sort of a soured relationship and whether
some would put pressure for a swap of leadership there.
They've been sort of positive signs out of it. Trump
saying that they had a good meeting is sort of
teeing up future meetings with his cabinet, and so the
(05:03):
pressure seems to be off a little bit on that
one for now. But we all know the President can
be mercurial on these things, and so it's sort of
a time will tell situation. There's a briefing here in
a couple of hours. We make it a little more
detail on what they spoke of in that meeting. Trump
has been taking sort of a lot a lot of these,
but his focus seems to be elsewhere. Today he's teeing
off on Goldman and threatening to sue J Powell.
Speaker 7 (05:25):
So it's a big day.
Speaker 6 (05:26):
Here at Bluemberg, you know, for when it comes to
the light of stuff. But right now I think it
seems like they're out of the woods a little bit.
Speaker 7 (05:35):
If you're Intel Josh.
Speaker 4 (05:36):
Wing Grove, we thank you for the perspective, at least
on the tech executives. Let's deep dive a little bit
more with an investor take on the global chip sector.
Scott Landers here in the studio Horizon Investment cio.
Speaker 5 (05:47):
How do you navigate.
Speaker 4 (05:49):
The president's impact on certain companies, whether it's about them
doing business or who leaves their businesses?
Speaker 8 (05:55):
Well, I mean this is the question of the day today,
at least having to do with Trump, and I think
currently what we have to understand is that Trump at
his heart is a commercial guy. And so you know,
what we're what we're trying to figure out is like
what are the rules of the game that are acceptable
to him in order to actually run our.
Speaker 7 (06:11):
Businesses and in order to in order to sort of
move forward.
Speaker 8 (06:13):
And so I think sort of the discovery process of
figuring out, like what are the deals that are acceptable
to him in terms of like what do we have
to give in order to let him sort of leave
us alone to someone to actually run our businesses. You know,
that discovery process, I think is what the economy is
really and here it's specifically the chip makers are really
sort of going through right now, and I think they're
getting to a place that they understand the rules of
the game. So that's actually an acceptable landing spot, I think.
Speaker 4 (06:33):
But the game of Ping Pong, for the likes of
Lisa Su and indeed of Jenson Wang, has been hard
when it's accessing China, and already maybe we see the
ramifications of that pullback of their pair down chips. The
fact that China is saying we don't even want them,
is that a concern for you? The lack of access,
the lack of demand potentially the longer term, so sophisticated
chips from China.
Speaker 2 (06:54):
Look, I think it has to be.
Speaker 8 (06:55):
And so because you know, this is like one of,
if not the largest chip market in the world, that
they're having to sort of jump through hoops in order
to actually build access and cut special deals in orders
in order to build access, and so that's you know,
again once we can finally understand what the rules of
the game are going to end up being for how
do we sell chips into this very large Chinese market,
the better off we're going to be. But in the meantime,
(07:16):
these CEOs are having to go around and try to
try to cut these deals and try to understand you know,
what is it that I'd actually need to do outside
of just running my business and outside of doing all
the innovation that I have to do in order to
make good chips. Okay, what do I have to do
on the political front to actually access the second largest
ship market in the world.
Speaker 3 (07:32):
Scott from the CIO's perspective, the president of the United
States cutting an ad hoc deal where they get a
share of revenue in exchange for an export license. Did
you see that coming? And do you expect it to
be replicated to other parts of the technology industry and
how do you model for it?
Speaker 8 (07:51):
Well that I'm not sure that you do really model
for this. I think I think we're in a more
of a read and react situation with Trump and that's
and that's franctly how you do have to deal with
Trump on some of these policies.
Speaker 2 (08:00):
I mean it is.
Speaker 8 (08:01):
It is not a forecasting exercise, is a read and
react exercise, and so you know that that that you
know that I think that's just how we have to
sort of think about it.
Speaker 3 (08:10):
Scott, What does read and react exercise look like at
Horizon Investments? What did it like this morning in the
last twenty four hours?
Speaker 8 (08:16):
Well, I mean, I think it means to some extent
like figuring out are the things that we're facing in
terms of some of these some of these hurdles that
are that are new as of you know, the last
twenty four hours, are these really game changes for some
of the more in the medium and the longer term
themes that we think are going to really be important
in terms of what's what's driving some of these names
and what's what's driving some of the some of this
productivity shifts, we don't think they are. And again I think,
you know, I think because we understand that he's a
(08:38):
commercial guy, and he wants to cut deals like he
wants deals to get done.
Speaker 7 (08:41):
He doesn't want deals not to get done.
Speaker 2 (08:43):
He wants deals to get done.
Speaker 8 (08:44):
And so if that if that is sort of your
starting place, and these deals are somewhat acceptable, and we
understand what what they're going to look like. It doesn't
really change the medium term look is this is the
most important technology in a generation, and you've got to
be on board with it.
Speaker 4 (08:57):
I'll jump in here and just think about you've got
to be on board.
Speaker 5 (09:00):
You've got to read and react.
Speaker 4 (09:02):
Does this change the ultimate tailwinds of generative AI from
your perspective for names at AMD, for names like nin
Video More broadly, the valuations that we've garnered have been
a global opportunity. But if we cut off China off,
China moves away and they want to go domestic, does
that impact your desire to get into these names?
Speaker 8 (09:20):
It does on the margin, I'm sure. I mean, I
don't know that it has to. It sort of has to.
It has to on the margin, But it doesn't really
change the long term story. We haven't seen anything today
or the new cycle the last twenty four hours out
of some of these actions that really change what we
think about about that medium term and about some of
these access issues. Is it going to make it more expensive, Yes,
to make it more complicated, of course, But it doesn't
(09:40):
really change some of the more fundamental narrative in terms
of do we want to be in these names, Absolutely.
Speaker 7 (09:45):
We do.
Speaker 5 (09:45):
Do you want to be an Intel?
Speaker 8 (09:47):
Intel's a little bit a little more complicated because we
don't know that they've got leadership in place that can
get them to that next stage and get them into
the right types of chips. It's not just can you
produce chips? Can you produce the right types? And that's
that's the big question overring Intel right now.
Speaker 3 (10:00):
God, can we go a little deeper on that? I
guess what you're hinting at is that lit Bhutan's visit
to the White House doesn't necessarily solve the tension that's
they're based on the President's post last week.
Speaker 8 (10:12):
Well, look, Trump doesn't like to be to be wrong.
It doesn't like to admit and admit that he's wrong.
And so if if he calls for somebody to be fired,
and it's it's a pretty high hurdle to get him
to back off of something like that.
Speaker 7 (10:22):
But I'm not saying it's impossible.
Speaker 8 (10:24):
But but but in terms of you know, the the
future leadership an Intel, it would be a lot easier
for Intel to h to make a change like that
rather than to try to sort of fight against the stream,
you know, and sort of against the river. That is
that is the Trump truth post, and so that you
know that that you know that being said, I don't
know what they end up doing, but but it does
make things, you know, infinitely more complicated in an already
(10:44):
infinitely complicated situation for Intel from a corporate structuring standpoint
or from an innovation standpoint.
Speaker 7 (10:49):
That's the Martians. The market is already obviously questioning.
Speaker 3 (10:53):
Scott Ladanam of Horizon Investments, Thank you very much. Now
coming up on Bloomberg Tech, Nancy Tengla joins to talk
to some more on Nvidia on China, but also Apple
now in the crosshairs of Elon Musk an Xai.
Speaker 2 (11:07):
That's coming up next. This is Bloomberg Tech.
Speaker 3 (11:24):
Elon Musk lashed out against Apple's app store practices in
a post late on Monday, accusing the iPhone maker of
favoring open Ai, saying Apple makes it impossible for anyone
other than open Ai to reach the top of the
app store charts. Bloombo's Kirkwagner joins us now for more.
In fact, it was several posts on x throughout the
time I went to bed last night here in London
(11:45):
and the time I woke up in aggregate. What's at
the core of Musk's complaint.
Speaker 9 (11:51):
Yeah, he is claiming antitrust behavior by Apple, saying that
the company, is you point out ed, is favoring open Ai.
It's putting open Ai in more prominent positions on the
App Store, you know, artificially in his mind, putting them
higher on rankings lists. Now, of course, some of those
rankings lists are editorially curated by Apple employees.
Speaker 2 (12:11):
That's been the case for.
Speaker 9 (12:12):
Years, and it's always been a challenge for developers to
try and get onto those lists, to try and get
that sort of publicity that way. But again, a lot
of this is also just based on rankings which apps
are downloaded the most frequently, and in some cases open
ai and chat gybtr are the top of those lists.
Speaker 4 (12:29):
And you use X's own community notes and they point
out that it hasn't always been open Ai and the
top of the pile when it comes to other generative
AI chatbots. Others have eclipsed it, even since the open
Ai and Apple deal cut.
Speaker 5 (12:43):
But also some Almand weighed in a little bit too.
Speaker 7 (12:46):
He did he.
Speaker 9 (12:47):
Had some sharp words for elon Musk, pointing out that
it was sort of rich for Elon Musk to complain
about this when, in Sam Altman's words, you know, he's
putting his thumb on the scale on the X algorithm, right,
He's changing the things that you can see on X
to reflect Elon's view of the world or Elon's favorite topics.
And so that was sort of the throwback that Altman
(13:09):
had for Musk there, and the two of them obviously
have a long history Caroline, as we've talked.
Speaker 2 (13:13):
About repeatedly on the show.
Speaker 9 (13:14):
So for those who have followed, this is sort of
just the latest in that saga.
Speaker 3 (13:19):
So Apple has not responded to requests for comment on this,
but like you, I went through all the documents available
when Apple explains the methodology behind the rankings, but Elon
Musk is also complaining that open ai and Apple were
technology partners and for that reason they have a bias
toward them.
Speaker 2 (13:35):
Can you explain that that. Yeah, So last year.
Speaker 9 (13:39):
At WWDC, Apple announced a partnership with chat GPT that
it was going to integrate some of open AI's technology
into the iPhone, And so he's claiming, you know, and
this is the reason in Elon Musk's mind that open
ai is sort of getting this favorable treatment. Now, I
have to point out that Elon Musk is not the
first person to kind of go after Apple over the
(14:02):
years for making things difficult on developers they might compete with. Right,
Facebook and Mark Zuckerberg are the top of the list
in terms of being in the drum about Apple being
anti competitive over the last several years with the app
store fees that they take and other things. So Elon
Musk is not alone and sort of his view on
this now, whether that view is simply formed in any
(14:22):
actual real fact or just opinion, I think is.
Speaker 7 (14:25):
The challenge here.
Speaker 9 (14:26):
And clearly he's very upset with open AI's relationship right
now with Apple.
Speaker 3 (14:31):
Okay, bluebos Kurt Wagner, And as Kurt said, Elon Musk
has threatened Apple with litigation in the antitrust context. Will
bring more as we get it. Let's bring in Apple
and Tesla investor to talk a bit more about it.
Nancy Tengler, CEO and CIO for Laffatengler Investments. And you know,
like you have exposure to Apple, I think you've added
to it recently. You know the Tesla story, but also
(14:53):
Elon Ink's story really well when it comes to AI,
how concerned are you about this situation with Elon Musk,
you know, essentially going off to Apple.
Speaker 10 (15:05):
I ed listen. I think everybody's acting to script.
Speaker 11 (15:09):
So you know, Elon will describe himself as someone who's
who's programmed for war. This is one way for him
to gain shelf space, is to raise awareness, to claim
foul and then hopefully get some concessions from Apple. In
terms of the effect on Apple, I don't think it's
going to be long standing. I think there will be
(15:29):
some sort of behind the scenes handshake.
Speaker 10 (15:32):
But it always matters where you get into these stocks.
Speaker 11 (15:35):
And so we were adding to Tesla at two forty
during the tariff tantrums. You know, at three thirty three,
I'm pretty happy with the holdings. And then we added
to Apple last Tuesday. That was just sheer luck. And
you know, we picked it off at two hundred and two,
and we can wait around.
Speaker 10 (15:51):
For things to write size.
Speaker 11 (15:53):
But I don't think this is the end of the
app store, and I don't think it's going to be
a big headache. You know, he's filed a lot of
lawsuits that have gone into the Elon Musk lawsuit black hole,
so I think we'll get some resolution.
Speaker 5 (16:06):
He kinks Floyd is busy.
Speaker 4 (16:07):
That's for sure, about one point ten percent if you're
looking at Apple's share price soon.
Speaker 5 (16:11):
No one too worried, Nancy.
Speaker 4 (16:12):
But just love tell a little bit of the AI
opportunity within Tesla and why you're not adding to it
at the moment. Because there's been much about made about
whether they'd invest more broadly in xai itself.
Speaker 5 (16:22):
There's a lot of cross pollination that goes on.
Speaker 10 (16:26):
Yeah, I think the.
Speaker 11 (16:27):
Cross pollination would be good. I'd love to see Tesla
absorb XAI. I use rock religiously, and there's I just
think it. I just happened to think it's the best solution,
so you know, I'd love to see more people utilize
it and see the company continue to go deeper into
the AI portions of their business and have it benefit
(16:47):
Tesla's shareholders. We'll see when we get the shareholder vote
where you know, where the shareholders come down in terms
of investing further.
Speaker 10 (16:55):
But I like the ecosystem.
Speaker 11 (16:58):
We're building out a strategy that focuses on all these
new frontier you know, opportunities, quantum nuclear robotics, jen AI,
and in that we will have front and center.
Speaker 10 (17:11):
One of our largest holdings will be Tesla.
Speaker 3 (17:14):
Nancy I broke the story last week that Elon Musk
requested that the Dojo project be shut down, and he
confirmed it on Sunday in a post on X and
I reported today a lot of that engineering talent's been
reassigned across their other chip efforts. How central was Dojo
to your thesis with Tesla? Did you pay attention to
that one?
Speaker 10 (17:34):
Yeah, and congrats on on the story, ed, Yes, and no.
Speaker 11 (17:38):
I mean it was so so nascent in.
Speaker 10 (17:43):
Its origins that we were watching it.
Speaker 11 (17:46):
We are certainly focused on quantum computing and the elements
that will drive it, but we didn't we didn't have
it in our expectations for future earning Scrows. And I
think that's a lot of what you have to do
with with.
Speaker 10 (18:00):
Tesla and Elon.
Speaker 11 (18:01):
He's always thinking, trying and then restarting, and so you know,
we wait to see what's sustainable and where we think
the direction of the firm is going. And you know,
Caroline asks why or mentioned we haven't added to it recently,
I mean we will again.
Speaker 10 (18:16):
It's a pretty it's a pretty significant.
Speaker 11 (18:18):
Holding in our growth strategy not a member of our
twelve Best Ideas because I can't handle the elon volatility
and the twelve Best Ideas portfolio.
Speaker 10 (18:26):
But I think I think they'll figure it out.
Speaker 11 (18:29):
They'll either partner as it looks like they're going to,
or they'll they'll restart.
Speaker 4 (18:34):
I love going back to that frontier fundamental analysis you're
doing as well, Nancy, when you're looking at the opportunities
in general to AI, whether it's quantum, some of the
more forward thinking things and here and now when you
own a Nvidia and I know you're even exit TAMD,
but when you're thinking about what the administration means for
the future business, what China's owned demand for chips means
(18:54):
the future business, how are you thinking about that story?
Speaker 11 (18:57):
Yeah, this story is a little bit complicated, and you're
probably going to get the cranky side of me. I
think the precedent set by an administration that you know
is pay for playing isn't unseemly at best. I get
why Jensen made the deal. I would have too, but
for the President to say at a press conference, you know,
I told them you're going to have to pay us
for you pay us something for this that that may
(19:20):
have gone on behind the scenes. We probably had it
in the last administration with Meta, but it was different,
and I don't think it's I just don't think it's
the way we want to conduct business in the United States.
That said we had written off China investors had not.
So very long ago the company took Nvidia, that is,
took an eight billion dollar charge, and then.
Speaker 10 (19:40):
You know, the Middle East opened up. So I don't
think this is going to be the death now.
Speaker 11 (19:45):
I think China did exactly what you would have expected.
Speaker 10 (19:47):
Them to do.
Speaker 11 (19:49):
Come out, you know, in response to Jensen saying keep
China hooked on our products, They're going to come out
and say, no, we don't, we don't need your product.
So it'll settle somewhere in the middle, and we'll get
incremental revenue news and a little hit to Margins.
Speaker 10 (20:03):
Well.
Speaker 3 (20:03):
Very quickly, China responded in some form, how much do
you think they're trying to protect their own domestic chip names?
Speaker 11 (20:08):
Just very quick I think they are, of course ed,
and I also think they're trying to get a better
deal always out of the US, So stay tuned.
Speaker 10 (20:16):
I think we'll end up somewhere again in the middle.
Speaker 3 (20:20):
Nancy Tegler of Lafetenglo Investments giving us your cranky side,
which we appreciate, thank you very much. Now coming up,
GM looks to resurrect its autonomous ambitions, that story and
so much more.
Speaker 2 (20:31):
Next this is Bloomberg Tech.
Speaker 4 (20:40):
Time now for Talking tech and first up, GM is
looking to restart development of new driver's cars now Colling
to sources, it's looking to lull back ex employees of
its former autonomous cruise operations. The project is said to
be focused on autonomous vehicles for personal use, with the
ultimate goal being a car that can drive with no
one at the wheels. GitHub CEO Thomas Donker is stepping
(21:03):
down now the coding platform executive is set to remain
through the end of the year and will leave to
become a founder. GitHub, which was acquired by Microsoft back
in twenty eighteen, will become part of the company's core
AI team, and ESPN is hoping to lure that customers
with a new app now. The service costs thirty dollars
a month and it'll include live games, fantasy sports, highlights,
original programming look. This marks the first time ESPN's complete
(21:26):
sports lineup will be available to viewers without cable satellite
subscription ed.
Speaker 3 (21:33):
All right, coming up circle, CEO Jeremy joins to talk
about the company's first earnings since going public. Markets reacting
pretty positively to those results.
Speaker 2 (21:43):
We're gonna have a lot more on that next.
Speaker 3 (21:46):
I still feel like the story of the day is
one of volatility in those two chip names, and video
is modestly high in our AMD up eight tens of
one percent. But there was an information report that basically
said China has ordered tech company to stop ordering chips
from those US names, different to Bloomberg saying that regulators
and authorities had urged those tech companies in China to
(22:08):
stop placing the orders. The stocks bounced around over the place.
There's so much newsflow and we work more on it
throughout this hour. From London this week and also New
York City. That's what your index level looks like. This
is Bloomberg Tech. Welcome back to Bloomberg Tech. Markets have
(22:48):
just closed in Europe and in London where I'm sat,
and therefore I'm looking at these three names across Europe's
software names have been under pressure today. The concern for
these software names is that AR is going to kill software.
Such an interesting concept. In fact, there is a note
from RBC Capital Markets and List Matthew Hebberg which says, quote,
(23:08):
there is from a valuation perspective, death of software due
to AI. These are companies that in Europe are seeing
like really strong revenue growth, but the idea is that
AI elsewhere just renders their software offerings obsolete. It's not
saying we've talked about much, particularly from this geography Carro,
but serious declines and in Europe a lot of weakness
in those software names today. And this is something a
(23:31):
lot of people have clicked on this Tuesday, which also
took me a bit by surprise.
Speaker 5 (23:36):
Significant moves.
Speaker 4 (23:37):
Look, and let's pivot back to another stock that's moving
on the higher side this morning as well. We're focusing
in on the stable coin network Operator, up six and
a half percent of this circle. The company reporting second
quarter revenue jumping fifty three percent, six and fifty.
Speaker 5 (23:51):
Eight million dollars.
Speaker 4 (23:52):
Now it's the issue of stable coins, and it's its
first earnings release since it went public back in June.
Circle CEO Jeremy Elaire joins us. Now, Jeremy, just that
bump and revenue. We know how ultimately you make a
lot of your money, and that comes from treasuries, it
comes from other yielding assets there holding versus USDC. What
about the other revenue growth that you want to see?
(24:13):
How do you think about that pipeline?
Speaker 7 (24:16):
Well, a couple quick things.
Speaker 12 (24:18):
I think first, you know that bump in revenue is
driven by growth. We saw a ninety percent year over
year growth in USDC in circulation on our network, which
is significant, and that growth is obviously a driver even
where we see rates decline, that growth is really driving
our overall top line revenue growth. We're also seeing growth
(24:39):
in our other revenue and so you know, again as
you think about Circle and our business, we have our
stable coin network, we have money that flows on that network,
and we're adding new services, subscriptions and services fees, transaction
fees for a wide array of different things. We're building
an application layer through Circle Payments network. And actually we
(25:01):
just announced a new blockchain network ARC today and so
those also grew two hundred and fifty percent year on year.
And you know, obviously have a slightly different margin profile,
a higher margin profile. So that actually added a couple
hundred basis points to our margins, which obviously translated as
well on the aggregate into you know, our even to
(25:22):
growth adjusted growth to growth of fifty two percent with
a fifty percent kind of adjusted EBIT to margin.
Speaker 4 (25:29):
Let's just dive more into the new products into ARC
that you reference into your payments network. How close the
competition does it put you in with players like Stripe
out there already for example, how does it continue to
make you market neutral when it comes to an infrastructure player.
Speaker 12 (25:45):
Well, when we think about Circle, we think about ourselves
as an internet platform and network utility company, and we
want to make sure that we can provide the full
stack that's needed for financial institutions and leading enterprises around
the world to take advantage of stable cooin finance and
ARC as a blockchain network is purpose built for stable
(26:09):
coin finance. The transaction fees are paid in USDC and
potentially other stable coins. The network infrastructure is designed around
what's called deterministic settlement finality. That's key bank regulators want
to know that transactions and settlement are final. It's a
key characteristic of a prudential grade of financial infrastructure. So
(26:31):
we're building this, you know, very much in the you know,
in the view of what's coming all of these major
institutions that now want to build on stable coins, really
making sure that we have the right infrastructure at play,
but at the same time broad interoperability for our stablecoin network.
We're interoperable across twenty four different blockchain networks. We're fundamental
(26:53):
dollar liquidity on those networks, and we're going to continue
to do that, and in fact, ARC is going to
become a very powerful way to even greater provide even
greater support for liquidity and interoperability on these networks.
Speaker 3 (27:06):
Jeremy, there's a lot of interest in the other revenues
opportunity with you to get a better understanding of the
cool business. I have the Bloomberg story about your writing
is report in front of me, and the AI summary
is the majority of cycles revenue comes from US treasuries
and other yield bearing instruments that support the value of
USDC tokens. Just to the uninitiated or the layman, could
you just explain the basics of that.
Speaker 7 (27:28):
Yeah.
Speaker 12 (27:29):
So Circle operates the largest regulated stable coin network in
the world, and that network reaches over six hundred million
people who can reach in their pocket and access and
use USDC. There's tens of thousands of products and services
that are integrated to the network that provide ways for
people to store and make transactions and payments or investments
using USDC. So we have this really large network and
(27:51):
there's demand for these digital dollars, and that those digital dollars,
you know, are essentially purchased using existing money and then
issued is digital currency and are in free circulation on
the Internet. And so that money stock on the network
that's moving around. And we also noted we saw a
tremendous growth the amount of transactions on the network, six
(28:12):
trillion dollars of transactions in Q two and seeing that
accelerate into Q three as well. So we have this
very high velocity, high transaction money on the network and
we monetize that through the reserve returns. And so, you know,
what we really focused on on this part of the
business is growing that money stock. And there are a
(28:33):
lot of different views as to how fast stable pin
money supply is going to grow. There's an optimistic view
of a ninety percent kagger for the next five years,
There's a you know, the lowest view is a twenty
five percent kager over several years, and so we tend
to be on the more conservative side when we think
about that from a kind of outlook perspective. But you know,
we grew ninety percent year every year. That obviously drives
(28:53):
top line as well. And year to date we've grown
forty nine percent as of August tenth, which is very
strong growth, and that again driving and supporting that top line,
while we also build out all of these new products
with new revenue streams in subscriptions and services and in
transaction fees, and so we're continuing to build those out
(29:16):
as well.
Speaker 3 (29:18):
You go through going public, you go through your first
call through as a public company, and the first thing
the market's going to ask you is about inorganic growth.
What's your M and a strategy, Jeremy.
Speaker 12 (29:30):
I mean, look, we are a technology company. We're very
focused on software powered innovation. That's really the heritage, that
my heritage and the rest, and so virtually everything that
we've done here has been organic. We love building software
and software technology, and we have done acquisitions. We've actually
(29:51):
done three acquisitions this year. One was a product and
technology that's allowed us to accelerate our entry into the
bearing token space with us y C.
Speaker 7 (30:02):
We had some big news with that in.
Speaker 12 (30:04):
The quarter as well, and then too, what you know,
our teams and intellectual property acquisitions, both of which supported
our efforts to launch ARC. And so where we find
great intellectual property or technology and great people, we see
that as a very natural thing to do to kind
of augment and bring speed and velocity to our product
(30:26):
development initiatives. But you know, we're not really here to
like go do huge acquisitions and try and try and
roll things up.
Speaker 7 (30:35):
That's not really our approach.
Speaker 12 (30:37):
So we'll look at things and of course continue to
make acquisitions where it makes sense.
Speaker 7 (30:42):
But this is not an m and a play in
the sense that people.
Speaker 4 (30:48):
Understand Jeremy Anna taking us across the business. We thank
you Holt on the heels of your earnings a circle CEO. Now,
we just want to return to some breaking news more
broadly about financial markets, not just stable coins, but about data,
in particular labor statistics. Blueme Megg Inter National Economics Policy
Editor Michael McKee joins us now supporting done by Fox
(31:08):
about well, the person who's going to be potentially taking
over labor statistics in the United States and his view
on how often they should be just break down the.
Speaker 13 (31:16):
News for us, Well, it's kind of a strange situation
because he'd made these comments before the President announced that
he was going to nominate him. He did an interview
with Fox and apparently they didn't run it until now,
but he said, maybe, given the poor jobs report that
we had, maybe we should suspend the jobs report each
(31:36):
month until we can get the numbers fixed. It's the
president who thinks that the numbers are wrong, not the statisticians,
and that I'm not sure why you would do that, right,
because this would mean that Wall Street would have nothing
to trade on in terms of jobs reports, and I
would think that would not go over well.
Speaker 2 (31:57):
Michael McKee.
Speaker 3 (31:58):
If you're not sure, then I'm read because I and
hundreds of thousands rely on you for economic data. The
jobs print is key to what we do when it
comes out. Why does the market rely on it so much?
Speaker 13 (32:11):
It's a great signal of what's happening in the economy
because when people have jobs, they spend money. When people
are losing jobs, they don't spend money. And if people
are spending money, then companies hire more people and profits
go up. So it's sort of the lynchpin indicator that
the Fed uses, and a lot of people on Wall
Street use to tell us in general how the economy
(32:33):
is going. And it's the data are delayed, as we know,
and they get revised, but it is the best kind
of numbers that we have on a regular basis, on
a monthly basis. So the idea of suspending it, I
think would get no traction at all. I'm not sure
that the BLS commissioner would have that ability anyway.
Speaker 3 (32:53):
You know, I'm just riffing here a little bit carro
But you know, in terms of manufacturing data, I've been
thinking a lot about whether humanoid robots are coming on not.
Bloomberg's Michael McKee with some interesting news. We have some
breaking news crossing the Bloomberg terminal. Perplexity says that they've
made an unsolicited bid to Google today offering thirty four
(33:15):
point five billion dollars to purchase it's Chrome browser. I'm
going to repeat that Perplexity has sent says it's sent
an unsolicited bid to Google this Tuesday, thirty four zero
point five billion dollars for the Google Chrome browser. That's
a significant and interesting piece of news. We're going to
(33:35):
get the shares of Alphabet, the parent of Google, up
very soon, and we're going to talk to Bloomberg Seth Figureman,
who's one of our technology and AI editors out in
New York City. The details with the stock of alphabet
now up a percentage point, please, Seth.
Speaker 14 (33:51):
Yeah, it's an eyepopping offer. As a point, it's also
very much a long shot. But there's a lot of
caveats here. Google has not actually put Chrome up for
sale far as we know. It's largely in response to
the US government wanting a judge to order Google to
sell off Chrome. The judge has not actually put out
a ruling on that yet. And then on the offer itself,
(34:11):
Perplexity is offering thirty four point five billion dollars. That's
nearly double what Perplexity is valued at and far more
than the more than one billion that Perplexity has raised
a date. Perplexity is saying that they have investment funds
that are willing to support this big info. But again,
this is a long shot offer as of now.
Speaker 4 (34:30):
They've made long shot offers before, whether or not they've
been as formal as this one. But they threw their
name in the ring when it came to TikTok I, remember,
but the US part of TikTok numbers aside.
Speaker 5 (34:41):
The browser bit.
Speaker 4 (34:43):
Well, they've already been building their own browsers, so why
make this purchase and ultimately, how would it beef up
their offering and take away from that of Google's.
Speaker 14 (34:49):
Yeah, it's a great question. You know, they have been
working on a browser called Comet, but it's one thing
to try to build your own browser from scratch and
another to acquire a browser that reaches billions of people
around the world. The idea here seems to be that
they want to inject their AI agent capabilities into the
interface that we all use on the web every single
day and getting in front of far more people. This
would give them a major headstart on that front. But again,
(35:12):
this is a lot of money that we don't think
they currently have.
Speaker 3 (35:15):
Oh yeah, I mean, I'm reading the story and you'll
forgive me, seth, I'm just reading it in real time.
Perplexity says it's going to invest three billion dollars over
the next two years in Chrome and Chromium right, which
is the underlying open source coding that supports a number
of browsers, and also that they're going to extend a
substantial offer to Chrome talent. I mean, I'll leave some
of the details to you. But what do we make
(35:37):
of that? What else are we reporting?
Speaker 14 (35:39):
Yeah, I mean again, I think they're trying to show
that there'll be a good steward for a platform that's
used by billions of people around the world, while continuing
to move forward with their own venture and injecting AI
capabilities into key Internet functionality.
Speaker 4 (35:55):
Well, we're expecting that ruling from Judge am it Meta
in coming days on the rent is that they want
to see to prevent what it sees as Alphabet and
Google being some sort of monopoly when it comes to
search in the United States. Bloomberg Seth Figeman the breakdown
of perplexities offer for Google Chrome. Let's just return to
the overarching geopolitical story of US and China right now.
(36:16):
We've been talking a lot about how China is urging
it's domestic firms AI firms not to use in Videa's
H twenty chips. This after the US agreed to revenue
split for allowing a semi conductors from video from AMD
to re enter China. Now, Bloomberg Opinion Economist Daily wrote
about this yesterday, about the decision by the White House
and also what it would cost the US in terms
(36:38):
of ANAI advantage.
Speaker 5 (36:40):
The story moves on continually.
Speaker 4 (36:42):
But what's so striking about your story was, Look, if
there's a fifteen percent cut taken by the US government
to allow AMD and Vidia to sell into China, the
winners are in VideA, maybe less.
Speaker 5 (36:52):
So now, but China.
Speaker 4 (36:53):
Why would China clearly seeming to push ahead in terms
of its own a semi conductor offerings.
Speaker 15 (36:58):
Well, one of the things I used to empty chip
would allow more quickly as scale, right, I mean, one
of the things this chip is good at compared to
what China's capabilities are now is it can do more inference,
so it can run the applications that AI is built for.
That's something that we don't think domestically they could catch
up on for it for a couple of years. And
so look, this doesn't change China's aggression in trying to
(37:21):
build its own chips as quickly as possible, But what
it does do is kind of feel the interim there
to allow them to start integrating AI into all aspects
of Chinese life and therefore, you know, continue to make
it a global player. Question is and where the story
has moved on since I wrote those words. Is China
now going to look to sort of almost stop tavrom
(37:41):
happening in order to protect this domestic supply? How is
it going to balance trying to make sure AI is
used as often as much as it can in China
whilst making sure that it's homegrown effort is still built
upon us as quickly as possible.
Speaker 3 (37:55):
So Dave on your piece, and I appreciate a lot
actually in twenty four hours. Just take mine and Carrow's
word for it. It's been a nightmare doing this for
the last twenty four hours. But you actually your final
point is that there are two winners here in Vidia
and China. But you don't say the United States is
a winner. If you get what I mean. You know,
Trump is supposed to be the deal maker. But your
(38:18):
conclusion seems to be actually good deal for Nvidia, but
America in aggregate, that's what I want to get from you.
Speaker 15 (38:25):
I mean, look, if the concern over exporting these chips
existed this time last week, I don't think the fifteen
percent revenue cut changes that calculation. It doesn't seem like
a good enough change to warrant what's essentially quite a
dramatic change in national security policy. That would be my
sort of overarching question here on why the US would
(38:47):
go forward with this. I guess one of the dynamics
that we're just starting to learn now is what this
might mean for other parts of the trade deal between
the US and China. We're hearing about rare earth metals
being at being a concern, and there's other types of
chips that could be use his leverages as well. I mean, look,
this is becoming a hugely complex piece of negotiation between
the two countries. I worry that China has a position
(39:09):
now of sort of saying to in Video, well, look,
you might have got your permission from your masters over
there in the US, but we also hold many cards
as well, and unless we get more of what we
want in these trade deals, then we may not allow
the sale of these chips in the country. And look
for in video, China is a very very important part
of his business. It's billions of dollars revenue could be
(39:31):
billions of dollars more. They had to write off billions
of dollars when the restrictions on the age twenty were
going to put in place. So I think it really
matters to in Vidia to please both countries, and that
to me just seems incredibly difficult at this point.
Speaker 3 (39:49):
Bloomberg Opinions, davely did, good job, Thank you very much.
Let's get more on what we can expect from China's
policy response here. Amanda Shaw is a director in the
China practice of the Raisor Group Geopolitical Risk consulting firm,
and Dave raises a point of chronology. Back when we
were stopping the flow of chips to China, it was
(40:10):
America's national concerity concern about how China would use those
chips in the military context. The development twenty four hours
later after the President cut that deal is China saying
we have national security concerns and we want to champion
our own domestic names. Who has the upper hand in
this negotiation, Well, I.
Speaker 16 (40:32):
Think that for China a lot of this signaling that
it has been engaged in is largely performative. We know
that the Chinese continue to lack the capabilities that the
video Age twenty chips offer, and so to some degree
there will be strong demand from the Chinese for the
(40:55):
use of the Age twenty chips.
Speaker 10 (40:57):
But of course, as was.
Speaker 16 (40:58):
Pointed out previously, the Chinese, of course, do want to
continue to strengthen its domestic chips building capacity, and you know,
included in that is really providing support to national champions
like Huawei. But on the other hand, when we think
about where China is headed, China also wants to be
(41:20):
supporting national champions like deep Seek, and of course deep
Seek deep Seek's.
Speaker 10 (41:24):
AI models are run on in Nvidia chips.
Speaker 16 (41:27):
So I think for the Chinese there are boat sort
of economic considerations, but there's also security ones. So I
don't see the Chinese outright banning the use or purchase
of H twenty chips in the near term.
Speaker 4 (41:40):
Interesting that the information we reported that there was a
sort of full on stop being asked for the likes
of byte Dance or the likes of ten Cent.
Speaker 5 (41:47):
But for now you're thinking that there.
Speaker 4 (41:49):
Wouldn't be some sort of ban because it'd invocate the
users of chips. But what's so interesting is Cambra con
Technologies and Huawei, of course, we have seen a market
impact of the idea that they'd support their homegrown talent.
What else have we seen from the Chinese government to
really foster the building of semiconductors that rival that at
the age twenty.
Speaker 16 (42:10):
Right, Well, the Chinese have really poured a lot of
money into its effort to develop a home grown you know,
HILP industry, and we know that this is very much
in line with the top leaders vision for the country
that Chinese development and rise to national rejuvenation, as the
Chinese would put it. A key to that is technological
(42:33):
development and being able to rival the US in terms
of technology and AI.
Speaker 10 (42:39):
So, you know, the Chinese have really made it very clear.
Speaker 17 (42:43):
That this has been a priority and this will continue
to be a priority in terms of its economic development.
But nevertheless, the capabilities that they have at home remain
short of what USAI chips can provide.
Speaker 4 (42:58):
And briefly, where they do have the and outsized power
is where else.
Speaker 5 (43:02):
Is that part of the bargaining ship, if at all.
Speaker 10 (43:06):
Yeah, so we've seen that.
Speaker 16 (43:08):
Really the Chinese themselves have been I think a bit
surprised by how potent of a weapon the rare Earth's
controls have been in these trade negotiations. Now, I think
it's important to point out that the lifting of the
sales of H twenty chips on the part of the
Trump administration does not seem to have been linked to
(43:29):
some sort of deal or concession from the Chinese side.
Speaker 17 (43:32):
The Chinese in fact issued a statement saying that it
was not made as part of the deal, to make
clear really to an audience that they did not offer
any concessions for this. But in terms of rare earths
and its role in the larger US China trade negotiations, absolutely,
it's been very important, I think for the Chinese and
realizing that they have this key piece of leverage, and
(43:55):
I think for the Trump administration as well, and realizing
that the US will remain dependent on Chinese rots and
wrote earths processing technology.
Speaker 4 (44:04):
Amanda Schau from the Eurasia Group, thank you very much
for joining today.
Speaker 5 (44:08):
Coming up a bit of a pivot, Tayta Swift.
Speaker 4 (44:11):
It turns across the internet with a surprise album announcement.
Speaker 5 (44:14):
That's next, there's a Bloomberg Tech.
Speaker 10 (44:24):
So I wanted to show you something.
Speaker 7 (44:26):
Okay, what do we got? We got a briefcase.
Speaker 10 (44:31):
Yep, Mick Green, Yep.
Speaker 16 (44:35):
This is my brand new album, The Life of a
Show Girl.
Speaker 10 (44:39):
So I wanted to show you something.
Speaker 3 (44:42):
Well, Swifties worldwide got a surprise from Taylor Swift, who
announced her new album The Life of a show goal
during a sneak peek of her appearance on the New
Heights podcast with boyfriend Travis Kelce for more on the
power of podcasting and the astonishing sights before My eyes
Bloomberg Lucas Shaw, who leads screens on coverage. This has
(45:02):
dominated Google trending, by the way, and most other social
platforms for most of the time I've been awake. This
is big. Tell me more.
Speaker 7 (45:10):
Could you sleep last night?
Speaker 18 (45:12):
Were you able to or were you just so excited
that you had to stay up thinking about Taylor?
Speaker 2 (45:16):
That was Elon Musk related. Let's stick with Taylor please, thanks.
Speaker 18 (45:20):
I mean, look, she's the biggest pop star in the world.
It's not even really close. She just wrapped her Era's tour,
which is the best selling concert in music industry history,
less than a year ago. I think there's a lot
of debate speculation as to whether she would finally take
a break, go away for a year or two, as
some artists have been known to do, or if she
would just keep going because she's been on kind of
(45:42):
this crazy treadmill over the last five or six years,
where it feels like she's got new music every year,
if not more often than that she just had that
big tour and here she is ready less than a
year later, with a new album that I'm sure will
break all types of records. And I do think it's
interesting that she did it on her boyfriend's podcast.
Speaker 4 (46:01):
Yeah, so who wins here, Lucas the podcast underlying owner,
but also the music labels that she's affiliated with.
Speaker 18 (46:08):
Well, that's actually a little bit of a complicated question
because her music is released by Republic Records, which is
a division of Universal Music Group. It's the biggest owner
of all these different music companies.
Speaker 7 (46:18):
In the world.
Speaker 18 (46:19):
But from what we understand about her deal, she's definitely
the big winner, right, she owns the ultimate copyright, She
is the IP owner. Universal gets fees and revenue shares
for releasing it, and so it's good for them, but
it's not the same as when you have someone that
you fully control and own.
Speaker 4 (46:37):
Well, we'll see how this one unfolds, and we're going
to be able to all access it. Lucas Shaw, We
thank you very much coming live for us on the news. Meanwhile,
that does it for this edition of Bloomberg Tech Ed.
You're not going to get any sleep tonight. Maybe, whether
it's Elon or whether it's Taylor.
Speaker 3 (46:52):
Just like astonishing news flows, so much of it actually
playing out on social media in the Internet as well,
there's a lot to recap. Check out the podcast you
know where to find it on the Bloomberg terminal as
well as online on Apple, Spotify, and iHeart from samarn
Oh from London.
Speaker 2 (47:05):
I just to say, in New York City, this is
Bloomberg Tech
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and ever though in San Francisco.
Speaker 2 (00:23):
This is Bloomberg Tech coming up.
Speaker 3 (00:25):
Beijing urges local companies to avoid using Nvidia's H twenty processors.
Speaker 4 (00:31):
Plas e Lo Musk accuses Apple of favoring Open Ai
above other AI companies in.
Speaker 3 (00:36):
Its app store and stable coin issue a Circle's revenue
jump fifty three percent just two months after a splashy
public debut.
Speaker 2 (00:44):
We'll discuss with the CEO.
Speaker 4 (00:46):
First, we return to the public markets, not just Circle.
Speaker 5 (00:49):
But the broader indices. They're at record.
Speaker 4 (00:51):
Highs, the Nasdaq one hundred, the NASDAK, the S and
P five hundred.
Speaker 5 (00:54):
We're up six.
Speaker 4 (00:55):
It's been volatile trade as we digest the CPI number.
All importantly consumer price inflation coming in where the market anticipated.
It looks as if the market thinks still the Fed
has room to cut ed. But you are looking once
again at the semiconductor story.
Speaker 3 (01:10):
Yeah, Nvidia and AMD are off session lows. What happened
this morning was the Information reported that China's Internet regulator
had demanded that specific companies including Ali, Barba and ten
Cent cancel orders for H twenty. There's a lot to
unpack there, because, in particular, it is different from.
Speaker 2 (01:30):
What Bloomberg reported.
Speaker 3 (01:32):
Bloomberg reported that Chinese authorities had urged various Chinese entities
to hold off on ordering the technology.
Speaker 2 (01:40):
There's a difference of severity.
Speaker 3 (01:42):
They're hot on the heels of a big story twenty
four hours ago where the President cut a deal with
Nvidia ANDAMD to do a revenue split on a accelerator
sales in China.
Speaker 2 (01:52):
Let's get out to DC Carriac.
Speaker 4 (01:53):
Yeah, let's get that White House perspective. Josh Wingrove is
in the bowels of the White House as we speak,
and we thank you for joining us.
Speaker 2 (02:01):
Josh.
Speaker 4 (02:02):
Just what do you think the Teta tet means here
for the White House to see China's response in terms
of pushing back against age twenties.
Speaker 6 (02:11):
Yeah, thank you for having me. This is the glamour
of the press tows here at the White House. So
just in case you think it's it's all sunshine and
lollipop's down here, you know, we're we're in it. We're
in it, We're surviving. This is sort of I guess,
a tightening of the screws, and the sort of back
and forth between them, right, this question of will the
h twenties go at all? And then the report that
(02:34):
prom saying he asked for a twenty percent cut and
then Nvidian him settle at fifteen percent. And now that's
China saying, well, maybe we don't want those ships in
the first place. And you know, there's a few questions
swirling here. One of those is will the administration try
to do this on other products, whether chips or otherwise,
try to you know, leverage export controls for new government revenues.
(02:57):
It's unclear. They've been silent about it. Sure scene like
this is the model that Trump would like, So you know,
this sort of seems like it would be on the
table for things that, you know, where the working market
would bear it. Another one is, of course, whether companies
do actually heed what we're reporting, is the warning from
China or the request I guess from China to avoid
(03:18):
using these ships. Is that the big question is what
would ultimately the demand fall to if Chinese demand were
to fall on this. And then there's a question of, well,
what about the other chips? Right, Trump mused about even
selling more advanced chips, but a peared down version of them.
No one really knows what that would look like. Anyway,
might be open to that, again, it would seem with
(03:38):
some sort of cut. But a lot of analysts have said, well,
if you're just charging you know, premiums to send even
more advanced stuff to other nations, I mean that opens
the door to all kinds of things, including like, you know,
military sales or what have you. And so we're really
an uncharted territory here right now in a lot of
ways on this. But the bottom line is Trump likes
the idea of these chips moving, in part because he's
(03:59):
calling them obsolete. Of course they're not quite obsolete, but
it's so long as the US government is getting a cut.
Speaker 7 (04:05):
S in Prince.
Speaker 6 (04:06):
We don't know who actually is getting a cut. We
don't know if there's gone to general revenue or if
the Commerce Department was steered this summer.
Speaker 7 (04:11):
It's all so unclear.
Speaker 3 (04:13):
I think what the President was alluding to was Jensen
one coming to a meeting with him to talk about
a lower power version of Blackwell, which the market has
speculated is called B thirty, and Nvidia has never said
anything about the analyst community looked at this Chinese reaction
and said, it's a tactic in the broader US trade negotiations.
You've had a busy twenty four hours because Intel CEO
(04:35):
Bhutan also came to see the president.
Speaker 2 (04:38):
What's the latest there, Yeah, they.
Speaker 6 (04:41):
Had their meeting here yesterday. Trump sometimes calls in reporters
to these meetings that didn't happen yesterday. You know, there's
been a lot of to and fro between them of
whether that is sort of a soured relationship and whether
some would put pressure for a swap of leadership there.
They've been sort of positive signs out of it. Trump
saying that they had a good meeting is sort of
teeing up future meetings with his cabinet, and so the
(05:03):
pressure seems to be off a little bit on that
one for now. But we all know the President can
be mercurial on these things, and so it's sort of
a time will tell situation. There's a briefing here in
a couple of hours. We make it a little more
detail on what they spoke of in that meeting. Trump
has been taking sort of a lot a lot of these,
but his focus seems to be elsewhere. Today he's teeing
off on Goldman and threatening to sue J Powell.
Speaker 7 (05:25):
So it's a big day.
Speaker 6 (05:26):
Here at Bluemberg, you know, for when it comes to
the light of stuff. But right now I think it
seems like they're out of the woods a little bit.
Speaker 7 (05:35):
If you're Intel Josh.
Speaker 4 (05:36):
Wing Grove, we thank you for the perspective, at least
on the tech executives. Let's deep dive a little bit
more with an investor take on the global chip sector.
Scott Landers here in the studio Horizon Investment cio.
Speaker 5 (05:47):
How do you navigate.
Speaker 4 (05:49):
The president's impact on certain companies, whether it's about them
doing business or who leaves their businesses?
Speaker 8 (05:55):
Well, I mean this is the question of the day today,
at least having to do with Trump, and I think
currently what we have to understand is that Trump at
his heart is a commercial guy. And so you know,
what we're what we're trying to figure out is like
what are the rules of the game that are acceptable
to him in order to actually run our.
Speaker 7 (06:11):
Businesses and in order to in order to sort of
move forward.
Speaker 8 (06:13):
And so I think sort of the discovery process of
figuring out, like what are the deals that are acceptable
to him in terms of like what do we have
to give in order to let him sort of leave
us alone to someone to actually run our businesses. You know,
that discovery process, I think is what the economy is
really and here it's specifically the chip makers are really
sort of going through right now, and I think they're
getting to a place that they understand the rules of
the game. So that's actually an acceptable landing spot, I think.
Speaker 4 (06:33):
But the game of Ping Pong, for the likes of
Lisa Su and indeed of Jenson Wang, has been hard
when it's accessing China, and already maybe we see the
ramifications of that pullback of their pair down chips. The
fact that China is saying we don't even want them,
is that a concern for you? The lack of access,
the lack of demand potentially the longer term, so sophisticated
chips from China.
Speaker 2 (06:54):
Look, I think it has to be.
Speaker 8 (06:55):
And so because you know, this is like one of,
if not the largest chip market in the world, that
they're having to sort of jump through hoops in order
to actually build access and cut special deals in orders
in order to build access, and so that's you know,
again once we can finally understand what the rules of
the game are going to end up being for how
do we sell chips into this very large Chinese market,
the better off we're going to be. But in the meantime,
(07:16):
these CEOs are having to go around and try to
try to cut these deals and try to understand you know,
what is it that I'd actually need to do outside
of just running my business and outside of doing all
the innovation that I have to do in order to
make good chips. Okay, what do I have to do
on the political front to actually access the second largest
ship market in the world.
Speaker 3 (07:32):
Scott from the CIO's perspective, the president of the United
States cutting an ad hoc deal where they get a
share of revenue in exchange for an export license. Did
you see that coming? And do you expect it to
be replicated to other parts of the technology industry and
how do you model for it?
Speaker 8 (07:51):
Well that I'm not sure that you do really model
for this. I think I think we're in a more
of a read and react situation with Trump and that's
and that's franctly how you do have to deal with
Trump on some of these policies.
Speaker 2 (08:00):
I mean it is.
Speaker 8 (08:01):
It is not a forecasting exercise, is a read and
react exercise, and so you know that that that you
know that I think that's just how we have to
sort of think about it.
Speaker 3 (08:10):
Scott, What does read and react exercise look like at
Horizon Investments? What did it like this morning in the
last twenty four hours?
Speaker 8 (08:16):
Well, I mean, I think it means to some extent
like figuring out are the things that we're facing in
terms of some of these some of these hurdles that
are that are new as of you know, the last
twenty four hours, are these really game changes for some
of the more in the medium and the longer term
themes that we think are going to really be important
in terms of what's what's driving some of these names
and what's what's driving some of the some of this
productivity shifts, we don't think they are. And again I think,
you know, I think because we understand that he's a
(08:38):
commercial guy, and he wants to cut deals like he
wants deals to get done.
Speaker 7 (08:41):
He doesn't want deals not to get done.
Speaker 2 (08:43):
He wants deals to get done.
Speaker 8 (08:44):
And so if that if that is sort of your
starting place, and these deals are somewhat acceptable, and we
understand what what they're going to look like. It doesn't
really change the medium term look is this is the
most important technology in a generation, and you've got to
be on board with it.
Speaker 4 (08:57):
I'll jump in here and just think about you've got
to be on board.
Speaker 5 (09:00):
You've got to read and react.
Speaker 4 (09:02):
Does this change the ultimate tailwinds of generative AI from
your perspective for names at AMD, for names like nin
Video More broadly, the valuations that we've garnered have been
a global opportunity. But if we cut off China off,
China moves away and they want to go domestic, does
that impact your desire to get into these names?
Speaker 8 (09:20):
It does on the margin, I'm sure. I mean, I
don't know that it has to. It sort of has to.
It has to on the margin, But it doesn't really
change the long term story. We haven't seen anything today
or the new cycle the last twenty four hours out
of some of these actions that really change what we
think about about that medium term and about some of
these access issues. Is it going to make it more expensive, Yes,
to make it more complicated, of course, But it doesn't
(09:40):
really change some of the more fundamental narrative in terms
of do we want to be in these names, Absolutely.
Speaker 7 (09:45):
We do.
Speaker 5 (09:45):
Do you want to be an Intel?
Speaker 8 (09:47):
Intel's a little bit a little more complicated because we
don't know that they've got leadership in place that can
get them to that next stage and get them into
the right types of chips. It's not just can you
produce chips? Can you produce the right types? And that's
that's the big question overring Intel right now.
Speaker 3 (10:00):
God, can we go a little deeper on that? I
guess what you're hinting at is that lit Bhutan's visit
to the White House doesn't necessarily solve the tension that's
they're based on the President's post last week.
Speaker 8 (10:12):
Well, look, Trump doesn't like to be to be wrong.
It doesn't like to admit and admit that he's wrong.
And so if if he calls for somebody to be fired,
and it's it's a pretty high hurdle to get him
to back off of something like that.
Speaker 7 (10:22):
But I'm not saying it's impossible.
Speaker 8 (10:24):
But but but in terms of you know, the the
future leadership an Intel, it would be a lot easier
for Intel to h to make a change like that
rather than to try to sort of fight against the stream,
you know, and sort of against the river. That is
that is the Trump truth post, and so that you
know that that you know that being said, I don't
know what they end up doing, but but it does
make things, you know, infinitely more complicated in an already
(10:44):
infinitely complicated situation for Intel from a corporate structuring standpoint
or from an innovation standpoint.
Speaker 7 (10:49):
That's the Martians. The market is already obviously questioning.
Speaker 3 (10:53):
Scott Ladanam of Horizon Investments, Thank you very much. Now
coming up on Bloomberg Tech, Nancy Tengla joins to talk
to some more on Nvidia on China, but also Apple
now in the crosshairs of Elon Musk an Xai.
Speaker 2 (11:07):
That's coming up next. This is Bloomberg Tech.
Speaker 3 (11:24):
Elon Musk lashed out against Apple's app store practices in
a post late on Monday, accusing the iPhone maker of
favoring open Ai, saying Apple makes it impossible for anyone
other than open Ai to reach the top of the
app store charts. Bloombo's Kirkwagner joins us now for more.
In fact, it was several posts on x throughout the
time I went to bed last night here in London
(11:45):
and the time I woke up in aggregate. What's at
the core of Musk's complaint.
Speaker 9 (11:51):
Yeah, he is claiming antitrust behavior by Apple, saying that
the company, is you point out ed, is favoring open Ai.
It's putting open Ai in more prominent positions on the
App Store, you know, artificially in his mind, putting them
higher on rankings lists. Now, of course, some of those
rankings lists are editorially curated by Apple employees.
Speaker 2 (12:11):
That's been the case for.
Speaker 9 (12:12):
Years, and it's always been a challenge for developers to
try and get onto those lists, to try and get
that sort of publicity that way. But again, a lot
of this is also just based on rankings which apps
are downloaded the most frequently, and in some cases open
ai and chat gybtr are the top of those lists.
Speaker 4 (12:29):
And you use X's own community notes and they point
out that it hasn't always been open Ai and the
top of the pile when it comes to other generative
AI chatbots. Others have eclipsed it, even since the open
Ai and Apple deal cut.
Speaker 5 (12:43):
But also some Almand weighed in a little bit too.
Speaker 7 (12:46):
He did he.
Speaker 9 (12:47):
Had some sharp words for elon Musk, pointing out that
it was sort of rich for Elon Musk to complain
about this when, in Sam Altman's words, you know, he's
putting his thumb on the scale on the X algorithm, right,
He's changing the things that you can see on X
to reflect Elon's view of the world or Elon's favorite topics.
And so that was sort of the throwback that Altman
(13:09):
had for Musk there, and the two of them obviously
have a long history Caroline, as we've talked.
Speaker 2 (13:13):
About repeatedly on the show.
Speaker 9 (13:14):
So for those who have followed, this is sort of
just the latest in that saga.
Speaker 3 (13:19):
So Apple has not responded to requests for comment on this,
but like you, I went through all the documents available
when Apple explains the methodology behind the rankings, but Elon
Musk is also complaining that open ai and Apple were
technology partners and for that reason they have a bias
toward them.
Speaker 2 (13:35):
Can you explain that that. Yeah, So last year.
Speaker 9 (13:39):
At WWDC, Apple announced a partnership with chat GPT that
it was going to integrate some of open AI's technology
into the iPhone, And so he's claiming, you know, and
this is the reason in Elon Musk's mind that open
ai is sort of getting this favorable treatment. Now, I
have to point out that Elon Musk is not the
first person to kind of go after Apple over the
(14:02):
years for making things difficult on developers they might compete with. Right,
Facebook and Mark Zuckerberg are the top of the list
in terms of being in the drum about Apple being
anti competitive over the last several years with the app
store fees that they take and other things. So Elon
Musk is not alone and sort of his view on
this now, whether that view is simply formed in any
(14:22):
actual real fact or just opinion, I think is.
Speaker 7 (14:25):
The challenge here.
Speaker 9 (14:26):
And clearly he's very upset with open AI's relationship right
now with Apple.
Speaker 3 (14:31):
Okay, bluebos Kurt Wagner, And as Kurt said, Elon Musk
has threatened Apple with litigation in the antitrust context. Will
bring more as we get it. Let's bring in Apple
and Tesla investor to talk a bit more about it.
Nancy Tengler, CEO and CIO for Laffatengler Investments. And you know,
like you have exposure to Apple, I think you've added
to it recently. You know the Tesla story, but also
(14:53):
Elon Ink's story really well when it comes to AI,
how concerned are you about this situation with Elon Musk,
you know, essentially going off to Apple.
Speaker 10 (15:05):
I ed listen. I think everybody's acting to script.
Speaker 11 (15:09):
So you know, Elon will describe himself as someone who's
who's programmed for war. This is one way for him
to gain shelf space, is to raise awareness, to claim
foul and then hopefully get some concessions from Apple. In
terms of the effect on Apple, I don't think it's
going to be long standing. I think there will be
(15:29):
some sort of behind the scenes handshake.
Speaker 10 (15:32):
But it always matters where you get into these stocks.
Speaker 11 (15:35):
And so we were adding to Tesla at two forty
during the tariff tantrums. You know, at three thirty three,
I'm pretty happy with the holdings. And then we added
to Apple last Tuesday. That was just sheer luck. And
you know, we picked it off at two hundred and two,
and we can wait around.
Speaker 10 (15:51):
For things to write size.
Speaker 11 (15:53):
But I don't think this is the end of the
app store, and I don't think it's going to be
a big headache. You know, he's filed a lot of
lawsuits that have gone into the Elon Musk lawsuit black hole,
so I think we'll get some resolution.
Speaker 5 (16:06):
He kinks Floyd is busy.
Speaker 4 (16:07):
That's for sure, about one point ten percent if you're
looking at Apple's share price soon.
Speaker 5 (16:11):
No one too worried, Nancy.
Speaker 4 (16:12):
But just love tell a little bit of the AI
opportunity within Tesla and why you're not adding to it
at the moment. Because there's been much about made about
whether they'd invest more broadly in xai itself.
Speaker 5 (16:22):
There's a lot of cross pollination that goes on.
Speaker 10 (16:26):
Yeah, I think the.
Speaker 11 (16:27):
Cross pollination would be good. I'd love to see Tesla
absorb XAI. I use rock religiously, and there's I just
think it. I just happened to think it's the best solution,
so you know, I'd love to see more people utilize
it and see the company continue to go deeper into
the AI portions of their business and have it benefit
(16:47):
Tesla's shareholders. We'll see when we get the shareholder vote
where you know, where the shareholders come down in terms
of investing further.
Speaker 10 (16:55):
But I like the ecosystem.
Speaker 11 (16:58):
We're building out a strategy that focuses on all these
new frontier you know, opportunities, quantum nuclear robotics, jen AI,
and in that we will have front and center.
Speaker 10 (17:11):
One of our largest holdings will be Tesla.
Speaker 3 (17:14):
Nancy I broke the story last week that Elon Musk
requested that the Dojo project be shut down, and he
confirmed it on Sunday in a post on X and
I reported today a lot of that engineering talent's been
reassigned across their other chip efforts. How central was Dojo
to your thesis with Tesla? Did you pay attention to
that one?
Speaker 10 (17:34):
Yeah, and congrats on on the story, ed, Yes, and no.
Speaker 11 (17:38):
I mean it was so so nascent in.
Speaker 10 (17:43):
Its origins that we were watching it.
Speaker 11 (17:46):
We are certainly focused on quantum computing and the elements
that will drive it, but we didn't we didn't have
it in our expectations for future earning Scrows. And I
think that's a lot of what you have to do
with with.
Speaker 10 (18:00):
Tesla and Elon.
Speaker 11 (18:01):
He's always thinking, trying and then restarting, and so you know,
we wait to see what's sustainable and where we think
the direction of the firm is going. And you know,
Caroline asks why or mentioned we haven't added to it recently,
I mean we will again.
Speaker 10 (18:16):
It's a pretty it's a pretty significant.
Speaker 11 (18:18):
Holding in our growth strategy not a member of our
twelve Best Ideas because I can't handle the elon volatility
and the twelve Best Ideas portfolio.
Speaker 10 (18:26):
But I think I think they'll figure it out.
Speaker 11 (18:29):
They'll either partner as it looks like they're going to,
or they'll they'll restart.
Speaker 4 (18:34):
I love going back to that frontier fundamental analysis you're
doing as well, Nancy, when you're looking at the opportunities
in general to AI, whether it's quantum, some of the
more forward thinking things and here and now when you
own a Nvidia and I know you're even exit TAMD,
but when you're thinking about what the administration means for
the future business, what China's owned demand for chips means
(18:54):
the future business, how are you thinking about that story?
Speaker 11 (18:57):
Yeah, this story is a little bit complicated, and you're
probably going to get the cranky side of me. I
think the precedent set by an administration that you know
is pay for playing isn't unseemly at best. I get
why Jensen made the deal. I would have too, but
for the President to say at a press conference, you know,
I told them you're going to have to pay us
for you pay us something for this that that may
(19:20):
have gone on behind the scenes. We probably had it
in the last administration with Meta, but it was different,
and I don't think it's I just don't think it's
the way we want to conduct business in the United States.
That said we had written off China investors had not.
So very long ago the company took Nvidia, that is,
took an eight billion dollar charge, and then.
Speaker 10 (19:40):
You know, the Middle East opened up. So I don't
think this is going to be the death now.
Speaker 11 (19:45):
I think China did exactly what you would have expected.
Speaker 10 (19:47):
Them to do.
Speaker 11 (19:49):
Come out, you know, in response to Jensen saying keep
China hooked on our products, They're going to come out
and say, no, we don't, we don't need your product.
So it'll settle somewhere in the middle, and we'll get
incremental revenue news and a little hit to Margins.
Speaker 10 (20:03):
Well.
Speaker 3 (20:03):
Very quickly, China responded in some form, how much do
you think they're trying to protect their own domestic chip names?
Speaker 11 (20:08):
Just very quick I think they are, of course ed,
and I also think they're trying to get a better
deal always out of the US, So stay tuned.
Speaker 10 (20:16):
I think we'll end up somewhere again in the middle.
Speaker 3 (20:20):
Nancy Tegler of Lafetenglo Investments giving us your cranky side,
which we appreciate, thank you very much. Now coming up,
GM looks to resurrect its autonomous ambitions, that story and
so much more.
Speaker 2 (20:31):
Next this is Bloomberg Tech.
Speaker 4 (20:40):
Time now for Talking tech and first up, GM is
looking to restart development of new driver's cars now Colling
to sources, it's looking to lull back ex employees of
its former autonomous cruise operations. The project is said to
be focused on autonomous vehicles for personal use, with the
ultimate goal being a car that can drive with no
one at the wheels. GitHub CEO Thomas Donker is stepping
(21:03):
down now the coding platform executive is set to remain
through the end of the year and will leave to
become a founder. GitHub, which was acquired by Microsoft back
in twenty eighteen, will become part of the company's core
AI team, and ESPN is hoping to lure that customers
with a new app now. The service costs thirty dollars
a month and it'll include live games, fantasy sports, highlights,
original programming look. This marks the first time ESPN's complete
(21:26):
sports lineup will be available to viewers without cable satellite
subscription ed.
Speaker 3 (21:33):
All right, coming up circle, CEO Jeremy joins to talk
about the company's first earnings since going public. Markets reacting
pretty positively to those results.
Speaker 2 (21:43):
We're gonna have a lot more on that next.
Speaker 3 (21:46):
I still feel like the story of the day is
one of volatility in those two chip names, and video
is modestly high in our AMD up eight tens of
one percent. But there was an information report that basically
said China has ordered tech company to stop ordering chips
from those US names, different to Bloomberg saying that regulators
and authorities had urged those tech companies in China to
(22:08):
stop placing the orders. The stocks bounced around over the place.
There's so much newsflow and we work more on it
throughout this hour. From London this week and also New
York City. That's what your index level looks like. This
is Bloomberg Tech. Welcome back to Bloomberg Tech. Markets have
(22:48):
just closed in Europe and in London where I'm sat,
and therefore I'm looking at these three names across Europe's
software names have been under pressure today. The concern for
these software names is that AR is going to kill software.
Such an interesting concept. In fact, there is a note
from RBC Capital Markets and List Matthew Hebberg which says, quote,
(23:08):
there is from a valuation perspective, death of software due
to AI. These are companies that in Europe are seeing
like really strong revenue growth, but the idea is that
AI elsewhere just renders their software offerings obsolete. It's not
saying we've talked about much, particularly from this geography Carro,
but serious declines and in Europe a lot of weakness
in those software names today. And this is something a
(23:31):
lot of people have clicked on this Tuesday, which also
took me a bit by surprise.
Speaker 5 (23:36):
Significant moves.
Speaker 4 (23:37):
Look, and let's pivot back to another stock that's moving
on the higher side this morning as well. We're focusing
in on the stable coin network Operator, up six and
a half percent of this circle. The company reporting second
quarter revenue jumping fifty three percent, six and fifty.
Speaker 5 (23:51):
Eight million dollars.
Speaker 4 (23:52):
Now it's the issue of stable coins, and it's its
first earnings release since it went public back in June.
Circle CEO Jeremy Elaire joins us. Now, Jeremy, just that
bump and revenue. We know how ultimately you make a
lot of your money, and that comes from treasuries, it
comes from other yielding assets there holding versus USDC. What
about the other revenue growth that you want to see?
(24:13):
How do you think about that pipeline?
Speaker 7 (24:16):
Well, a couple quick things.
Speaker 12 (24:18):
I think first, you know that bump in revenue is
driven by growth. We saw a ninety percent year over
year growth in USDC in circulation on our network, which
is significant, and that growth is obviously a driver even
where we see rates decline, that growth is really driving
our overall top line revenue growth. We're also seeing growth
(24:39):
in our other revenue and so you know, again as
you think about Circle and our business, we have our
stable coin network, we have money that flows on that network,
and we're adding new services, subscriptions and services fees, transaction
fees for a wide array of different things. We're building
an application layer through Circle Payments network. And actually we
(25:01):
just announced a new blockchain network ARC today and so
those also grew two hundred and fifty percent year on year.
And you know, obviously have a slightly different margin profile,
a higher margin profile. So that actually added a couple
hundred basis points to our margins, which obviously translated as
well on the aggregate into you know, our even to
(25:22):
growth adjusted growth to growth of fifty two percent with
a fifty percent kind of adjusted EBIT to margin.
Speaker 4 (25:29):
Let's just dive more into the new products into ARC
that you reference into your payments network. How close the
competition does it put you in with players like Stripe
out there already for example, how does it continue to
make you market neutral when it comes to an infrastructure player.
Speaker 12 (25:45):
Well, when we think about Circle, we think about ourselves
as an internet platform and network utility company, and we
want to make sure that we can provide the full
stack that's needed for financial institutions and leading enterprises around
the world to take advantage of stable cooin finance and
ARC as a blockchain network is purpose built for stable
(26:09):
coin finance. The transaction fees are paid in USDC and
potentially other stable coins. The network infrastructure is designed around
what's called deterministic settlement finality. That's key bank regulators want
to know that transactions and settlement are final. It's a
key characteristic of a prudential grade of financial infrastructure. So
(26:31):
we're building this, you know, very much in the you know,
in the view of what's coming all of these major
institutions that now want to build on stable coins, really
making sure that we have the right infrastructure at play,
but at the same time broad interoperability for our stablecoin network.
We're interoperable across twenty four different blockchain networks. We're fundamental
(26:53):
dollar liquidity on those networks, and we're going to continue
to do that, and in fact, ARC is going to
become a very powerful way to even greater provide even
greater support for liquidity and interoperability on these networks.
Speaker 3 (27:06):
Jeremy, there's a lot of interest in the other revenues
opportunity with you to get a better understanding of the
cool business. I have the Bloomberg story about your writing
is report in front of me, and the AI summary
is the majority of cycles revenue comes from US treasuries
and other yield bearing instruments that support the value of
USDC tokens. Just to the uninitiated or the layman, could
you just explain the basics of that.
Speaker 7 (27:28):
Yeah.
Speaker 12 (27:29):
So Circle operates the largest regulated stable coin network in
the world, and that network reaches over six hundred million
people who can reach in their pocket and access and
use USDC. There's tens of thousands of products and services
that are integrated to the network that provide ways for
people to store and make transactions and payments or investments
using USDC. So we have this really large network and
(27:51):
there's demand for these digital dollars, and that those digital dollars,
you know, are essentially purchased using existing money and then
issued is digital currency and are in free circulation on
the Internet. And so that money stock on the network
that's moving around. And we also noted we saw a
tremendous growth the amount of transactions on the network, six
(28:12):
trillion dollars of transactions in Q two and seeing that
accelerate into Q three as well. So we have this
very high velocity, high transaction money on the network and
we monetize that through the reserve returns. And so, you know,
what we really focused on on this part of the
business is growing that money stock. And there are a
(28:33):
lot of different views as to how fast stable pin
money supply is going to grow. There's an optimistic view
of a ninety percent kagger for the next five years,
There's a you know, the lowest view is a twenty
five percent kager over several years, and so we tend
to be on the more conservative side when we think
about that from a kind of outlook perspective. But you know,
we grew ninety percent year every year. That obviously drives
(28:53):
top line as well. And year to date we've grown
forty nine percent as of August tenth, which is very
strong growth, and that again driving and supporting that top line,
while we also build out all of these new products
with new revenue streams in subscriptions and services and in
transaction fees, and so we're continuing to build those out
(29:16):
as well.
Speaker 3 (29:18):
You go through going public, you go through your first
call through as a public company, and the first thing
the market's going to ask you is about inorganic growth.
What's your M and a strategy, Jeremy.
Speaker 12 (29:30):
I mean, look, we are a technology company. We're very
focused on software powered innovation. That's really the heritage, that
my heritage and the rest, and so virtually everything that
we've done here has been organic. We love building software
and software technology, and we have done acquisitions. We've actually
(29:51):
done three acquisitions this year. One was a product and
technology that's allowed us to accelerate our entry into the
bearing token space with us y C.
Speaker 7 (30:02):
We had some big news with that in.
Speaker 12 (30:04):
The quarter as well, and then too, what you know,
our teams and intellectual property acquisitions, both of which supported
our efforts to launch ARC. And so where we find
great intellectual property or technology and great people, we see
that as a very natural thing to do to kind
of augment and bring speed and velocity to our product
(30:26):
development initiatives. But you know, we're not really here to
like go do huge acquisitions and try and try and
roll things up.
Speaker 7 (30:35):
That's not really our approach.
Speaker 12 (30:37):
So we'll look at things and of course continue to
make acquisitions where it makes sense.
Speaker 7 (30:42):
But this is not an m and a play in
the sense that people.
Speaker 4 (30:48):
Understand Jeremy Anna taking us across the business. We thank
you Holt on the heels of your earnings a circle CEO. Now,
we just want to return to some breaking news more
broadly about financial markets, not just stable coins, but about data,
in particular labor statistics. Blueme Megg Inter National Economics Policy
Editor Michael McKee joins us now supporting done by Fox
(31:08):
about well, the person who's going to be potentially taking
over labor statistics in the United States and his view
on how often they should be just break down the.
Speaker 13 (31:16):
News for us, Well, it's kind of a strange situation
because he'd made these comments before the President announced that
he was going to nominate him. He did an interview
with Fox and apparently they didn't run it until now,
but he said, maybe, given the poor jobs report that
we had, maybe we should suspend the jobs report each
(31:36):
month until we can get the numbers fixed. It's the
president who thinks that the numbers are wrong, not the statisticians,
and that I'm not sure why you would do that, right,
because this would mean that Wall Street would have nothing
to trade on in terms of jobs reports, and I
would think that would not go over well.
Speaker 2 (31:57):
Michael McKee.
Speaker 3 (31:58):
If you're not sure, then I'm read because I and
hundreds of thousands rely on you for economic data. The
jobs print is key to what we do when it
comes out. Why does the market rely on it so much?
Speaker 13 (32:11):
It's a great signal of what's happening in the economy
because when people have jobs, they spend money. When people
are losing jobs, they don't spend money. And if people
are spending money, then companies hire more people and profits
go up. So it's sort of the lynchpin indicator that
the Fed uses, and a lot of people on Wall
Street use to tell us in general how the economy
(32:33):
is going. And it's the data are delayed, as we know,
and they get revised, but it is the best kind
of numbers that we have on a regular basis, on
a monthly basis. So the idea of suspending it, I
think would get no traction at all. I'm not sure
that the BLS commissioner would have that ability anyway.
Speaker 3 (32:53):
You know, I'm just riffing here a little bit carro
But you know, in terms of manufacturing data, I've been
thinking a lot about whether humanoid robots are coming on not.
Bloomberg's Michael McKee with some interesting news. We have some
breaking news crossing the Bloomberg terminal. Perplexity says that they've
made an unsolicited bid to Google today offering thirty four
(33:15):
point five billion dollars to purchase it's Chrome browser. I'm
going to repeat that Perplexity has sent says it's sent
an unsolicited bid to Google this Tuesday, thirty four zero
point five billion dollars for the Google Chrome browser. That's
a significant and interesting piece of news. We're going to
(33:35):
get the shares of Alphabet, the parent of Google, up
very soon, and we're going to talk to Bloomberg Seth Figureman,
who's one of our technology and AI editors out in
New York City. The details with the stock of alphabet
now up a percentage point, please, Seth.
Speaker 14 (33:51):
Yeah, it's an eyepopping offer. As a point, it's also
very much a long shot. But there's a lot of
caveats here. Google has not actually put Chrome up for
sale far as we know. It's largely in response to
the US government wanting a judge to order Google to
sell off Chrome. The judge has not actually put out
a ruling on that yet. And then on the offer itself,
(34:11):
Perplexity is offering thirty four point five billion dollars. That's
nearly double what Perplexity is valued at and far more
than the more than one billion that Perplexity has raised
a date. Perplexity is saying that they have investment funds
that are willing to support this big info. But again,
this is a long shot offer as of now.
Speaker 4 (34:30):
They've made long shot offers before, whether or not they've
been as formal as this one. But they threw their
name in the ring when it came to TikTok I, remember,
but the US part of TikTok numbers aside.
Speaker 5 (34:41):
The browser bit.
Speaker 4 (34:43):
Well, they've already been building their own browsers, so why
make this purchase and ultimately, how would it beef up
their offering and take away from that of Google's.
Speaker 14 (34:49):
Yeah, it's a great question. You know, they have been
working on a browser called Comet, but it's one thing
to try to build your own browser from scratch and
another to acquire a browser that reaches billions of people
around the world. The idea here seems to be that
they want to inject their AI agent capabilities into the
interface that we all use on the web every single
day and getting in front of far more people. This
would give them a major headstart on that front. But again,
(35:12):
this is a lot of money that we don't think
they currently have.
Speaker 3 (35:15):
Oh yeah, I mean, I'm reading the story and you'll
forgive me, seth, I'm just reading it in real time.
Perplexity says it's going to invest three billion dollars over
the next two years in Chrome and Chromium right, which
is the underlying open source coding that supports a number
of browsers, and also that they're going to extend a
substantial offer to Chrome talent. I mean, I'll leave some
of the details to you. But what do we make
(35:37):
of that? What else are we reporting?
Speaker 14 (35:39):
Yeah, I mean again, I think they're trying to show
that there'll be a good steward for a platform that's
used by billions of people around the world, while continuing
to move forward with their own venture and injecting AI
capabilities into key Internet functionality.
Speaker 4 (35:55):
Well, we're expecting that ruling from Judge am it Meta
in coming days on the rent is that they want
to see to prevent what it sees as Alphabet and
Google being some sort of monopoly when it comes to
search in the United States. Bloomberg Seth Figeman the breakdown
of perplexities offer for Google Chrome. Let's just return to
the overarching geopolitical story of US and China right now.
(36:16):
We've been talking a lot about how China is urging
it's domestic firms AI firms not to use in Videa's
H twenty chips. This after the US agreed to revenue
split for allowing a semi conductors from video from AMD
to re enter China. Now, Bloomberg Opinion Economist Daily wrote
about this yesterday, about the decision by the White House
and also what it would cost the US in terms
(36:38):
of ANAI advantage.
Speaker 5 (36:40):
The story moves on continually.
Speaker 4 (36:42):
But what's so striking about your story was, Look, if
there's a fifteen percent cut taken by the US government
to allow AMD and Vidia to sell into China, the
winners are in VideA, maybe less.
Speaker 5 (36:52):
So now, but China.
Speaker 4 (36:53):
Why would China clearly seeming to push ahead in terms
of its own a semi conductor offerings.
Speaker 15 (36:58):
Well, one of the things I used to empty chip
would allow more quickly as scale, right, I mean, one
of the things this chip is good at compared to
what China's capabilities are now is it can do more inference,
so it can run the applications that AI is built for.
That's something that we don't think domestically they could catch
up on for it for a couple of years. And
so look, this doesn't change China's aggression in trying to
(37:21):
build its own chips as quickly as possible, But what
it does do is kind of feel the interim there
to allow them to start integrating AI into all aspects
of Chinese life and therefore, you know, continue to make
it a global player. Question is and where the story
has moved on since I wrote those words. Is China
now going to look to sort of almost stop tavrom
(37:41):
happening in order to protect this domestic supply? How is
it going to balance trying to make sure AI is
used as often as much as it can in China
whilst making sure that it's homegrown effort is still built
upon us as quickly as possible.
Speaker 3 (37:55):
So Dave on your piece, and I appreciate a lot
actually in twenty four hours. Just take mine and Carrow's
word for it. It's been a nightmare doing this for
the last twenty four hours. But you actually your final
point is that there are two winners here in Vidia
and China. But you don't say the United States is
a winner. If you get what I mean. You know,
Trump is supposed to be the deal maker. But your
(38:18):
conclusion seems to be actually good deal for Nvidia, but
America in aggregate, that's what I want to get from you.
Speaker 15 (38:25):
I mean, look, if the concern over exporting these chips
existed this time last week, I don't think the fifteen
percent revenue cut changes that calculation. It doesn't seem like
a good enough change to warrant what's essentially quite a
dramatic change in national security policy. That would be my
sort of overarching question here on why the US would
(38:47):
go forward with this. I guess one of the dynamics
that we're just starting to learn now is what this
might mean for other parts of the trade deal between
the US and China. We're hearing about rare earth metals
being at being a concern, and there's other types of
chips that could be use his leverages as well. I mean, look,
this is becoming a hugely complex piece of negotiation between
the two countries. I worry that China has a position
(39:09):
now of sort of saying to in Video, well, look,
you might have got your permission from your masters over
there in the US, but we also hold many cards
as well, and unless we get more of what we
want in these trade deals, then we may not allow
the sale of these chips in the country. And look
for in video, China is a very very important part
of his business. It's billions of dollars revenue could be
(39:31):
billions of dollars more. They had to write off billions
of dollars when the restrictions on the age twenty were
going to put in place. So I think it really
matters to in Vidia to please both countries, and that
to me just seems incredibly difficult at this point.
Speaker 3 (39:49):
Bloomberg Opinions, davely did, good job, Thank you very much.
Let's get more on what we can expect from China's
policy response here. Amanda Shaw is a director in the
China practice of the Raisor Group Geopolitical Risk consulting firm,
and Dave raises a point of chronology. Back when we
were stopping the flow of chips to China, it was
(40:10):
America's national concerity concern about how China would use those
chips in the military context. The development twenty four hours
later after the President cut that deal is China saying
we have national security concerns and we want to champion
our own domestic names. Who has the upper hand in
this negotiation, Well, I.
Speaker 16 (40:32):
Think that for China a lot of this signaling that
it has been engaged in is largely performative. We know
that the Chinese continue to lack the capabilities that the
video Age twenty chips offer, and so to some degree
there will be strong demand from the Chinese for the
(40:55):
use of the Age twenty chips.
Speaker 10 (40:57):
But of course, as was.
Speaker 16 (40:58):
Pointed out previously, the Chinese, of course, do want to
continue to strengthen its domestic chips building capacity, and you know,
included in that is really providing support to national champions
like Huawei. But on the other hand, when we think
about where China is headed, China also wants to be
(41:20):
supporting national champions like deep Seek, and of course deep
Seek deep Seek's.
Speaker 10 (41:24):
AI models are run on in Nvidia chips.
Speaker 16 (41:27):
So I think for the Chinese there are boat sort
of economic considerations, but there's also security ones. So I
don't see the Chinese outright banning the use or purchase
of H twenty chips in the near term.
Speaker 4 (41:40):
Interesting that the information we reported that there was a
sort of full on stop being asked for the likes
of byte Dance or the likes of ten Cent.
Speaker 5 (41:47):
But for now you're thinking that there.
Speaker 4 (41:49):
Wouldn't be some sort of ban because it'd invocate the
users of chips. But what's so interesting is Cambra con
Technologies and Huawei, of course, we have seen a market
impact of the idea that they'd support their homegrown talent.
What else have we seen from the Chinese government to
really foster the building of semiconductors that rival that at
the age twenty.
Speaker 16 (42:10):
Right, Well, the Chinese have really poured a lot of
money into its effort to develop a home grown you know,
HILP industry, and we know that this is very much
in line with the top leaders vision for the country
that Chinese development and rise to national rejuvenation, as the
Chinese would put it. A key to that is technological
(42:33):
development and being able to rival the US in terms
of technology and AI.
Speaker 10 (42:39):
So, you know, the Chinese have really made it very clear.
Speaker 17 (42:43):
That this has been a priority and this will continue
to be a priority in terms of its economic development.
But nevertheless, the capabilities that they have at home remain
short of what USAI chips can provide.
Speaker 4 (42:58):
And briefly, where they do have the and outsized power
is where else.
Speaker 5 (43:02):
Is that part of the bargaining ship, if at all.
Speaker 10 (43:06):
Yeah, so we've seen that.
Speaker 16 (43:08):
Really the Chinese themselves have been I think a bit
surprised by how potent of a weapon the rare Earth's
controls have been in these trade negotiations. Now, I think
it's important to point out that the lifting of the
sales of H twenty chips on the part of the
Trump administration does not seem to have been linked to
(43:29):
some sort of deal or concession from the Chinese side.
Speaker 17 (43:32):
The Chinese in fact issued a statement saying that it
was not made as part of the deal, to make
clear really to an audience that they did not offer
any concessions for this. But in terms of rare earths
and its role in the larger US China trade negotiations, absolutely,
it's been very important, I think for the Chinese and
realizing that they have this key piece of leverage, and
(43:55):
I think for the Trump administration as well, and realizing
that the US will remain dependent on Chinese rots and
wrote earths processing technology.
Speaker 4 (44:04):
Amanda Schau from the Eurasia Group, thank you very much
for joining today.
Speaker 5 (44:08):
Coming up a bit of a pivot, Tayta Swift.
Speaker 4 (44:11):
It turns across the internet with a surprise album announcement.
Speaker 5 (44:14):
That's next, there's a Bloomberg Tech.
Speaker 10 (44:24):
So I wanted to show you something.
Speaker 7 (44:26):
Okay, what do we got? We got a briefcase.
Speaker 10 (44:31):
Yep, Mick Green, Yep.
Speaker 16 (44:35):
This is my brand new album, The Life of a
Show Girl.
Speaker 10 (44:39):
So I wanted to show you something.
Speaker 3 (44:42):
Well, Swifties worldwide got a surprise from Taylor Swift, who
announced her new album The Life of a show goal
during a sneak peek of her appearance on the New
Heights podcast with boyfriend Travis Kelce for more on the
power of podcasting and the astonishing sights before My eyes
Bloomberg Lucas Shaw, who leads screens on coverage. This has
(45:02):
dominated Google trending, by the way, and most other social
platforms for most of the time I've been awake. This
is big. Tell me more.
Speaker 7 (45:10):
Could you sleep last night?
Speaker 18 (45:12):
Were you able to or were you just so excited
that you had to stay up thinking about Taylor?
Speaker 2 (45:16):
That was Elon Musk related. Let's stick with Taylor please, thanks.
Speaker 18 (45:20):
I mean, look, she's the biggest pop star in the world.
It's not even really close. She just wrapped her Era's tour,
which is the best selling concert in music industry history,
less than a year ago. I think there's a lot
of debate speculation as to whether she would finally take
a break, go away for a year or two, as
some artists have been known to do, or if she
would just keep going because she's been on kind of
(45:42):
this crazy treadmill over the last five or six years,
where it feels like she's got new music every year,
if not more often than that she just had that
big tour and here she is ready less than a
year later, with a new album that I'm sure will
break all types of records. And I do think it's
interesting that she did it on her boyfriend's podcast.
Speaker 4 (46:01):
Yeah, so who wins here, Lucas the podcast underlying owner,
but also the music labels that she's affiliated with.
Speaker 18 (46:08):
Well, that's actually a little bit of a complicated question
because her music is released by Republic Records, which is
a division of Universal Music Group. It's the biggest owner
of all these different music companies.
Speaker 7 (46:18):
In the world.
Speaker 18 (46:19):
But from what we understand about her deal, she's definitely
the big winner, right, she owns the ultimate copyright, She
is the IP owner. Universal gets fees and revenue shares
for releasing it, and so it's good for them, but
it's not the same as when you have someone that
you fully control and own.
Speaker 4 (46:37):
Well, we'll see how this one unfolds, and we're going
to be able to all access it. Lucas Shaw, We
thank you very much coming live for us on the news. Meanwhile,
that does it for this edition of Bloomberg Tech Ed.
You're not going to get any sleep tonight. Maybe, whether
it's Elon or whether it's Taylor.
Speaker 3 (46:52):
Just like astonishing news flows, so much of it actually
playing out on social media in the Internet as well,
there's a lot to recap. Check out the podcast you
know where to find it on the Bloomberg terminal as
well as online on Apple, Spotify, and iHeart from samarn
Oh from London.
Speaker 2 (47:05):
I just to say, in New York City, this is
Bloomberg Tech
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