July 9, 2025 • 43 mins
Bloomberg’s Caroline Hyde discusses Nvidia's rise to become the first ever company to have touched a $4 trillion market cap. Plus, SpaceX is in talks to sell shares that could value the company at $400 billion. And the White House puts Apple on blast for their slow migration of production, saying the tech giant thinks it's "too big to tariff".
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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 (00:21):
This is Bloomberg Tech coming up in video.
Speaker 3 (00:23):
Becomes the first company in history to have reached a
four trillion dollar market cap, plus a new record for
a private giant two SpaceX is, and discussions to sell
shares that would value the company at four hundred billion dollars.
And Apple thinks it's too big to tariff now. That's
according to White House Trade counselor Petere Navarro. This is
(00:44):
wider trade questions remain, But first we check in on
these markets, which, as she managed to shrug off a
lot of that trade anxiety. On the day in the
NASTAC up to ten percent. We were trading in excess
of five ten percent higher, led by key names such
as in video. Let's just dig into what's happenings. We
await big bond auctions in the United States. We try
(01:05):
to digest what's happening in terms of trade. I am
seeing a four trillion dollar market capitalization for the first
time in history. We touch it, we pull back down
a little bit, but in video is very close to
it as we stand out. And this despite the world's
biggest market cap erosion back in February after the deep
Seak anxiety, they pull back and they're up twenty percent
(01:26):
so far in twenty twenty five.
Speaker 2 (01:28):
Move on, though, and have.
Speaker 3 (01:28):
A look what's happening with Apple, because from a points perspective,
it is the big drag lower on the major benchmarks
today Apple Office, you'll see by more than a percentage point.
This is we hear from Peter Navarro, of course, who
whispers closely in trumps hera around trade that he thinks
that Apple sees itself as too big to tariff, but
they are moving.
Speaker 2 (01:47):
Fast to change this.
Speaker 3 (01:49):
Nevertheless, the anxiety remains around Apple and the exposure to
certain trade tariffs still to be decided and announce Bloomberg's
balance of power. Host Kayleie Lyons has more. We heard
from Peter Navarro, who is on another network earlier today.
But bring us up to speed, which is where we
stand in terms of the new deadline of August first.
Speaker 4 (02:08):
Well, President Trump suggests that deadline actually isn't new, Caroline.
He said yesterday that it's always been August first, though
we thought today July ninth initially was the trade deadline
that at least countries were facing in order to make
trade deals with the United States. Obviously that has been
punted back a few weeks. The President, in addition to
tariffs on countries, is still teasing further sectoral tariffs that
could affect companies like Apple when it comes to things
(02:29):
like semiconductors, for example. And then there's copper, which he
surprisingly announced yesterday. Not necessarily, the tariffs itself were surprising
because a Section two thirty two investigation had been opened
into copper, but the timing and the scale of the
tariff were what caught us a bit aback. Fifty percent
in the Commerce Secretary Howard Lutnix says, that could be
effective at the end of July or also on August first,
(02:50):
and you think about a commodity like copper, what that
could do to supply and demand dynamics, Knowing right now
the US doesn't have adequate supply to meet the growing
demand for copper because of the role it plays in
things like, for example, powering artificial intelligence, or rather the
data centers that do that work in the facilities that
generate the power for those data centers, the actual infrastructure
to get that power to data centers, the construction of
(03:12):
data centers that require it for things like cooling systems
or their circuit boards. All of that requires copper, and
copper could either be harder to come by or potentially
more expensive when these tariffs go into effect.
Speaker 5 (03:22):
So that obviously is.
Speaker 4 (03:23):
One area of the market that has been roiled by
tariff news in recent days, and we're waiting potentially for
more tariff news. Caroline. The President posted on true Social
overnight that this morning he would be announcing seven countries
in regard to trade.
Speaker 2 (03:38):
Assumably we assume what would.
Speaker 4 (03:40):
Be letters like we saw earlier this week when fourteen
countries had tariff rates essentially set for them that will
take effect on August first. No news yet on this front,
but he did say seven will come this morning, with
additional letters to come later this afternoon, so we'll be
on watch for those essentially all day here in Washington.
Speaker 3 (03:57):
The weaving of politics and technology expertly done, Thank you,
Kayley Lines. Now, let's just admit that talk of tariffs
are probably going to be consuming much of.
Speaker 2 (04:07):
The conversation over the annual Allen and co retreat in
Sun Valley.
Speaker 3 (04:10):
But so two, there's a competition in AI when companies
like Meta actively recruiting top talent from across the industry,
including from Open Ai.
Speaker 6 (04:19):
Now.
Speaker 3 (04:19):
Despite that, talent war CEO Sam Altman says he remains
confident in this team.
Speaker 7 (04:24):
I think we have an incredible I mean, obviously an
incredibly talented team, and I think they really love what
they're doing.
Speaker 5 (04:28):
Obviously some people have got a different places.
Speaker 8 (04:30):
There's a lot of excitement I guess we could say
in the industry, but.
Speaker 3 (04:35):
No, I think we still find joining us now is
our very own ed Ludlow in Sunny Sun Valley, Idaho.
So thus far, no awkward meeting between Altman and zuck
has been witnessed, right.
Speaker 9 (04:49):
No, people I've spoken to haven't witnessed one, and we
haven't actually seen Zuckerberg arrive yet. But that was what
Sam Altman said because he was asked. You know, his
expectation is that he will see Mark's Uckerberg and that
he's looking forward to it.
Speaker 6 (05:02):
You know.
Speaker 9 (05:02):
He kind of elaborated on what he discussed on the
podcast with his brother a few weeks back, which is
he feels the strategy on talent is to be mission oriented,
to have the great research lab and a great company.
It was kind of a reference to that quote that
he had about being mission driven missionaries not mercenaries. But
again we're waiting for it to happen. I do know
that it's a big point of focus this year here
(05:24):
at Anal.
Speaker 2 (05:24):
And coch Well.
Speaker 3 (05:25):
A big talent question has just arisen as well, a
movement of Linday Acarino out of x she's posting on
the social media platform saying she's stepping down as the CEO.
Speaker 2 (05:35):
ED what do you make of it?
Speaker 9 (05:39):
Yeah, I mean in the post she's talking about the
turnaround job that she's done without sort of giving any
specific metrics that lowered down. There's a reference to Xai, right,
and it's really important to remember that post March, when
x and Xai essentially merged under Xai Holdings, that the
structure of that company changed.
Speaker 5 (05:58):
There's a lot of.
Speaker 9 (05:59):
Emphasis on how how x the social platform provides a
mote for Xai, the developer of large language models and
generative AI tools. But Elon Musk, this is the latest
person in his orbit to step down or leave. You'll
remember reporting about Omi Dafshar leaving Tesla, other senior executives
in other places. So very interesting to see what happens
(06:20):
big picture with x and where it fits in alongside
XAI rather than just being an ad base social platform.
Speaker 3 (06:26):
And let's talk about orbits and Elon Musk a bit more,
because you have a great scoop out on SpaceX working
with colleagues talking about how it's going to be perhaps
a record setting valuation of a private company.
Speaker 9 (06:39):
So SpaceX does tend to do a secondary or tender
every six months, and they use this mechanism where it's
concurrent with a very small primary in other words, they
sell very small number of new shares to set the
price and the valuation. And what we're hearing from sources
is that that valuation is now above four hundred billion
dollars and it's astonishing, right, like it's a milestone, most
(07:00):
valuable private startup. But you know it's also in the
backdrop of Elon Musk and the President of the United States.
SpaceX relies heavily on contracts from the US government defense apparatus,
but it also dominates commercial payload to orbit, and that
valuation continues to climb with a really heavy emphasis on starlink.
A big part of it as well, of course, is
(07:21):
about employee liquidity and talent, because there are people that
worked at SpaceX for a really long time and stock
is a big part of comp Loads of people watching
this show will know that. But it continues to go up,
and that's super interesting.
Speaker 3 (07:33):
It is still validation in Elon Inc. It feels at
this moment. But what everyone's going to be talking about
where you sit is also a bit of M and
A and a healthy amount potentially going on in the
media landscape.
Speaker 2 (07:44):
Talk to us about Ane, Yeah.
Speaker 9 (07:48):
I mean, this is the history of all and Cohen,
Sun Valley, right, TMT and M and A. And the
news that we've had in the last twenty four hours
is that A and E, which is the joint venture
between Disney and Hurst, is available for sale. That's kind
of like the cable channels, including History Channel, shout out
History channels to.
Speaker 6 (08:03):
Those that watch it.
Speaker 9 (08:04):
Bob Iger walked past and we asked him, can we
talk a little bit about A and E? And he said,
I'm not going to be talking about that right now,
but it is some property up for grabs. And then
you have Warner Brothers Discovery that's on a path to
split between a pure place streaming business and a pure
place studio business. And we did catch up with David
Zaslov who said, like, look, we're on track. There are
no approvals needed. We aren't ready to talk about the
(08:27):
debt side of this, but all of that indicates that
in this space some stuff might happen, and I think
that's what people are going to be talking about a
lot in in amongst all of the seminars and coffee
stops in the next few days, a.
Speaker 3 (08:40):
History lesson on the History Channel and the history of
Allen co Ed Lulow out in Idaho.
Speaker 2 (08:45):
Love catching ups soon.
Speaker 3 (08:47):
Meanwhile, let's dive into all of this with Scott Lanner
from Horizon Investments, who, of course is taking a temperature
gauge of the markets right now. And Scott, we're looking
at maybe a little bit of em and a coming
to bear. We're seeing phenomenal valuations on the public market
with a new four trillion dollar company if we can
retain it back for Nvidia and that four hundred billion
dollar private valuation for SpaceX.
Speaker 2 (09:09):
Can we sustain these sorts of valuations?
Speaker 10 (09:11):
Scott, Hey, Caroline, you know, like long as a short yes,
I think we can. And the reason why we probably
can is because these companies are growing into the valuations
that the market is placing upon them. This is not like,
you know, kind of not not like the nineties where
where those companies really sort of got ahead of themselves
there weren't making enough money to justify the valuations ultimately.
But these you know, this, this you know, this generation's Internet,
(09:34):
this generations tech companies you know have have ros in
the thirties and and you know that is a very
sustainable kind of valuation metric that we can that we
can use to say, yeah, this is this is pretty
sustainable right now like these this is this is we're
not multatory anywhere close to it.
Speaker 3 (09:47):
I mean, return on equity looking still healthy and.
Speaker 2 (09:50):
Not too eye watering, Scott.
Speaker 3 (09:53):
Will that be vindicated in the earning season that we're
about to get. Will Microsoft for some of these particular
the hyperscalers be able to co to the spending that
drives in video yet further higher?
Speaker 10 (10:03):
Yeah, that is obviously the trillion dollar question, Joe. Do
we get continued growth and continued upward pressure on those
ro and kind of kind of metrics you get the
ro expansion by by having additional profitability, additional market, additional
margin expansion, and just and just overall is just better
accution on the business side. And and if these companies
can continue to do that, then there's there's no reason
why we can't be substantially higher in a year from
(10:24):
now in many of these companies than we are right now.
Our expectation is that that's going to continue. There's no
reason why it really shouldn't. At this point. We are
still early stages of the AI revolution, and that is
our expectation currently.
Speaker 3 (10:35):
I mean, I guess the extraordinary matter of all of
this is, of course we saw the biggest sell off
ever in a market capitalization of Nvideo just in February
because of the worry of deep Seed. But we also
have the tariff anxiety that just doesn't seem to impede
its valuation. Is that something that could knock off valuations
or do you think we're getting numbed to tariffs?
Speaker 6 (10:53):
We're definitely getting numb.
Speaker 10 (10:54):
I mean, look that the market is not trading like
it used to in April on based on the tariff headlines.
You see, there's just sort of a diminished return towards
towards the shock the mark is able to absorb with
these because now we sort of get we think we
understand what what the playbook looks like. Playbook looks like,
you know, you know, talk tough and then eventually find
some way to get a deal as acceptable to everybody,
and that if that that continues to pace, then that
there's no reason why, you know, why the market can't
(11:16):
sort of sustain these types of levels. But you know
that that you know that getting getting comfortable with the
way that that the terroifts are going to end up
going and figuring out the market frankly is starting to
figure out that there's not really an alternative still to
to to Nvidian and some of those ships. Despite this,
there's does wite some of the deep seat stuff and
that's why we've recaptured, you know, these all time highs
and valuations.
Speaker 3 (11:35):
It does seem to be a story of AI winners
and then the laggards, and we're talking tough. Has really
got hard today is on Apple once again, Peter Navarro
calling it out, saying they think they're too big to tariff.
Are we just going to see more money pile into
the infrastructure, air or what point are we going to
start to see companies winning out with the application of AI,
which thus far Apple doesn't seem to.
Speaker 2 (11:55):
Be on top of.
Speaker 10 (11:56):
Yeah, we think that's probably a twenty twenty, like late
twenty twenty by early twenty sixth story. You know, as
we move from the you know, the makers of the
stuff to the users of the stuff and that and
that's probably gonna be the most important and that's being
called to make as we as we come into next year,
is like figuring out which companies and which sectors are
actually able to use the AI technology which is amazing
to increase profit margins, to increase productivity and and that
(12:18):
you know, that's we're spending quite a lot of time
on that on that here at Horizon, and it's it's
something that we're actually pretty excited about. But you know,
the the focus on the intense focus we've had on
the infrastructure side try not can go away. It's you know,
it's not it can be diminished, but it's kind of
broughten out towards towards more more towards those users and
in some of the ultimate winners in the space, which
which are always the users of the technology rather than
the makers of the technology.
Speaker 3 (12:38):
I mean, I know you say it's still early days,
but can you give us an inkling of where you're
getting most excited about.
Speaker 2 (12:43):
Is it a healthcare space, is it elsewhere?
Speaker 10 (12:46):
Healthcare is definitely one of the top of the mind
in terms of the people that can use this to
just really speed up the drug development is like an
obvious application for some of these things. I Mean, the
exciting thing, Caroline, I think is we don't really know
what that's what's around the corner. I'm not smart to
figure out like what the next shoe drop is and
like which which companies and sectors are you're really going
to take, especially the agenic AI and into the ends
(13:07):
of the next level. And so you know, we are
spending a fair amount time kind of figure that stuff
out right now, but I don't know what I don't know.
Speaker 6 (13:13):
And that's actually one of.
Speaker 10 (13:14):
Some of the most exciting parts about this is you know,
really have to stay front footed and do and do
the research and just listen to what you're what you're seeing.
Speaker 3 (13:21):
And Scott, therefore, do you take money out of prior
winners to allocate to the future ones or are you
taking out of just lagging industry groups that you just
don't want to be allocated to.
Speaker 2 (13:31):
At the moment.
Speaker 10 (13:32):
I think it's more it's more, you know, you probably
do take some out of the infrastructure plas you you
take some out of the prior winners. You know, some
have the videos of the world. And but but like
as I said earlier, Carolyn, it's more of a broadening play.
So you know, I think you actually increase the overall
allocation towards AI in your portfolio. But and you're taking
out some of you know, some of like in the
the envitees of the world. You're also taking out of
like industrials, you're taking out of you know, like utilities,
(13:54):
and you're gonna take it out of some of the
more borings like staples types of things. You know, you
probably just want to allocate out of those types of
sectors and just overall increase your breadth you AI in
your portfolio.
Speaker 3 (14:05):
Scott Lander of Rising Investments, Chief investment Officer, thanks for
pushing us forward.
Speaker 2 (14:09):
We appreciate it. Coming out, Samsung unveils a slew of
new foldable phones. Were on that.
Speaker 3 (14:15):
Next, this is Reuberg Tech. It's time now for talking
tech and first up. Waimo's first self driving taxis have
arrived in New York City, but Ford Autonomous Operations remain
pending regulatory approval.
Speaker 6 (14:34):
Now.
Speaker 3 (14:34):
In the meantime, the company is collecting data across the
city the safety drivers behind the wheel as it awaits
to begin self driving tests.
Speaker 2 (14:42):
Plus, a California.
Speaker 3 (14:43):
Lawmaker makes another push to regulate AI in the state.
Senator Scott Wiener has introduced a bill that will require
companies developing certain AI models to publicly release safety and
security protocols. The bill is expected to go before a
California Assembly committee later this month. And Samsung unveiled it
is the latest smartphones and wearable devices and its annual
(15:03):
Unpacked event is announced three new foldable devices, each thinner
lighter than previous iterations. The company also revealed a new
line of upgrade A smart watches.
Speaker 2 (15:13):
They use Google's Gemina AI.
Speaker 3 (15:16):
Now for more on Samsung and plenty elsewhere in consumer tech,
mallu Meg's Mark gum And joins us, you haven't had
your hands on.
Speaker 2 (15:22):
These things, they look pretty good. What do you make
of the announcements from Unpacked?
Speaker 11 (15:27):
I think these are hugely significant announcements.
Speaker 12 (15:29):
What Samsung is trying to do Year is take buldabule's mainstream.
Speaker 11 (15:33):
So two main levers they've pulled here.
Speaker 12 (15:36):
One they've widened the display so they've made it less narrow.
This is an older Samsung foldable right here, and you
can see.
Speaker 11 (15:45):
How narrow it is.
Speaker 12 (15:46):
And if you're used to working on an iPhone or
a regular Samsung phone, the narrow form factor makes it
quite difficult to you. So they've expanded it so now
in the closed state. The new foldable fold this is
the two thousand dollars model, feels like a normal candy
bar phone that you can then open up to have
even more screen real estate. The other thing they've done
(16:06):
is they've released a sub thousand dollars foldable. This is
a new version of the Flip that's their vertical phone,
and that rice point makes it a lot more compelling
and is taking it.
Speaker 11 (16:17):
Out of the early adopter price range.
Speaker 12 (16:20):
And it's interesting because foldables have been popular amongst the
early adopter crowd, some of the tech year crowd, more
of the productivity focused crowd, but now Samsung is trying
to take it mainstream. And really those were the two
levers they needed to pull in order to accomplish that,
So we'll see what happens. Next year, Apple will announce
their foldable, which certainly is going to bring a much
(16:42):
bigger spotlight to the category, not only for its own
product that they're unveiling, but for everyone else who already
has foldables on the market.
Speaker 3 (16:49):
And mark just spotlight app a little bit more for
us because you brought us that news yesterday that a
changing of the guards COO is now departing. Perhaps not unexpectedly,
it's a blockbuster move.
Speaker 12 (17:03):
As one former Apple executive told me, the band is dissolving.
Right at some point in the next few years, it's
going to be Tim Cook left standing with a whole
new executive team around him. These are serious organizational changes
happening at Apple. There are more to come, obviously. Jeff
Williams was the long time number two at Apple to Cook,
(17:26):
but really primary decision maker when it came to product development,
which products Apple should launch, what it shouldn't launch. Really
deep in the weeds on expansion for manufacturing into new areas,
obviously dealing with tariffs, obviously dealing with their AI struggles.
Speaker 11 (17:44):
There's really no sugarcoating it.
Speaker 12 (17:46):
This is one of the most significant departures in Apple's history.
Speaker 3 (17:51):
Hey ed watches how What's interesting though, is Sabi Khan,
who takes the reins, has been there for three decades
and has been managing supply chain. But who do we
to now mark the new guard that might even one
day replace him?
Speaker 2 (18:04):
Cook himself well.
Speaker 11 (18:06):
On Selby Kahan.
Speaker 12 (18:07):
He has been there three decades, is only a few
years younger than Jeff Williams. So you're going to see
another COO transition in a few years from now. Right,
You're going to see a lot of movement on the
Apple executive team over the next few years. You've seen
a lot over the past few years. We've been talking
about this several times. I think we've had conversations about this.
I've written several articles on this. Terms of the next CEO,
(18:28):
look no further than John turnas the senior VP of
Hardware Engineering at Apple.
Speaker 2 (18:33):
We keep all eyes on him. Mark German always ahead
of the curve. We appreciate it.
Speaker 3 (18:43):
A Rivian back startup that's developing small e these is
getting valued at a billion dollars in new investment from
Green Oak's capital, and the company called Also Inc. Was
spun out of Rivian earlier this year also well, it
hasn't revealed specifics, but said it's tech platform will be
applicable to e Bike's microcrs and neighborhood evs. Meanwhile, French
(19:03):
AI start up Mistral is in talks to raise as
much as one billion dollars in equity from several investors,
including Abidabi Fund, mgx Sort, according to sources. For more,
we go out to Blue Meg's Mark Bergen, who helped
break this story and just focusing on Mistrale here. They've
already raised about a billion before in equity, but they're
also looking to the debt markets as well.
Speaker 5 (19:24):
That's right.
Speaker 7 (19:24):
I mean it's a move that we've seen Elon do
with Xai. I mean, these are incredibly compute, computational intensive businesses,
especially if you're trying to build language models and the
kind of keep up with the frontier of Open Ai
and Google. Miestrel has I think tapped the brakes a
little bit on that being a direct competitor to open Ai,
but they still want to be in this sort of
generative AI model game that's very expensive, both as we've
(19:49):
talked about a lot on the show, for hiring engineers,
and then it's very expensive for these these big data
center projects that they announced earlier this year. So that's
why we believe they're actually I'm not raising this equity round,
but also seeming the race probably almost half as much
in debt.
Speaker 3 (20:05):
Wow, and go back to those data center announcements because
Abidabi's involved in that too, just tell us about how
much this is political in many ways.
Speaker 6 (20:14):
I think.
Speaker 7 (20:14):
So this is partially We've seen a bilateral agreement coming
out a few months back to the UAE in France
talking about building the biggest data centers in Europe.
Speaker 5 (20:24):
MGX was part of that.
Speaker 7 (20:25):
There was a commitment of somewhere between thirty to fifty
billion euros in funding for data centers across France. MGX
has basically taken a portfolio strategy.
Speaker 5 (20:36):
If they go through with this deal.
Speaker 7 (20:38):
We've also reported that they're in talks to invest with Inthropic,
They've invested in open Ai, they invested in XAI. They
are getting behind sort of every major player in this
AI race. I believe they're probably gonna do something similar
with infrastructure. We do see something similar on the energy
and on the chip side as well.
Speaker 3 (20:55):
It's interesting because we've had perhaps some pieces so surprisingly
within the contracts that assign when you're giving money. As
of course you can't be sharing information when you're invested
in so many of these startups. But if you're looking
at mistrial versus XAI or open AI, where are those
niche Because they're not more broad anymore.
Speaker 7 (21:16):
Right, they're not more broad and they're not necessarily as
commercially successful or building the sort of cutting edge models.
I mean, their niche has been and their selling point
is sort of we are an open source alternative. We
are the sort of sovereign AI where the will come
in and kind of build you these AI services that
can live in a private cloud.
Speaker 5 (21:35):
They're targeting governments.
Speaker 7 (21:36):
They've started working on defense in France and Europe in
a time when sovereign AI is certainly like a marketing
term thrown around a lot, but it is something that's
become much more politically critical where countries and companies in
Europe are looking to rely on local tech as much
as they can.
Speaker 2 (21:51):
Is Mestra like the pin up for Europe right now?
Speaker 7 (21:56):
I mean, right now they are they're certainly the highest.
Speaker 5 (22:00):
This would make them the most valuable. I think they're
probably the most valuable.
Speaker 7 (22:02):
We don't an evaluation for Wave, which is a self
driving company based here in the UK. I think there's
been a little bit of wavering enthusiasm for Miestro. I
don't think people have been asn't impressed with their models,
but there's certainly a lot of energy and certainly a
lot of investor money tied up with their success.
Speaker 3 (22:18):
M Meg's mart Bergen coming to us from London. We
appreciate it.
Speaker 2 (22:27):
Welcome back to lu Meg Tech.
Speaker 3 (22:28):
Let's take a look at these markets that are very
close to record highs. We have the NASAK one hundred
currently powering up full tens of percent. We're shaking off
some of that trade anxiety and we're seeing.
Speaker 2 (22:38):
Some of the key leaders of the pack drivers.
Speaker 3 (22:39):
From a points perspective, yes, Apple is lower, particularly worrying
about TARIS to them as again today, but let's look
at what is really on the points perspective driving us higher.
Speaker 2 (22:48):
In video.
Speaker 3 (22:49):
We have at one point hit four trillion dollars in
market capitalization, never been seen before.
Speaker 2 (22:55):
We're up more than two percent, is a record high
for the AI.
Speaker 3 (22:58):
Darling Amazon also helping contribute from more points perspective. Microsoft
two that's got an upgrade, but Amazon doing well at
one point three percent.
Speaker 2 (23:07):
NASA's Prime Day is in full swing.
Speaker 3 (23:10):
We are stretching now over four days this year, up
from two in twenty twenty four. That it remains to
be seen whether that will entice shoppers and sellers alike. This,
of course in the context of rising tariffs and rising prices.
Speaker 2 (23:22):
Let's get more on the inside track. Jamal Ghani's with
US vice president of Amazon Prime.
Speaker 3 (23:27):
And you're really already seeing Jamil Adobe Analytics saying that
US retailers drove close to eight billion in online spending
on July eighth, up almost ten percent, and single biggest
e commerce day so far this year is sent have
been good.
Speaker 8 (23:42):
Therefore, Yeah, we just started the event yesterday, so it's
very early, but we're really pleased by the engagement that
we're getting from our customers and our members. Not only
is the event twice as long, so four days, as
you mentioned, but we're also offering more than double the
number of deals that are fifty percent off or more.
That's striving engagement across the millions of deals we have
(24:04):
in thirty five categories. So we're really pleased. But it's
very early, of course.
Speaker 3 (24:08):
Why make it four days, and how is that affecting
the pace of spending do you.
Speaker 8 (24:12):
Think, Well, we listen to our members and they told
us they needed more time to shop the millions of.
Speaker 6 (24:20):
Deals that we offer across our entire store. This gives
them that.
Speaker 8 (24:24):
We're also offering new AI tools to get a more personalized,
more targeted experience that allows our members to shop both
the needs that.
Speaker 6 (24:33):
Are on their list but also the wants. And you
see that in the data already.
Speaker 8 (24:38):
The top categories that our members are engaging with are
health and personal care, apparel, beauty, home, kitchen, and really
it's stretching the entire entirety of the store and members
need time to shop it, and so we've given them
double that time needs and wants.
Speaker 2 (24:55):
That's an interesting way of putting it.
Speaker 3 (24:56):
We've seen a lot of spend galvanizing groceries, for example,
in some of the competitors. Is that an error you're
feeling you're having to make more inroads in when you
show that you can discount in this particular.
Speaker 8 (25:05):
Time, you know, grocery and everyday essentials, which is the
broader definition we use internally to describe those things that
a busy household needs to keep running and you know,
deal with all the things that come their way, and
we're investing heavily. That's the fastest growing part of our store.
And you know, some of the items that are really
(25:26):
resonating with our members during prime day already are like
down Platinum powerwash, Disphray, something that my household, your household
likely has it under the cupboards. It's also Crest three
D white strips, Amazon Basic Triple A batteries. It's these
essentials that you need for modern life, but it's also
the other end of the spectrum. Beauty is a really
exciting part of our store. Medcube has a number of
(25:48):
fantastic products on sale. One of the top products so
far is their zero core pads.
Speaker 6 (25:53):
So you can see just even in.
Speaker 8 (25:54):
The data of what members are scooping up in terms
of savings. It's stretching from you know, the things you
need to do in order to keep life moving all
the way to what you would consider more wants as well,
things you might have had on your list for a while.
Speaker 3 (26:10):
Apparently white Teeth needed to keep life moving. Jimil talk
to us about Jenai though, because you just mentioned how
that's helping it become more personalized. How's Rufus the shopping
assistant doing. How more broadly is alexaplus doing Because I
think as Adobe again saying that we're going to see
more than three thousand percent increase in the use of
Jenai in this particular spending screen.
Speaker 6 (26:30):
Yeah, Caroline, you're absolutely right.
Speaker 8 (26:32):
We've been investing for years, from the very beginning of Amazon,
at the beginning of Amazon Prime, which is celebrating its
twentieth anniversary this year, in all forms of AI.
Speaker 6 (26:40):
This year, we're bringing Rufus.
Speaker 8 (26:42):
As you said, is Rufus is smarter about Prime day.
Rufus is smarter about your interests and can respond to
natural language queries and bring back those deals that match
those interests.
Speaker 6 (26:53):
We also have a product called.
Speaker 8 (26:54):
Interest where you can go in and with a simple
set of statements, you can say, I'd like to remodel
my live room in mid century modern. Please show me
deals that are less than one hundred dollars, and it
will proactively make that into the recommendations you see.
Speaker 6 (27:09):
Throughout the store.
Speaker 8 (27:10):
We also have shopping guides for those items that are
a bit more considered. You know, I'm in the I'm
in the shopping mode for a laptop, for my eldest daughter,
who's eight, I don't buy a laptop that often, and
these AI power shopping guides have been invaluable. And then lastly,
Alexa plus is rolling out. Millions of members have access
now and they're using it to check, you know, the
timing for Prime Day, but also to get recommendations on
(27:33):
deals and to be alerted when something that they've looked
at previously is now on sale.
Speaker 3 (27:37):
Okay, so you're in the market to how you're eight
year old. But what's interesting is Amazon seems to be
in the market to learn more young adults. Right That
is such a push right now? Why is that the
area you want to make in roads?
Speaker 8 (27:50):
Well, we recognize that, you know, Prime exists to deliver
three things convenience, savings, and entertainment behind one simple membership,
and we hold ourselves to the bar of delivering disproportionate value.
Everybody today and likely always wants to make a dollar stretch,
and for younger customers that's more true than maybe for
(28:11):
most and so we're reinventing our young adult program. Prime
for young adults is fifty percent off, but now on
top of that, we also are offering an evergreen five
percent discount that for Prime Day is ten percent, so
our members cannot only avail the great deals across the
entire store that we've been talking about, but also add
(28:32):
to it ten percent in categories that they really care about,
like beauty, apparel, electronics, and so we're really proud of
that program that offering to that key customer segment.
Speaker 3 (28:44):
See how much they love the lebron adds to Jimmy
ol Ghani. Great to has some time with you Amazon
Prime Worldwide. Meanwhile, coming up, we'll dive into how China
is building data centers throughout the country's deserts and a
bit of fuel Beijing's AI ambitions. As blommeg Tech, China
(29:09):
is betting big on AI. We know this, but in
a new Bloomberg investigation, we have found Chinese companies driven
to build data centers in some of the most remote
regions of the country to fuel Beijing's AI ambitions and
looking to buy one hundred and fifteen thousand in video
chips to power them. Lumo's Jackie Devolos joins us now
(29:30):
for more so. On the edge of the Gobi Desert
in modest county called yu Wu, I think has massive
AI ambitions what draws them there In particular, why that
spot because.
Speaker 13 (29:41):
This is in the Shinjiang region and a lot of
US know about that region because of the controversy around
labor issues, religious persecution. But it's also one of the
most energy rich places in China. It's rich in solar,
it's rich in wind, and it also has abundant coal energy,
(30:02):
which is needed to power this massive AI infrastructure undertaking Caroline.
It is one of the largest that we've seen come
out of China, and in many ways it's almost, you know,
garnering the same kind of clout as the US is Stargate.
Speaker 2 (30:18):
This is a huge undertaking.
Speaker 13 (30:20):
Thirty six data centers are planned and seventy percent are
expected to be housed within a single compound, seventy percent
of that capacity. It is massive when you think about
just how much AI compute power China needs to kind of.
Speaker 5 (30:37):
Get up to speed to the US.
Speaker 13 (30:39):
But of course, the big question coming out of this
story is how will they obtain these Nvidia chips one
hundred and fifteen thousand to really get that power off
the ground.
Speaker 3 (30:49):
That's so poignant because we know that China has energy,
but it doesn't have the scale needed to create their
own semiconductors sophisticated as ones as far as we on
done now in Nvidio did weigh in and have been
saying that ultimately this isn't what they believe is currently occurring.
They say, trying to cobble together a data center from
(31:10):
smuggled previous generation products makes no business or engineering sense.
So where's this one hundred and fifteen thousand Nvidia chips
coming from?
Speaker 8 (31:17):
Jackie Well?
Speaker 13 (31:18):
Reporters that put together this story really combed through tender documents,
investment approvals, and other reporting that really didn't explain this,
not in those documents. And perhaps it's for a reason
because these are banned chips. China is not supposed to
have access to them. Since October of twenty twenty two,
(31:39):
these chips have been banned, so it's not clear exactly
how this would occur. But of course one avenue is
through smuggling, and even US officials have said that such
a smuggling out operation would be too complex, so it
is ambitious, but it's not clear just what measures they
would need to take. Obviously, the United States has been
(32:00):
taking a closer look at other countries where such smuggling
could help China, Thailand and Malaysia being two countries. But
this is a major focus for the Trump administration, which
has really started to ramp up those efforts to curtail
China's ability to get access.
Speaker 3 (32:20):
To these steps Caroline sort of a replacement to the
AI diffusion rule, Bloomberg's Jackie Devolo's fantastic roundhup.
Speaker 2 (32:26):
Thank you.
Speaker 3 (32:26):
Now, let's keep discussing how the US can compete with
China's growing AI efforts.
Speaker 2 (32:31):
But please to Welcome to the show.
Speaker 3 (32:32):
Jason Oxman, President and CEO of the Information Technology Industry Council,
alongside New America's senior fellow Sam Sachs. And Sam, I
start with you, because you've been assessing analyzing Chinese tech
policy for decades. In the moment, what do you make
of their belief system that they could access in video
chips like this?
Speaker 2 (32:51):
Would they?
Speaker 3 (32:52):
I mean, I know you're about to go out to
China for a KEYAI conference, then.
Speaker 14 (32:57):
Headed to Shanghai for the World AI Conference at.
Speaker 11 (32:59):
The end of the month.
Speaker 14 (33:01):
And the reality is both China and the United States
are focused on getting the infrastructure necessary to win the
so called AI race, and whether it's actually a race
is a separate question, but data, energy, computation, and human
capital are all critical inputs to this, and massive investment
in infrastructure is top of mind for leaders in both
(33:23):
countries as they seek to do it.
Speaker 6 (33:25):
Now.
Speaker 14 (33:26):
The question of chips is also colliding with the tariff battle.
Expert controls and the question of whether the Trump administration
will loosen its grip on China's access to the advanced
technology advanced semiconductors is going to be a key question
as these negotiations take place.
Speaker 3 (33:44):
Let's therefore, talk about what the executives are wanting at
this moment. And Jason, you represent the most innovative companies
in the United States, So how do they think about
this so called competition with China? Are they thinking that
they need to raise and where are our bottlenecks?
Speaker 5 (33:59):
More broadly here, it's very real.
Speaker 15 (34:01):
And if we go all the way back to the
very second day of the Trump administration, you saw a
big announcement Project Stargate, as Jackie mentioned, companies like open
Ai and Oracle and soft Bank and Vidia investing five
hundred billion dollars.
Speaker 5 (34:16):
In AI capability.
Speaker 15 (34:17):
Here in the United States, it's definitely a race and
the primary competitor in that race is China. China has
aspirations to compete globally on AI, we need to win the.
Speaker 5 (34:26):
Race here in the United States.
Speaker 15 (34:28):
So what the technology industry is really looking for is
an environment that's conducive to investment in the US. You
saw it with Project Stargate. You've seen a lot of
other announcements. Apple announcing five hundred billion dollars as an
investment in the US, IBM announcing one hundred and fifty
billion dollars.
Speaker 5 (34:42):
The list goes on.
Speaker 15 (34:43):
It's up over two trillion dollars at this point. But
there's certainty that's necessary. We got a little bit of
that last week with the big beautiful bill passing and
restoring the tax incentives for investment in manufacturing, accelerating the
incentives for investing, particularly in manufacturing.
Speaker 5 (34:58):
And technology in the United States.
Speaker 15 (35:00):
The next thing we need is some trade certainty and
a move away from tariffs's a trade strategy and into
trade agreements so we can expand that investment in the
United States as well.
Speaker 2 (35:08):
Well.
Speaker 3 (35:09):
Sam Way in here on the trade negotiations with China
in particular, and whether there will be any wiggle room
to be seeing what China ultimately wants is access to
certain semiconductors. Will that be a bargaining chip that could
be loosened in some way.
Speaker 14 (35:24):
So a year ago I was in Beijing and I
heard from interlocutors, we will not come to the table.
And this was before the tariff battle. This was just
regular tensions. We will not really come to the table
to work things out with US unless export controls are lifted.
And a year ago that was an impossibility. But when
the two sides met in London last month to try
(35:46):
to get things back on track, we had the Secretary
of Commerce, Howard Lutnik included in the negotiations alongside Treasury
Secretary in USTR, which meant export controls are now on
the table. The question is how far will they go.
In April we saw in Video's H twenty chips put
on the export control list. Those were designed to be
(36:08):
compliant with China's market, But we don't know will they
lift that, Will the Trump administration lift that? Are they
going to go even further and unwind some of the
buyer administration controls on advanced semiconductors equipment. We saw loosening
on electronic design software just in the last week.
Speaker 11 (36:27):
Or so so there's a lot of room to work.
Speaker 14 (36:30):
With and the question is what specific tools will be
acceptable to the Hawks in the Trump administration when China
is eager to get sort of at this issue that
has been front and center for them for a long time.
Speaker 3 (36:43):
I know this is a hard one for you, Jason,
but to single out a few of your members AMD
and VIDEO.
Speaker 2 (36:49):
They want access still to China.
Speaker 3 (36:52):
Do you think that's ever going to be something that
they're managing to convince that they can do that safely.
Speaker 15 (36:58):
There is a way to balance national security interests that
Sam made reference to with the economic interests of American companies.
Ninety five percent of the people that live on the
planet do not live in the United States, and if
we deny American companies access to global markets, we're denying
them the opportunity to really expand economically and succeed. There
is a way, and the Trump administration has been moving
in this direction to make sure that the Chinese Communist
(37:22):
Party doesn't get access to the most sensitive technology for
its military purposes. The Biden administration tried this with the
AI diffusion rule that you mentioned. They did it in
a very poor way. They restricted access to our allies
around their world getting access to American AI technology and
semiconductive technology.
Speaker 5 (37:39):
That rule has been scrapped. We're moving forward and ensuring.
Speaker 15 (37:43):
That we make a legitimate national security approach, not harbor
that economic interests as well. In other words, we can't
in the name of national security, deny American companies access
to the rest of the world.
Speaker 5 (37:57):
We can balance it correctly.
Speaker 15 (37:59):
We can make sure that the markets are open and accessible,
but make sure that the national security interests are protected
as well.
Speaker 3 (38:05):
Sam Many would say that some of the moves on
limiting copper, for example, into the United States is about
national security in the longer term to make it more
self sufficient, but that takes decades. Just tell us about
some of the certainty that's necessary. I think of rare
earth elements, rare earth metals so dependent on China. That's
a big bargaining chip of China versus the US. But
(38:27):
thus father hasn't been this sort of support coming necessary
from the administration to allow us.
Speaker 2 (38:32):
To mine it more in the United States. That certainty
isn't there.
Speaker 14 (38:36):
The thing about rare earth that everyone will say is
they're not that rare, but they're really dirty, and it
will take a long time and do we actually want.
Speaker 2 (38:43):
Those industries here.
Speaker 14 (38:44):
But certainly I think there's been an emphasis on reducing
bottlenecks because these are choke points that can be weaponized
against the United States, and Beijing realized that they'd stumbled
upon an incredibly important choke point. Looking at where the
negotiations stand right now on Earth specifically, you know, when
the two sides came back to the table they said
we have a deal. I noticed two things from the
(39:07):
Chinese side, specifically on rare earths. One, they agreed that
they were going to loosen their controls and speed up approvals,
but they're only going to be granting licenses for six
months at a time, which means Beijing wants to keep
this in their back pocket as leverage. And the second
is we've heard that US companies in the process of
(39:27):
applying for those approvals have been subject to very invasive
questions from the Chinese government for sensitive business information. So
we're not out of the woodwork yet, and I think
it's yet to be seen what the Chinese government is
willing to give on rare earths.
Speaker 2 (39:43):
Very briefly, Jason, the other key bottle necks talent, have we.
Speaker 5 (39:46):
Got a hair.
Speaker 15 (39:47):
Yeah, So China is racing to deploy that AI talent.
The Trump administration just last week announced a new AI
education initiative that ITI and a number of our member
companies signed onto to develop the homegrown talent that we need.
We also need to attract the best and the brightest
from around the world. Most technology companies that we're familiar
with were started by first or second generation immigrants, and
(40:07):
we need that next generation of AI talent to happen here,
to start their companies here, to stay here.
Speaker 5 (40:12):
So we need to attract them as students.
Speaker 15 (40:13):
And we also need to educate the workforce to make
sure that we have the best AI talent here in
the United States doing that invention, doing that creating and
job descriptions that we want to see out there.
Speaker 3 (40:23):
What a great conversation Jason Oxman from the Information Technology
Industry Council right here in New York, along with Sam
Sachs from New America. It's been wonderful having you both.
Speaker 2 (40:32):
Thank you.
Speaker 3 (40:33):
META it is investing three and a half billion dollars
in eslor Luxotka, purchasing a minority state in the company
as it boots his aiglasses ambitions. So all according to sources,
some more blue mos Kurt Wagner joins us you help
break this story. Basically, they are the maker of ray
bands and Oakley's the power the Meta AI story.
Speaker 6 (40:52):
That's right.
Speaker 16 (40:53):
This is a company that Meta has been partnering with
on the product side for several years now. You mentioned
the ray ban, Meta glasses, the Oakley glasses that they
just announced last month, So this is a company has
had a long relationship with and actually this investment has
been expected, but now it's final.
Speaker 11 (41:08):
And what I think it does is just it ties
these two companies.
Speaker 16 (41:11):
Together in a more formal way, but it also signals
how much Meta continues to believe in this idea.
Speaker 11 (41:17):
Of AI glasses as the future.
Speaker 8 (41:18):
Right.
Speaker 16 (41:19):
I mean this is not a small investment. This is
a sign that they are not only building these things,
but that they're kind of putting their money where their
mouth is here and this is the future for them.
Speaker 3 (41:28):
Yeah, they want to profit from the upside as well
as they deepen that tie cut. Just pivoting to another
AI story, and one is XAI and just looking at
x I mean, how do you react to Linda Yacarino
saying she no longer going to be CEO.
Speaker 16 (41:42):
Yeah, well I was surprised, not because we haven't been
talking about this for a while, right, I think everyone's
sort of been wondering how long she would last since
she took the job two years ago. But I was
just at can Lyons in the south of France a
few weeks ago, and she was there. She was representing X,
she was on stage, she was in meetings with partners
and advertisers, and so I kind of thought that she
would be around a little a little longer because of that.
(42:04):
But look, this is a job that I've said from
the beginning, is incredibly hard, especially when Elon Musk is
the owner of this company, because he does not do
things that make selling advertising on X an easy proposition, right,
So her whole job is to make X seems safe,
brand friendly, And when you have you know, Musk out
there doing the thing that he tends to do, it.
Speaker 11 (42:23):
Is a it is a tough, a tough gig. And
so I'm not.
Speaker 16 (42:26):
Surprised that, you know, two years in, she's decided.
Speaker 2 (42:29):
To move on and thirty seconds.
Speaker 3 (42:31):
It's also hard when Grock the chatbod is doing the
things it's been doing, anti semitic commentary was what was
reported yesterday, but they've got a big update tonight.
Speaker 5 (42:41):
They do.
Speaker 16 (42:42):
There's a live stream tonight about Grock four. You mentioned
that the timing of yesterday when Grok was viewing this
really vitriolic stuff of anti Semitism things like that that
a lot of people took issue with, and so it'll
be interesting to see how they address that if they
address that tonight on the live stream. But it works
back been that late tonight Pacific time.
Speaker 2 (43:02):
Forever busy, bloombos Kote Wagner. Thanks for bringing us the story.
Now that does it for this edition of Bloomberg Tech.
Do not forget to check.
Speaker 3 (43:08):
Out our podcast finding on the terminal as well as
online on Apple, Spotify, and iHeart 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 (00:21):
This is Bloomberg Tech coming up in video.
Speaker 3 (00:23):
Becomes the first company in history to have reached a
four trillion dollar market cap, plus a new record for
a private giant two SpaceX is, and discussions to sell
shares that would value the company at four hundred billion dollars.
And Apple thinks it's too big to tariff now. That's
according to White House Trade counselor Petere Navarro. This is
(00:44):
wider trade questions remain, But first we check in on
these markets, which, as she managed to shrug off a
lot of that trade anxiety. On the day in the
NASTAC up to ten percent. We were trading in excess
of five ten percent higher, led by key names such
as in video. Let's just dig into what's happenings. We
await big bond auctions in the United States. We try
(01:05):
to digest what's happening in terms of trade. I am
seeing a four trillion dollar market capitalization for the first
time in history. We touch it, we pull back down
a little bit, but in video is very close to
it as we stand out. And this despite the world's
biggest market cap erosion back in February after the deep
Seak anxiety, they pull back and they're up twenty percent
(01:26):
so far in twenty twenty five.
Speaker 2 (01:28):
Move on, though, and have.
Speaker 3 (01:28):
A look what's happening with Apple, because from a points perspective,
it is the big drag lower on the major benchmarks
today Apple Office, you'll see by more than a percentage point.
This is we hear from Peter Navarro, of course, who
whispers closely in trumps hera around trade that he thinks
that Apple sees itself as too big to tariff, but
they are moving.
Speaker 2 (01:47):
Fast to change this.
Speaker 3 (01:49):
Nevertheless, the anxiety remains around Apple and the exposure to
certain trade tariffs still to be decided and announce Bloomberg's
balance of power. Host Kayleie Lyons has more. We heard
from Peter Navarro, who is on another network earlier today.
But bring us up to speed, which is where we
stand in terms of the new deadline of August first.
Speaker 4 (02:08):
Well, President Trump suggests that deadline actually isn't new, Caroline.
He said yesterday that it's always been August first, though
we thought today July ninth initially was the trade deadline
that at least countries were facing in order to make
trade deals with the United States. Obviously that has been
punted back a few weeks. The President, in addition to
tariffs on countries, is still teasing further sectoral tariffs that
could affect companies like Apple when it comes to things
(02:29):
like semiconductors, for example. And then there's copper, which he
surprisingly announced yesterday. Not necessarily, the tariffs itself were surprising
because a Section two thirty two investigation had been opened
into copper, but the timing and the scale of the
tariff were what caught us a bit aback. Fifty percent
in the Commerce Secretary Howard Lutnix says, that could be
effective at the end of July or also on August first,
(02:50):
and you think about a commodity like copper, what that
could do to supply and demand dynamics, Knowing right now
the US doesn't have adequate supply to meet the growing
demand for copper because of the role it plays in
things like, for example, powering artificial intelligence, or rather the
data centers that do that work in the facilities that
generate the power for those data centers, the actual infrastructure
to get that power to data centers, the construction of
(03:12):
data centers that require it for things like cooling systems
or their circuit boards. All of that requires copper, and
copper could either be harder to come by or potentially
more expensive when these tariffs go into effect.
Speaker 5 (03:22):
So that obviously is.
Speaker 4 (03:23):
One area of the market that has been roiled by
tariff news in recent days, and we're waiting potentially for
more tariff news. Caroline. The President posted on true Social
overnight that this morning he would be announcing seven countries
in regard to trade.
Speaker 2 (03:38):
Assumably we assume what would.
Speaker 4 (03:40):
Be letters like we saw earlier this week when fourteen
countries had tariff rates essentially set for them that will
take effect on August first. No news yet on this front,
but he did say seven will come this morning, with
additional letters to come later this afternoon, so we'll be
on watch for those essentially all day here in Washington.
Speaker 3 (03:57):
The weaving of politics and technology expertly done, Thank you,
Kayley Lines. Now, let's just admit that talk of tariffs
are probably going to be consuming much of.
Speaker 2 (04:07):
The conversation over the annual Allen and co retreat in
Sun Valley.
Speaker 3 (04:10):
But so two, there's a competition in AI when companies
like Meta actively recruiting top talent from across the industry,
including from Open Ai.
Speaker 6 (04:19):
Now.
Speaker 3 (04:19):
Despite that, talent war CEO Sam Altman says he remains
confident in this team.
Speaker 7 (04:24):
I think we have an incredible I mean, obviously an
incredibly talented team, and I think they really love what
they're doing.
Speaker 5 (04:28):
Obviously some people have got a different places.
Speaker 8 (04:30):
There's a lot of excitement I guess we could say
in the industry, but.
Speaker 3 (04:35):
No, I think we still find joining us now is
our very own ed Ludlow in Sunny Sun Valley, Idaho.
So thus far, no awkward meeting between Altman and zuck
has been witnessed, right.
Speaker 9 (04:49):
No, people I've spoken to haven't witnessed one, and we
haven't actually seen Zuckerberg arrive yet. But that was what
Sam Altman said because he was asked. You know, his
expectation is that he will see Mark's Uckerberg and that
he's looking forward to it.
Speaker 6 (05:02):
You know.
Speaker 9 (05:02):
He kind of elaborated on what he discussed on the
podcast with his brother a few weeks back, which is
he feels the strategy on talent is to be mission oriented,
to have the great research lab and a great company.
It was kind of a reference to that quote that
he had about being mission driven missionaries not mercenaries. But
again we're waiting for it to happen. I do know
that it's a big point of focus this year here
(05:24):
at Anal.
Speaker 2 (05:24):
And coch Well.
Speaker 3 (05:25):
A big talent question has just arisen as well, a
movement of Linday Acarino out of x she's posting on
the social media platform saying she's stepping down as the CEO.
Speaker 2 (05:35):
ED what do you make of it?
Speaker 9 (05:39):
Yeah, I mean in the post she's talking about the
turnaround job that she's done without sort of giving any
specific metrics that lowered down. There's a reference to Xai, right,
and it's really important to remember that post March, when
x and Xai essentially merged under Xai Holdings, that the
structure of that company changed.
Speaker 5 (05:58):
There's a lot of.
Speaker 9 (05:59):
Emphasis on how how x the social platform provides a
mote for Xai, the developer of large language models and
generative AI tools. But Elon Musk, this is the latest
person in his orbit to step down or leave. You'll
remember reporting about Omi Dafshar leaving Tesla, other senior executives
in other places. So very interesting to see what happens
(06:20):
big picture with x and where it fits in alongside
XAI rather than just being an ad base social platform.
Speaker 3 (06:26):
And let's talk about orbits and Elon Musk a bit more,
because you have a great scoop out on SpaceX working
with colleagues talking about how it's going to be perhaps
a record setting valuation of a private company.
Speaker 9 (06:39):
So SpaceX does tend to do a secondary or tender
every six months, and they use this mechanism where it's
concurrent with a very small primary in other words, they
sell very small number of new shares to set the
price and the valuation. And what we're hearing from sources
is that that valuation is now above four hundred billion
dollars and it's astonishing, right, like it's a milestone, most
(07:00):
valuable private startup. But you know it's also in the
backdrop of Elon Musk and the President of the United States.
SpaceX relies heavily on contracts from the US government defense apparatus,
but it also dominates commercial payload to orbit, and that
valuation continues to climb with a really heavy emphasis on starlink.
A big part of it as well, of course, is
(07:21):
about employee liquidity and talent, because there are people that
worked at SpaceX for a really long time and stock
is a big part of comp Loads of people watching
this show will know that. But it continues to go up,
and that's super interesting.
Speaker 3 (07:33):
It is still validation in Elon Inc. It feels at
this moment. But what everyone's going to be talking about
where you sit is also a bit of M and
A and a healthy amount potentially going on in the
media landscape.
Speaker 2 (07:44):
Talk to us about Ane, Yeah.
Speaker 9 (07:48):
I mean, this is the history of all and Cohen,
Sun Valley, right, TMT and M and A. And the
news that we've had in the last twenty four hours
is that A and E, which is the joint venture
between Disney and Hurst, is available for sale. That's kind
of like the cable channels, including History Channel, shout out
History channels to.
Speaker 6 (08:03):
Those that watch it.
Speaker 9 (08:04):
Bob Iger walked past and we asked him, can we
talk a little bit about A and E? And he said,
I'm not going to be talking about that right now,
but it is some property up for grabs. And then
you have Warner Brothers Discovery that's on a path to
split between a pure place streaming business and a pure
place studio business. And we did catch up with David
Zaslov who said, like, look, we're on track. There are
no approvals needed. We aren't ready to talk about the
(08:27):
debt side of this, but all of that indicates that
in this space some stuff might happen, and I think
that's what people are going to be talking about a
lot in in amongst all of the seminars and coffee
stops in the next few days, a.
Speaker 3 (08:40):
History lesson on the History Channel and the history of
Allen co Ed Lulow out in Idaho.
Speaker 2 (08:45):
Love catching ups soon.
Speaker 3 (08:47):
Meanwhile, let's dive into all of this with Scott Lanner
from Horizon Investments, who, of course is taking a temperature
gauge of the markets right now. And Scott, we're looking
at maybe a little bit of em and a coming
to bear. We're seeing phenomenal valuations on the public market
with a new four trillion dollar company if we can
retain it back for Nvidia and that four hundred billion
dollar private valuation for SpaceX.
Speaker 2 (09:09):
Can we sustain these sorts of valuations?
Speaker 10 (09:11):
Scott, Hey, Caroline, you know, like long as a short yes,
I think we can. And the reason why we probably
can is because these companies are growing into the valuations
that the market is placing upon them. This is not like,
you know, kind of not not like the nineties where
where those companies really sort of got ahead of themselves
there weren't making enough money to justify the valuations ultimately.
But these you know, this, this you know, this generation's Internet,
(09:34):
this generations tech companies you know have have ros in
the thirties and and you know that is a very
sustainable kind of valuation metric that we can that we
can use to say, yeah, this is this is pretty
sustainable right now like these this is this is we're
not multatory anywhere close to it.
Speaker 3 (09:47):
I mean, return on equity looking still healthy and.
Speaker 2 (09:50):
Not too eye watering, Scott.
Speaker 3 (09:53):
Will that be vindicated in the earning season that we're
about to get. Will Microsoft for some of these particular
the hyperscalers be able to co to the spending that
drives in video yet further higher?
Speaker 10 (10:03):
Yeah, that is obviously the trillion dollar question, Joe. Do
we get continued growth and continued upward pressure on those
ro and kind of kind of metrics you get the
ro expansion by by having additional profitability, additional market, additional
margin expansion, and just and just overall is just better
accution on the business side. And and if these companies
can continue to do that, then there's there's no reason
why we can't be substantially higher in a year from
(10:24):
now in many of these companies than we are right now.
Our expectation is that that's going to continue. There's no
reason why it really shouldn't. At this point. We are
still early stages of the AI revolution, and that is
our expectation currently.
Speaker 3 (10:35):
I mean, I guess the extraordinary matter of all of
this is, of course we saw the biggest sell off
ever in a market capitalization of Nvideo just in February
because of the worry of deep Seed. But we also
have the tariff anxiety that just doesn't seem to impede
its valuation. Is that something that could knock off valuations
or do you think we're getting numbed to tariffs?
Speaker 6 (10:53):
We're definitely getting numb.
Speaker 10 (10:54):
I mean, look that the market is not trading like
it used to in April on based on the tariff headlines.
You see, there's just sort of a diminished return towards
towards the shock the mark is able to absorb with
these because now we sort of get we think we
understand what what the playbook looks like. Playbook looks like,
you know, you know, talk tough and then eventually find
some way to get a deal as acceptable to everybody,
and that if that that continues to pace, then that
there's no reason why, you know, why the market can't
(11:16):
sort of sustain these types of levels. But you know
that that you know that getting getting comfortable with the
way that that the terroifts are going to end up
going and figuring out the market frankly is starting to
figure out that there's not really an alternative still to
to to Nvidian and some of those ships. Despite this,
there's does wite some of the deep seat stuff and
that's why we've recaptured, you know, these all time highs
and valuations.
Speaker 3 (11:35):
It does seem to be a story of AI winners
and then the laggards, and we're talking tough. Has really
got hard today is on Apple once again, Peter Navarro
calling it out, saying they think they're too big to tariff.
Are we just going to see more money pile into
the infrastructure, air or what point are we going to
start to see companies winning out with the application of AI,
which thus far Apple doesn't seem to.
Speaker 2 (11:55):
Be on top of.
Speaker 10 (11:56):
Yeah, we think that's probably a twenty twenty, like late
twenty twenty by early twenty sixth story. You know, as
we move from the you know, the makers of the
stuff to the users of the stuff and that and
that's probably gonna be the most important and that's being
called to make as we as we come into next year,
is like figuring out which companies and which sectors are
actually able to use the AI technology which is amazing
to increase profit margins, to increase productivity and and that
(12:18):
you know, that's we're spending quite a lot of time
on that on that here at Horizon, and it's it's
something that we're actually pretty excited about. But you know,
the the focus on the intense focus we've had on
the infrastructure side try not can go away. It's you know,
it's not it can be diminished, but it's kind of
broughten out towards towards more more towards those users and
in some of the ultimate winners in the space, which
which are always the users of the technology rather than
the makers of the technology.
Speaker 3 (12:38):
I mean, I know you say it's still early days,
but can you give us an inkling of where you're
getting most excited about.
Speaker 2 (12:43):
Is it a healthcare space, is it elsewhere?
Speaker 10 (12:46):
Healthcare is definitely one of the top of the mind
in terms of the people that can use this to
just really speed up the drug development is like an
obvious application for some of these things. I Mean, the
exciting thing, Caroline, I think is we don't really know
what that's what's around the corner. I'm not smart to
figure out like what the next shoe drop is and
like which which companies and sectors are you're really going
to take, especially the agenic AI and into the ends
(13:07):
of the next level. And so you know, we are
spending a fair amount time kind of figure that stuff
out right now, but I don't know what I don't know.
Speaker 6 (13:13):
And that's actually one of.
Speaker 10 (13:14):
Some of the most exciting parts about this is you know,
really have to stay front footed and do and do
the research and just listen to what you're what you're seeing.
Speaker 3 (13:21):
And Scott, therefore, do you take money out of prior
winners to allocate to the future ones or are you
taking out of just lagging industry groups that you just
don't want to be allocated to.
Speaker 2 (13:31):
At the moment.
Speaker 10 (13:32):
I think it's more it's more, you know, you probably
do take some out of the infrastructure plas you you
take some out of the prior winners. You know, some
have the videos of the world. And but but like
as I said earlier, Carolyn, it's more of a broadening play.
So you know, I think you actually increase the overall
allocation towards AI in your portfolio. But and you're taking
out some of you know, some of like in the
the envitees of the world. You're also taking out of
like industrials, you're taking out of you know, like utilities,
(13:54):
and you're gonna take it out of some of the
more borings like staples types of things. You know, you
probably just want to allocate out of those types of
sectors and just overall increase your breadth you AI in
your portfolio.
Speaker 3 (14:05):
Scott Lander of Rising Investments, Chief investment Officer, thanks for
pushing us forward.
Speaker 2 (14:09):
We appreciate it. Coming out, Samsung unveils a slew of
new foldable phones. Were on that.
Speaker 3 (14:15):
Next, this is Reuberg Tech. It's time now for talking
tech and first up. Waimo's first self driving taxis have
arrived in New York City, but Ford Autonomous Operations remain
pending regulatory approval.
Speaker 6 (14:34):
Now.
Speaker 3 (14:34):
In the meantime, the company is collecting data across the
city the safety drivers behind the wheel as it awaits
to begin self driving tests.
Speaker 2 (14:42):
Plus, a California.
Speaker 3 (14:43):
Lawmaker makes another push to regulate AI in the state.
Senator Scott Wiener has introduced a bill that will require
companies developing certain AI models to publicly release safety and
security protocols. The bill is expected to go before a
California Assembly committee later this month. And Samsung unveiled it
is the latest smartphones and wearable devices and its annual
(15:03):
Unpacked event is announced three new foldable devices, each thinner
lighter than previous iterations. The company also revealed a new
line of upgrade A smart watches.
Speaker 2 (15:13):
They use Google's Gemina AI.
Speaker 3 (15:16):
Now for more on Samsung and plenty elsewhere in consumer tech,
mallu Meg's Mark gum And joins us, you haven't had
your hands on.
Speaker 2 (15:22):
These things, they look pretty good. What do you make
of the announcements from Unpacked?
Speaker 11 (15:27):
I think these are hugely significant announcements.
Speaker 12 (15:29):
What Samsung is trying to do Year is take buldabule's mainstream.
Speaker 11 (15:33):
So two main levers they've pulled here.
Speaker 12 (15:36):
One they've widened the display so they've made it less narrow.
This is an older Samsung foldable right here, and you
can see.
Speaker 11 (15:45):
How narrow it is.
Speaker 12 (15:46):
And if you're used to working on an iPhone or
a regular Samsung phone, the narrow form factor makes it
quite difficult to you. So they've expanded it so now
in the closed state. The new foldable fold this is
the two thousand dollars model, feels like a normal candy
bar phone that you can then open up to have
even more screen real estate. The other thing they've done
(16:06):
is they've released a sub thousand dollars foldable. This is
a new version of the Flip that's their vertical phone,
and that rice point makes it a lot more compelling
and is taking it.
Speaker 11 (16:17):
Out of the early adopter price range.
Speaker 12 (16:20):
And it's interesting because foldables have been popular amongst the
early adopter crowd, some of the tech year crowd, more
of the productivity focused crowd, but now Samsung is trying
to take it mainstream. And really those were the two
levers they needed to pull in order to accomplish that,
So we'll see what happens. Next year, Apple will announce
their foldable, which certainly is going to bring a much
(16:42):
bigger spotlight to the category, not only for its own
product that they're unveiling, but for everyone else who already
has foldables on the market.
Speaker 3 (16:49):
And mark just spotlight app a little bit more for
us because you brought us that news yesterday that a
changing of the guards COO is now departing. Perhaps not unexpectedly,
it's a blockbuster move.
Speaker 12 (17:03):
As one former Apple executive told me, the band is dissolving.
Right at some point in the next few years, it's
going to be Tim Cook left standing with a whole
new executive team around him. These are serious organizational changes
happening at Apple. There are more to come, obviously. Jeff
Williams was the long time number two at Apple to Cook,
(17:26):
but really primary decision maker when it came to product development,
which products Apple should launch, what it shouldn't launch. Really
deep in the weeds on expansion for manufacturing into new areas,
obviously dealing with tariffs, obviously dealing with their AI struggles.
Speaker 11 (17:44):
There's really no sugarcoating it.
Speaker 12 (17:46):
This is one of the most significant departures in Apple's history.
Speaker 3 (17:51):
Hey ed watches how What's interesting though, is Sabi Khan,
who takes the reins, has been there for three decades
and has been managing supply chain. But who do we
to now mark the new guard that might even one
day replace him?
Speaker 2 (18:04):
Cook himself well.
Speaker 11 (18:06):
On Selby Kahan.
Speaker 12 (18:07):
He has been there three decades, is only a few
years younger than Jeff Williams. So you're going to see
another COO transition in a few years from now. Right,
You're going to see a lot of movement on the
Apple executive team over the next few years. You've seen
a lot over the past few years. We've been talking
about this several times. I think we've had conversations about this.
I've written several articles on this. Terms of the next CEO,
(18:28):
look no further than John turnas the senior VP of
Hardware Engineering at Apple.
Speaker 2 (18:33):
We keep all eyes on him. Mark German always ahead
of the curve. We appreciate it.
Speaker 3 (18:43):
A Rivian back startup that's developing small e these is
getting valued at a billion dollars in new investment from
Green Oak's capital, and the company called Also Inc. Was
spun out of Rivian earlier this year also well, it
hasn't revealed specifics, but said it's tech platform will be
applicable to e Bike's microcrs and neighborhood evs. Meanwhile, French
(19:03):
AI start up Mistral is in talks to raise as
much as one billion dollars in equity from several investors,
including Abidabi Fund, mgx Sort, according to sources. For more,
we go out to Blue Meg's Mark Bergen, who helped
break this story and just focusing on Mistrale here. They've
already raised about a billion before in equity, but they're
also looking to the debt markets as well.
Speaker 5 (19:24):
That's right.
Speaker 7 (19:24):
I mean it's a move that we've seen Elon do
with Xai. I mean, these are incredibly compute, computational intensive businesses,
especially if you're trying to build language models and the
kind of keep up with the frontier of Open Ai
and Google. Miestrel has I think tapped the brakes a
little bit on that being a direct competitor to open Ai,
but they still want to be in this sort of
generative AI model game that's very expensive, both as we've
(19:49):
talked about a lot on the show, for hiring engineers,
and then it's very expensive for these these big data
center projects that they announced earlier this year. So that's
why we believe they're actually I'm not raising this equity round,
but also seeming the race probably almost half as much
in debt.
Speaker 3 (20:05):
Wow, and go back to those data center announcements because
Abidabi's involved in that too, just tell us about how
much this is political in many ways.
Speaker 6 (20:14):
I think.
Speaker 7 (20:14):
So this is partially We've seen a bilateral agreement coming
out a few months back to the UAE in France
talking about building the biggest data centers in Europe.
Speaker 5 (20:24):
MGX was part of that.
Speaker 7 (20:25):
There was a commitment of somewhere between thirty to fifty
billion euros in funding for data centers across France. MGX
has basically taken a portfolio strategy.
Speaker 5 (20:36):
If they go through with this deal.
Speaker 7 (20:38):
We've also reported that they're in talks to invest with Inthropic,
They've invested in open Ai, they invested in XAI. They
are getting behind sort of every major player in this
AI race. I believe they're probably gonna do something similar
with infrastructure. We do see something similar on the energy
and on the chip side as well.
Speaker 3 (20:55):
It's interesting because we've had perhaps some pieces so surprisingly
within the contracts that assign when you're giving money. As
of course you can't be sharing information when you're invested
in so many of these startups. But if you're looking
at mistrial versus XAI or open AI, where are those
niche Because they're not more broad anymore.
Speaker 7 (21:16):
Right, they're not more broad and they're not necessarily as
commercially successful or building the sort of cutting edge models.
I mean, their niche has been and their selling point
is sort of we are an open source alternative. We
are the sort of sovereign AI where the will come
in and kind of build you these AI services that
can live in a private cloud.
Speaker 5 (21:35):
They're targeting governments.
Speaker 7 (21:36):
They've started working on defense in France and Europe in
a time when sovereign AI is certainly like a marketing
term thrown around a lot, but it is something that's
become much more politically critical where countries and companies in
Europe are looking to rely on local tech as much
as they can.
Speaker 2 (21:51):
Is Mestra like the pin up for Europe right now?
Speaker 7 (21:56):
I mean, right now they are they're certainly the highest.
Speaker 5 (22:00):
This would make them the most valuable. I think they're
probably the most valuable.
Speaker 7 (22:02):
We don't an evaluation for Wave, which is a self
driving company based here in the UK. I think there's
been a little bit of wavering enthusiasm for Miestro. I
don't think people have been asn't impressed with their models,
but there's certainly a lot of energy and certainly a
lot of investor money tied up with their success.
Speaker 3 (22:18):
M Meg's mart Bergen coming to us from London. We
appreciate it.
Speaker 2 (22:27):
Welcome back to lu Meg Tech.
Speaker 3 (22:28):
Let's take a look at these markets that are very
close to record highs. We have the NASAK one hundred
currently powering up full tens of percent. We're shaking off
some of that trade anxiety and we're seeing.
Speaker 2 (22:38):
Some of the key leaders of the pack drivers.
Speaker 3 (22:39):
From a points perspective, yes, Apple is lower, particularly worrying
about TARIS to them as again today, but let's look
at what is really on the points perspective driving us higher.
Speaker 2 (22:48):
In video.
Speaker 3 (22:49):
We have at one point hit four trillion dollars in
market capitalization, never been seen before.
Speaker 2 (22:55):
We're up more than two percent, is a record high
for the AI.
Speaker 3 (22:58):
Darling Amazon also helping contribute from more points perspective. Microsoft
two that's got an upgrade, but Amazon doing well at
one point three percent.
Speaker 2 (23:07):
NASA's Prime Day is in full swing.
Speaker 3 (23:10):
We are stretching now over four days this year, up
from two in twenty twenty four. That it remains to
be seen whether that will entice shoppers and sellers alike. This,
of course in the context of rising tariffs and rising prices.
Speaker 2 (23:22):
Let's get more on the inside track. Jamal Ghani's with
US vice president of Amazon Prime.
Speaker 3 (23:27):
And you're really already seeing Jamil Adobe Analytics saying that
US retailers drove close to eight billion in online spending
on July eighth, up almost ten percent, and single biggest
e commerce day so far this year is sent have
been good.
Speaker 8 (23:42):
Therefore, Yeah, we just started the event yesterday, so it's
very early, but we're really pleased by the engagement that
we're getting from our customers and our members. Not only
is the event twice as long, so four days, as
you mentioned, but we're also offering more than double the
number of deals that are fifty percent off or more.
That's striving engagement across the millions of deals we have
(24:04):
in thirty five categories. So we're really pleased. But it's
very early, of course.
Speaker 3 (24:08):
Why make it four days, and how is that affecting
the pace of spending do you.
Speaker 8 (24:12):
Think, Well, we listen to our members and they told
us they needed more time to shop the millions of.
Speaker 6 (24:20):
Deals that we offer across our entire store. This gives
them that.
Speaker 8 (24:24):
We're also offering new AI tools to get a more personalized,
more targeted experience that allows our members to shop both
the needs that.
Speaker 6 (24:33):
Are on their list but also the wants. And you
see that in the data already.
Speaker 8 (24:38):
The top categories that our members are engaging with are
health and personal care, apparel, beauty, home, kitchen, and really
it's stretching the entire entirety of the store and members
need time to shop it, and so we've given them
double that time needs and wants.
Speaker 2 (24:55):
That's an interesting way of putting it.
Speaker 3 (24:56):
We've seen a lot of spend galvanizing groceries, for example,
in some of the competitors. Is that an error you're
feeling you're having to make more inroads in when you
show that you can discount in this particular.
Speaker 8 (25:05):
Time, you know, grocery and everyday essentials, which is the
broader definition we use internally to describe those things that
a busy household needs to keep running and you know,
deal with all the things that come their way, and
we're investing heavily. That's the fastest growing part of our store.
And you know, some of the items that are really
(25:26):
resonating with our members during prime day already are like
down Platinum powerwash, Disphray, something that my household, your household
likely has it under the cupboards. It's also Crest three
D white strips, Amazon Basic Triple A batteries. It's these
essentials that you need for modern life, but it's also
the other end of the spectrum. Beauty is a really
exciting part of our store. Medcube has a number of
(25:48):
fantastic products on sale. One of the top products so
far is their zero core pads.
Speaker 6 (25:53):
So you can see just even in.
Speaker 8 (25:54):
The data of what members are scooping up in terms
of savings. It's stretching from you know, the things you
need to do in order to keep life moving all
the way to what you would consider more wants as well,
things you might have had on your list for a while.
Speaker 3 (26:10):
Apparently white Teeth needed to keep life moving. Jimil talk
to us about Jenai though, because you just mentioned how
that's helping it become more personalized. How's Rufus the shopping
assistant doing. How more broadly is alexaplus doing Because I
think as Adobe again saying that we're going to see
more than three thousand percent increase in the use of
Jenai in this particular spending screen.
Speaker 6 (26:30):
Yeah, Caroline, you're absolutely right.
Speaker 8 (26:32):
We've been investing for years, from the very beginning of Amazon,
at the beginning of Amazon Prime, which is celebrating its
twentieth anniversary this year, in all forms of AI.
Speaker 6 (26:40):
This year, we're bringing Rufus.
Speaker 8 (26:42):
As you said, is Rufus is smarter about Prime day.
Rufus is smarter about your interests and can respond to
natural language queries and bring back those deals that match
those interests.
Speaker 6 (26:53):
We also have a product called.
Speaker 8 (26:54):
Interest where you can go in and with a simple
set of statements, you can say, I'd like to remodel
my live room in mid century modern. Please show me
deals that are less than one hundred dollars, and it
will proactively make that into the recommendations you see.
Speaker 6 (27:09):
Throughout the store.
Speaker 8 (27:10):
We also have shopping guides for those items that are
a bit more considered. You know, I'm in the I'm
in the shopping mode for a laptop, for my eldest daughter,
who's eight, I don't buy a laptop that often, and
these AI power shopping guides have been invaluable. And then lastly,
Alexa plus is rolling out. Millions of members have access
now and they're using it to check, you know, the
timing for Prime Day, but also to get recommendations on
(27:33):
deals and to be alerted when something that they've looked
at previously is now on sale.
Speaker 3 (27:37):
Okay, so you're in the market to how you're eight
year old. But what's interesting is Amazon seems to be
in the market to learn more young adults. Right That
is such a push right now? Why is that the
area you want to make in roads?
Speaker 8 (27:50):
Well, we recognize that, you know, Prime exists to deliver
three things convenience, savings, and entertainment behind one simple membership,
and we hold ourselves to the bar of delivering disproportionate value.
Everybody today and likely always wants to make a dollar stretch,
and for younger customers that's more true than maybe for
(28:11):
most and so we're reinventing our young adult program. Prime
for young adults is fifty percent off, but now on
top of that, we also are offering an evergreen five
percent discount that for Prime Day is ten percent, so
our members cannot only avail the great deals across the
entire store that we've been talking about, but also add
(28:32):
to it ten percent in categories that they really care about,
like beauty, apparel, electronics, and so we're really proud of
that program that offering to that key customer segment.
Speaker 3 (28:44):
See how much they love the lebron adds to Jimmy
ol Ghani. Great to has some time with you Amazon
Prime Worldwide. Meanwhile, coming up, we'll dive into how China
is building data centers throughout the country's deserts and a
bit of fuel Beijing's AI ambitions. As blommeg Tech, China
(29:09):
is betting big on AI. We know this, but in
a new Bloomberg investigation, we have found Chinese companies driven
to build data centers in some of the most remote
regions of the country to fuel Beijing's AI ambitions and
looking to buy one hundred and fifteen thousand in video
chips to power them. Lumo's Jackie Devolos joins us now
(29:30):
for more so. On the edge of the Gobi Desert
in modest county called yu Wu, I think has massive
AI ambitions what draws them there In particular, why that
spot because.
Speaker 13 (29:41):
This is in the Shinjiang region and a lot of
US know about that region because of the controversy around
labor issues, religious persecution. But it's also one of the
most energy rich places in China. It's rich in solar,
it's rich in wind, and it also has abundant coal energy,
(30:02):
which is needed to power this massive AI infrastructure undertaking Caroline.
It is one of the largest that we've seen come
out of China, and in many ways it's almost, you know,
garnering the same kind of clout as the US is Stargate.
Speaker 2 (30:18):
This is a huge undertaking.
Speaker 13 (30:20):
Thirty six data centers are planned and seventy percent are
expected to be housed within a single compound, seventy percent
of that capacity. It is massive when you think about
just how much AI compute power China needs to kind of.
Speaker 5 (30:37):
Get up to speed to the US.
Speaker 13 (30:39):
But of course, the big question coming out of this
story is how will they obtain these Nvidia chips one
hundred and fifteen thousand to really get that power off
the ground.
Speaker 3 (30:49):
That's so poignant because we know that China has energy,
but it doesn't have the scale needed to create their
own semiconductors sophisticated as ones as far as we on
done now in Nvidio did weigh in and have been
saying that ultimately this isn't what they believe is currently occurring.
They say, trying to cobble together a data center from
(31:10):
smuggled previous generation products makes no business or engineering sense.
So where's this one hundred and fifteen thousand Nvidia chips
coming from?
Speaker 8 (31:17):
Jackie Well?
Speaker 13 (31:18):
Reporters that put together this story really combed through tender documents,
investment approvals, and other reporting that really didn't explain this,
not in those documents. And perhaps it's for a reason
because these are banned chips. China is not supposed to
have access to them. Since October of twenty twenty two,
(31:39):
these chips have been banned, so it's not clear exactly
how this would occur. But of course one avenue is
through smuggling, and even US officials have said that such
a smuggling out operation would be too complex, so it
is ambitious, but it's not clear just what measures they
would need to take. Obviously, the United States has been
(32:00):
taking a closer look at other countries where such smuggling
could help China, Thailand and Malaysia being two countries. But
this is a major focus for the Trump administration, which
has really started to ramp up those efforts to curtail
China's ability to get access.
Speaker 3 (32:20):
To these steps Caroline sort of a replacement to the
AI diffusion rule, Bloomberg's Jackie Devolo's fantastic roundhup.
Speaker 2 (32:26):
Thank you.
Speaker 3 (32:26):
Now, let's keep discussing how the US can compete with
China's growing AI efforts.
Speaker 2 (32:31):
But please to Welcome to the show.
Speaker 3 (32:32):
Jason Oxman, President and CEO of the Information Technology Industry Council,
alongside New America's senior fellow Sam Sachs. And Sam, I
start with you, because you've been assessing analyzing Chinese tech
policy for decades. In the moment, what do you make
of their belief system that they could access in video
chips like this?
Speaker 2 (32:51):
Would they?
Speaker 3 (32:52):
I mean, I know you're about to go out to
China for a KEYAI conference, then.
Speaker 14 (32:57):
Headed to Shanghai for the World AI Conference at.
Speaker 11 (32:59):
The end of the month.
Speaker 14 (33:01):
And the reality is both China and the United States
are focused on getting the infrastructure necessary to win the
so called AI race, and whether it's actually a race
is a separate question, but data, energy, computation, and human
capital are all critical inputs to this, and massive investment
in infrastructure is top of mind for leaders in both
(33:23):
countries as they seek to do it.
Speaker 6 (33:25):
Now.
Speaker 14 (33:26):
The question of chips is also colliding with the tariff battle.
Expert controls and the question of whether the Trump administration
will loosen its grip on China's access to the advanced
technology advanced semiconductors is going to be a key question
as these negotiations take place.
Speaker 3 (33:44):
Let's therefore, talk about what the executives are wanting at
this moment. And Jason, you represent the most innovative companies
in the United States, So how do they think about
this so called competition with China? Are they thinking that
they need to raise and where are our bottlenecks?
Speaker 5 (33:59):
More broadly here, it's very real.
Speaker 15 (34:01):
And if we go all the way back to the
very second day of the Trump administration, you saw a
big announcement Project Stargate, as Jackie mentioned, companies like open
Ai and Oracle and soft Bank and Vidia investing five
hundred billion dollars.
Speaker 5 (34:16):
In AI capability.
Speaker 15 (34:17):
Here in the United States, it's definitely a race and
the primary competitor in that race is China. China has
aspirations to compete globally on AI, we need to win the.
Speaker 5 (34:26):
Race here in the United States.
Speaker 15 (34:28):
So what the technology industry is really looking for is
an environment that's conducive to investment in the US. You
saw it with Project Stargate. You've seen a lot of
other announcements. Apple announcing five hundred billion dollars as an
investment in the US, IBM announcing one hundred and fifty
billion dollars.
Speaker 5 (34:42):
The list goes on.
Speaker 15 (34:43):
It's up over two trillion dollars at this point. But
there's certainty that's necessary. We got a little bit of
that last week with the big beautiful bill passing and
restoring the tax incentives for investment in manufacturing, accelerating the
incentives for investing, particularly in manufacturing.
Speaker 5 (34:58):
And technology in the United States.
Speaker 15 (35:00):
The next thing we need is some trade certainty and
a move away from tariffs's a trade strategy and into
trade agreements so we can expand that investment in the
United States as well.
Speaker 2 (35:08):
Well.
Speaker 3 (35:09):
Sam Way in here on the trade negotiations with China
in particular, and whether there will be any wiggle room
to be seeing what China ultimately wants is access to
certain semiconductors. Will that be a bargaining chip that could
be loosened in some way.
Speaker 14 (35:24):
So a year ago I was in Beijing and I
heard from interlocutors, we will not come to the table.
And this was before the tariff battle. This was just
regular tensions. We will not really come to the table
to work things out with US unless export controls are lifted.
And a year ago that was an impossibility. But when
the two sides met in London last month to try
(35:46):
to get things back on track, we had the Secretary
of Commerce, Howard Lutnik included in the negotiations alongside Treasury
Secretary in USTR, which meant export controls are now on
the table. The question is how far will they go.
In April we saw in Video's H twenty chips put
on the export control list. Those were designed to be
(36:08):
compliant with China's market, But we don't know will they
lift that, Will the Trump administration lift that? Are they
going to go even further and unwind some of the
buyer administration controls on advanced semiconductors equipment. We saw loosening
on electronic design software just in the last week.
Speaker 11 (36:27):
Or so so there's a lot of room to work.
Speaker 14 (36:30):
With and the question is what specific tools will be
acceptable to the Hawks in the Trump administration when China
is eager to get sort of at this issue that
has been front and center for them for a long time.
Speaker 3 (36:43):
I know this is a hard one for you, Jason,
but to single out a few of your members AMD
and VIDEO.
Speaker 2 (36:49):
They want access still to China.
Speaker 3 (36:52):
Do you think that's ever going to be something that
they're managing to convince that they can do that safely.
Speaker 15 (36:58):
There is a way to balance national security interests that
Sam made reference to with the economic interests of American companies.
Ninety five percent of the people that live on the
planet do not live in the United States, and if
we deny American companies access to global markets, we're denying
them the opportunity to really expand economically and succeed. There
is a way, and the Trump administration has been moving
in this direction to make sure that the Chinese Communist
(37:22):
Party doesn't get access to the most sensitive technology for
its military purposes. The Biden administration tried this with the
AI diffusion rule that you mentioned. They did it in
a very poor way. They restricted access to our allies
around their world getting access to American AI technology and
semiconductive technology.
Speaker 5 (37:39):
That rule has been scrapped. We're moving forward and ensuring.
Speaker 15 (37:43):
That we make a legitimate national security approach, not harbor
that economic interests as well. In other words, we can't
in the name of national security, deny American companies access
to the rest of the world.
Speaker 5 (37:57):
We can balance it correctly.
Speaker 15 (37:59):
We can make sure that the markets are open and accessible,
but make sure that the national security interests are protected
as well.
Speaker 3 (38:05):
Sam Many would say that some of the moves on
limiting copper, for example, into the United States is about
national security in the longer term to make it more
self sufficient, but that takes decades. Just tell us about
some of the certainty that's necessary. I think of rare
earth elements, rare earth metals so dependent on China. That's
a big bargaining chip of China versus the US. But
(38:27):
thus father hasn't been this sort of support coming necessary
from the administration to allow us.
Speaker 2 (38:32):
To mine it more in the United States. That certainty
isn't there.
Speaker 14 (38:36):
The thing about rare earth that everyone will say is
they're not that rare, but they're really dirty, and it
will take a long time and do we actually want.
Speaker 2 (38:43):
Those industries here.
Speaker 14 (38:44):
But certainly I think there's been an emphasis on reducing
bottlenecks because these are choke points that can be weaponized
against the United States, and Beijing realized that they'd stumbled
upon an incredibly important choke point. Looking at where the
negotiations stand right now on Earth specifically, you know, when
the two sides came back to the table they said
we have a deal. I noticed two things from the
(39:07):
Chinese side, specifically on rare earths. One, they agreed that
they were going to loosen their controls and speed up approvals,
but they're only going to be granting licenses for six
months at a time, which means Beijing wants to keep
this in their back pocket as leverage. And the second
is we've heard that US companies in the process of
(39:27):
applying for those approvals have been subject to very invasive
questions from the Chinese government for sensitive business information. So
we're not out of the woodwork yet, and I think
it's yet to be seen what the Chinese government is
willing to give on rare earths.
Speaker 2 (39:43):
Very briefly, Jason, the other key bottle necks talent, have we.
Speaker 5 (39:46):
Got a hair.
Speaker 15 (39:47):
Yeah, So China is racing to deploy that AI talent.
The Trump administration just last week announced a new AI
education initiative that ITI and a number of our member
companies signed onto to develop the homegrown talent that we need.
We also need to attract the best and the brightest
from around the world. Most technology companies that we're familiar
with were started by first or second generation immigrants, and
(40:07):
we need that next generation of AI talent to happen here,
to start their companies here, to stay here.
Speaker 5 (40:12):
So we need to attract them as students.
Speaker 15 (40:13):
And we also need to educate the workforce to make
sure that we have the best AI talent here in
the United States doing that invention, doing that creating and
job descriptions that we want to see out there.
Speaker 3 (40:23):
What a great conversation Jason Oxman from the Information Technology
Industry Council right here in New York, along with Sam
Sachs from New America. It's been wonderful having you both.
Speaker 2 (40:32):
Thank you.
Speaker 3 (40:33):
META it is investing three and a half billion dollars
in eslor Luxotka, purchasing a minority state in the company
as it boots his aiglasses ambitions. So all according to sources,
some more blue mos Kurt Wagner joins us you help
break this story. Basically, they are the maker of ray
bands and Oakley's the power the Meta AI story.
Speaker 6 (40:52):
That's right.
Speaker 16 (40:53):
This is a company that Meta has been partnering with
on the product side for several years now. You mentioned
the ray ban, Meta glasses, the Oakley glasses that they
just announced last month, So this is a company has
had a long relationship with and actually this investment has
been expected, but now it's final.
Speaker 11 (41:08):
And what I think it does is just it ties
these two companies.
Speaker 16 (41:11):
Together in a more formal way, but it also signals
how much Meta continues to believe in this idea.
Speaker 11 (41:17):
Of AI glasses as the future.
Speaker 8 (41:18):
Right.
Speaker 16 (41:19):
I mean this is not a small investment. This is
a sign that they are not only building these things,
but that they're kind of putting their money where their
mouth is here and this is the future for them.
Speaker 3 (41:28):
Yeah, they want to profit from the upside as well
as they deepen that tie cut. Just pivoting to another
AI story, and one is XAI and just looking at
x I mean, how do you react to Linda Yacarino
saying she no longer going to be CEO.
Speaker 16 (41:42):
Yeah, well I was surprised, not because we haven't been
talking about this for a while, right, I think everyone's
sort of been wondering how long she would last since
she took the job two years ago. But I was
just at can Lyons in the south of France a
few weeks ago, and she was there. She was representing X,
she was on stage, she was in meetings with partners
and advertisers, and so I kind of thought that she
would be around a little a little longer because of that.
(42:04):
But look, this is a job that I've said from
the beginning, is incredibly hard, especially when Elon Musk is
the owner of this company, because he does not do
things that make selling advertising on X an easy proposition, right,
So her whole job is to make X seems safe,
brand friendly, And when you have you know, Musk out
there doing the thing that he tends to do, it.
Speaker 11 (42:23):
Is a it is a tough, a tough gig. And
so I'm not.
Speaker 16 (42:26):
Surprised that, you know, two years in, she's decided.
Speaker 2 (42:29):
To move on and thirty seconds.
Speaker 3 (42:31):
It's also hard when Grock the chatbod is doing the
things it's been doing, anti semitic commentary was what was
reported yesterday, but they've got a big update tonight.
Speaker 5 (42:41):
They do.
Speaker 16 (42:42):
There's a live stream tonight about Grock four. You mentioned
that the timing of yesterday when Grok was viewing this
really vitriolic stuff of anti Semitism things like that that
a lot of people took issue with, and so it'll
be interesting to see how they address that if they
address that tonight on the live stream. But it works
back been that late tonight Pacific time.
Speaker 2 (43:02):
Forever busy, bloombos Kote Wagner. Thanks for bringing us the story.
Now that does it for this edition of Bloomberg Tech.
Do not forget to check.
Speaker 3 (43:08):
Out our podcast finding on the terminal as well as
online on Apple, Spotify, and iHeart this is Bloomberg Tech.
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