August 15, 2025 • 42 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss reports that the Trump administration is eyeing CHIPS Act funds in order to take a stake in Intel. Plus, Applied Materials shares plunge due to growing trade concerns between the US and China. And OpenAI Chairman and Sierra CEO Bret Taylor talks about the impact artificial intelligence is having on software and how the OpenAI board is approaching corporate restructuring.
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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a
live from Coast to Coast with Caroline Hyde and New
York and Ed Ludlow in Fendrances Go.
Speaker 2 (00:23):
This is Bloomberg Tech.
Speaker 3 (00:25):
Coming up, the Trump administration is eyeing CHIPSAC funds for
a steak in Intel.
Speaker 4 (00:30):
Plus applied materials plunges due to growing trade concerns between
the US and China.
Speaker 3 (00:35):
And an in depth interview with Open AI chairman and
Sierra CEO Brett Taylor that's later in the hour.
Speaker 2 (00:43):
We go straight to.
Speaker 3 (00:44):
The top story, Bloomberg reporting the White House is considering
tapping US CHIPSAC funds in an effort to take a
steak in American chip maker Intel. That's according to sources.
For more, Bloomberg's Joe Doe joins us Joe, what's the
new information?
Speaker 2 (01:00):
Reporting today?
Speaker 5 (01:02):
Right?
Speaker 6 (01:02):
A follow on from yesterday's scoop from Bloomberg that it
looks like the funding that the White House is looking
at using would come from chips Act money. Of course,
everybody might remember that from the law pass during the
Biden administration. We've understood that some of that money has
laid dormant and could be potentially used for this potential
(01:23):
equity stake that the administration was looking at and Intel.
Speaker 4 (01:28):
Fascinating because we understood there was almost eight billion dollars
coming Intel's way pre agreed, maybe even eleven billion dollars
and loans. We don't know the intricacies of how much
money and what equity state that would be equivalent to.
But Joe remind us why the US government is doing this,
We're even eyeing it.
Speaker 6 (01:46):
The way to look at so much of this Intel
is one. Of course, this hasn't happened, but we do
have one that has happened, which was the MP Materials,
rare earth company that very few people have heard of,
but just got a four hundred million dollar preferred EQ
stake investment from the Defense Department. It is all built
around this idea of national security. What does the Trump administration,
(02:08):
the White House view as central to national security efforts,
in particular related to its race against China. You have
a rare earth company, potentially a chips company. Earlier this week,
had we had the announcement that in Nvidia and AMD
would be giving fifteen percent of their revenues generated out
of China to the federal government, this is all built
(02:31):
around this kind of new idea that Trump.
Speaker 2 (02:34):
Is trying to make work. Joe some basics.
Speaker 3 (02:39):
Intel has not commented directly on our reporting. They've issued
this statement. We're going to put it on the screen
now and generally right this is the point that what
the administration is trying to do is achieve onshoring of
manufacturing of chips in this country. Intel kind of wants
to do the same thing. There is more reporting that
you did that a lot of this literally relates to
(03:00):
the meeting this week between Bhutan and the President.
Speaker 6 (03:03):
What have sources teld us We understand that this is
the idea. This idea did come up in that meeting.
I think the point that we draw from this, and
I was just saying this earlier, is we have an
administration a president I'm not an administration, a president directly
who's willing to just have a bilateral talk or negotiation
(03:24):
with any CEO he can bring into the White House
that he finds, you know, central to some of the
most important themes.
Speaker 2 (03:33):
In his second term.
Speaker 6 (03:35):
So obviously, as the Intel chief come in and as
you've pointed out ed, you know, we don't have a
full confirm here that this is happening. These things remain fluid.
We've seen this in so many different issues with the
White House. A lot of it is just hey, what
about this? What about that? But in particular related to this,
the Intel chief does show up to the White House
(03:56):
and has this conversation with the President, and this apparently
is where this idea whispurred.
Speaker 4 (04:01):
Bloomberg's Jodo fascinating reporting. Scoops keep coming. We thank you. Look,
let's dive into the Intel side of the equation. Why
they do it? Jordan Klein, Zooho Securities Managing director joins
us now who put I don't knowe this morning discussing
the implications of a possible government stake and Jordan, you're
questioning it, asking how does the US government help Intel
(04:22):
fixes leading edge node when it's not a money issue?
Speaker 7 (04:25):
They have no customers and.
Speaker 4 (04:26):
There is a good reason for that. Jordan, extrapolate on that.
Speaker 8 (04:31):
Yeah, I mean, Intel, in my opinion, has two main issues.
One is on the technology side, where their leading edge
foundry business has struggled to execute at these more advanced
nodes and they've lost you know, a lot of potential
business and share to TSM, who's executed flawlessly. And the
second big issue is, you know, and this is kind
(04:53):
of the chicken in the egg, is that they don't
have any external non Intel customers to move you know,
volume and bi business into these fabs on this new
leading edge. So you kind of need the former, meaning
you need to be a leader improved to customers you
can execute at these advanced nodes for these you know,
AI and leading edge chips.
Speaker 9 (05:14):
And then secondly then you need to win the business.
Speaker 8 (05:16):
And until they get both of those, I think they're
going to continue to struggle.
Speaker 4 (05:20):
And the Bhutan really said that articulated it in the
earnings saying we are not going to have this, build
it and they will come. Mentality, they've got to say.
Speaker 7 (05:29):
That they're coming before we build it.
Speaker 4 (05:30):
In the fourteen a leading cutting edge nodes for example Jordan,
is government control or at a smaller equity stake going
to secure that demand.
Speaker 8 (05:42):
Well, on the surface, it's not because the customers are
going to ultimately decide is Intel a company I can
depend and count on for my most advanced you know
products that I have to get to the market. Why
would I leave TSM who's proven to me year after
year that they can execute on the plan. I think
(06:04):
the goal here is that Trump puts some money in
or gets the government to invest, and then uses that
to get Intel to accelerate the process of building out
these new fabs in Ohio, and then he can go
to these customers like Broadcom, Qualcom, Apple and Nvidia and say, oh,
now they have the capability and you need to move
(06:27):
more of your orders and production to a domestic, leading
edge company like Intel.
Speaker 3 (06:34):
Jordan, I really want the desk analysts take and experience.
We broke the story yesterday about the stake, We broke
the story this morning about using chips Act funds. What
was the byside saying to you about how they interpreted
that news.
Speaker 8 (06:49):
Yeah, that's kind of the key question, and I think
it's it's I haven't heard a ton of questions as
to Okay, what next does this mean I go out
and buy Intel. Ultimately, if you look at semiconductors that
have led much of the market this year, I think
Intel has been the laggered due to their weak fundamentals
and a lot of people who need shorts to offset longs,
(07:13):
like in video, Broadcon TSM.
Speaker 9 (07:15):
Have used Intel as that short.
Speaker 8 (07:17):
Now today the news about a stake and what this
could mean I think gets people nervous. You know, maybe
Intel's going to go on a run. I should cover
my short But outside of that, I do not hear
you know, big mutual funds, the traditional guys who would
come in take a big steak and think this company
is going to turn it around, you know, acting on
this and these headlines. One because it's premature, but two,
(07:40):
I think they're coming to the same conclusion that I
just talked about, is that how does government money or
an equity stake, you know, really bring them the customers
or fixed their internal technology problems?
Speaker 9 (07:50):
And that's unknown.
Speaker 3 (07:54):
Jensen Wogen Nvidia have demonstrated the proximity to the President
has allowed them to move fast as I'm thinking King
Prince be actually about exports to the Gulf, a good
relationship between the President and lit Bhutan.
Speaker 2 (08:06):
Is there an unlock for Intel in that, Well, you know.
Speaker 8 (08:12):
I don't know what the I think ultimately, here's what
I would Here's the way I see it is that
I don't think Trump likes the fact that the you know, largest,
you know, oldest and most established kind of US foundry
logic company and Intel is on its heels struggling, losing
share to these foreign players in Asia like TSM.
Speaker 9 (08:33):
I think it's a bad look.
Speaker 8 (08:35):
Obviously, he wants the US, you know, to be great
again and that you know, we so much depends on semiconductors.
So I think the fact that they're firing people, reducing costs,
struggling is just a bad look under his watch. And
all this Chipsacked money was allocated and they got the
most of it.
Speaker 9 (08:55):
So I think basically he's saying.
Speaker 8 (08:57):
I want some return for this, and you know, I
want to try to help this, you know, semiconductor business
domestically improve, and that's got to start with you somehow.
Speaker 9 (09:06):
So I think he's just putting pressure.
Speaker 8 (09:08):
On them, and I don't know what other alternative Intel has,
they can't really push back, and ultimately they'll probably take
what money the government wants to invest and try to
strengthen the relationship going forward.
Speaker 4 (09:21):
Jordan, what's so interesting is then we heard on Air
Force one, and we're going to discuss it more in
the show later.
Speaker 7 (09:26):
A potential threat of.
Speaker 4 (09:27):
Two hundred to three hundred percent tariffs on semiconductors coming
into the US.
Speaker 7 (09:32):
But there are huge.
Speaker 4 (09:33):
Carve outs that we understand being written here that if
you're investing a lot in America, you don't face that.
So that seems that TSMC and Samsung that are building
in America aren't affected. Is he going to allow these
big Asian chip giants to continue to build in America
and get these sorts of carve outs.
Speaker 9 (09:51):
I don't know what other alternative they really have.
Speaker 8 (09:54):
I mean, the US is in the government, and the
administration's kind of in a tough spot here. They need
to project, like, you know, a strategy of trying to
get you know, more domestic US semiconductor capacity. But if
you get too tough and put too high of a tariff,
that that really puts the US consumer and our strategic technology,
(10:19):
whether it's defense or AI, at a major disadvantage. And
the reason that is is because the US doesn't have
an alternative. It's not like, you know, we can just
shift to all this domestic capacity. It's going to take
a lot of time and money to basically get that.
And right now that's basically TSM and a lot of
Samsung and some of Intel. So I think that's why
(10:41):
they get the carve outs is to buy time and
then ultimately that time runs out, and then Trump's going
to say, well, if we have the capacity here and
Intel is, you know, on a better footing and track,
then we want you to push that those orders in
that money towards Intel and away from Ta Simon Samsung,
and that's where he could start to then use the
(11:02):
tariffs to basically push that business towards Intel.
Speaker 4 (11:07):
Really thoughtful and a great note. Jordan Klein of Mizuho,
Thanks for bringing you expertise.
Speaker 7 (11:17):
Shares of Applied Materials tumbling.
Speaker 4 (11:20):
Worst day since March twenty twenty after the company presented
a disappointing sales forecast for the fiscal fourth quarter said
it's seeing less demand from China more. Let's bring in
Bloomberg's Brodie Ford. What's so interesting is Land Research came
out a week or so ago and look pretty buoyant
about future growth and revenue. Very different for this chip
equipment company.
Speaker 10 (11:40):
You are pointing out the debate that is waging and
all the sales side reports in my inbox right now, right,
I mean on the call last night, the narrative from
the company was that China demand is worst and some
of our largest customer mergers that are holding off due
to kind of just general economic uncertainty, tariffs and all that.
Speaker 11 (11:59):
But there's also a head here.
Speaker 10 (12:00):
As you said, some of the peers have done relatively well.
So is applied losing share here? Or is this truly
just a macroeconomic it's hitting everybody the same way kind
of issue.
Speaker 3 (12:14):
They try to explain away those two categories of customer.
Right in China, loads of chip makers have gone through
a refresh of their equipment, but the larger customers they're
talking about is largely TSMC and Samsung.
Speaker 2 (12:27):
And this is a tariff's issue. What is it?
Speaker 12 (12:30):
Right?
Speaker 10 (12:30):
I think tariffs is the big word we heard, but
I think also, I mean, we have an administration right
now that's negotiating trade deals. I mean, we saw the
Intel news this morning. There's just a lot of economic
uncertainty right now, right, I mean, some of the data
coming out people are questioning. And so the narrative we
heard on the call, and I heard in a conversation
(12:51):
with the CEO is that companies are holding off purchases.
They're not sure exactly what the economic picture of it
is like in six months, and so why do you
want to make a multi billion dollar commitment right now?
How much to hit the brakes for a little while.
Speaker 4 (13:04):
And Brodie, we put this in the deeper context as
you just hinted at with Intel. This is at a
time where we want more manufacturing the United States, according
to the administration, and Apply Materials.
Speaker 7 (13:14):
Is part of that.
Speaker 4 (13:15):
They've got what eighty percent of the revenue.
Speaker 7 (13:17):
Coming from abroad.
Speaker 4 (13:17):
But is that going to shift more to America?
Speaker 10 (13:20):
That is the song they're singing, right, I mean they
say that we are involved with you know, Apple's initiatives
and Samsungs. The actual dollars committed at this point to
me don't look incredible, right. I mean, a lot of
companies are talking about multi billions invested in the US,
and Apply to talking about hundreds of millions, and so
(13:41):
I don't think the expectation is that revenue shift to
the US in a meaningful way right now. But it's
an interesting part of the narrative. I mean, how much
can the administration push the industry to, you know, reshore
more of this demanding capacity?
Speaker 3 (13:57):
Then, thanks Brady Ford, thank you very much. Meanwhile, President
Trump is en route to Alaska for a high stakes
meeting with Russian President Vladimir Putin.
Speaker 2 (14:06):
During the flight on air Force one.
Speaker 3 (14:08):
He addressed the state of tariffs on chip makers, saying
it could rise to as much as three hundred percent.
Speaker 2 (14:13):
Listen to this.
Speaker 12 (14:14):
They're all coming in because they want to beat the
tariffs because if they open here, they don't have to
pay tariffs. If they don't open here, they have to
make in some cases two hundred percent, three hundred percent.
I haven't even said some of the tariffs yet till
sent Semiconductors will be setting sometime next week week.
Speaker 3 (14:34):
Care for for more on the tariff implications on chips
and the broader technology sector. Martin Norton Empower Chief Investment Strategists. Actually,
of all the reporting out there, this is the President
speaking on the record saying up to three hundred percent
tariffs on chips coming into America. I haven't even said
the tariffs yet. This is the point policy keeps changing.
(14:56):
As a strategist, how do you interpret it?
Speaker 13 (15:00):
Well, I mean, I think there's a few things that
we have to look at.
Speaker 14 (15:03):
First.
Speaker 13 (15:03):
We have to look at the breadth of the tariffs
that we've seen and the way the market has reacted
as tariffs have become part of the daily conversation. At first,
you know, April second, this was something that the market
felt was a disaster.
Speaker 14 (15:17):
But as we've.
Speaker 13 (15:17):
Rolled forward, we've seen little effect on corporate earnings, we've seen.
Speaker 14 (15:21):
Little effect on economic data.
Speaker 13 (15:23):
And I think there's this kind of benign neglect of
tariffs as a concern for the market, which I think
embolden's President Trump to continue to push forward bigger and
bigger numbers when we're looking at triple digits. Of course,
when we're talking about tariffs, that's a pretty astonishing thing.
I really like how your last guest with Jordan really
(15:43):
kind of talked about the very long term emphasis here.
Building manufacturing here in the US is a long term thing.
Forcing companies or encouraging companies to buy US as a
long term thing, and I think these tariffs are part
of that game.
Speaker 3 (15:58):
So if the endgame is bring Chit manufacturing back to America,
you agree with Jordan that it will work or you disagree.
Speaker 13 (16:07):
Well, I think there has to be a long term
commitment on the part of the administration and the folks
in Washington to keep those tariffs in place. I think
that's in question whether that's something that we're going to
see over the period of several years, because that's what
it would take several years to bring manufacturing back to
the United States or to the United States in the
first place.
Speaker 14 (16:27):
So I think there's still.
Speaker 13 (16:29):
An open question as to how effective it will be
and how long term that commitment will be, and how.
Speaker 4 (16:35):
Long until you see it rewarding companies like an Applied Materials,
which right here right now is having its worst days.
It's March twenty twenty and rated all of its games
for the year Marta. How do you decide who are
the winners longer term in this environment?
Speaker 13 (16:48):
I think the winners is one of the bigger questions
that we're looking at, especially when you start to look
at it in the context of artificial intelligence. When we're
taking a look at corporate earnings long term, of course
we're concerned about the that deglobalization will have on those
corporate earnings. And yet when we look at the estimates
that artificial intelligence can add to corporate earnings to profit margins,
(17:09):
it more than offsets it. The question is who those
winners are, And what we've seen in past periods of
innovation is that the early winners are not necessarily the
long term the enduring winners. And there's also questions as
to how different industries respond. You know, first folks thought
with software is the next leg of this story, but
that doesn't necessarily need to be the case. If some
(17:30):
of these big tech companies can capture some of the
developments there, it's not necessarily going.
Speaker 14 (17:34):
To be the small cap companies that win.
Speaker 13 (17:36):
So when I'm looking at this and I'm thinking about
how do you play this, I think it's more of
a broad based question than it is trying to find
and pick those narrow winners.
Speaker 4 (17:45):
So you take tech thinking to other industry groups, that's right, Yes,
absolutely so.
Speaker 13 (17:52):
For example, if you're taking a look at where can
you apply AI? Where can you apply some of these narratives.
The areas that we've heard talked about regularly is healthcare
and applying artificial intelligence to research and development. That's a
long term play, and of course there's tons of headwinds
against healthcare, pharma and the like, and when we think
(18:13):
about those headwinds, those are opening up pretty attractive valuations
while there's also this positive long term narrative that's there.
So I do think that we can look at some
of these other areas, particularly those that are a bit cheaper.
There's not many of them. There's a few as areas
of long term beneficiaries of AI.
Speaker 2 (18:31):
Marta.
Speaker 3 (18:31):
It's funny for me, but it's been a week where
economic data has impacted technology markets, right, PPI and I
grew up in the Bloomberg school of why do we
care about the FED? Because higher rates discount the present
value of future cash flows. And I just wondered if
you'd react to that statement, please well listen.
Speaker 14 (18:49):
I mean, I do think when we think.
Speaker 13 (18:51):
About economic data and we think about technology, there are
these secular growth themes that can really push back against
any headwind that economic data poses for technology, And of
course there are other areas of the market that are
more sensitive.
Speaker 14 (19:05):
When I think about the economic.
Speaker 13 (19:07):
Data that we're seeing come through, all that comes out
is this idea of mixed signals, and people can kind
of project whatever view they want on the market and
find or on the economy and find evidence to support
that view. I think at this point what matters more
are the secular themes rather than some of these economic
data points that are trickling in.
Speaker 4 (19:27):
Briefly matter It's also been a week of record hizing
crypto IPOs.
Speaker 7 (19:31):
How many questions you get on that?
Speaker 14 (19:34):
Well, it does come up more and more.
Speaker 13 (19:36):
I think one of the things that people are looking
at when they see the record highs in crypto, or
when they're looking at IPOs, or in fact the kind
of resurgence of the mean theme is what does this
mean in terms of the speculative froth in the market.
I don't think we're at all time peaks there, but
there is this measure of complacency that's been baked in,
this kind of sense that nothing can go wrong, and
of course that's reflected in valuations. So I do think
(19:58):
when we're looking at those kind of signals, it's important
to remember that things are a bit priced for perfection
and we could see some volatility in the nearest term.
Speaker 4 (20:06):
Martin Norton, we so appreciate having you on today of Empower.
Speaker 7 (20:09):
Have great weekend.
Speaker 4 (20:16):
It's time now for talking tech and first up, Masuyoshi's
son has added eleven billion to his fortune in just
the first two weeks of August. That is, his AI
bets over at SoftBank sent shares to record highs.
Speaker 7 (20:27):
Look Sum's net worth naws dance more.
Speaker 4 (20:29):
Than thirty three billion dollars, making him the second richest
man in Japan, according to the Bloomberg Billionaires Index plus
Bill Ackman's Pershing Square Capital. Well, it's revealed that it
a mastered in nearly one point three billion dollar steak
in Amazon. The firm initially disclosed it had built a
stake during an analyst school in May. That's after the
stock tumbled more than thirty percent over AI and tariff concerns.
(20:50):
Look regulatory filing on Thursday show that Pershing had accumulated
more than five point eight.
Speaker 7 (20:54):
Million Amazon shares.
Speaker 4 (20:56):
And Jackie Bezos, mother of Jeff Bezos, has died at
the age of seventy eight. According to the Bezos Family
Foundation website, she passed away at a home in Miami
after a long battle with louis body dementia. Jackie Bezos
was an advocate for early childhood education.
Speaker 7 (21:12):
Alongside her husband.
Speaker 4 (21:13):
She was in fact the first to invest in Amazon
in nineteen ninety five.
Speaker 9 (21:16):
ED.
Speaker 2 (21:23):
Welcome back to Bloomberg Tech. I want to go back
to Intel.
Speaker 3 (21:26):
The reporting is that the US government's thinking about using
chipsec funds to take a stake in Intel. Caroline, believe
it or not. On the course of the week, this
stocks up almost twenty five percent. If it continues to
chop around and climb just a percentage point higher. It
will have its best five day gain, its best weekly
gain on record ever, just seven days after the President
(21:50):
said that its CEO should resign after ties with China.
Later in the program, we're going to do so much
more on Intel. But when you go into the data
in the Bloomberg terminal, you can always surprise your because
in Agrica over the course of the week, what an
astonishing stat that is.
Speaker 4 (22:05):
It is quite the stat six straight days against for Intel.
What a winning performance twenty five percent that you can
see it in.
Speaker 7 (22:12):
All its glory.
Speaker 4 (22:13):
Let's get into the world of generative AI now, though,
because we are joined by Brett Taylor ed whose extensive
Silicon Valley resume, who's Google metas Salesforce open Ai. His
startups Erra AI helps companies build agentic customer service tools.
You work with the likes of ram with clear among others. Brett,
and boy, is it competitive out there at the moment.
(22:35):
How are you seeing your customer facing GENDERAI products being taken.
Speaker 7 (22:40):
Up right now?
Speaker 5 (22:42):
Yeah, I've never quite been in a market like this,
and as you said, I've been in the Silicon Valley
for a long time. I've started three companies, one in
sort of the early days of the internet, you know,
one call it about you know, a decade ago, and
we have never seen this kind of customer interest. I've
never seen this kind of of revenue growth and customer momentum.
(23:02):
But as you said, a lot of competition too, you know.
I think if you look at what is the impact
of AI and society, there's probably two areas being impacted
most right now, software engineering and customer service. We're in
that latter category. We have the privilege to be the
leader survey it. As you said, traditional companies like ADT,
Home Security and direct TV, and the fastest growing companies
(23:23):
in Silicon Valley like Ramp. And it is such a
privilege and so much fun to be in the middle
of this right now.
Speaker 4 (23:28):
I'm not sure the competitors, particularly the older god of
SaaS some that you helped work with, like Salesforce, love
the enthusiasm way that you're shaking things up in terms
of pricing though, I mean outcome based pricing models.
Speaker 7 (23:39):
How are you seeing that really.
Speaker 4 (23:41):
Change the cadence of which others.
Speaker 7 (23:43):
Can sell and how they're selling.
Speaker 5 (23:45):
It's such a great question if you look at the
history of software. These technical shifts have also given rise
to changes in business models, so kind of famously, you know,
when Mark and Parker started Salesforce, the world went from
buying a petrol license to software, to software as a
service and subscribing to it. Now, our view is at Sierra,
(24:06):
these agents aren't just helping you be more productive, but
actually solving problems for you. And the best business model
is to actually pay for a job well done. So
at Sierra, we only charge our customers when it solves
the problem autonomously for that customer.
Speaker 11 (24:20):
We call it outcomes based pricing.
Speaker 5 (24:22):
And we think it's going to really disrupt the software
industry because if you think about it as a business,
what a great alignment of values with your partners. You
only pay us when we actually save you money and
solve the customer's problem delightfully. And I think it really
aligns the software industry with all of our partners, and
I think it's a really positive trend for the industry
as a whole.
Speaker 3 (24:43):
Right, you founded Sierra with Clay in twenty twenty three, Right,
and I think back to when you came on the
show in February twenty twenty four, it had grown so
quickly the company update us on what Sierra looks like today.
Speaker 5 (24:56):
Well, we have customers across a wide range of industries,
from some of the largest health insurance companies to banks
to some of the fastest growing companies in Silicon Valley,
like Ramp, which is we're also a proud customer of
They power all of our corporate credit cards. What's remarkable
is just the size of customers that have aligned with us.
So over twenty percent of our customers have over ten
(25:18):
billion in revenue, over half have over a billion in revenue.
These aren't just early adopters, right, These are some of
the most traditional financial services firms, healthcare firms that are
really saying, Hey, I don't want my customers to.
Speaker 11 (25:29):
Have to wait on hold or press two for service.
Speaker 5 (25:32):
Can we have a multi lingual, delightful AI agent just
pick up the phone and solve problems automatically. And what's
remarkable is just how well it works. You know, you
brought up RAMP at the beginning of the call. Their
AI agent is actually solving ninety percent of customer cases
completely autonomously. And you know that's obviously great for Ramp
(25:52):
as a business, but for me as a customer of Ramp.
It means I don't have to wait on hold ninety
percent of the time. It's completely transforming the industry and
it is so fun to be able to help brands
really in every industry transform their customer experience.
Speaker 3 (26:06):
Brett, I'd still like to learn more about Sierra. So
you talked about you haven't seen growth like this in
your career. Would you share with us an arr figure,
what Sierra's financials look like, number of team members, how
aggressively you're hiring.
Speaker 5 (26:22):
I won't share a rr numbers, sorry, but maybe when
we do, I'll come back on this show and you
can hear it first. But I'll tell you we have
hundreds of employees. We've opened offices in New York, Atlanta, London.
We're planning our expansion into Asia. We're the leader in
this space. We'll do hundreds of millions of phone calls
on our platform this year, hundreds of millions of digital chats.
(26:42):
We're the highest volume company in this space, and really
that scale benefits all of our customers. It means we
support more languages, it means that we've dealt with some
of the most complex regulatory landscapes from hip A compliance
to the compliance regimes that apply to the financial industry.
We're really trying to be the best and safest bet
(27:04):
for every company in the world who wants to transform
their customer experience who they are.
Speaker 4 (27:08):
And to do that, you're scaling, and I'm sure there's
a little bit of a fierce fight out there for
talent and that costs money before get into the talent
wars a little bit, Brett, what about having to raise
more money because you did back in twenty twenty four.
Speaker 7 (27:20):
Do you need any more? We've got a good runway.
Speaker 5 (27:23):
We have a good runway. But it's a great question,
just because I do think that we really want to
grow as quickly as possible. There's this great I attribute
to Albert Einstein. As quickly as possible, but no more quickly.
And you know right now our businesses work in I've
never seen product market that quite like this. And we're
always asking ourselves the question as a management team, how
(27:46):
fast can we grow? Because if you look around the world,
the application of technology is not limited to one industry,
is not limited to one country. How can we best
serve not just multinationals based here, but in Europe and
Asia as well? And so if raising more money will
enable us to achieve that end, we're absolutely open to it. Thankfully,
we have a really healthy business model and it's not
(28:08):
something we need to do, but absolutely something we're allays
open to considering because.
Speaker 4 (28:11):
In many ways, Look, you raised one hundred and seventy
five million last year led by Green Oaks Capital.
Speaker 7 (28:16):
I'm thinking like two hundred million.
Speaker 4 (28:18):
Dollars is now what Meta is willing to pay to
get one person. In terms of talent, Brett, Yeah, we
all chose the wrong profector here. You didn't, but Brett,
I mean, I'm no coder, but Brett, tell us a
little bit about trying to get that sort off the
talent do you need it?
Speaker 7 (28:33):
And how face is it?
Speaker 5 (28:35):
Well, first, you know, I do think there's a slight
difference between the really small handful of researchers building these
foundation models at the research labs and you know, Sierra,
we're an apply to I company, So you can think
of us not necessarily as the folks doing the R
and D to build these frontier models like Open Eye
GPT five, but really taking all of those models and
(28:58):
fine tuning them and applying them to a solution in
the marketplace, so you can really think of the market.
I think of it really in three areas. The companies
building these frontier models, open the eyes models are obviously
the leading and frontier models in the space. You have
companies building tools, So what are the tools you need
if you're applying AI in your business. These are companies
(29:18):
that can do data labeling and data transformation and data storage.
And then you have companies like Ours and Cursor and
Harvey that are taking all of that great technology and
making a push button solution so you can just solve
a problem without a lot of implementation time. We just
went live with an international retailer in fifteen markets in
six weeks and are solving eighty five percent of their
(29:41):
customer service cases automatically. That's what really an apply DA
company does is makes it easy to consume, easy to deploy.
So thankfully we're not competing in the market for some
of those I think widely publicized researchers. But as you said,
it's a competitive market, a competitive market for talent, as
it always is in the Valley.
Speaker 3 (30:00):
You know, Brett, Over the years, I got told a
lot of stories about you in meetings, like in the
Salesforce context. And you know, basically people say you're pretty
frighteningly effective when you talk to customers, but you're also
you know, you're a busy guy. You have a very
unusual jewel roll right as chairman of open Ai and
chairman of its board. That's an unusual gig. How do
(30:22):
you split the time?
Speaker 5 (30:25):
You know, I love to work, is the short answer.
So I work from the moment I get up to
the moment I go to sleep, and I love every
minute of it. And you know, some weeks I'll spend
more time at some two weeks last. It's really what
the organization demands. And you know, it is a lot
of work, but it is such a privilege just because well,
I'm very excited about what Siro is doing. To be
(30:46):
able to spend time with I think the greatest research
lab in the world developing, I think the most important
consumer product in the world in chat GPT is such
a privilege and it makes me a better leader. I
understand AI with more depth than ones. And then similarly,
hopefully my experience having scaled a lot of companies in
the past is helping Open Eye, is it? I think
(31:07):
it's scaling and faster than really any company in history,
and so it's so fun. I wouldn't have it any
other way. Sleep is for the week, right.
Speaker 3 (31:17):
The big question our audience has for you in the
open AYE context is how much you're working on this
relationship with Microsoft and how much you personally have focused
on the restructuring or the move to a new or
different corporate structure.
Speaker 5 (31:30):
Well, Microsoft is open Ey's most important partner and has
been for years, so it's a very important relationship. The
board's role is really specific. Open Eyes a not for profit.
Our fiduciary duties on the board are really related exclusively
to our mission, which is to ensure that our official
general intelligent intelligence benefits humanity. And so we're always thinking
(31:52):
how do we set up the organization over the long
term to ensure that we can achieve that goal. And
you know, one of the things that we've talked a
lot about is, you know, since the company was founded
as a small research lab, the level of capital expenditure
required for the infrastructure for AI, I think exceeds anyone's
expectations that they had a year ago, let alone ten
(32:13):
years ago, and so really thinking about how do we
ensure that we remain a mission driven not for profit,
but also set up our organization so we can raise
the capital we need to achieve that mission. So that's
what I think the media is appropriately called the restructuring.
It is something that we're working on. Nothing to announce
it this time, but I think it's one of the
most important things we work on as a board, because
your job as a board is to set the company
(32:35):
up for the future, and that's really how we think
about it.
Speaker 7 (32:37):
Do you think you'll get it done by the end
of this year, Brett?
Speaker 5 (32:41):
I can't really comment on timelines, and you know, we're
really just trying to work with all the stakeholders who
have an interest in it and most importantly focused on
the mission. But no update on the time frame.
Speaker 3 (32:54):
Redeye a CEO of Sierra and chairman of the board
for Open AI. Thank you very much for your time.
This is Bloomberg Tech and you're looking at a live
shot of the principal room. Check out the Bloomberg Tech podcast.
You can find it on the terminal so its online
on Apple, Spotify and on iHeart. This is Bloomberg. Okay,
(33:21):
all eyes are meta real quick. In the session, it's
made attempts to hit all time highs and at one
point go beyond two trillion dollars of market cap for
the first time. Where will we close We don't know,
but it's exciting and it's one to watch. And we're
also thinking a lot about Meta's AI app, which is
facing mounting pressure with users complaining of an underpersonalized and
(33:41):
inconsistent experience. The tech giant emitting this is quote just
the first and many steps, as the company will continue
to make updates over time. Joining us now is Bloomberg's
Natalie Lung. This is the post launch digest, tell us.
Speaker 2 (33:55):
What we need to know.
Speaker 15 (33:57):
Yeah, we have tested it for a few weeks and
asking it basic inquiries, asking it for personalized recommendations, and
overall we found the experience rather inconsistent and it felt
a little bit half baked. For example, I asked it
to give me recommendations and what to do over the
weekend here in New York City. For some reason, it
(34:17):
knew min zip code. I might have provided it to
an advertiser one time, but it wasn't able to personalize
it to that area. And the unique thing about it,
apart from Rivals, is that it has a discover feed
where you can see how others are prompting and interacting
with the chatbot, and they're like endless images.
Speaker 5 (34:36):
There, you can see.
Speaker 4 (34:38):
Endless images that perhaps aren't that relevant to you, and
sometimes the more edgy types of chatbots you might not
want to interface with, Natalie, what's so weird as well?
Is I interact with METAAI actually more within the WhatsApp
offering and maybe within the Instagram offering? Why is that
not taking my data that I'm feeding it and bringing
(34:58):
it over to Meta right now?
Speaker 15 (35:01):
All of those experiences are not connected, as you rightly
pointed out. It is on WhatsApp, it is on Messenger,
it is on Instagram, but they're not connected, which makes
it a little bit foreshot of some of the personalization
ambitions that Zuckerberg has.
Speaker 7 (35:18):
Almost Natalie Lang a real deep dive. Go read the analysis.
Speaker 4 (35:27):
Getting back to our top story, the White House is
set to consider using chips At funding to take a
stake in Intel, scording to sources from more Bloombergs. Ryan
Gould is here who helped break this story. It's been
very busy twenty four hours. Do we have any idea
how much equity they could take for this?
Speaker 2 (35:42):
Not yet, Caroline.
Speaker 16 (35:42):
We're still trying to find out exactly how much the
government is talking. I mean, just on the base of it.
If you think about the problems that are facing Intel
right now, you're probably looking to solve something as big
as Ohio to onshore manufacturing in the US. You're talking
tens of billions of dollars that the company needs. Now,
I'm not going to suggest that they got it is
going to go out and put that money in. We
don't know, and the government has not obviously commented on
(36:04):
this reporting yet, but I would say that you know
that the challenges facing Intel are vast, and I think
most investors and alis know that. I think, just at
the top of this, though, it's worth taking a step
back and thinking about what a difference a week makes.
If you think about Donald Trump calling for the resignation
of Liputen, the CEO, last Thursday, last Friday, I mean
(36:24):
a week later, we're now on the cusp of maybe
a potentially game changing deal, at least in the short
term for one of America's most beleagued companies.
Speaker 3 (36:34):
Bloombos Ryan Gould part of the reporting team, or an
astonishing week for Intel.
Speaker 2 (36:38):
Thank you.
Speaker 3 (36:38):
Let's get more on Intel and Washington's chip goals and
how this all fits in Ben hur in Creative Strategy CEO, Ben,
for loads of people, this isn't actually an issue of
money for Intel, It's an issue of technology and it's
an issue of no customers. How did you react to
Bloomberg's reporting in the last twenty four hours.
Speaker 17 (36:57):
Yeah, I mean, I think we've been looking at this
from some sort of a leading in this direction for
some time. I mean, obviously, when you know, Trump came
up and said what he said about lip butan we
felt that this was in light of wanting to do
or at least have a broader conversation that had not
had happened prior. If he's noted like Intel was not
involved in a lot of the you know, sort of
(37:19):
public displays of America first, even though everybody knows they're
America first. And obviously his comments right on earnings about
you know, they may not go forward to fourteen A
without help, I think was very telling. And I think
all of that led to this moment, which is, you know,
from a national security standpoint, and really anybody in insecurity
and knowing what's going on in chips in the US
(37:41):
should believe we want a US company to make leading
edge chips here in the United States, and that's Intel.
So we want to see some resolution, right as one
hundred percent clear. Like you said, they need customers and
we need to figure out how to get some form
of capital so they can keep going.
Speaker 3 (37:57):
Over the course of five days, Intel's up twenty seven percent.
If it closes at those levels, it will be the
biggest weekly gain on record on a closing basis, which, yeah,
is Boo Tan the man for this Ben Yeah.
Speaker 17 (38:09):
I mean I think his approach is fairly pragmatic. Right,
It's not just about build and invests. Build the right technology,
but do so in a capital way that makes sense.
I think that's really what the board wants, that's what
investors wants.
Speaker 5 (38:21):
You know.
Speaker 17 (38:21):
And I think really the strategy is, again, how much
money do they actually need. I do think the tens
of billions of dollars is right in terms of to
get to fourteen A on top of what Intel will
bring in customers. But the bottom line is right, they
can't do this on their own, that's what they're saying.
Whether it's customers or whether it's the government. You know,
there needs to be an infusion of capital that's not
just Intel, to make sure that foundry is secured for
(38:43):
the long haul.
Speaker 4 (38:44):
Ben there is this chicken nag situation because le Bhutan is saying,
I'm not going to build it and wait for them
to come. They've got to tell me that the demand
is there. Does in some way taking equity by the
US government incentivize others to get behind the government and
say will buy them. We'll them if indeed you do
innovate and get that fourteen A out there.
Speaker 17 (39:04):
I mean, I think it's got to be more than
just the government stake. I mean, I think what everybody's
been speculating is would that come along with some form
of a of a tariff or something that you know,
strongly incentivized companies like you know, Nvidia, Apple, A, md Qualcom,
et cetera to not you know, use TSMC, but then
use some capacity of Intel, not one hundred percent, but
(39:25):
some of it.
Speaker 11 (39:26):
So I think it would necessitate that.
Speaker 17 (39:27):
You know, again, I think we want Intel to win
on the merit of technology, which we think is very
good on paper, but they just need to get some
customer wins. And I think once that happens, the confidence,
you know, continues but again they're at a they're at
a need for capital, and so how that arises is
sort of the root of this situation.
Speaker 4 (39:45):
Ben, that's interesting that you say the tariff tactic because
we've heard on air Force one from President Trump today.
Speaker 7 (39:51):
Then maybe it goes fast two hundred.
Speaker 4 (39:52):
Three hundred percent tariffs on semiconductors. But then there's all
these carv oalves, particularly for companies investing in the US,
like TSMC likes, I'm sung Intel's biggest competitives.
Speaker 17 (40:03):
Yeah, And I think the difference though, is that Intel
is more at the leading edge, So TSMC is not
going to bring in. The Taiwanese government has been very
clear they're not going to allow them to bring the
leading edge. So call it two naanimeter, one nanometer and beyond.
Samsung's equally struggling to hit that number even though they're trying.
Intel's really the best bet. And more importantly, Intel is
(40:23):
an American company, And so that's why I say, like,
if this is some investment of peep private equity plus government,
it makes sense that they want to protect that investment,
so they will do what they need in terms of
terrorists or some other form of regulations that just encourage
customers to use Intel. But again, I still think it's
better if Intel just wins on technological merit, which we
(40:44):
think they have.
Speaker 11 (40:46):
But we need a bridge, we need a gap, and.
Speaker 17 (40:48):
That's kind of where everybodys struggling to figure out where
that comes from.
Speaker 3 (40:52):
Ben Intel will not comment on Bloomberg's reporting. The White
House hasn't said anything to confirm the reporting. But the
chart says, you assigned to this deal happening.
Speaker 11 (41:04):
Oh, it's a tough it's a good question.
Speaker 17 (41:05):
I mean, I think it really comes down to do
would they believe that they could structure this in the
way in a way that's fair, whether that's divesting of
shares right or paying that back like some of the
ways where you've seen them when they have to do,
you know, investments in companies, so.
Speaker 11 (41:23):
It's not just a constant holding.
Speaker 17 (41:24):
I think when anytime the government gets involved, it's very
very tricky. But again, right, they need customers. I'd like,
I know, this is an non answer, I'd say fifty
to fifty.
Speaker 7 (41:33):
It's okay, but you know, a phone a friend. Fifty
to fifty phone a friend.
Speaker 4 (41:37):
Benar creative strategies fantastic to get your opinion.
Speaker 7 (41:42):
Thank you very much.
Speaker 4 (41:43):
Indeed, that does it for this edition of Bloomboat Tech.
An extraordinary week around semiconductor Z.
Speaker 3 (41:48):
Yeah, like the rest of the session, keep an eye
on Intel if it closes that level best week on record.
Recap everything we discussed in the podcast. You know where
to find it on the Bloomberg terminal as well as
online on Apple fight In. iHeart from New York City
and London. I'm taking a little.
Speaker 2 (42:04):
Break for a while, but we'll be back. This is
Koomberg Tech.
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a
live from Coast to Coast with Caroline Hyde and New
York and Ed Ludlow in Fendrances Go.
Speaker 2 (00:23):
This is Bloomberg Tech.
Speaker 3 (00:25):
Coming up, the Trump administration is eyeing CHIPSAC funds for
a steak in Intel.
Speaker 4 (00:30):
Plus applied materials plunges due to growing trade concerns between
the US and China.
Speaker 3 (00:35):
And an in depth interview with Open AI chairman and
Sierra CEO Brett Taylor that's later in the hour.
Speaker 2 (00:43):
We go straight to.
Speaker 3 (00:44):
The top story, Bloomberg reporting the White House is considering
tapping US CHIPSAC funds in an effort to take a
steak in American chip maker Intel. That's according to sources.
For more, Bloomberg's Joe Doe joins us Joe, what's the
new information?
Speaker 2 (01:00):
Reporting today?
Speaker 5 (01:02):
Right?
Speaker 6 (01:02):
A follow on from yesterday's scoop from Bloomberg that it
looks like the funding that the White House is looking
at using would come from chips Act money. Of course,
everybody might remember that from the law pass during the
Biden administration. We've understood that some of that money has
laid dormant and could be potentially used for this potential
(01:23):
equity stake that the administration was looking at and Intel.
Speaker 4 (01:28):
Fascinating because we understood there was almost eight billion dollars
coming Intel's way pre agreed, maybe even eleven billion dollars
and loans. We don't know the intricacies of how much
money and what equity state that would be equivalent to.
But Joe remind us why the US government is doing this,
We're even eyeing it.
Speaker 6 (01:46):
The way to look at so much of this Intel
is one. Of course, this hasn't happened, but we do
have one that has happened, which was the MP Materials,
rare earth company that very few people have heard of,
but just got a four hundred million dollar preferred EQ
stake investment from the Defense Department. It is all built
around this idea of national security. What does the Trump administration,
(02:08):
the White House view as central to national security efforts,
in particular related to its race against China. You have
a rare earth company, potentially a chips company. Earlier this week,
had we had the announcement that in Nvidia and AMD
would be giving fifteen percent of their revenues generated out
of China to the federal government, this is all built
(02:31):
around this kind of new idea that Trump.
Speaker 2 (02:34):
Is trying to make work. Joe some basics.
Speaker 3 (02:39):
Intel has not commented directly on our reporting. They've issued
this statement. We're going to put it on the screen
now and generally right this is the point that what
the administration is trying to do is achieve onshoring of
manufacturing of chips in this country. Intel kind of wants
to do the same thing. There is more reporting that
you did that a lot of this literally relates to
(03:00):
the meeting this week between Bhutan and the President.
Speaker 6 (03:03):
What have sources teld us We understand that this is
the idea. This idea did come up in that meeting.
I think the point that we draw from this, and
I was just saying this earlier, is we have an
administration a president I'm not an administration, a president directly
who's willing to just have a bilateral talk or negotiation
(03:24):
with any CEO he can bring into the White House
that he finds, you know, central to some of the
most important themes.
Speaker 2 (03:33):
In his second term.
Speaker 6 (03:35):
So obviously, as the Intel chief come in and as
you've pointed out ed, you know, we don't have a
full confirm here that this is happening. These things remain fluid.
We've seen this in so many different issues with the
White House. A lot of it is just hey, what
about this? What about that? But in particular related to this,
the Intel chief does show up to the White House
(03:56):
and has this conversation with the President, and this apparently
is where this idea whispurred.
Speaker 4 (04:01):
Bloomberg's Jodo fascinating reporting. Scoops keep coming. We thank you. Look,
let's dive into the Intel side of the equation. Why
they do it? Jordan Klein, Zooho Securities Managing director joins
us now who put I don't knowe this morning discussing
the implications of a possible government stake and Jordan, you're
questioning it, asking how does the US government help Intel
(04:22):
fixes leading edge node when it's not a money issue?
Speaker 7 (04:25):
They have no customers and.
Speaker 4 (04:26):
There is a good reason for that. Jordan, extrapolate on that.
Speaker 8 (04:31):
Yeah, I mean, Intel, in my opinion, has two main issues.
One is on the technology side, where their leading edge
foundry business has struggled to execute at these more advanced
nodes and they've lost you know, a lot of potential
business and share to TSM, who's executed flawlessly. And the
second big issue is, you know, and this is kind
(04:53):
of the chicken in the egg, is that they don't
have any external non Intel customers to move you know,
volume and bi business into these fabs on this new
leading edge. So you kind of need the former, meaning
you need to be a leader improved to customers you
can execute at these advanced nodes for these you know,
AI and leading edge chips.
Speaker 9 (05:14):
And then secondly then you need to win the business.
Speaker 8 (05:16):
And until they get both of those, I think they're
going to continue to struggle.
Speaker 4 (05:20):
And the Bhutan really said that articulated it in the
earnings saying we are not going to have this, build
it and they will come. Mentality, they've got to say.
Speaker 7 (05:29):
That they're coming before we build it.
Speaker 4 (05:30):
In the fourteen a leading cutting edge nodes for example Jordan,
is government control or at a smaller equity stake going
to secure that demand.
Speaker 8 (05:42):
Well, on the surface, it's not because the customers are
going to ultimately decide is Intel a company I can
depend and count on for my most advanced you know
products that I have to get to the market. Why
would I leave TSM who's proven to me year after
year that they can execute on the plan. I think
(06:04):
the goal here is that Trump puts some money in
or gets the government to invest, and then uses that
to get Intel to accelerate the process of building out
these new fabs in Ohio, and then he can go
to these customers like Broadcom, Qualcom, Apple and Nvidia and say, oh,
now they have the capability and you need to move
(06:27):
more of your orders and production to a domestic, leading
edge company like Intel.
Speaker 3 (06:34):
Jordan, I really want the desk analysts take and experience.
We broke the story yesterday about the stake, We broke
the story this morning about using chips Act funds. What
was the byside saying to you about how they interpreted
that news.
Speaker 8 (06:49):
Yeah, that's kind of the key question, and I think
it's it's I haven't heard a ton of questions as
to Okay, what next does this mean I go out
and buy Intel. Ultimately, if you look at semiconductors that
have led much of the market this year, I think
Intel has been the laggered due to their weak fundamentals
and a lot of people who need shorts to offset longs,
(07:13):
like in video, Broadcon TSM.
Speaker 9 (07:15):
Have used Intel as that short.
Speaker 8 (07:17):
Now today the news about a stake and what this
could mean I think gets people nervous. You know, maybe
Intel's going to go on a run. I should cover
my short But outside of that, I do not hear
you know, big mutual funds, the traditional guys who would
come in take a big steak and think this company
is going to turn it around, you know, acting on
this and these headlines. One because it's premature, but two,
(07:40):
I think they're coming to the same conclusion that I
just talked about, is that how does government money or
an equity stake, you know, really bring them the customers
or fixed their internal technology problems?
Speaker 9 (07:50):
And that's unknown.
Speaker 3 (07:54):
Jensen Wogen Nvidia have demonstrated the proximity to the President
has allowed them to move fast as I'm thinking King
Prince be actually about exports to the Gulf, a good
relationship between the President and lit Bhutan.
Speaker 2 (08:06):
Is there an unlock for Intel in that, Well, you know.
Speaker 8 (08:12):
I don't know what the I think ultimately, here's what
I would Here's the way I see it is that
I don't think Trump likes the fact that the you know, largest,
you know, oldest and most established kind of US foundry
logic company and Intel is on its heels struggling, losing
share to these foreign players in Asia like TSM.
Speaker 9 (08:33):
I think it's a bad look.
Speaker 8 (08:35):
Obviously, he wants the US, you know, to be great
again and that you know, we so much depends on semiconductors.
So I think the fact that they're firing people, reducing costs,
struggling is just a bad look under his watch. And
all this Chipsacked money was allocated and they got the
most of it.
Speaker 9 (08:55):
So I think basically he's saying.
Speaker 8 (08:57):
I want some return for this, and you know, I
want to try to help this, you know, semiconductor business
domestically improve, and that's got to start with you somehow.
Speaker 9 (09:06):
So I think he's just putting pressure.
Speaker 8 (09:08):
On them, and I don't know what other alternative Intel has,
they can't really push back, and ultimately they'll probably take
what money the government wants to invest and try to
strengthen the relationship going forward.
Speaker 4 (09:21):
Jordan, what's so interesting is then we heard on Air
Force one, and we're going to discuss it more in
the show later.
Speaker 7 (09:26):
A potential threat of.
Speaker 4 (09:27):
Two hundred to three hundred percent tariffs on semiconductors coming
into the US.
Speaker 7 (09:32):
But there are huge.
Speaker 4 (09:33):
Carve outs that we understand being written here that if
you're investing a lot in America, you don't face that.
So that seems that TSMC and Samsung that are building
in America aren't affected. Is he going to allow these
big Asian chip giants to continue to build in America
and get these sorts of carve outs.
Speaker 9 (09:51):
I don't know what other alternative they really have.
Speaker 8 (09:54):
I mean, the US is in the government, and the
administration's kind of in a tough spot here. They need
to project, like, you know, a strategy of trying to
get you know, more domestic US semiconductor capacity. But if
you get too tough and put too high of a tariff,
that that really puts the US consumer and our strategic technology,
(10:19):
whether it's defense or AI, at a major disadvantage. And
the reason that is is because the US doesn't have
an alternative. It's not like, you know, we can just
shift to all this domestic capacity. It's going to take
a lot of time and money to basically get that.
And right now that's basically TSM and a lot of
Samsung and some of Intel. So I think that's why
(10:41):
they get the carve outs is to buy time and
then ultimately that time runs out, and then Trump's going
to say, well, if we have the capacity here and
Intel is, you know, on a better footing and track,
then we want you to push that those orders in
that money towards Intel and away from Ta Simon Samsung,
and that's where he could start to then use the
(11:02):
tariffs to basically push that business towards Intel.
Speaker 4 (11:07):
Really thoughtful and a great note. Jordan Klein of Mizuho,
Thanks for bringing you expertise.
Speaker 7 (11:17):
Shares of Applied Materials tumbling.
Speaker 4 (11:20):
Worst day since March twenty twenty after the company presented
a disappointing sales forecast for the fiscal fourth quarter said
it's seeing less demand from China more. Let's bring in
Bloomberg's Brodie Ford. What's so interesting is Land Research came
out a week or so ago and look pretty buoyant
about future growth and revenue. Very different for this chip
equipment company.
Speaker 10 (11:40):
You are pointing out the debate that is waging and
all the sales side reports in my inbox right now, right,
I mean on the call last night, the narrative from
the company was that China demand is worst and some
of our largest customer mergers that are holding off due
to kind of just general economic uncertainty, tariffs and all that.
Speaker 11 (11:59):
But there's also a head here.
Speaker 10 (12:00):
As you said, some of the peers have done relatively well.
So is applied losing share here? Or is this truly
just a macroeconomic it's hitting everybody the same way kind
of issue.
Speaker 3 (12:14):
They try to explain away those two categories of customer.
Right in China, loads of chip makers have gone through
a refresh of their equipment, but the larger customers they're
talking about is largely TSMC and Samsung.
Speaker 2 (12:27):
And this is a tariff's issue. What is it?
Speaker 12 (12:30):
Right?
Speaker 10 (12:30):
I think tariffs is the big word we heard, but
I think also, I mean, we have an administration right
now that's negotiating trade deals. I mean, we saw the
Intel news this morning. There's just a lot of economic
uncertainty right now, right, I mean, some of the data
coming out people are questioning. And so the narrative we
heard on the call, and I heard in a conversation
(12:51):
with the CEO is that companies are holding off purchases.
They're not sure exactly what the economic picture of it
is like in six months, and so why do you
want to make a multi billion dollar commitment right now?
How much to hit the brakes for a little while.
Speaker 4 (13:04):
And Brodie, we put this in the deeper context as
you just hinted at with Intel. This is at a
time where we want more manufacturing the United States, according
to the administration, and Apply Materials.
Speaker 7 (13:14):
Is part of that.
Speaker 4 (13:15):
They've got what eighty percent of the revenue.
Speaker 7 (13:17):
Coming from abroad.
Speaker 4 (13:17):
But is that going to shift more to America?
Speaker 10 (13:20):
That is the song they're singing, right, I mean they
say that we are involved with you know, Apple's initiatives
and Samsungs. The actual dollars committed at this point to
me don't look incredible, right. I mean, a lot of
companies are talking about multi billions invested in the US,
and Apply to talking about hundreds of millions, and so
(13:41):
I don't think the expectation is that revenue shift to
the US in a meaningful way right now. But it's
an interesting part of the narrative. I mean, how much
can the administration push the industry to, you know, reshore
more of this demanding capacity?
Speaker 3 (13:57):
Then, thanks Brady Ford, thank you very much. Meanwhile, President
Trump is en route to Alaska for a high stakes
meeting with Russian President Vladimir Putin.
Speaker 2 (14:06):
During the flight on air Force one.
Speaker 3 (14:08):
He addressed the state of tariffs on chip makers, saying
it could rise to as much as three hundred percent.
Speaker 2 (14:13):
Listen to this.
Speaker 12 (14:14):
They're all coming in because they want to beat the
tariffs because if they open here, they don't have to
pay tariffs. If they don't open here, they have to
make in some cases two hundred percent, three hundred percent.
I haven't even said some of the tariffs yet till
sent Semiconductors will be setting sometime next week week.
Speaker 3 (14:34):
Care for for more on the tariff implications on chips
and the broader technology sector. Martin Norton Empower Chief Investment Strategists. Actually,
of all the reporting out there, this is the President
speaking on the record saying up to three hundred percent
tariffs on chips coming into America. I haven't even said
the tariffs yet. This is the point policy keeps changing.
(14:56):
As a strategist, how do you interpret it?
Speaker 13 (15:00):
Well, I mean, I think there's a few things that
we have to look at.
Speaker 14 (15:03):
First.
Speaker 13 (15:03):
We have to look at the breadth of the tariffs
that we've seen and the way the market has reacted
as tariffs have become part of the daily conversation. At first,
you know, April second, this was something that the market
felt was a disaster.
Speaker 14 (15:17):
But as we've.
Speaker 13 (15:17):
Rolled forward, we've seen little effect on corporate earnings, we've seen.
Speaker 14 (15:21):
Little effect on economic data.
Speaker 13 (15:23):
And I think there's this kind of benign neglect of
tariffs as a concern for the market, which I think
embolden's President Trump to continue to push forward bigger and
bigger numbers when we're looking at triple digits. Of course,
when we're talking about tariffs, that's a pretty astonishing thing.
I really like how your last guest with Jordan really
(15:43):
kind of talked about the very long term emphasis here.
Building manufacturing here in the US is a long term thing.
Forcing companies or encouraging companies to buy US as a
long term thing, and I think these tariffs are part
of that game.
Speaker 3 (15:58):
So if the endgame is bring Chit manufacturing back to America,
you agree with Jordan that it will work or you disagree.
Speaker 13 (16:07):
Well, I think there has to be a long term
commitment on the part of the administration and the folks
in Washington to keep those tariffs in place. I think
that's in question whether that's something that we're going to
see over the period of several years, because that's what
it would take several years to bring manufacturing back to
the United States or to the United States in the
first place.
Speaker 14 (16:27):
So I think there's still.
Speaker 13 (16:29):
An open question as to how effective it will be
and how long term that commitment will be, and how.
Speaker 4 (16:35):
Long until you see it rewarding companies like an Applied Materials,
which right here right now is having its worst days.
It's March twenty twenty and rated all of its games
for the year Marta. How do you decide who are
the winners longer term in this environment?
Speaker 13 (16:48):
I think the winners is one of the bigger questions
that we're looking at, especially when you start to look
at it in the context of artificial intelligence. When we're
taking a look at corporate earnings long term, of course
we're concerned about the that deglobalization will have on those
corporate earnings. And yet when we look at the estimates
that artificial intelligence can add to corporate earnings to profit margins,
(17:09):
it more than offsets it. The question is who those
winners are, And what we've seen in past periods of
innovation is that the early winners are not necessarily the
long term the enduring winners. And there's also questions as
to how different industries respond. You know, first folks thought
with software is the next leg of this story, but
that doesn't necessarily need to be the case. If some
(17:30):
of these big tech companies can capture some of the
developments there, it's not necessarily going.
Speaker 14 (17:34):
To be the small cap companies that win.
Speaker 13 (17:36):
So when I'm looking at this and I'm thinking about
how do you play this, I think it's more of
a broad based question than it is trying to find
and pick those narrow winners.
Speaker 4 (17:45):
So you take tech thinking to other industry groups, that's right, Yes,
absolutely so.
Speaker 13 (17:52):
For example, if you're taking a look at where can
you apply AI? Where can you apply some of these narratives.
The areas that we've heard talked about regularly is healthcare
and applying artificial intelligence to research and development. That's a
long term play, and of course there's tons of headwinds
against healthcare, pharma and the like, and when we think
(18:13):
about those headwinds, those are opening up pretty attractive valuations
while there's also this positive long term narrative that's there.
So I do think that we can look at some
of these other areas, particularly those that are a bit cheaper.
There's not many of them. There's a few as areas
of long term beneficiaries of AI.
Speaker 2 (18:31):
Marta.
Speaker 3 (18:31):
It's funny for me, but it's been a week where
economic data has impacted technology markets, right, PPI and I
grew up in the Bloomberg school of why do we
care about the FED? Because higher rates discount the present
value of future cash flows. And I just wondered if
you'd react to that statement, please well listen.
Speaker 14 (18:49):
I mean, I do think when we think.
Speaker 13 (18:51):
About economic data and we think about technology, there are
these secular growth themes that can really push back against
any headwind that economic data poses for technology, And of
course there are other areas of the market that are
more sensitive.
Speaker 14 (19:05):
When I think about the economic.
Speaker 13 (19:07):
Data that we're seeing come through, all that comes out
is this idea of mixed signals, and people can kind
of project whatever view they want on the market and
find or on the economy and find evidence to support
that view. I think at this point what matters more
are the secular themes rather than some of these economic
data points that are trickling in.
Speaker 4 (19:27):
Briefly matter It's also been a week of record hizing
crypto IPOs.
Speaker 7 (19:31):
How many questions you get on that?
Speaker 14 (19:34):
Well, it does come up more and more.
Speaker 13 (19:36):
I think one of the things that people are looking
at when they see the record highs in crypto, or
when they're looking at IPOs, or in fact the kind
of resurgence of the mean theme is what does this
mean in terms of the speculative froth in the market.
I don't think we're at all time peaks there, but
there is this measure of complacency that's been baked in,
this kind of sense that nothing can go wrong, and
of course that's reflected in valuations. So I do think
(19:58):
when we're looking at those kind of signals, it's important
to remember that things are a bit priced for perfection
and we could see some volatility in the nearest term.
Speaker 4 (20:06):
Martin Norton, we so appreciate having you on today of Empower.
Speaker 7 (20:09):
Have great weekend.
Speaker 4 (20:16):
It's time now for talking tech and first up, Masuyoshi's
son has added eleven billion to his fortune in just
the first two weeks of August. That is, his AI
bets over at SoftBank sent shares to record highs.
Speaker 7 (20:27):
Look Sum's net worth naws dance more.
Speaker 4 (20:29):
Than thirty three billion dollars, making him the second richest
man in Japan, according to the Bloomberg Billionaires Index plus
Bill Ackman's Pershing Square Capital. Well, it's revealed that it
a mastered in nearly one point three billion dollar steak
in Amazon. The firm initially disclosed it had built a
stake during an analyst school in May. That's after the
stock tumbled more than thirty percent over AI and tariff concerns.
(20:50):
Look regulatory filing on Thursday show that Pershing had accumulated
more than five point eight.
Speaker 7 (20:54):
Million Amazon shares.
Speaker 4 (20:56):
And Jackie Bezos, mother of Jeff Bezos, has died at
the age of seventy eight. According to the Bezos Family
Foundation website, she passed away at a home in Miami
after a long battle with louis body dementia. Jackie Bezos
was an advocate for early childhood education.
Speaker 7 (21:12):
Alongside her husband.
Speaker 4 (21:13):
She was in fact the first to invest in Amazon
in nineteen ninety five.
Speaker 9 (21:16):
ED.
Speaker 2 (21:23):
Welcome back to Bloomberg Tech. I want to go back
to Intel.
Speaker 3 (21:26):
The reporting is that the US government's thinking about using
chipsec funds to take a stake in Intel. Caroline, believe
it or not. On the course of the week, this
stocks up almost twenty five percent. If it continues to
chop around and climb just a percentage point higher. It
will have its best five day gain, its best weekly
gain on record ever, just seven days after the President
(21:50):
said that its CEO should resign after ties with China.
Later in the program, we're going to do so much
more on Intel. But when you go into the data
in the Bloomberg terminal, you can always surprise your because
in Agrica over the course of the week, what an
astonishing stat that is.
Speaker 4 (22:05):
It is quite the stat six straight days against for Intel.
What a winning performance twenty five percent that you can
see it in.
Speaker 7 (22:12):
All its glory.
Speaker 4 (22:13):
Let's get into the world of generative AI now, though,
because we are joined by Brett Taylor ed whose extensive
Silicon Valley resume, who's Google metas Salesforce open Ai. His
startups Erra AI helps companies build agentic customer service tools.
You work with the likes of ram with clear among others. Brett,
and boy, is it competitive out there at the moment.
(22:35):
How are you seeing your customer facing GENDERAI products being taken.
Speaker 7 (22:40):
Up right now?
Speaker 5 (22:42):
Yeah, I've never quite been in a market like this,
and as you said, I've been in the Silicon Valley
for a long time. I've started three companies, one in
sort of the early days of the internet, you know,
one call it about you know, a decade ago, and
we have never seen this kind of customer interest. I've
never seen this kind of of revenue growth and customer momentum.
(23:02):
But as you said, a lot of competition too, you know.
I think if you look at what is the impact
of AI and society, there's probably two areas being impacted
most right now, software engineering and customer service. We're in
that latter category. We have the privilege to be the
leader survey it. As you said, traditional companies like ADT,
Home Security and direct TV, and the fastest growing companies
(23:23):
in Silicon Valley like Ramp. And it is such a
privilege and so much fun to be in the middle
of this right now.
Speaker 4 (23:28):
I'm not sure the competitors, particularly the older god of
SaaS some that you helped work with, like Salesforce, love
the enthusiasm way that you're shaking things up in terms
of pricing though, I mean outcome based pricing models.
Speaker 7 (23:39):
How are you seeing that really.
Speaker 4 (23:41):
Change the cadence of which others.
Speaker 7 (23:43):
Can sell and how they're selling.
Speaker 5 (23:45):
It's such a great question if you look at the
history of software. These technical shifts have also given rise
to changes in business models, so kind of famously, you know,
when Mark and Parker started Salesforce, the world went from
buying a petrol license to software, to software as a
service and subscribing to it. Now, our view is at Sierra,
(24:06):
these agents aren't just helping you be more productive, but
actually solving problems for you. And the best business model
is to actually pay for a job well done. So
at Sierra, we only charge our customers when it solves
the problem autonomously for that customer.
Speaker 11 (24:20):
We call it outcomes based pricing.
Speaker 5 (24:22):
And we think it's going to really disrupt the software
industry because if you think about it as a business,
what a great alignment of values with your partners. You
only pay us when we actually save you money and
solve the customer's problem delightfully. And I think it really
aligns the software industry with all of our partners, and
I think it's a really positive trend for the industry
as a whole.
Speaker 3 (24:43):
Right, you founded Sierra with Clay in twenty twenty three, Right,
and I think back to when you came on the
show in February twenty twenty four, it had grown so
quickly the company update us on what Sierra looks like today.
Speaker 5 (24:56):
Well, we have customers across a wide range of industries,
from some of the largest health insurance companies to banks
to some of the fastest growing companies in Silicon Valley,
like Ramp, which is we're also a proud customer of
They power all of our corporate credit cards. What's remarkable
is just the size of customers that have aligned with us.
So over twenty percent of our customers have over ten
(25:18):
billion in revenue, over half have over a billion in revenue.
These aren't just early adopters, right, These are some of
the most traditional financial services firms, healthcare firms that are
really saying, Hey, I don't want my customers to.
Speaker 11 (25:29):
Have to wait on hold or press two for service.
Speaker 5 (25:32):
Can we have a multi lingual, delightful AI agent just
pick up the phone and solve problems automatically. And what's
remarkable is just how well it works. You know, you
brought up RAMP at the beginning of the call. Their
AI agent is actually solving ninety percent of customer cases
completely autonomously. And you know that's obviously great for Ramp
(25:52):
as a business, but for me as a customer of Ramp.
It means I don't have to wait on hold ninety
percent of the time. It's completely transforming the industry and
it is so fun to be able to help brands
really in every industry transform their customer experience.
Speaker 3 (26:06):
Brett, I'd still like to learn more about Sierra. So
you talked about you haven't seen growth like this in
your career. Would you share with us an arr figure,
what Sierra's financials look like, number of team members, how
aggressively you're hiring.
Speaker 5 (26:22):
I won't share a rr numbers, sorry, but maybe when
we do, I'll come back on this show and you
can hear it first. But I'll tell you we have
hundreds of employees. We've opened offices in New York, Atlanta, London.
We're planning our expansion into Asia. We're the leader in
this space. We'll do hundreds of millions of phone calls
on our platform this year, hundreds of millions of digital chats.
(26:42):
We're the highest volume company in this space, and really
that scale benefits all of our customers. It means we
support more languages, it means that we've dealt with some
of the most complex regulatory landscapes from hip A compliance
to the compliance regimes that apply to the financial industry.
We're really trying to be the best and safest bet
(27:04):
for every company in the world who wants to transform
their customer experience who they are.
Speaker 4 (27:08):
And to do that, you're scaling, and I'm sure there's
a little bit of a fierce fight out there for
talent and that costs money before get into the talent
wars a little bit, Brett, what about having to raise
more money because you did back in twenty twenty four.
Speaker 7 (27:20):
Do you need any more? We've got a good runway.
Speaker 5 (27:23):
We have a good runway. But it's a great question,
just because I do think that we really want to
grow as quickly as possible. There's this great I attribute
to Albert Einstein. As quickly as possible, but no more quickly.
And you know right now our businesses work in I've
never seen product market that quite like this. And we're
always asking ourselves the question as a management team, how
(27:46):
fast can we grow? Because if you look around the world,
the application of technology is not limited to one industry,
is not limited to one country. How can we best
serve not just multinationals based here, but in Europe and
Asia as well? And so if raising more money will
enable us to achieve that end, we're absolutely open to it. Thankfully,
we have a really healthy business model and it's not
(28:08):
something we need to do, but absolutely something we're allays
open to considering because.
Speaker 4 (28:11):
In many ways, Look, you raised one hundred and seventy
five million last year led by Green Oaks Capital.
Speaker 7 (28:16):
I'm thinking like two hundred million.
Speaker 4 (28:18):
Dollars is now what Meta is willing to pay to
get one person. In terms of talent, Brett, Yeah, we
all chose the wrong profector here. You didn't, but Brett,
I mean, I'm no coder, but Brett, tell us a
little bit about trying to get that sort off the
talent do you need it?
Speaker 7 (28:33):
And how face is it?
Speaker 5 (28:35):
Well, first, you know, I do think there's a slight
difference between the really small handful of researchers building these
foundation models at the research labs and you know, Sierra,
we're an apply to I company, So you can think
of us not necessarily as the folks doing the R
and D to build these frontier models like Open Eye
GPT five, but really taking all of those models and
(28:58):
fine tuning them and applying them to a solution in
the marketplace, so you can really think of the market.
I think of it really in three areas. The companies
building these frontier models, open the eyes models are obviously
the leading and frontier models in the space. You have
companies building tools, So what are the tools you need
if you're applying AI in your business. These are companies
(29:18):
that can do data labeling and data transformation and data storage.
And then you have companies like Ours and Cursor and
Harvey that are taking all of that great technology and
making a push button solution so you can just solve
a problem without a lot of implementation time. We just
went live with an international retailer in fifteen markets in
six weeks and are solving eighty five percent of their
(29:41):
customer service cases automatically. That's what really an apply DA
company does is makes it easy to consume, easy to deploy.
So thankfully we're not competing in the market for some
of those I think widely publicized researchers. But as you said,
it's a competitive market, a competitive market for talent, as
it always is in the Valley.
Speaker 3 (30:00):
You know, Brett, Over the years, I got told a
lot of stories about you in meetings, like in the
Salesforce context. And you know, basically people say you're pretty
frighteningly effective when you talk to customers, but you're also
you know, you're a busy guy. You have a very
unusual jewel roll right as chairman of open Ai and
chairman of its board. That's an unusual gig. How do
(30:22):
you split the time?
Speaker 5 (30:25):
You know, I love to work, is the short answer.
So I work from the moment I get up to
the moment I go to sleep, and I love every
minute of it. And you know, some weeks I'll spend
more time at some two weeks last. It's really what
the organization demands. And you know, it is a lot
of work, but it is such a privilege just because well,
I'm very excited about what Siro is doing. To be
(30:46):
able to spend time with I think the greatest research
lab in the world developing, I think the most important
consumer product in the world in chat GPT is such
a privilege and it makes me a better leader. I
understand AI with more depth than ones. And then similarly,
hopefully my experience having scaled a lot of companies in
the past is helping Open Eye, is it? I think
(31:07):
it's scaling and faster than really any company in history,
and so it's so fun. I wouldn't have it any
other way. Sleep is for the week, right.
Speaker 3 (31:17):
The big question our audience has for you in the
open AYE context is how much you're working on this
relationship with Microsoft and how much you personally have focused
on the restructuring or the move to a new or
different corporate structure.
Speaker 5 (31:30):
Well, Microsoft is open Ey's most important partner and has
been for years, so it's a very important relationship. The
board's role is really specific. Open Eyes a not for profit.
Our fiduciary duties on the board are really related exclusively
to our mission, which is to ensure that our official
general intelligent intelligence benefits humanity. And so we're always thinking
(31:52):
how do we set up the organization over the long
term to ensure that we can achieve that goal. And
you know, one of the things that we've talked a
lot about is, you know, since the company was founded
as a small research lab, the level of capital expenditure
required for the infrastructure for AI, I think exceeds anyone's
expectations that they had a year ago, let alone ten
(32:13):
years ago, and so really thinking about how do we
ensure that we remain a mission driven not for profit,
but also set up our organization so we can raise
the capital we need to achieve that mission. So that's
what I think the media is appropriately called the restructuring.
It is something that we're working on. Nothing to announce
it this time, but I think it's one of the
most important things we work on as a board, because
your job as a board is to set the company
(32:35):
up for the future, and that's really how we think
about it.
Speaker 7 (32:37):
Do you think you'll get it done by the end
of this year, Brett?
Speaker 5 (32:41):
I can't really comment on timelines, and you know, we're
really just trying to work with all the stakeholders who
have an interest in it and most importantly focused on
the mission. But no update on the time frame.
Speaker 3 (32:54):
Redeye a CEO of Sierra and chairman of the board
for Open AI. Thank you very much for your time.
This is Bloomberg Tech and you're looking at a live
shot of the principal room. Check out the Bloomberg Tech podcast.
You can find it on the terminal so its online
on Apple, Spotify and on iHeart. This is Bloomberg. Okay,
(33:21):
all eyes are meta real quick. In the session, it's
made attempts to hit all time highs and at one
point go beyond two trillion dollars of market cap for
the first time. Where will we close We don't know,
but it's exciting and it's one to watch. And we're
also thinking a lot about Meta's AI app, which is
facing mounting pressure with users complaining of an underpersonalized and
(33:41):
inconsistent experience. The tech giant emitting this is quote just
the first and many steps, as the company will continue
to make updates over time. Joining us now is Bloomberg's
Natalie Lung. This is the post launch digest, tell us.
Speaker 2 (33:55):
What we need to know.
Speaker 15 (33:57):
Yeah, we have tested it for a few weeks and
asking it basic inquiries, asking it for personalized recommendations, and
overall we found the experience rather inconsistent and it felt
a little bit half baked. For example, I asked it
to give me recommendations and what to do over the
weekend here in New York City. For some reason, it
(34:17):
knew min zip code. I might have provided it to
an advertiser one time, but it wasn't able to personalize
it to that area. And the unique thing about it,
apart from Rivals, is that it has a discover feed
where you can see how others are prompting and interacting
with the chatbot, and they're like endless images.
Speaker 5 (34:36):
There, you can see.
Speaker 4 (34:38):
Endless images that perhaps aren't that relevant to you, and
sometimes the more edgy types of chatbots you might not
want to interface with, Natalie, what's so weird as well?
Is I interact with METAAI actually more within the WhatsApp
offering and maybe within the Instagram offering? Why is that
not taking my data that I'm feeding it and bringing
(34:58):
it over to Meta right now?
Speaker 15 (35:01):
All of those experiences are not connected, as you rightly
pointed out. It is on WhatsApp, it is on Messenger,
it is on Instagram, but they're not connected, which makes
it a little bit foreshot of some of the personalization
ambitions that Zuckerberg has.
Speaker 7 (35:18):
Almost Natalie Lang a real deep dive. Go read the analysis.
Speaker 4 (35:27):
Getting back to our top story, the White House is
set to consider using chips At funding to take a
stake in Intel, scording to sources from more Bloombergs. Ryan
Gould is here who helped break this story. It's been
very busy twenty four hours. Do we have any idea
how much equity they could take for this?
Speaker 2 (35:42):
Not yet, Caroline.
Speaker 16 (35:42):
We're still trying to find out exactly how much the
government is talking. I mean, just on the base of it.
If you think about the problems that are facing Intel
right now, you're probably looking to solve something as big
as Ohio to onshore manufacturing in the US. You're talking
tens of billions of dollars that the company needs. Now,
I'm not going to suggest that they got it is
going to go out and put that money in. We
don't know, and the government has not obviously commented on
(36:04):
this reporting yet, but I would say that you know
that the challenges facing Intel are vast, and I think
most investors and alis know that. I think, just at
the top of this, though, it's worth taking a step
back and thinking about what a difference a week makes.
If you think about Donald Trump calling for the resignation
of Liputen, the CEO, last Thursday, last Friday, I mean
(36:24):
a week later, we're now on the cusp of maybe
a potentially game changing deal, at least in the short
term for one of America's most beleagued companies.
Speaker 3 (36:34):
Bloombos Ryan Gould part of the reporting team, or an
astonishing week for Intel.
Speaker 2 (36:38):
Thank you.
Speaker 3 (36:38):
Let's get more on Intel and Washington's chip goals and
how this all fits in Ben hur in Creative Strategy CEO, Ben,
for loads of people, this isn't actually an issue of
money for Intel, It's an issue of technology and it's
an issue of no customers. How did you react to
Bloomberg's reporting in the last twenty four hours.
Speaker 17 (36:57):
Yeah, I mean, I think we've been looking at this
from some sort of a leading in this direction for
some time. I mean, obviously, when you know, Trump came
up and said what he said about lip butan we
felt that this was in light of wanting to do
or at least have a broader conversation that had not
had happened prior. If he's noted like Intel was not
involved in a lot of the you know, sort of
(37:19):
public displays of America first, even though everybody knows they're
America first. And obviously his comments right on earnings about
you know, they may not go forward to fourteen A
without help, I think was very telling. And I think
all of that led to this moment, which is, you know,
from a national security standpoint, and really anybody in insecurity
and knowing what's going on in chips in the US
(37:41):
should believe we want a US company to make leading
edge chips here in the United States, and that's Intel.
So we want to see some resolution, right as one
hundred percent clear. Like you said, they need customers and
we need to figure out how to get some form
of capital so they can keep going.
Speaker 3 (37:57):
Over the course of five days, Intel's up twenty seven percent.
If it closes at those levels, it will be the
biggest weekly gain on record on a closing basis, which, yeah,
is Boo Tan the man for this Ben Yeah.
Speaker 17 (38:09):
I mean I think his approach is fairly pragmatic. Right,
It's not just about build and invests. Build the right technology,
but do so in a capital way that makes sense.
I think that's really what the board wants, that's what
investors wants.
Speaker 5 (38:21):
You know.
Speaker 17 (38:21):
And I think really the strategy is, again, how much
money do they actually need. I do think the tens
of billions of dollars is right in terms of to
get to fourteen A on top of what Intel will
bring in customers. But the bottom line is right, they
can't do this on their own, that's what they're saying.
Whether it's customers or whether it's the government. You know,
there needs to be an infusion of capital that's not
just Intel, to make sure that foundry is secured for
(38:43):
the long haul.
Speaker 4 (38:44):
Ben there is this chicken nag situation because le Bhutan is saying,
I'm not going to build it and wait for them
to come. They've got to tell me that the demand
is there. Does in some way taking equity by the
US government incentivize others to get behind the government and
say will buy them. We'll them if indeed you do
innovate and get that fourteen A out there.
Speaker 17 (39:04):
I mean, I think it's got to be more than
just the government stake. I mean, I think what everybody's
been speculating is would that come along with some form
of a of a tariff or something that you know,
strongly incentivized companies like you know, Nvidia, Apple, A, md Qualcom,
et cetera to not you know, use TSMC, but then
use some capacity of Intel, not one hundred percent, but
(39:25):
some of it.
Speaker 11 (39:26):
So I think it would necessitate that.
Speaker 17 (39:27):
You know, again, I think we want Intel to win
on the merit of technology, which we think is very
good on paper, but they just need to get some
customer wins. And I think once that happens, the confidence,
you know, continues but again they're at a they're at
a need for capital, and so how that arises is
sort of the root of this situation.
Speaker 4 (39:45):
Ben, that's interesting that you say the tariff tactic because
we've heard on air Force one from President Trump today.
Speaker 7 (39:51):
Then maybe it goes fast two hundred.
Speaker 4 (39:52):
Three hundred percent tariffs on semiconductors. But then there's all
these carv oalves, particularly for companies investing in the US,
like TSMC likes, I'm sung Intel's biggest competitives.
Speaker 17 (40:03):
Yeah, And I think the difference though, is that Intel
is more at the leading edge, So TSMC is not
going to bring in. The Taiwanese government has been very
clear they're not going to allow them to bring the
leading edge. So call it two naanimeter, one nanometer and beyond.
Samsung's equally struggling to hit that number even though they're trying.
Intel's really the best bet. And more importantly, Intel is
(40:23):
an American company, And so that's why I say, like,
if this is some investment of peep private equity plus government,
it makes sense that they want to protect that investment,
so they will do what they need in terms of
terrorists or some other form of regulations that just encourage
customers to use Intel. But again, I still think it's
better if Intel just wins on technological merit, which we
(40:44):
think they have.
Speaker 11 (40:46):
But we need a bridge, we need a gap, and.
Speaker 17 (40:48):
That's kind of where everybodys struggling to figure out where
that comes from.
Speaker 3 (40:52):
Ben Intel will not comment on Bloomberg's reporting. The White
House hasn't said anything to confirm the reporting. But the
chart says, you assigned to this deal happening.
Speaker 11 (41:04):
Oh, it's a tough it's a good question.
Speaker 17 (41:05):
I mean, I think it really comes down to do
would they believe that they could structure this in the
way in a way that's fair, whether that's divesting of
shares right or paying that back like some of the
ways where you've seen them when they have to do,
you know, investments in companies, so.
Speaker 11 (41:23):
It's not just a constant holding.
Speaker 17 (41:24):
I think when anytime the government gets involved, it's very
very tricky. But again, right, they need customers. I'd like,
I know, this is an non answer, I'd say fifty
to fifty.
Speaker 7 (41:33):
It's okay, but you know, a phone a friend. Fifty
to fifty phone a friend.
Speaker 4 (41:37):
Benar creative strategies fantastic to get your opinion.
Speaker 7 (41:42):
Thank you very much.
Speaker 4 (41:43):
Indeed, that does it for this edition of Bloomboat Tech.
An extraordinary week around semiconductor Z.
Speaker 3 (41:48):
Yeah, like the rest of the session, keep an eye
on Intel if it closes that level best week on record.
Recap everything we discussed in the podcast. You know where
to find it on the Bloomberg terminal as well as
online on Apple fight In. iHeart from New York City
and London. I'm taking a little.
Speaker 2 (42:04):
Break for a while, but we'll be back. This is
Koomberg Tech.
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