February 25, 2025 • 43 mins
Bloomberg's Caroline Hyde and Jackie Davalos discuss the market anxiety building around chip export controls to China. And we’ll hear from the Cato Institute's Jennifer Huddleston about the impact of President Donald Trump’s tech policy on trade and anti-trust investigations. Plus, Josh Chapman, managing partner of Konvoy, explains how tensions between the US and China could impact the video game industry.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hide and Ed Ludlow.
Speaker 2 (00:34):
Live from New York Home. Caroline Hyde and.
Speaker 3 (00:37):
I'm Jackie Devalas in San Francisco. This is Bloomberg Technology
coming up.
Speaker 2 (00:41):
Anxiety builds with China chip controls weighing on semi stocks
all ahead of Nvidia's numbers tomorrow, plus Tesla sales in
Europe plummet forty five percent last month to a two
year low in the region, and Bitcoin it slides below
ninety thousand, its lowest level since mid November, as a
crypto selloff gathers steam. But first we check in on
these markets that identify the anxiety, whether it's around consumer
(01:03):
sentiment here in the United States, whether it's around chip
curves into China, technology access to China once again under
the focus. And that's that one hundred off by one
and a half percent. That is the longest losing streak
as well, four straight days that we've seen since the
beginning of this year. We're looking at Bitcoin under pressure,
down by more than seven percent. Is it the macro picture.
Is it concerns around a hack? Is it all just
(01:24):
dialing into the selling pressure that we see across one
is of course an asset risk asset of choice for
the show move over and have a look at the
individual movers that we want to cast a light on.
Because Tesla off by eight percent, it has lost a
third of its market capitalization since it's high back in December,
and we're looking at currently once again under pressure on
the sales side of the equation. We'll dig into it
in a moment. Biggest points drag on the Nastak swiftly
(01:46):
followed by Nvidia off by more than three percent ahead
of its numbers tomorrow. We worry about the limitations of
its chips into China once again, Trump extending the focus
of the Biden administration here and the Magnificent seven just
a tidle in a bow is off by two point
eight percent. We are now in correction territory. This total
return indexes off by more than ten percent from its highs.
(02:06):
We're going to dig into the key focus of the day,
that is the chip controls that's bringing Brnenbergs, Mike Shepard,
Mike just an extension of Biden's focus here, and once
again it is going to be impacting European technology players
and the key ones here in the US.
Speaker 4 (02:21):
Yeah, Cara, this is a rare moment where you see
the Trump administration picking up where their Biden administration predecessors
left off, and that is pressuring governments in Japan and
the Netherlands to get two signature companies, Tokyo Electron and ASML,
to stop servicing chip making equipment that they have sold
(02:42):
in China. Now this matters because those photo lithography machines
that make semiconductors are really finicky. They're sensitive. Think of
a Formula racing car.
Speaker 3 (02:52):
They need a.
Speaker 4 (02:52):
Lot of upkeep and regular upkeep to continue working at
that level. And if you cut that off, it under
what China and China's chip makers may be able to
do with those machines.
Speaker 3 (03:05):
Mike, what does this mean for Trump's approach to chip
policy towards China broadly? Are there any other signs that
we're seeing that might make it different from the approach
as Biden took.
Speaker 4 (03:16):
Well, Jackie, I'm glad you asked that, because this really
does signal a broader direction of travel from the Trump administration,
and that was one of the big questions coming in
as they took office. Might they actually pull back a
little bit on some of these restrictions as Trump tries
to negotiate something with trade. Remember he is someone who
tries to think of himself as a deal maker on everything,
(03:37):
and why not throw chips into the mix. But he
has also declared that artificial intelligence is an area where
the US must maintain dominance, and the way to keep
China at bay really is to deny a lot of
that technology. So we've talked about possible restrictions on Nvidia's
China's access to Nvidia chips used in a This is
(04:01):
after the deep Seek breakthrough. We're also looking at another
area that Trump may pick up where Biden left off,
and that is possible measures against Chinese chip makers SMLIC
and CXMT that are really critical to the domestic production
in that country. And then, finally, the Trump team is
also wage whether to further tighten those AI diffusion rules.
(04:23):
Remember that three tiered system that the Biden folks unveiled
just a week before the president left office. This is
a signal to the market and to China that the
Trump team really is trying to get tough and companies
will have to brace maybe for more, especially when you
consider that there are already ten percent tariffsu on Chinese
imports with more to come. We may hear from Jensen
(04:46):
Wang about this too. He's expressed a lot of concern
and misgivings about this direction of travel.
Speaker 2 (04:51):
What about hearing from China. We know that they're trying
to speed up their own independence. We hear of the
latest developments out of Huawei and their chips, for example.
Speaker 4 (04:58):
Mike, that's a great question, Carol, because we are seeing
Ali Baba investing Chinese going on the offense with rhetoric
of course decrying these kinds of measures from the Biden administration,
and now rumbling is about the same possibly coming from Trump.
We heard that when the ten percent tariffs on Chinese
(05:19):
imports were announced. They are also trying to invest heavily
in their area. We saw the heads of Deep Seek
and Ali Baba meet with Chinese President Xi Jianping just
a few weeks ago to talk about how to get
China tech back not only on the map, but really
in the vanguard of Chinese industry. And this is after
(05:40):
a few years of estrangement, and we're also seeing Ali Baba,
as I said, investing heavily in this area. But you
know a way to counter what we're seeing from the
likes of Microsoft and US based companies that are trying
to really dominate in this technology.
Speaker 2 (05:57):
Mike Shepard, thank you so much. Let's get the investment
analysis now. Angelo Cacafa is with us. He a senior
investment strategist, and Edward Jones. Angelo, we look at basically
the only mag seven company now in the green for
this year is Matter. All the rest are in the red.
Are you expecting this going into twenty twenty five.
Speaker 5 (06:17):
I think one of our themes has been that of
rotation and broadening, and that's playing out at the sectorial level,
investment style and also a regional geographic Many people probably
are surprised by the market's resilience. If you told the
investors six months ago that six of the seven Magnificent
names would be lagging the market down the group five
(06:37):
percent for the year, most people have thought the market
would be lower, which is not and I think that
speaks to the still supportive backdrop that we have.
Speaker 3 (06:47):
Angelou what does this tell us about how investors are
feeling or perhaps some of the reasoning behind it is
this because of the uncertainty that Trump has injected into
tech markets, more so as of way or our investors
growing more discerning about tech growth prospects.
Speaker 5 (07:01):
Yeah, the market has had to navigate a lot of news,
thinking about deep sick thinking about all the tariff announcements
and uncertainty and the last hatter than expected CPI print.
All that has been weighing on sentiment, and right now
we are navigating a growth scare. It's not the first,
it will not be the last. But at the same time,
(07:23):
looking at the last three years, it's been a pattern
that we do see some seasonality, negative seasonality in the
first quarter of the year. Part of that probably related
to weather, some snowstorms that are dragging down consumer spending,
but the broader trend remains that where corporate profits are accelerating,
so they don't have a need for layoffs to protect
(07:46):
profit margins, and we have a federal reserve that is
not looking to go back into tightening mode. So all
that to us remain supportive. But at the near term
we're going to experience probably a type of soft patch
for the economy in first world and I hate.
Speaker 2 (08:00):
To say this sort of healthy flush out or what
people like to suk about it, but many are thinking, look,
this is froth that needs to come out. There were
so called tourist investors that have come in and not
assessed really the geopolitical element of these names. Look and
videos traded lower than this this year. But are we
going to start seed deep baying do you think?
Speaker 6 (08:19):
Yeah?
Speaker 5 (08:19):
I think that's exactly right. We have seen some froth
and we are seeing some froth come out of the market.
And we all know that sentiment is a contrarian indicator.
So that sets up well for the second potentially half
of the year where for a long term investors standpoint,
these pullbacks can be opportunities to really deploy capital first
capital divers fire portfolios. We think that broadening in rotation
(08:42):
theme has legs to it. And for those that worried
about tariffs and the impact of policies, we have domestic
cyclical companies and sectors that can benefit from the pro
growth policies that are likely coming down the road. So far,
we're getting the vegetables before the cake. In the first
tip administry, we get the cake first with tax cats,
and then the vegetable, so we have to navigate through
(09:04):
this bumbierd path earlier in the year.
Speaker 2 (09:06):
But everyone ate the Tesla cake the minute that basically
Trump was announced as the winner in Elod's relationship. But
how idiosyncratic, how focused on individual names. You have to
get and actually read through what are fundamental changes and
the views on certain companies like European Sales testl which
will dig into later in the show.
Speaker 5 (09:24):
Yeah, I think you know, certainly the concentration is an
issue for investors and people that manage money. But at
the same time, we know that the four ninety three
earnings are accelerating and actually are the strongest in three years.
So there is a lot more beyond these seven names. Yes,
they are important, but they're becoming less important than the
we're in the past, and I think the versification is
(09:44):
going to be a key theme for investors to pay
attention to.
Speaker 3 (09:49):
San Angelo krakoffa senior investment Strategies at Edward Jones. Thanks
for joining us. Let's get a look at Tesla shares
are down after sales plummeted by nearly fifty percent across
Europe at the start of twenty twenty five. That drag
(10:10):
Tesla markets cap now below a trillion dollars. Bloomberg's Craig
Trudell joins us now for more. Craig, what's behind this
disconnect because the UK's EV sales actually grew by forty percent,
but you're seeing Tesla registrations fall.
Speaker 7 (10:25):
Yeah, they grew in the UK, they grew in Europe broadly.
I think there's a couple of things going on here.
Of course, there's a lot of questions about, you know,
how much of this is a sort of backlash against
Elon Musk and how much of it is you know,
something's going on specific to Tesla, And I think, you know,
it's probably a mix of both. I think we'll be
(10:46):
able to untangle that a bit more as the year
goes on. But we know that earlier this year the
company is changing over its factories as part of a
redesign of a model why that is a really important
vehicle for them, and so that's definitely coming out into
play here. But I think the fact that he inserted
himself in politics in in Germany and in the UK
(11:06):
so emphatically last month really raises a lot of questions.
Speaker 2 (11:10):
Has that been much data drawn from whether This is
a consumer reaction, knee jerk reaction to Elon Musk's own behavior,
because one month doesn't an entire trend make as you
point out, yeah.
Speaker 7 (11:22):
No, that's it's very fair, and I mean we we
don't unfortunately, have you know, sort of the equivalent of
exit polls at dealerships right where people tell us, you know,
well I bought this Renault or this Volkswagen because I
didn't like Elon Musk. But what we do know is that,
you know, some poles were taken in some of the
biggest ev markets in Europe in January and they did
not look very good for Elon Musk. And so you know,
(11:44):
for him to be increasingly unpopular in some of these places,
and you know, for him to take these sans stances
that you know are are unpopular, you know, whether it's
it's uh, you know, kind of taking these reporting far
right parties or taking this hardline stance against Ukraine, these
(12:05):
sorts of things, you know, potentially, you know, put the
Tesla brand at risk more so than even in the US.
Speaker 3 (12:13):
Craig, who's gaining from this? What Tesla rivals are benefiting
from from this lag?
Speaker 7 (12:20):
I think it's it's really honestly kind of diffuse in
terms of who's benefiting. It's it's pretty consistent that, you know,
other manufacturers are seeing increases in their EV sales and
that's probably no coincidence. We do know that, you know,
in Europe in twenty twenty five, everyone's going to have
to meet a tougher CO two regulations and so everyone
(12:41):
really has to sort of put the pedal to the
metal and sell more electric vehicles. That means more competition
for Tesla this year in Europe, and that's also likely
coming into play and going to be a sort of
lasting thing that Tesla's going to have to face the
rest of the year.
Speaker 2 (12:55):
All eyes on BYD in the UK, for example, Craig
Drudell is a great story. Meanwhile, Elo Musk SpaceX is
seeking to deploy Starling satellite Internet terminals to help upgrade
the IT networks that support the Federal Aviation Administration's National
Air Base System that's here in the US as all.
According to sources who say this latest effort really raises
questions about conflicts of interest for Musk's business empire. New
(13:19):
Meg's Allison Firstville is here with us for more. What
exactly is the FAA going to do with these Starling terminals, so.
Speaker 8 (13:26):
Right now they're really in a testing phase. We know
that they're starting to test them out in Atlantic City,
which is kind of the air traffic control lab, if
you will, where they do a lot of R and D.
There also testing them out in Alaska. And the FA
statement that came out last night confirming this reporting, they
essentially said, you know, we're looking to fix telecommunications connections
and remote areas to provide more reliable information such as
(13:49):
weather information, which has been a problem in places like Alaska.
At this point, we're still, you know, waiting to see
how expansive the use of starlink might get, but we
do know that, you know from talking to our sources
that Elon Musk has approved the shipment of four thousand
terminals in total to the FAA.
Speaker 9 (14:07):
So, you know, it seems like Morris to.
Speaker 3 (14:09):
Come, Allison, what does this mean for Verizon, who has
an existing contract with the agency?
Speaker 8 (14:16):
That's right, So Verizon has this existing two billion dollar
contract to provide all of these types of telecommunications services,
and you know, in kind of dueling statements last night,
Elon Musk said on social media platform x that you know,
the Verizon system isn't working. Verizon said, you know, the
enhancements that it is doing are critical to air safety.
(14:39):
So we're still waiting to see exactly what happens with
the Verizon contract. That's something that we're continuing to talk
to people about. And the folks that we talked to
already said they weren't sure exactly where that was going
to go.
Speaker 2 (14:51):
And there is indeed the statement that you don't put
out on X a little bit earlier reaction to your reporting.
The next steps are going to be about conflicts of
interest here. I'm sure that's something that everyone is considering.
Is it something that Verizon considers, the government considers, so.
Speaker 8 (15:08):
I mean, it's certainly something that lawmakers on Capitol Hill
are considering. We already saw when Transportation Secretary Sean Duffy
first announced that SpaceX would be involved in modernizing the
US aviation systems in air traffic control. You know, you
saw lawmakers like Senator Maria Cantwell, who's the top Democrat
on the Senate Commerce Committee, saying, you know, Elon mus
shouldn't be involved in this effort. He has a company
(15:30):
with SpaceX that's regulated by the FAA, and he has
had penalties proposed against him from that same agency. And
then you have others like Senator Tammy Duckworth, who have
you know, questioned, can we afford to move this quickly
like Elon Musk likes to do with some of his companies,
because this is something you really don't want to break.
Speaker 3 (15:49):
That's Bloomberg's Allison Versuspaile, Thanks so much for joining us.
Elon Musk is doubling down and said federal workers will
be given a second opportunity to respond to a government
wide email detailing what they did last week and threatened
to fire any employee who doesn't need as demands. But
the federal agency sent that email said that Monday. It's
(16:10):
up to agency leadership, not Musk. What happens to those
who ignore the message? Caroline coming up, Jackie super Micro.
We're keeping an eye on the stock as it's a
crucial day the AI server maker.
Speaker 2 (16:22):
Why the company is facing a deadline to file it's
already delayed financials. We are off twelve percent on the day.
This is Blue Meg Technology. The crypto sell off is
(16:47):
gaining traction, Bitcoin tumbling to the lowest level since November tenth,
that worst day since August. As we stand, the Trump
victory rally reversing under the pressure of industry setbacks and
of course tariff policy and macro perspective in Emily, Nicole,
is it macro? Is it idiosyncratic? Can we worried about
the hats example?
Speaker 3 (17:05):
I think it's a mix of everything.
Speaker 10 (17:07):
To be honest, with crypto, you can never rule out
the macro impact that's going on around it. It's definitely
still an asset that does move in tandem with traditional markets,
and so the pain that we're seeing in treasury is
the pain that we're seeing in stocks that is also
spilling into crypto. But with the market having overcome a
one point five billion dollar hack on Friday, you can't
ignore that either, and so we're definitely seeing a tandem
(17:29):
effect happening and Bitcoin is really suffering because of that.
Speaker 3 (17:34):
Nicole, Emily, I'm sorry. What catalyst are we waiting for here?
What are crypto markets looking for over the next couple
months that could turn the tides? Is it going to
be another Trump? Mean coin?
Speaker 2 (17:44):
There are a few things that might be on the horizon.
Speaker 10 (17:47):
So for example, in Solana, one of the smaller tokens,
a lot of people pay attention to these days. We
have a big unlocked coming next month about a one
point seven billion dollars worth in tokens that could hit
the market, So that's something that might weigh on price
and for bitcoin as well. You know, with Trump, every
day there's something new that's coming out of Washington.
Speaker 3 (18:06):
There could be.
Speaker 10 (18:06):
Signs of things coming on the possible US Strategic Reserve
for bitcoin that he floated last summer. There could be
things coming in terms of bills on stable coins. So
all of that will be weighing on sentiment, but none
of it is really big enough that you know, could
push it really back above that one hundred thousand dollar mark,
and that's what crypti traders really want to see at
the minute.
Speaker 2 (18:26):
No, we just saw eth that was indeed more the
focus of that by bit hack. There are issues that
you see globally, Javier Mille over in Argentina getting embroiled
in mean coin fiasco as well. This is a global
sentiment indicator. But how much are you seeing people pull
away from some of the more sordid sides of crypto
more broadly.
Speaker 10 (18:46):
Well, I mean crypto as a whole is an asset
cast that really does run that gammut. You know, you've
got bitcoin now being considered firmly a bit of an
institutional bet because of the debut of US spot ets
tied to it last January. It's definitely one that is
kind of ingratiated itself there, at least.
Speaker 9 (19:01):
On Wall Street.
Speaker 10 (19:03):
But then if we look at something like Solana. The
last year for that folk chain has been a lot
about pump un dump schemes, meme coins assets that like
the one supported by Malai can go to four billion
and then down to almost nothing in the same day.
So there's definitely a bit of a wait and see
it the minute as to how these tokens really kind
(19:23):
of go forward this year, whether or not institutions might
look more favorably on coins in future. A lot of
that will depend on how the regulatory landscape pans out.
Speaker 3 (19:32):
That's Bloomberg's eminente look, Nicole, thanks so much for joining us.
Super Micro is set to submit outstanding financial reports today
to remain listed on the Nasdaq. The stock, which recently
rallied is hinging on the company's ability to trade on
the exchange. Bloomberg's Brody Ford joins US now for more Brody,
Why are they taking this down to the wire. Has
the company said anything about its plans to actually meet
(19:55):
this deadline?
Speaker 11 (19:57):
They've said a couple of times, and backing up a bit,
I mean, super Micro's had a rough couple of months.
They weren't able to file some financials back in August.
Their auditor dropped them with some pretty colorful language, some
things you never want your audit or to say privately,
let alone publicly. But you know what, they picked up
a new auditor and they said, we're going to be
able to get it in time. We believe we'll be
(20:17):
able to do it. They were saying this as recently
as a week or two ago, and so the consensus
at least until today was that they were going to
be able to make it. The stock right now suggests
there's some anxiety creeping in, certainly, but we don't have
any reason to believe that, you know, their plans have
changed or they're not going to be able to make it.
Speaker 2 (20:37):
Yeah, the CEO but a week or so ago sounding
pretty confident. There are five by ratings on this stock.
There are two cells where are general fundamental analysis on
the company, even headed Brody Well.
Speaker 11 (20:49):
They are for sure in the AI story they're making money.
I mean, if you look at their revenue chart over time,
I think their revenue annually is going to be up
like you know, four times where it was a couple
of years ago. When you need to buy these Nvidia chips,
you need to buy them in a server, and super
Micro is done a really good job selling into the
major customers. The margins are pretty bad because chips are expensive,
(21:11):
and you know it's a competitive market, but they have
been a clear beneficiary. They have picked up a lot
of investor interest, including the retail side, and there's a
lot of you know, forums given a lot of theories
on the current situation, and so you know, the stock
movements we are seeing can be a bit unpredictable.
Speaker 2 (21:28):
I mean, look, a twelve percent decline is actually the
only worst sell off since January the twenty seventh. We're
used to this volatility. But how has the investor base changed.
Is it more largely retail now or is it predominant institution.
Speaker 11 (21:40):
I can't say the exact split, but certainly if I
write a story about super Micro, I'm getting a call
from a retail trader, right, I mean, that doesn't happen
if I write about Bellar HPE. So they are a
sizeable presence here and yeah, there will be a lot
of They are watched often as the kind of bell
Weather for a video because as if super Micro says, hey,
(22:02):
we'll be able to ship a lot more servers and
the second half of twenty five, like they said, people
understand that is okay, invading a supply gets better in
twenty twenty five. The two companies are pretty interestingly linked.
Speaker 2 (22:14):
Most Brodie Ford, thanks so much, Welcome back to bloomg Technology.
I'm Caroline hid in New.
Speaker 3 (22:26):
York and I'm Jackie Devalas and San Francisco.
Speaker 2 (22:29):
We've got to check in on these markets, Jackie, because
it is a turbulent day. The NASDAG will broadly under
pressure as we see consumer sentiment take a hit. From
a macro perspective, we're also worrying about the Magnificent seven
in particular, we are currently off more than ten percent
now in complete correction territory. When it comes to the
more mag seven index that we focus here on Bloomberg,
there are total return index under pressure from its peak
(22:50):
that we saw back in December. We're questioning valuations We're questioning,
of course, the run into Nvidia's numbers that come after
the Bell. We're questioning ultimately about some of the crackdown
on going into China and what that means for local players.
Move on and have a look at what we're seeing
under duress. Look, we've seen Alphabet off by more than
fourteen percent from the beginning of the year. You've also
seen other key names will Meta in the red, but
(23:11):
in video is now off by more than three percent.
It's of fifteen percent from its highs. And this is
on the back of worrying about valuations, about the curtailment
of geopolitics. But there is good news out there. They're
deepening their relationship with the likes of Cisco Networking player
here to make the rollout of AI easier more broadly, Jackie,
that's right.
Speaker 3 (23:30):
Now, let's dive into the AI race between the US
and China following the latest restrictions on chip sales from
the Trump administration. Let's bring in Jennifer Huddleston, Senior Tech
policy fellow at the Cato Institute. Jennifer, We've been talking
a lot about how the Trump administration is going about
AI policy, chip policy, but A key component of this
is also competition and the agency that oversees it, the
(23:52):
Federal Trade Commission. I think a lot of people were
expecting Lina Khan's departure to mean perhaps a friendlier FTC
towards tech deals. But what are you expecting in this administration?
Speaker 12 (24:04):
Well, thank you for having me today, And I think
when it comes to anti trust in this administration, it
is important to remember that many of the anti trust
cases against the leading tech companies actually began.
Speaker 9 (24:15):
In the prior Trump administration.
Speaker 12 (24:16):
And what we've seen so far, particularly in the tech space,
is that it seems like this administration is going to
continue an aggressive approach to anti trust, whether it was
recent statements from the FTC that they planned to continue
the merger guidelines that were passed under Chair CON's FTC,
or whether it's things like last week's requests for information
on tech censorship that brought up questions of competition and
(24:41):
content moderation, indicating that we could again see the Trump
administration FTC seeking to perhaps use anti trust enforcement as
a way to try and get changes it perceives to
content moderation, which could raise a lot of concerns both
for tech companies for online speech, as well as for
(25:02):
the overall approach to antitrust in general.
Speaker 3 (25:05):
We've seen some creative deals, specifically in the AI space,
with some of the big hyper scalers taking stakes and
smaller startups. Do you expect those to come under additional
scrutiny in this administration as well?
Speaker 12 (25:18):
The AI space is still really early in its infancy
and it's a very broad ecosystem. One of the reasons
that mergers are important is not only to large companies,
but to small players as well. Small players are going
to need a variety of exit strategies, particularly in the
AI space, and particularly when we look at the global
nature of this competition. For some small players, they may
(25:40):
be the next real innovative product that forever changes our market,
and they may be seeking to IPO and go public.
For others, they may be seeking to improve an existing
product or operate further down the stack and a merger
might make sense. And in some cases they may be
great innovators or serial entrepreneurs who just don't want to
take the time to full run a company. As a result,
(26:01):
we need to ensure that they have a variety of
exits strategies and that we don't wrongly demonize mergers just
because of beliefs in certain amounts of concentration rather than
looking at the actual impact they could have on consumers,
because in many cases mergers can benefit both small players
and consumers.
Speaker 2 (26:19):
I just want to go a bit broader here, Jennifer,
because we are in this context of US China and
what seems to be this competitive race, whether it's a
straw man or real. Ultimately, when you think about how
the administration is overseeing E merging technology, as I know
you focus on how are we seeing the US able
to propel itself forward versus China when we are also
(26:41):
seeing restrictions on sales of key technology into other countries.
Speaker 12 (26:45):
One of the ways we've heard a lot of this
discussion is in the approach to AI policy. The Trump
administration very early on revoked the Biden administration's AI Executive Order,
something that was seen as having a much more regulatory approach.
Speaker 9 (26:58):
You also recently saw Vice.
Speaker 12 (27:00):
President Vance really pushing back against the European approach to
AI that he felt would strongly impact American companies and
American leadership in AI. At the same time, while there
seems to be a lot of indications, particularly in the
AI space, that the Trump administration plans to.
Speaker 9 (27:16):
Take a very light touch approach.
Speaker 12 (27:19):
There also have been some indications that we could still
see regulation, particularly around issues as it might relate to
labor and again to the kind of impact that some
of these anti trust cases could have on the development
of AI technology, particularly by some of our larger leading
tech companies.
Speaker 2 (27:35):
Okay, the larger leading tech companies, Are they at the
moment getting enough transparency on the future direction of policy makings?
Speaker 3 (27:44):
Do you think?
Speaker 12 (27:44):
I think it's still early in the administration. We've certainly
seen a lot of statements already made, and so it
remains to be seen fully what the trajectory will be
when it comes to various issues around particularly AI policy.
As mentioned, the Biden executive Order was revoked, but we
haven't fully seen what the Trump administration might plan to
(28:06):
replace that with. On anti trust, there do seem to
be clear signals that it's unlikely to have a significant change,
particularly around.
Speaker 9 (28:14):
The cases that are already filed.
Speaker 12 (28:15):
What remains to be seen is kind of some of
the questions around We had to start to hear rumblings
around potential competition investigations in for example, the AI space,
and given some of the other comments, is that the
type of thing where we will see anti trust enforcement
really directed at kind of the concerns related to content moderation,
or at concerns related to quote unquote big tech companies
(28:39):
which could have significant impacts on the future of anti
trust policy as well as on consumers, or what we
see something that's much broader the way that we saw,
for example, in the Biden administration under Lena khns FTC.
Speaker 3 (28:53):
Jennifer, as you mentioned, you spent a lot of time
thinking about content moderation. Where do you see that going
in an administration that has really decried woke social media
and AI models.
Speaker 12 (29:04):
It will be interesting to see, particularly how the changes
from the prior Trump administration in the social media marketplace
might impact the positioning that we see towards content moderation.
Speaker 9 (29:14):
Elon Musk, of course has bought.
Speaker 12 (29:16):
X and made significant changes to content moderation policy there.
We've also recently seen Mark Zuckerberg saying that he's making
significant changes to Meta and Facebook's content moderation policy, and
of course President Trump himself now has True Social which
has a very different content moderation policy. We continue to
see a great amount of competition in the content moderation
(29:36):
policy space. However, we did recently see this request for
information from the FTC around tech censorship, which could raise
concerns that we could see the administration or the government
via the FTC seeking to intervene into the speech rights
of Americans and into the rights of private actors to
make decisions around the content that they host.
Speaker 2 (29:58):
Jennifer Steenwolshing. But take it out to the States for
a minute, because we had a key guest yesterday, Victoria
Espinancies over at the Business Software Alliance yesterday, We're be
talking about how important the states are at regulating AI
at the moment.
Speaker 12 (30:11):
What is there a disconnect that there certainly has been
a lot of state level activity around AI. Several hundreds
of bills have already been introduced or considered at a
state level, and this is something to certainly watch because
a state AI patchwork could impact the overall development of
this industry, particularly when we're looking at bills like we
saw last term in California or Colorado that could really
(30:35):
impact the development side.
Speaker 9 (30:37):
As well as any potential deployment.
Speaker 12 (30:39):
This is important not only for large players who may
be operating across state lines, but of course will certainly
impact small players and in their ability to even launch
their products in various states.
Speaker 2 (30:50):
Tennifa Huddleston. Great to have you from the Cato Institute. Now,
let's talk about AI more because Deep Seek has reopened
access to its core programming interface after a three week pause. Now,
the Chinese startup stopped allowing customers to top up credits
for use on its application due to capacity shortages. Team
Sek's AI chatbought reinvigorated the Chinese tech scene and stunned
Silicon Valley when it was revealed last month.
Speaker 3 (31:12):
Jackie Anthropic is nearing a deal to raise three point
five billion dollars at a sixty one point five billion
dollar valuation. It comes as the company releases a new
artificial intelligence model that allows users to decide the complexity
of the response that they want. Bloomberg Seth Figureman joins
us now for more on this, Seth, let's talk about
the fundraise first, who participated in the deal and how
(31:34):
does it stack up to some of the other players
that have raised in recent months.
Speaker 13 (31:37):
Yeah, I mean it's a smaller amount that we're seeing
open thee and reportedly XAYI go after open the I
is seeking you know, forty billion dollars of staggering some
this one is three point five billion order magnitudeless, but
still large by any other standard in tech history. Light
Speed Capital seems to be the one that's really leading
the way here as we understand that they kind of
introduced the idea of doing a funding round and now
(31:58):
it's oversubscribed. The most interesting one to me is that MGX,
the Middle East Abu Dhabi Fund is now also way
an investment here on MGX is kind of sprinkling its
money across the AI sector as we speak.
Speaker 2 (32:08):
So and when it comes to wanting to get in
on these names, many have worried about the commoditization of
these large language models more broadly set. But it's interesting
that here I TOP it's trying to set itself apart, trying,
for example, turn off and on the reasoning in Sonnet
three point seven.
Speaker 13 (32:25):
Yeah, it's a really novel hybrid approach. If we talked
a year ago, they're really worrying any of these reasoning models.
Now we're seeing Deep seek, Open AI, Anthropic XAI all
push in this direction. But the reality is for the
average consumer, You may not always need some advanced reasoning
engine to answer your question. You may just want to
ask for a quick recipe or synonym for a word.
And in that scenario, maybe you don't need the computer
(32:47):
or the system to take a long time to show
you every chin of thought step Degga takes along the way.
On the other hands, some people are trying to use
it for advanced coding, mathematical questions and the like, and
so I think for Anthropic that gives them a chance
to kind of control a little bit of experience, simplify it,
and perhaps also limit the amount of computing resources that
needs to devote to all the queries.
Speaker 3 (33:05):
On a whole. We're going to be hearing from Salesforce
later this week when they report results, and it's widely
seen as a gauge for how the market, for how
the company's really navigating agents. This is kind of the
next big thing. How is Nthropic going about it?
Speaker 13 (33:18):
It were really early here this idea of a computer
use program that could basically take your computer and start
clicking around the web on your behalf. But I don't
think we've seen it quite make a dent in the workspace.
It's being deployed gradually, but most people we speak with
I've not seen it fundamentally change their jobs. That's Open
Eyes moving in distrection, Salesforce, Microsoft, the whole slew other startups.
This is supposed to be the year of AI agents,
(33:38):
but it's early in that.
Speaker 2 (33:39):
Year, sefta human. Great to have you, Thanks so much.
Now coming up, we're going to dig into gaming. Josh
Chapman from Convoy joining us on the landscape and how
AI could change that industry to the subrume BG technology.
Speaker 3 (34:09):
Let's get to VC Spotlight. China just approved over one
hundred domestic video game titles this month, underscoring the country
support for the game industry after an earlier crackdown. Josh Chapman,
managing partner and co founder of Convoy, joined us now,
Josh Geopolitical tensions between the US and China play a.
Speaker 14 (34:27):
Huge role in big tech, but it's also kind of
veering its way into the gaming sector with Tencent, one
of China's largest vcs is also has staken some of
the largest games Fortnite, League of Legends and those makers.
Speaker 3 (34:42):
How are you seeing this play out in the gaming sector?
Speaker 6 (34:47):
Absolutely, and thanks for having me.
Speaker 15 (34:48):
This is certainly a very tense moment for not only
the world geopolitically, but certainly within gaming, giving that so
much of the Chinese companies have such large ownership state
into gaming companies around the world. A notable one is
that ten Cent owns Riot Games that has legal legends
right over one hundred million monthly active players and based
(35:09):
out of Los Angeles. If geopolitical tensions continue, you could
see things like the TikTok thing play out into the
gaming space, which would lead to divestments or you know,
a forced sale due to government tensions. So yes, it
has a huge impact on the future of gaming as
an industry and broadly globally.
Speaker 2 (35:31):
I mean, many were shocked to see Tencent placed on
a sort of watch list, a military watch list. So
how much do you think that we could see an
unfolding of what's happened with TikTok across the gaming space.
Speaker 15 (35:43):
So I think, you know, high level, we are very
excited that the United States is taking a firm stance
and against what is you know, a you know, categorically
a foreign adversary of the United States, which is the
Chinese Communist Party. I think when you see that, you
know what companies come under that WAT. Unfortunately, there are
lots of great people that work at ten cents, and
there's lots of great people that work at place like
(36:05):
Riode Games and other companies that will be subject to
whatever happens to you politically. So I think this is
absolutely going to impact the space. And I think to
your question, we're going to see the gaming industry kind
of rally around finding a solution to keep these games
going regardless of the ownership.
Speaker 6 (36:21):
And I think there are solutions in.
Speaker 15 (36:22):
The private markets but also the public markets to find
potential new homes for these assets if we get there right,
and I think there is a big if, but if
that plays out, that's probably where it's going to land.
Speaker 2 (36:34):
And much of this is in the context of the
feeling of a race in terms of AI and China
and US who's winning. It's interesting that we just saw
Microsoft really show the future of AI within a gaming
context last week with news AI tell us where we
land in terms of US use of AI in gaming
versus China, for example.
Speaker 15 (36:54):
So there's basically two ways that I would highlight how
AI is impacting gaming. First and foremost, it's impacting the
creating content by making the content game developers more efficient.
Now it's not necessarily making them eight times more efficient,
but we're seeing anywhere from twenty to fifty percent improvement
on costs at the content creation level. The second way
(37:15):
that you're seeing this even in the public markets is
groups like app love and or even Unity that are
using AI to improve their ad monetization strategies, and this
has led to huge gains for both stocks app Love
and most notably even though just recently they kind of
gave back a lot of those gains in the past week,
but Unity just popped because they're also using AI.
Speaker 6 (37:35):
To improve their own ad monetization platform.
Speaker 15 (37:37):
So I think you're seeing this absolutely play out in gaming,
and it's leading to a lot of enterprise value creation
for enterprises in the private markets and in the public markets.
Speaker 3 (37:47):
Josh, last year we saw Roadblocks attract a lot of
scrutiny over child safety on its platform. Do you think
this scrutiny is going to continue into this year because
it seems like one of the spots where it really
gained by part is in support.
Speaker 15 (38:02):
Yes, So the scrutiny around child safety within gaming is
absolutely going to be a trend. This is something that
we at Convoy are actively investing around is child safety
of whether it's the experiences that they're having, whether it's
the data around them, whether it's what you can advertise
to them or not advertise to them.
Speaker 6 (38:19):
And so this is a huge topic that's.
Speaker 15 (38:21):
Affecting families worldwide and also in our country here in
the United States, and so absolutely this is going to
remain a huge issue. And then most recently, just a
couple of weeks ago, the SEC opened up investigation into Roadblocks,
but this under Exemption seven A, which means that they
don't have to disclose what they are investigating exactly. To
(38:42):
make a delineation here, though, the FTC went after Fortnite
and gave them a huge fine.
Speaker 6 (38:47):
I believe it was about four hundred million dollars.
Speaker 15 (38:49):
Around the misuse of child data, and Fortnite had to
pay that huge fine.
Speaker 6 (38:53):
This investigation, though, is not from the FTC.
Speaker 15 (38:56):
It's actually from the SEC, and so this has something
to do with reporting requirements. Back in the fall, we
as a firm put out a piece talking about how
we believe that Roadblocks may not be aging up exactly
as they know are reporting and we think.
Speaker 6 (39:11):
That that's not that the fact that they.
Speaker 15 (39:13):
Are misreporting is the fact that users are likely misrepresenting
how old they are.
Speaker 6 (39:18):
So an eight year old is saying that they're over
the age of eighteen.
Speaker 15 (39:22):
So the data is accurate, but the input of that
data is inaccurate. And this is something we challenged back
in the fall, and I think that's probably what's going
to play out this year.
Speaker 3 (39:31):
It's an important issue. We'll be following. Josh Chapman, Managing
partner of Convoy, Thanks for joining us, Caroline.
Speaker 2 (39:38):
Time now for talking to Jackie. First out, Quantum Machines
raised one hundred and seventy million dollars in a Series
C round following advances in the technology, and that's of
course by Google and Microsoft that have sparked renewed interest
in quantum computing. The raise, led by PSD Equity brings
it is really start ups. Total funding to two hundred
and eighty million to date plus twenty three and meters.
CEO and Rijiki has raised her take private offers for
(40:00):
the Genetic testing company. Now Jiski has secured backing from
private equity firm New Mountain Capital. Together they are offering
two way five three dollars a share according to a
letter to a special committee A twenty three and me's board,
and according to reports telecom provider Altes France, it's close
to finalizing a deal to cut the company's debt by
nine billion dollars in exchange, creditors will get a non
(40:20):
controlling equity state in governance changes. Remember this is billionaire
Patrick Draghi, who retains control. Apple currently holding its annual
meeting of shareholders as we speak, which includes a vote
on shareholders proposal to abolish its corporate diversity, Equity and
Inclusion program. The board currently recommending, of course that it
votes against the proposal, and indeed they did a vote
(40:42):
against that proposal. Mark German is here. This is very
much a live event, and we just had the latest
indeed that investors have rejected the outsider shareholder proposal. Where
else do we think this day will lead?
Speaker 16 (40:53):
Yeah, so Apple got a clean sweep, at least some
preliminary talities.
Speaker 9 (40:57):
Right, So the entire boardy people.
Speaker 16 (40:58):
Including Tim Cook elected, They ratified Ernst and Young as
their outside accounting firm. They approved executive pay right twenty
twenty four pay for Tim Cook and the other named officers.
Rejected an outside proposal on artificial intelligence policies. They rejected
an outside proposal that asked Apple to seese its DEI efforts.
(41:20):
They rejected an outside proposal related to CESAM or child
sex abuse material efforts at Apple, and they rejected another
proposal related to charitable giving. So that's a lot clean sweep.
Apple got what it wanted across the board, both its
internal proposals and its external proposals from shareholders. The AI
one and the DEI ones are obviously the hottest topics
(41:42):
right now. The AI one was related to what open
ai is doing with consumer data. Some shareholders were concerned
about Apple's partnership with open ai. Apple's response was to
reject that given that open AI's integration is separate from
their core on device LMS Apple Intelligence, and that Apple
already publishes its privacy policies related to that, so that
(42:03):
is sort of a moot issue DEI. It's interesting projected,
but Tim Cook said, as the legal landscape continues to evolve,
Apple may need to make changes in the future, but
they're still going to offer employees a collaborative environment.
Speaker 3 (42:16):
Mark, how what do we know about how Apple has
handled these sorts of DEI issues? In the past, we
saw discent come from companies like Google who had employees
that were disputing certain contracts that were taking in defense.
Have we ever seen something similar play out with Apple
thirty minut seconds.
Speaker 16 (42:33):
Yeah, at a large scale, we have not seen descent
at Apple related to DEI. I mean, Apple has a
very inclusive culture. I don't get the sense that anything
is going to happen at Apple related to its DEI
efforts unless there is some sort of legal mandate to
do so.
Speaker 2 (42:49):
Mark German, with the very latest out of the shareholder meeting,
we so appreciate it.
Speaker 10 (42:54):
Now.
Speaker 2 (42:55):
That does it for this edition of but Like Technology,
Do not forget to check out our podcast. Do you
find it on the terminal, online on Apple, Spotify, and
iHeart from New York and San Francisco. This is Bloomberg Technology.
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hide and Ed Ludlow.
Speaker 2 (00:34):
Live from New York Home. Caroline Hyde and.
Speaker 3 (00:37):
I'm Jackie Devalas in San Francisco. This is Bloomberg Technology
coming up.
Speaker 2 (00:41):
Anxiety builds with China chip controls weighing on semi stocks
all ahead of Nvidia's numbers tomorrow, plus Tesla sales in
Europe plummet forty five percent last month to a two
year low in the region, and Bitcoin it slides below
ninety thousand, its lowest level since mid November, as a
crypto selloff gathers steam. But first we check in on
these markets that identify the anxiety, whether it's around consumer
(01:03):
sentiment here in the United States, whether it's around chip
curves into China, technology access to China once again under
the focus. And that's that one hundred off by one
and a half percent. That is the longest losing streak
as well, four straight days that we've seen since the
beginning of this year. We're looking at Bitcoin under pressure,
down by more than seven percent. Is it the macro picture.
Is it concerns around a hack? Is it all just
(01:24):
dialing into the selling pressure that we see across one
is of course an asset risk asset of choice for
the show move over and have a look at the
individual movers that we want to cast a light on.
Because Tesla off by eight percent, it has lost a
third of its market capitalization since it's high back in December,
and we're looking at currently once again under pressure on
the sales side of the equation. We'll dig into it
in a moment. Biggest points drag on the Nastak swiftly
(01:46):
followed by Nvidia off by more than three percent ahead
of its numbers tomorrow. We worry about the limitations of
its chips into China once again, Trump extending the focus
of the Biden administration here and the Magnificent seven just
a tidle in a bow is off by two point
eight percent. We are now in correction territory. This total
return indexes off by more than ten percent from its highs.
(02:06):
We're going to dig into the key focus of the day,
that is the chip controls that's bringing Brnenbergs, Mike Shepard,
Mike just an extension of Biden's focus here, and once
again it is going to be impacting European technology players
and the key ones here in the US.
Speaker 4 (02:21):
Yeah, Cara, this is a rare moment where you see
the Trump administration picking up where their Biden administration predecessors
left off, and that is pressuring governments in Japan and
the Netherlands to get two signature companies, Tokyo Electron and ASML,
to stop servicing chip making equipment that they have sold
(02:42):
in China. Now this matters because those photo lithography machines
that make semiconductors are really finicky. They're sensitive. Think of
a Formula racing car.
Speaker 3 (02:52):
They need a.
Speaker 4 (02:52):
Lot of upkeep and regular upkeep to continue working at
that level. And if you cut that off, it under
what China and China's chip makers may be able to
do with those machines.
Speaker 3 (03:05):
Mike, what does this mean for Trump's approach to chip
policy towards China broadly? Are there any other signs that
we're seeing that might make it different from the approach
as Biden took.
Speaker 4 (03:16):
Well, Jackie, I'm glad you asked that, because this really
does signal a broader direction of travel from the Trump administration,
and that was one of the big questions coming in
as they took office. Might they actually pull back a
little bit on some of these restrictions as Trump tries
to negotiate something with trade. Remember he is someone who
tries to think of himself as a deal maker on everything,
(03:37):
and why not throw chips into the mix. But he
has also declared that artificial intelligence is an area where
the US must maintain dominance, and the way to keep
China at bay really is to deny a lot of
that technology. So we've talked about possible restrictions on Nvidia's
China's access to Nvidia chips used in a This is
(04:01):
after the deep Seek breakthrough. We're also looking at another
area that Trump may pick up where Biden left off,
and that is possible measures against Chinese chip makers SMLIC
and CXMT that are really critical to the domestic production
in that country. And then, finally, the Trump team is
also wage whether to further tighten those AI diffusion rules.
(04:23):
Remember that three tiered system that the Biden folks unveiled
just a week before the president left office. This is
a signal to the market and to China that the
Trump team really is trying to get tough and companies
will have to brace maybe for more, especially when you
consider that there are already ten percent tariffsu on Chinese
imports with more to come. We may hear from Jensen
(04:46):
Wang about this too. He's expressed a lot of concern
and misgivings about this direction of travel.
Speaker 2 (04:51):
What about hearing from China. We know that they're trying
to speed up their own independence. We hear of the
latest developments out of Huawei and their chips, for example.
Speaker 4 (04:58):
Mike, that's a great question, Carol, because we are seeing
Ali Baba investing Chinese going on the offense with rhetoric
of course decrying these kinds of measures from the Biden administration,
and now rumbling is about the same possibly coming from Trump.
We heard that when the ten percent tariffs on Chinese
(05:19):
imports were announced. They are also trying to invest heavily
in their area. We saw the heads of Deep Seek
and Ali Baba meet with Chinese President Xi Jianping just
a few weeks ago to talk about how to get
China tech back not only on the map, but really
in the vanguard of Chinese industry. And this is after
(05:40):
a few years of estrangement, and we're also seeing Ali Baba,
as I said, investing heavily in this area. But you
know a way to counter what we're seeing from the
likes of Microsoft and US based companies that are trying
to really dominate in this technology.
Speaker 2 (05:57):
Mike Shepard, thank you so much. Let's get the investment
analysis now. Angelo Cacafa is with us. He a senior
investment strategist, and Edward Jones. Angelo, we look at basically
the only mag seven company now in the green for
this year is Matter. All the rest are in the red.
Are you expecting this going into twenty twenty five.
Speaker 5 (06:17):
I think one of our themes has been that of
rotation and broadening, and that's playing out at the sectorial level,
investment style and also a regional geographic Many people probably
are surprised by the market's resilience. If you told the
investors six months ago that six of the seven Magnificent
names would be lagging the market down the group five
(06:37):
percent for the year, most people have thought the market
would be lower, which is not and I think that
speaks to the still supportive backdrop that we have.
Speaker 3 (06:47):
Angelou what does this tell us about how investors are
feeling or perhaps some of the reasoning behind it is
this because of the uncertainty that Trump has injected into
tech markets, more so as of way or our investors
growing more discerning about tech growth prospects.
Speaker 5 (07:01):
Yeah, the market has had to navigate a lot of news,
thinking about deep sick thinking about all the tariff announcements
and uncertainty and the last hatter than expected CPI print.
All that has been weighing on sentiment, and right now
we are navigating a growth scare. It's not the first,
it will not be the last. But at the same time,
(07:23):
looking at the last three years, it's been a pattern
that we do see some seasonality, negative seasonality in the
first quarter of the year. Part of that probably related
to weather, some snowstorms that are dragging down consumer spending,
but the broader trend remains that where corporate profits are accelerating,
so they don't have a need for layoffs to protect
(07:46):
profit margins, and we have a federal reserve that is
not looking to go back into tightening mode. So all
that to us remain supportive. But at the near term
we're going to experience probably a type of soft patch
for the economy in first world and I hate.
Speaker 2 (08:00):
To say this sort of healthy flush out or what
people like to suk about it, but many are thinking, look,
this is froth that needs to come out. There were
so called tourist investors that have come in and not
assessed really the geopolitical element of these names. Look and
videos traded lower than this this year. But are we
going to start seed deep baying do you think?
Speaker 6 (08:19):
Yeah?
Speaker 5 (08:19):
I think that's exactly right. We have seen some froth
and we are seeing some froth come out of the market.
And we all know that sentiment is a contrarian indicator.
So that sets up well for the second potentially half
of the year where for a long term investors standpoint,
these pullbacks can be opportunities to really deploy capital first
capital divers fire portfolios. We think that broadening in rotation
(08:42):
theme has legs to it. And for those that worried
about tariffs and the impact of policies, we have domestic
cyclical companies and sectors that can benefit from the pro
growth policies that are likely coming down the road. So far,
we're getting the vegetables before the cake. In the first
tip administry, we get the cake first with tax cats,
and then the vegetable, so we have to navigate through
(09:04):
this bumbierd path earlier in the year.
Speaker 2 (09:06):
But everyone ate the Tesla cake the minute that basically
Trump was announced as the winner in Elod's relationship. But
how idiosyncratic, how focused on individual names. You have to
get and actually read through what are fundamental changes and
the views on certain companies like European Sales testl which
will dig into later in the show.
Speaker 5 (09:24):
Yeah, I think you know, certainly the concentration is an
issue for investors and people that manage money. But at
the same time, we know that the four ninety three
earnings are accelerating and actually are the strongest in three years.
So there is a lot more beyond these seven names. Yes,
they are important, but they're becoming less important than the
we're in the past, and I think the versification is
(09:44):
going to be a key theme for investors to pay
attention to.
Speaker 3 (09:49):
San Angelo krakoffa senior investment Strategies at Edward Jones. Thanks
for joining us. Let's get a look at Tesla shares
are down after sales plummeted by nearly fifty percent across
Europe at the start of twenty twenty five. That drag
(10:10):
Tesla markets cap now below a trillion dollars. Bloomberg's Craig
Trudell joins us now for more. Craig, what's behind this
disconnect because the UK's EV sales actually grew by forty percent,
but you're seeing Tesla registrations fall.
Speaker 7 (10:25):
Yeah, they grew in the UK, they grew in Europe broadly.
I think there's a couple of things going on here.
Of course, there's a lot of questions about, you know,
how much of this is a sort of backlash against
Elon Musk and how much of it is you know,
something's going on specific to Tesla, And I think, you know,
it's probably a mix of both. I think we'll be
(10:46):
able to untangle that a bit more as the year
goes on. But we know that earlier this year the
company is changing over its factories as part of a
redesign of a model why that is a really important
vehicle for them, and so that's definitely coming out into
play here. But I think the fact that he inserted
himself in politics in in Germany and in the UK
(11:06):
so emphatically last month really raises a lot of questions.
Speaker 2 (11:10):
Has that been much data drawn from whether This is
a consumer reaction, knee jerk reaction to Elon Musk's own behavior,
because one month doesn't an entire trend make as you
point out, yeah.
Speaker 7 (11:22):
No, that's it's very fair, and I mean we we
don't unfortunately, have you know, sort of the equivalent of
exit polls at dealerships right where people tell us, you know,
well I bought this Renault or this Volkswagen because I
didn't like Elon Musk. But what we do know is that,
you know, some poles were taken in some of the
biggest ev markets in Europe in January and they did
not look very good for Elon Musk. And so you know,
(11:44):
for him to be increasingly unpopular in some of these places,
and you know, for him to take these sans stances
that you know are are unpopular, you know, whether it's
it's uh, you know, kind of taking these reporting far
right parties or taking this hardline stance against Ukraine, these
(12:05):
sorts of things, you know, potentially, you know, put the
Tesla brand at risk more so than even in the US.
Speaker 3 (12:13):
Craig, who's gaining from this? What Tesla rivals are benefiting
from from this lag?
Speaker 7 (12:20):
I think it's it's really honestly kind of diffuse in
terms of who's benefiting. It's it's pretty consistent that, you know,
other manufacturers are seeing increases in their EV sales and
that's probably no coincidence. We do know that, you know,
in Europe in twenty twenty five, everyone's going to have
to meet a tougher CO two regulations and so everyone
(12:41):
really has to sort of put the pedal to the
metal and sell more electric vehicles. That means more competition
for Tesla this year in Europe, and that's also likely
coming into play and going to be a sort of
lasting thing that Tesla's going to have to face the
rest of the year.
Speaker 2 (12:55):
All eyes on BYD in the UK, for example, Craig
Drudell is a great story. Meanwhile, Elo Musk SpaceX is
seeking to deploy Starling satellite Internet terminals to help upgrade
the IT networks that support the Federal Aviation Administration's National
Air Base System that's here in the US as all.
According to sources who say this latest effort really raises
questions about conflicts of interest for Musk's business empire. New
(13:19):
Meg's Allison Firstville is here with us for more. What
exactly is the FAA going to do with these Starling terminals, so.
Speaker 8 (13:26):
Right now they're really in a testing phase. We know
that they're starting to test them out in Atlantic City,
which is kind of the air traffic control lab, if
you will, where they do a lot of R and D.
There also testing them out in Alaska. And the FA
statement that came out last night confirming this reporting, they
essentially said, you know, we're looking to fix telecommunications connections
and remote areas to provide more reliable information such as
(13:49):
weather information, which has been a problem in places like Alaska.
At this point, we're still, you know, waiting to see
how expansive the use of starlink might get, but we
do know that, you know from talking to our sources
that Elon Musk has approved the shipment of four thousand
terminals in total to the FAA.
Speaker 9 (14:07):
So, you know, it seems like Morris to.
Speaker 3 (14:09):
Come, Allison, what does this mean for Verizon, who has
an existing contract with the agency?
Speaker 8 (14:16):
That's right, So Verizon has this existing two billion dollar
contract to provide all of these types of telecommunications services,
and you know, in kind of dueling statements last night,
Elon Musk said on social media platform x that you know,
the Verizon system isn't working. Verizon said, you know, the
enhancements that it is doing are critical to air safety.
(14:39):
So we're still waiting to see exactly what happens with
the Verizon contract. That's something that we're continuing to talk
to people about. And the folks that we talked to
already said they weren't sure exactly where that was going
to go.
Speaker 2 (14:51):
And there is indeed the statement that you don't put
out on X a little bit earlier reaction to your reporting.
The next steps are going to be about conflicts of
interest here. I'm sure that's something that everyone is considering.
Is it something that Verizon considers, the government considers, so.
Speaker 8 (15:08):
I mean, it's certainly something that lawmakers on Capitol Hill
are considering. We already saw when Transportation Secretary Sean Duffy
first announced that SpaceX would be involved in modernizing the
US aviation systems in air traffic control. You know, you
saw lawmakers like Senator Maria Cantwell, who's the top Democrat
on the Senate Commerce Committee, saying, you know, Elon mus
shouldn't be involved in this effort. He has a company
(15:30):
with SpaceX that's regulated by the FAA, and he has
had penalties proposed against him from that same agency. And
then you have others like Senator Tammy Duckworth, who have
you know, questioned, can we afford to move this quickly
like Elon Musk likes to do with some of his companies,
because this is something you really don't want to break.
Speaker 3 (15:49):
That's Bloomberg's Allison Versuspaile, Thanks so much for joining us.
Elon Musk is doubling down and said federal workers will
be given a second opportunity to respond to a government
wide email detailing what they did last week and threatened
to fire any employee who doesn't need as demands. But
the federal agency sent that email said that Monday. It's
(16:10):
up to agency leadership, not Musk. What happens to those
who ignore the message? Caroline coming up, Jackie super Micro.
We're keeping an eye on the stock as it's a
crucial day the AI server maker.
Speaker 2 (16:22):
Why the company is facing a deadline to file it's
already delayed financials. We are off twelve percent on the day.
This is Blue Meg Technology. The crypto sell off is
(16:47):
gaining traction, Bitcoin tumbling to the lowest level since November tenth,
that worst day since August. As we stand, the Trump
victory rally reversing under the pressure of industry setbacks and
of course tariff policy and macro perspective in Emily, Nicole,
is it macro? Is it idiosyncratic? Can we worried about
the hats example?
Speaker 3 (17:05):
I think it's a mix of everything.
Speaker 10 (17:07):
To be honest, with crypto, you can never rule out
the macro impact that's going on around it. It's definitely
still an asset that does move in tandem with traditional markets,
and so the pain that we're seeing in treasury is
the pain that we're seeing in stocks that is also
spilling into crypto. But with the market having overcome a
one point five billion dollar hack on Friday, you can't
ignore that either, and so we're definitely seeing a tandem
(17:29):
effect happening and Bitcoin is really suffering because of that.
Speaker 3 (17:34):
Nicole, Emily, I'm sorry. What catalyst are we waiting for here?
What are crypto markets looking for over the next couple
months that could turn the tides? Is it going to
be another Trump? Mean coin?
Speaker 2 (17:44):
There are a few things that might be on the horizon.
Speaker 10 (17:47):
So for example, in Solana, one of the smaller tokens,
a lot of people pay attention to these days. We
have a big unlocked coming next month about a one
point seven billion dollars worth in tokens that could hit
the market, So that's something that might weigh on price
and for bitcoin as well. You know, with Trump, every
day there's something new that's coming out of Washington.
Speaker 3 (18:06):
There could be.
Speaker 10 (18:06):
Signs of things coming on the possible US Strategic Reserve
for bitcoin that he floated last summer. There could be
things coming in terms of bills on stable coins. So
all of that will be weighing on sentiment, but none
of it is really big enough that you know, could
push it really back above that one hundred thousand dollar mark,
and that's what crypti traders really want to see at
the minute.
Speaker 2 (18:26):
No, we just saw eth that was indeed more the
focus of that by bit hack. There are issues that
you see globally, Javier Mille over in Argentina getting embroiled
in mean coin fiasco as well. This is a global
sentiment indicator. But how much are you seeing people pull
away from some of the more sordid sides of crypto
more broadly.
Speaker 10 (18:46):
Well, I mean crypto as a whole is an asset
cast that really does run that gammut. You know, you've
got bitcoin now being considered firmly a bit of an
institutional bet because of the debut of US spot ets
tied to it last January. It's definitely one that is
kind of ingratiated itself there, at least.
Speaker 9 (19:01):
On Wall Street.
Speaker 10 (19:03):
But then if we look at something like Solana. The
last year for that folk chain has been a lot
about pump un dump schemes, meme coins assets that like
the one supported by Malai can go to four billion
and then down to almost nothing in the same day.
So there's definitely a bit of a wait and see
it the minute as to how these tokens really kind
(19:23):
of go forward this year, whether or not institutions might
look more favorably on coins in future. A lot of
that will depend on how the regulatory landscape pans out.
Speaker 3 (19:32):
That's Bloomberg's eminente look, Nicole, thanks so much for joining us.
Super Micro is set to submit outstanding financial reports today
to remain listed on the Nasdaq. The stock, which recently
rallied is hinging on the company's ability to trade on
the exchange. Bloomberg's Brody Ford joins US now for more Brody,
Why are they taking this down to the wire. Has
the company said anything about its plans to actually meet
(19:55):
this deadline?
Speaker 11 (19:57):
They've said a couple of times, and backing up a bit,
I mean, super Micro's had a rough couple of months.
They weren't able to file some financials back in August.
Their auditor dropped them with some pretty colorful language, some
things you never want your audit or to say privately,
let alone publicly. But you know what, they picked up
a new auditor and they said, we're going to be
able to get it in time. We believe we'll be
(20:17):
able to do it. They were saying this as recently
as a week or two ago, and so the consensus
at least until today was that they were going to
be able to make it. The stock right now suggests
there's some anxiety creeping in, certainly, but we don't have
any reason to believe that, you know, their plans have
changed or they're not going to be able to make it.
Speaker 2 (20:37):
Yeah, the CEO but a week or so ago sounding
pretty confident. There are five by ratings on this stock.
There are two cells where are general fundamental analysis on
the company, even headed Brody Well.
Speaker 11 (20:49):
They are for sure in the AI story they're making money.
I mean, if you look at their revenue chart over time,
I think their revenue annually is going to be up
like you know, four times where it was a couple
of years ago. When you need to buy these Nvidia chips,
you need to buy them in a server, and super
Micro is done a really good job selling into the
major customers. The margins are pretty bad because chips are expensive,
(21:11):
and you know it's a competitive market, but they have
been a clear beneficiary. They have picked up a lot
of investor interest, including the retail side, and there's a
lot of you know, forums given a lot of theories
on the current situation, and so you know, the stock
movements we are seeing can be a bit unpredictable.
Speaker 2 (21:28):
I mean, look, a twelve percent decline is actually the
only worst sell off since January the twenty seventh. We're
used to this volatility. But how has the investor base changed.
Is it more largely retail now or is it predominant institution.
Speaker 11 (21:40):
I can't say the exact split, but certainly if I
write a story about super Micro, I'm getting a call
from a retail trader, right, I mean, that doesn't happen
if I write about Bellar HPE. So they are a
sizeable presence here and yeah, there will be a lot
of They are watched often as the kind of bell
Weather for a video because as if super Micro says, hey,
(22:02):
we'll be able to ship a lot more servers and
the second half of twenty five, like they said, people
understand that is okay, invading a supply gets better in
twenty twenty five. The two companies are pretty interestingly linked.
Speaker 2 (22:14):
Most Brodie Ford, thanks so much, Welcome back to bloomg Technology.
I'm Caroline hid in New.
Speaker 3 (22:26):
York and I'm Jackie Devalas and San Francisco.
Speaker 2 (22:29):
We've got to check in on these markets, Jackie, because
it is a turbulent day. The NASDAG will broadly under
pressure as we see consumer sentiment take a hit. From
a macro perspective, we're also worrying about the Magnificent seven
in particular, we are currently off more than ten percent
now in complete correction territory. When it comes to the
more mag seven index that we focus here on Bloomberg,
there are total return index under pressure from its peak
(22:50):
that we saw back in December. We're questioning valuations We're questioning,
of course, the run into Nvidia's numbers that come after
the Bell. We're questioning ultimately about some of the crackdown
on going into China and what that means for local players.
Move on and have a look at what we're seeing
under duress. Look, we've seen Alphabet off by more than
fourteen percent from the beginning of the year. You've also
seen other key names will Meta in the red, but
(23:11):
in video is now off by more than three percent.
It's of fifteen percent from its highs. And this is
on the back of worrying about valuations, about the curtailment
of geopolitics. But there is good news out there. They're
deepening their relationship with the likes of Cisco Networking player
here to make the rollout of AI easier more broadly, Jackie,
that's right.
Speaker 3 (23:30):
Now, let's dive into the AI race between the US
and China following the latest restrictions on chip sales from
the Trump administration. Let's bring in Jennifer Huddleston, Senior Tech
policy fellow at the Cato Institute. Jennifer, We've been talking
a lot about how the Trump administration is going about
AI policy, chip policy, but A key component of this
is also competition and the agency that oversees it, the
(23:52):
Federal Trade Commission. I think a lot of people were
expecting Lina Khan's departure to mean perhaps a friendlier FTC
towards tech deals. But what are you expecting in this administration?
Speaker 12 (24:04):
Well, thank you for having me today, And I think
when it comes to anti trust in this administration, it
is important to remember that many of the anti trust
cases against the leading tech companies actually began.
Speaker 9 (24:15):
In the prior Trump administration.
Speaker 12 (24:16):
And what we've seen so far, particularly in the tech space,
is that it seems like this administration is going to
continue an aggressive approach to anti trust, whether it was
recent statements from the FTC that they planned to continue
the merger guidelines that were passed under Chair CON's FTC,
or whether it's things like last week's requests for information
on tech censorship that brought up questions of competition and
(24:41):
content moderation, indicating that we could again see the Trump
administration FTC seeking to perhaps use anti trust enforcement as
a way to try and get changes it perceives to
content moderation, which could raise a lot of concerns both
for tech companies for online speech, as well as for
(25:02):
the overall approach to antitrust in general.
Speaker 3 (25:05):
We've seen some creative deals, specifically in the AI space,
with some of the big hyper scalers taking stakes and
smaller startups. Do you expect those to come under additional
scrutiny in this administration as well?
Speaker 12 (25:18):
The AI space is still really early in its infancy
and it's a very broad ecosystem. One of the reasons
that mergers are important is not only to large companies,
but to small players as well. Small players are going
to need a variety of exit strategies, particularly in the
AI space, and particularly when we look at the global
nature of this competition. For some small players, they may
(25:40):
be the next real innovative product that forever changes our market,
and they may be seeking to IPO and go public.
For others, they may be seeking to improve an existing
product or operate further down the stack and a merger
might make sense. And in some cases they may be
great innovators or serial entrepreneurs who just don't want to
take the time to full run a company. As a result,
(26:01):
we need to ensure that they have a variety of
exits strategies and that we don't wrongly demonize mergers just
because of beliefs in certain amounts of concentration rather than
looking at the actual impact they could have on consumers,
because in many cases mergers can benefit both small players
and consumers.
Speaker 2 (26:19):
I just want to go a bit broader here, Jennifer,
because we are in this context of US China and
what seems to be this competitive race, whether it's a
straw man or real. Ultimately, when you think about how
the administration is overseeing E merging technology, as I know
you focus on how are we seeing the US able
to propel itself forward versus China when we are also
(26:41):
seeing restrictions on sales of key technology into other countries.
Speaker 12 (26:45):
One of the ways we've heard a lot of this
discussion is in the approach to AI policy. The Trump
administration very early on revoked the Biden administration's AI Executive Order,
something that was seen as having a much more regulatory approach.
Speaker 9 (26:58):
You also recently saw Vice.
Speaker 12 (27:00):
President Vance really pushing back against the European approach to
AI that he felt would strongly impact American companies and
American leadership in AI. At the same time, while there
seems to be a lot of indications, particularly in the
AI space, that the Trump administration plans to.
Speaker 9 (27:16):
Take a very light touch approach.
Speaker 12 (27:19):
There also have been some indications that we could still
see regulation, particularly around issues as it might relate to
labor and again to the kind of impact that some
of these anti trust cases could have on the development
of AI technology, particularly by some of our larger leading
tech companies.
Speaker 2 (27:35):
Okay, the larger leading tech companies, Are they at the
moment getting enough transparency on the future direction of policy makings?
Speaker 3 (27:44):
Do you think?
Speaker 12 (27:44):
I think it's still early in the administration. We've certainly
seen a lot of statements already made, and so it
remains to be seen fully what the trajectory will be
when it comes to various issues around particularly AI policy.
As mentioned, the Biden executive Order was revoked, but we
haven't fully seen what the Trump administration might plan to
(28:06):
replace that with. On anti trust, there do seem to
be clear signals that it's unlikely to have a significant change,
particularly around.
Speaker 9 (28:14):
The cases that are already filed.
Speaker 12 (28:15):
What remains to be seen is kind of some of
the questions around We had to start to hear rumblings
around potential competition investigations in for example, the AI space,
and given some of the other comments, is that the
type of thing where we will see anti trust enforcement
really directed at kind of the concerns related to content moderation,
or at concerns related to quote unquote big tech companies
(28:39):
which could have significant impacts on the future of anti
trust policy as well as on consumers, or what we
see something that's much broader the way that we saw,
for example, in the Biden administration under Lena khns FTC.
Speaker 3 (28:53):
Jennifer, as you mentioned, you spent a lot of time
thinking about content moderation. Where do you see that going
in an administration that has really decried woke social media
and AI models.
Speaker 12 (29:04):
It will be interesting to see, particularly how the changes
from the prior Trump administration in the social media marketplace
might impact the positioning that we see towards content moderation.
Speaker 9 (29:14):
Elon Musk, of course has bought.
Speaker 12 (29:16):
X and made significant changes to content moderation policy there.
We've also recently seen Mark Zuckerberg saying that he's making
significant changes to Meta and Facebook's content moderation policy, and
of course President Trump himself now has True Social which
has a very different content moderation policy. We continue to
see a great amount of competition in the content moderation
(29:36):
policy space. However, we did recently see this request for
information from the FTC around tech censorship, which could raise
concerns that we could see the administration or the government
via the FTC seeking to intervene into the speech rights
of Americans and into the rights of private actors to
make decisions around the content that they host.
Speaker 2 (29:58):
Jennifer Steenwolshing. But take it out to the States for
a minute, because we had a key guest yesterday, Victoria
Espinancies over at the Business Software Alliance yesterday, We're be
talking about how important the states are at regulating AI
at the moment.
Speaker 12 (30:11):
What is there a disconnect that there certainly has been
a lot of state level activity around AI. Several hundreds
of bills have already been introduced or considered at a
state level, and this is something to certainly watch because
a state AI patchwork could impact the overall development of
this industry, particularly when we're looking at bills like we
saw last term in California or Colorado that could really
(30:35):
impact the development side.
Speaker 9 (30:37):
As well as any potential deployment.
Speaker 12 (30:39):
This is important not only for large players who may
be operating across state lines, but of course will certainly
impact small players and in their ability to even launch
their products in various states.
Speaker 2 (30:50):
Tennifa Huddleston. Great to have you from the Cato Institute. Now,
let's talk about AI more because Deep Seek has reopened
access to its core programming interface after a three week pause. Now,
the Chinese startup stopped allowing customers to top up credits
for use on its application due to capacity shortages. Team
Sek's AI chatbought reinvigorated the Chinese tech scene and stunned
Silicon Valley when it was revealed last month.
Speaker 3 (31:12):
Jackie Anthropic is nearing a deal to raise three point
five billion dollars at a sixty one point five billion
dollar valuation. It comes as the company releases a new
artificial intelligence model that allows users to decide the complexity
of the response that they want. Bloomberg Seth Figureman joins
us now for more on this, Seth, let's talk about
the fundraise first, who participated in the deal and how
(31:34):
does it stack up to some of the other players
that have raised in recent months.
Speaker 13 (31:37):
Yeah, I mean it's a smaller amount that we're seeing
open thee and reportedly XAYI go after open the I
is seeking you know, forty billion dollars of staggering some
this one is three point five billion order magnitudeless, but
still large by any other standard in tech history. Light
Speed Capital seems to be the one that's really leading
the way here as we understand that they kind of
introduced the idea of doing a funding round and now
(31:58):
it's oversubscribed. The most interesting one to me is that MGX,
the Middle East Abu Dhabi Fund is now also way
an investment here on MGX is kind of sprinkling its
money across the AI sector as we speak.
Speaker 2 (32:08):
So and when it comes to wanting to get in
on these names, many have worried about the commoditization of
these large language models more broadly set. But it's interesting
that here I TOP it's trying to set itself apart, trying,
for example, turn off and on the reasoning in Sonnet
three point seven.
Speaker 13 (32:25):
Yeah, it's a really novel hybrid approach. If we talked
a year ago, they're really worrying any of these reasoning models.
Now we're seeing Deep seek, Open AI, Anthropic XAI all
push in this direction. But the reality is for the
average consumer, You may not always need some advanced reasoning
engine to answer your question. You may just want to
ask for a quick recipe or synonym for a word.
And in that scenario, maybe you don't need the computer
(32:47):
or the system to take a long time to show
you every chin of thought step Degga takes along the way.
On the other hands, some people are trying to use
it for advanced coding, mathematical questions and the like, and
so I think for Anthropic that gives them a chance
to kind of control a little bit of experience, simplify it,
and perhaps also limit the amount of computing resources that
needs to devote to all the queries.
Speaker 3 (33:05):
On a whole. We're going to be hearing from Salesforce
later this week when they report results, and it's widely
seen as a gauge for how the market, for how
the company's really navigating agents. This is kind of the
next big thing. How is Nthropic going about it?
Speaker 13 (33:18):
It were really early here this idea of a computer
use program that could basically take your computer and start
clicking around the web on your behalf. But I don't
think we've seen it quite make a dent in the workspace.
It's being deployed gradually, but most people we speak with
I've not seen it fundamentally change their jobs. That's Open
Eyes moving in distrection, Salesforce, Microsoft, the whole slew other startups.
This is supposed to be the year of AI agents,
(33:38):
but it's early in that.
Speaker 2 (33:39):
Year, sefta human. Great to have you, Thanks so much.
Now coming up, we're going to dig into gaming. Josh
Chapman from Convoy joining us on the landscape and how
AI could change that industry to the subrume BG technology.
Speaker 3 (34:09):
Let's get to VC Spotlight. China just approved over one
hundred domestic video game titles this month, underscoring the country
support for the game industry after an earlier crackdown. Josh Chapman,
managing partner and co founder of Convoy, joined us now,
Josh Geopolitical tensions between the US and China play a.
Speaker 14 (34:27):
Huge role in big tech, but it's also kind of
veering its way into the gaming sector with Tencent, one
of China's largest vcs is also has staken some of
the largest games Fortnite, League of Legends and those makers.
Speaker 3 (34:42):
How are you seeing this play out in the gaming sector?
Speaker 6 (34:47):
Absolutely, and thanks for having me.
Speaker 15 (34:48):
This is certainly a very tense moment for not only
the world geopolitically, but certainly within gaming, giving that so
much of the Chinese companies have such large ownership state
into gaming companies around the world. A notable one is
that ten Cent owns Riot Games that has legal legends
right over one hundred million monthly active players and based
(35:09):
out of Los Angeles. If geopolitical tensions continue, you could
see things like the TikTok thing play out into the
gaming space, which would lead to divestments or you know,
a forced sale due to government tensions. So yes, it
has a huge impact on the future of gaming as
an industry and broadly globally.
Speaker 2 (35:31):
I mean, many were shocked to see Tencent placed on
a sort of watch list, a military watch list. So
how much do you think that we could see an
unfolding of what's happened with TikTok across the gaming space.
Speaker 15 (35:43):
So I think, you know, high level, we are very
excited that the United States is taking a firm stance
and against what is you know, a you know, categorically
a foreign adversary of the United States, which is the
Chinese Communist Party. I think when you see that, you
know what companies come under that WAT. Unfortunately, there are
lots of great people that work at ten cents, and
there's lots of great people that work at place like
(36:05):
Riode Games and other companies that will be subject to
whatever happens to you politically. So I think this is
absolutely going to impact the space. And I think to
your question, we're going to see the gaming industry kind
of rally around finding a solution to keep these games
going regardless of the ownership.
Speaker 6 (36:21):
And I think there are solutions in.
Speaker 15 (36:22):
The private markets but also the public markets to find
potential new homes for these assets if we get there right,
and I think there is a big if, but if
that plays out, that's probably where it's going to land.
Speaker 2 (36:34):
And much of this is in the context of the
feeling of a race in terms of AI and China
and US who's winning. It's interesting that we just saw
Microsoft really show the future of AI within a gaming
context last week with news AI tell us where we
land in terms of US use of AI in gaming
versus China, for example.
Speaker 15 (36:54):
So there's basically two ways that I would highlight how
AI is impacting gaming. First and foremost, it's impacting the
creating content by making the content game developers more efficient.
Now it's not necessarily making them eight times more efficient,
but we're seeing anywhere from twenty to fifty percent improvement
on costs at the content creation level. The second way
(37:15):
that you're seeing this even in the public markets is
groups like app love and or even Unity that are
using AI to improve their ad monetization strategies, and this
has led to huge gains for both stocks app Love
and most notably even though just recently they kind of
gave back a lot of those gains in the past week,
but Unity just popped because they're also using AI.
Speaker 6 (37:35):
To improve their own ad monetization platform.
Speaker 15 (37:37):
So I think you're seeing this absolutely play out in gaming,
and it's leading to a lot of enterprise value creation
for enterprises in the private markets and in the public markets.
Speaker 3 (37:47):
Josh, last year we saw Roadblocks attract a lot of
scrutiny over child safety on its platform. Do you think
this scrutiny is going to continue into this year because
it seems like one of the spots where it really
gained by part is in support.
Speaker 15 (38:02):
Yes, So the scrutiny around child safety within gaming is
absolutely going to be a trend. This is something that
we at Convoy are actively investing around is child safety
of whether it's the experiences that they're having, whether it's
the data around them, whether it's what you can advertise
to them or not advertise to them.
Speaker 6 (38:19):
And so this is a huge topic that's.
Speaker 15 (38:21):
Affecting families worldwide and also in our country here in
the United States, and so absolutely this is going to
remain a huge issue. And then most recently, just a
couple of weeks ago, the SEC opened up investigation into Roadblocks,
but this under Exemption seven A, which means that they
don't have to disclose what they are investigating exactly. To
(38:42):
make a delineation here, though, the FTC went after Fortnite
and gave them a huge fine.
Speaker 6 (38:47):
I believe it was about four hundred million dollars.
Speaker 15 (38:49):
Around the misuse of child data, and Fortnite had to
pay that huge fine.
Speaker 6 (38:53):
This investigation, though, is not from the FTC.
Speaker 15 (38:56):
It's actually from the SEC, and so this has something
to do with reporting requirements. Back in the fall, we
as a firm put out a piece talking about how
we believe that Roadblocks may not be aging up exactly
as they know are reporting and we think.
Speaker 6 (39:11):
That that's not that the fact that they.
Speaker 15 (39:13):
Are misreporting is the fact that users are likely misrepresenting
how old they are.
Speaker 6 (39:18):
So an eight year old is saying that they're over
the age of eighteen.
Speaker 15 (39:22):
So the data is accurate, but the input of that
data is inaccurate. And this is something we challenged back
in the fall, and I think that's probably what's going
to play out this year.
Speaker 3 (39:31):
It's an important issue. We'll be following. Josh Chapman, Managing
partner of Convoy, Thanks for joining us, Caroline.
Speaker 2 (39:38):
Time now for talking to Jackie. First out, Quantum Machines
raised one hundred and seventy million dollars in a Series
C round following advances in the technology, and that's of
course by Google and Microsoft that have sparked renewed interest
in quantum computing. The raise, led by PSD Equity brings
it is really start ups. Total funding to two hundred
and eighty million to date plus twenty three and meters.
CEO and Rijiki has raised her take private offers for
(40:00):
the Genetic testing company. Now Jiski has secured backing from
private equity firm New Mountain Capital. Together they are offering
two way five three dollars a share according to a
letter to a special committee A twenty three and me's board,
and according to reports telecom provider Altes France, it's close
to finalizing a deal to cut the company's debt by
nine billion dollars in exchange, creditors will get a non
(40:20):
controlling equity state in governance changes. Remember this is billionaire
Patrick Draghi, who retains control. Apple currently holding its annual
meeting of shareholders as we speak, which includes a vote
on shareholders proposal to abolish its corporate diversity, Equity and
Inclusion program. The board currently recommending, of course that it
votes against the proposal, and indeed they did a vote
(40:42):
against that proposal. Mark German is here. This is very
much a live event, and we just had the latest
indeed that investors have rejected the outsider shareholder proposal. Where
else do we think this day will lead?
Speaker 16 (40:53):
Yeah, so Apple got a clean sweep, at least some
preliminary talities.
Speaker 9 (40:57):
Right, So the entire boardy people.
Speaker 16 (40:58):
Including Tim Cook elected, They ratified Ernst and Young as
their outside accounting firm. They approved executive pay right twenty
twenty four pay for Tim Cook and the other named officers.
Rejected an outside proposal on artificial intelligence policies. They rejected
an outside proposal that asked Apple to seese its DEI efforts.
(41:20):
They rejected an outside proposal related to CESAM or child
sex abuse material efforts at Apple, and they rejected another
proposal related to charitable giving. So that's a lot clean sweep.
Apple got what it wanted across the board, both its
internal proposals and its external proposals from shareholders. The AI
one and the DEI ones are obviously the hottest topics
(41:42):
right now. The AI one was related to what open
ai is doing with consumer data. Some shareholders were concerned
about Apple's partnership with open ai. Apple's response was to
reject that given that open AI's integration is separate from
their core on device LMS Apple Intelligence, and that Apple
already publishes its privacy policies related to that, so that
(42:03):
is sort of a moot issue DEI. It's interesting projected,
but Tim Cook said, as the legal landscape continues to evolve,
Apple may need to make changes in the future, but
they're still going to offer employees a collaborative environment.
Speaker 3 (42:16):
Mark, how what do we know about how Apple has
handled these sorts of DEI issues? In the past, we
saw discent come from companies like Google who had employees
that were disputing certain contracts that were taking in defense.
Have we ever seen something similar play out with Apple
thirty minut seconds.
Speaker 16 (42:33):
Yeah, at a large scale, we have not seen descent
at Apple related to DEI. I mean, Apple has a
very inclusive culture. I don't get the sense that anything
is going to happen at Apple related to its DEI
efforts unless there is some sort of legal mandate to
do so.
Speaker 2 (42:49):
Mark German, with the very latest out of the shareholder meeting,
we so appreciate it.
Speaker 10 (42:54):
Now.
Speaker 2 (42:55):
That does it for this edition of but Like Technology,
Do not forget to check out our podcast. Do you
find it on the terminal, online on Apple, Spotify, and
iHeart from New York and San Francisco. This is Bloomberg Technology.
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