April 16, 2025 • 46 mins
Bloomberg's Ed Ludlow details the tech stock rout as chipmakers like Nvidia and ASML warn of stresses from President Trump's tariffs. And, Lyft enters the European market, purchasing FreeNow in a nearly $200M deal. Plus, a conversation with President Trump's chief technology advisor and director of the White House office of Science and Technology policy, Michael Kratsios.
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Speaker 1 (00:00):
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde and Ed Ludlow.
Speaker 2 (00:27):
Live from San Francisco. This is Bloomberg Technology coming up
in Nvidia drives a global route in chip stocks after
new US government restrictions on tech exports to China. Plus
Lift buys its way into the European market with an
eye on rolling out autonomous driving. And we speak to
the President's Chief Technology Advisor and Director of the White
(00:48):
House Office of Science and Technology Policy, Michael Kratzios. Again,
it is the chip sector, semiconductors, where our focus is
new export controls and license requirements on two big names
for the export of specific technologies designed for the Chinese market.
This is the picture at the index level. We're down
(01:08):
three and a half percent. Clearly some pain across the
industry that's spreading the key names of this in Video
and AMD, both of them taking write downs in the
first quarter. We'll get to the numbers very soon. Elsewhere
ASML is an earning story out of Europe. It missed
its bookings by almost a billion dollars and it's saying
we don't know how to quantify the impact of tariff's
(01:29):
on our business. Their business. They are the biggest and
most important maker of the machines that make the chips
chip making equipment. Again, we will go deep on that
story in the show. Let's get to our top story
and Video and AMD have been hit hard by new
US restrictions on semiconductor exports to China. Bluebow Technology editor
Michael Shepherd joins us from DC give us the details
(01:51):
the license requirements and I guess, Michael, what happens next
for these two names.
Speaker 3 (01:56):
Well, what happened just now is the write downs that
the company had to report.
Speaker 2 (02:00):
First of all, they are not small.
Speaker 3 (02:02):
In video report out of five point five billion dollar
dollar charge for the first quarter, AMD eight hundred million,
and all from these new restrictions that they are now
facing on the chips that they have designed specifically for
the Chinese market. And these were designed to comply with
previous rounds of US restrictions on sales of advanced semiconductors
(02:24):
to China. The goal for the administration and for the
prior administration too, has been to try to keep those
sophisticated semiconductors out of Chinese hands where they can help
Beijing gain an edge militarily and give Chinese companies perhaps
a way to gain ground on American hyperscalers, an American
advantage in artificial intelligence. Now, the catch with these chips
(02:47):
is that while they have been scaled down our lower
power for the Chinese market AD, they are also useful
in inference and this is an emerging area in AI
where it is helping companies develop models faster and more effectively,
something that we saw with Deep Seek, and that was
one of the wake up calls for the Trump administration
as it took offices.
Speaker 4 (03:07):
I'm sure you'll recall, and we heard Commerce.
Speaker 3 (03:09):
Secretary Howard Lutner articulate.
Speaker 4 (03:12):
This and make clear that restrictions like these would be coming,
and now we're seeing them today and the companies, of
course are feeling the pain. And this is compounded, of
course by all the concerns about tariffs and elsewhere.
Speaker 2 (03:24):
In Bloomberg's Mike Shepherd in Washington, d C. Thank you
very much. The other big downward pressure on the semiconductor
space is ASML, the world's biggest chip equipment maker, posting
orders that missed estimates in a very big way. It
has dimmed the outlook for the semiconductor sector overall, particularly
with regards to anxiety about tariffs. Bloomberg's executive editor, Peter
(03:45):
Elstrom is in London and it's a one billion dollar
miss basically on bookings. But what accounted for the miss
and what did ASML say about the impact of tariffs
principally and efforts by the United States for ASML to
bring some manufacturing to this country.
Speaker 5 (04:01):
Peter, Yeah, it's a big miss by ASML. And ASML
of course makes the machines that produce chips for the
likes of TSMC and Intel and Samsung, so they're kind
of a bell weather for chip demand in particular. Now,
the CEO, Christoph Fouquet, was pressed pretty hard on the
earnings call that we were just listening to now, asking
(04:22):
questions about what's driving this, what are the implications. One
key factor is certainly this tariff uncertainty that we're seeing.
It's not exactly clear what kind of demand is going
to be generated in some of these areas, including artificial
intelligence and other areas. Another key question is whether tariffs
are going to be levied on the machines that ASML
makes as they're getting shipped into the United States. The
(04:44):
Biden administration now the Trump administration both want to build
up the chip capacity within the United States, but that's
going to be more difficult if TSMC and Intel and
other companies have to pay more for these machines. At
the same time, you're seeing some weakness in some of
the key players here. Intel, of course, is struggling quite
a bit. Even Samsung Electronics now is having a bit
(05:04):
of a difficult time building up its capacity. Has slowed
things down, so you don't want to add additional costs
on top of that. Just to give a sense of
the scale, ASML's machines can go for three hundred and
eighty million dollars, if you put a terrif on top
of that, in the range that the Trump administration is
talking about, it could be ninety five million dollars in
tariff costs.
Speaker 6 (05:23):
Now.
Speaker 5 (05:24):
Fo K was very clear to say that the customers
are going to bear the brunt of those costs. It's
not going to be ALML themselves. But even if the
customers bear those costs, it may slow them down a
bit in terms of buying these machines and then deploying them.
They may have to think twice about how quickly they're
going to move ahead in building the kind of capacity
that the administration actually does want in the United States.
Speaker 2 (05:44):
Bloomberg's Pizza Elstrom in London, Thank you very much. Denny
Fish is a tech investor with skin in the game.
His funds at Janis Henderson count Nvidia and ASML among
its top holdings. There's also TSMC, Broadcom, some of the hyperscalers.
Let's get the investors take on technology, export controls and tariffs.
(06:05):
Good morning, Denny Fish. Were you ready for those headlines
on in video and AMD.
Speaker 7 (06:11):
No. I wasn't, particularly because there was reporting just a
couple of days ago that they had come to an
agreement the administration within video that they weren't going to
have these restrictions. Obviously, that was just a report, but
it definitely took the market by surprise.
Speaker 2 (06:28):
I want to show a chart which is the proportion
of Nvidia's revenue that comes from China, and clearly the
chart tells a clear story. In twenty twenty two, China
revenues around twenty six percent, currently twenty twenty five with
down the thirteen percent. I think many except that this
(06:49):
is headed towards single digit because of the impact of
technology export controls. Does that matter to you as an
Nvidia investor, Denny, do you sort of worry about that
and lay awake at night thinking about in Vidia's business
in China?
Speaker 7 (07:04):
Well, two parts of that question. One is whether it
matters to me as an investor. In two, I lay
awake thinking about China. I think the important thing is
it's actually good to just get it out of the model. Okay,
So I mean we're kind of wiping it clean. We're
taking a clean cut to estimates. And to your point,
the revenue contribution from China has come down materially over
(07:26):
the last few years. I think something else that's important
is that you know, there's something that's it's called the
diffusion Rule that is supposed to come into effect in
the month of May, and effectively with that is that
just puts a quota on the number of GPUs that
certain countries can actually buy. Now, one might think that
(07:47):
potentially the diffusion rule could be relaxed somewhat.
Speaker 6 (07:51):
That could benefit in video.
Speaker 7 (07:53):
The other thing that's just kind of puzzling about all
of this is that in some ways this makes no
sense at all for.
Speaker 6 (08:01):
The administration to do. And why is that.
Speaker 7 (08:04):
Huawei already produces a chip it's somewhat comparable to the
H twenty that is actually the customized chip that Nvidia
has been selling in to China, and as a result,
they're just giving the market to Huawei. And so they're
penalizing a US company by you know, restricting a chip
that's not even that competitive relative to a locally supplied chip. So,
(08:29):
you know, we've already thought about this, you know, pretty extensively.
We didn't know if we would get a full cut,
but I think, you know, the direction of travel was clear.
Contribution from China was going to go way down, and
you know, because we're still supply constrained, and Nvidia has
the benefit of being able to read direct wafers to
(08:50):
other areas where they can actually sell more powerful chips
and chips with higher gross margins.
Speaker 2 (08:57):
The goal of this administration appays to be to shift
mores of the United States, be it localized fabrication of
the core chip assembly, whatever it may be. And so
the companies will face the higher cost of doing business
in this country, or they will face twenty thirty five
percent net tariff somewhere else. What are the pros and
(09:20):
cons of just going with what this administration was and saying, Okay,
we're going to do this in America.
Speaker 7 (09:26):
Well, the pros are that to the extent that we
actually have the capacity to manufacture leading edge.
Speaker 6 (09:35):
Chips, that's a good thing.
Speaker 7 (09:37):
And it's a good thing because those are the types
of chips that are used in our most important industries
for national security and for maintaining our competitive advantage globally
as we you know, race towards artificial general intelligence. The
cons are it is more expensive, but nonetheless, you would
think that the productivity gains that we get in agg
(10:00):
it from deploying AI probably more than offsets what the
aggregate costs would be for manufacturing the chips in the
United States. And I just say, you know, thank goodness,
TSMC put a shovel in the ground, you know several
years ago in Arizona that they're actually in a position
now for companies like Nvidian a MD to actually announce
(10:20):
that they're going to be producing leading edge two nanometer
chips with TSMC in Arizona as well as configuring full
systems in the United States.
Speaker 6 (10:31):
From a manufacturing standpoint, a story.
Speaker 2 (10:34):
We put heavy emphasis on this week. So in video
is your top holding across a couple of funds, right,
TSMC is always in there? You said, Thank goodness, that's
the case basically, But how does your your thinking now change?
Speaker 6 (10:47):
Right?
Speaker 2 (10:47):
Do you stick with this this idea that capital expenditures
will continue to grow in twenty five, twenty six, twenty seven,
the hyperscalers will continue to take from Nvidia or are
you now going to adjust where you put your end assist.
Speaker 6 (11:00):
Any Well, we take the data as it comes.
Speaker 7 (11:04):
But most importantly, I think if you just look at
the most recent comments out of Nvidia where they just
had their GtC conference, if you actually parsed through the
comments from ASML today and you pars through the comments
that we've heard from hyperscalar CEOs, we don't see signs
(11:27):
of a slow down in AI capex and so now
the growth may slow, but nonetheless the signs still support
healthy growth in AI capex. Well, like I said, we'll
take the data as it comes. But ASML was still
optimistic about AI. And you know, it's really the lagging
(11:49):
edge stuff, you know, analog chips and so forth that
go into industrial and auto and things like that that
still you know, continue to be soft. And I will
remind you, you know, I know this is different with
the tariffs and the geopolitical situation, but just rewind the
clock one year and asml same thing happened, they missed bookings,
the stock was down, and then all they because the
(12:10):
bookings are really lumpy, and then bookings just reaccelerated throughout
the year and they're doing some really cool stuff. And
you know, one of the things they talked about is,
you know, one of the reasons that you know they
can continue to drive higher pricing for their EUV and
high NA EUV is because they're starting to do what's
called single layer and what that effectively does it increases
the throughput, it's more valuable, and therefore they can charge
(12:33):
a higher price that.
Speaker 2 (12:35):
A technology charge a higher price. Danny Fisher, Jannis Henderson
is great to have you back on the program. Thank
you very much. Now coming up here on Bloomberg Technology,
list is expanding outside of the US and Canada. We
have CEO David Risha on the company's European acquisition. That's next.
This is Bloomberg Technology. Some deal news. Lift has agreed
(13:08):
to buy the European Multi Mobility and taxi ailing app
Free Now for about one hundred and ninety seven million dollars.
It marks its first global expansion beyond the US and Canada.
Lift CEO David Risha joins US. Now, I've been using Uber,
your main competitor in Europe for a really long time.
I've been going in taxis in Europe for a really
long time. Why acquire free now and not just launch
(13:29):
the Lift app in that jurisdiction.
Speaker 8 (13:32):
Because Frenal is a great company that's got great relationships
all across Europe in the really important taxi industry. I mean, look,
so Lift, as you know ed you've been following us
for a while. We're in a stronger position than we've
ever been. We're picking riders up faster than we've ever
picked them up before. Drivers are making billions on the
platform in the US and Canada, and so now's the
right time for us to go global. And what's great
(13:53):
about it is it expands our market, doubles our market,
and it allows us to plug into, as you say,
the taxi world, which is a huge, huge part of
the European mobility scene.
Speaker 2 (14:03):
Tomorrow. I think I'm right in saying it's your two
year anniversary at Lyft, good memories and you have fixed
the finances of that company to an extent. But the
data is so key, right, Uber has what one million
drivers in Europe and I think free now has about
one hundred and fifty thousand registered taxi drivers nine cities.
How do you bridge the gap? Are you confident you
(14:24):
can bridge the gap? Yeah?
Speaker 8 (14:26):
I am the goodness So free Now is a great
company and one of the things that makes them so
strong is they really understand the local dynamics, market by
market by market. Here's that thing. The mobility market in
Europe for this this kind of you ride heiling is
about forty billion euros.
Speaker 6 (14:43):
Half of that are offline taxes.
Speaker 8 (14:46):
This are literally still people calling up a taxi company
and saying, come take me to the airport, come take me,
I'm going on a business trip.
Speaker 6 (14:52):
Whatever it is.
Speaker 8 (14:52):
So well, it's true, there are other companies there. Free
Now is the leader in the taxi space. And remember
is you know, taxi is kind of an elevat experience
to a lot of Europe think of the London Blackpam.
So we think that the company is really well positioned
to really sort of you know, continue to grow and
take over the much bigger space.
Speaker 2 (15:09):
But it is a company that's only recently broken even
it's had historic losses. What are you modeling for in
terms of what it adds to your top line and
bottom line and how immediately.
Speaker 8 (15:19):
Yeah, so it's a profitable company. It hasn't been a
billion dollars in bookings, which is significant. Now I've left,
of course, has sixteen billion in booking. So you know,
there's a lot of growth, you know, ahead of both
of us. But it'll be financially creative for us, which
is wonderful. And I think as we you know, they've
been owned by Mercedes and BMW, two great sort of
storied bottom manufacturers, but I think combining with US is
(15:40):
going to give them some new energy, some new expertise
to really allow.
Speaker 2 (15:44):
Both of us to grow. There is zero mention in
the release about autonomous driving, and every cell side note
about this deal says it's your plan to roll out
autonomous driving in Europe with those two OEMs that you
just mentioned. Yeah, so here's how we.
Speaker 8 (16:01):
Think about autonomous as we've said, I mean, first of all,
of course it's happening in the US.
Speaker 6 (16:05):
We're actually a.
Speaker 8 (16:06):
Little bit further ahead Europe a little bit not so much.
One of the great things free Now has is well too,
they've got great relationships with European regulators, and they've got
great fleet management and as you and I have discussed before,
fleet management is so important to autonomous So yeah, we
think it sets this up really well. Let's be clear,
this is going to be years down the road, but
it's a really important part of the overall strategy for
(16:28):
being a global player.
Speaker 2 (16:30):
Two years in you've done some M and A, will
you do more M and A?
Speaker 6 (16:34):
And where.
Speaker 8 (16:37):
I mean, never say never, but this really is our
focus right now, right, I mean, the good news is,
you know again free Now is a great, strong company
and we've got.
Speaker 6 (16:43):
So much to build on.
Speaker 8 (16:44):
So we're going to be really focused on our European expansion,
obviously making sure it's a big success. And then who knows,
we'll talk later about someone else.
Speaker 2 (16:54):
Engine capital activists, investor they want to change your board.
Your reaction please, I mean, we.
Speaker 8 (17:00):
Interact with shareholders all the time and you know, listen
to their feedback. Take it seriously. You know, there's a
whole process for dealing with activist investors that were involved
in but probably speaking if you look at what shareholders want,
you know, capital return. We're giving out five hundred million
dollars in a share buyback. Growth, we're growing, We're now expanding,
We're strengthening our business by going international.
Speaker 6 (17:20):
I think we're really.
Speaker 8 (17:21):
Well positioned to address all of the issue.
Speaker 2 (17:22):
Have you that shareholders bring Sorry to interrupt, David. Have
you spoken to them about the free now deal since
it happened? No, Okay, that's kind of interesting. Final questions
on technology Atlanta technology partnerships, MAME Mobility operationally give me
an update please.
Speaker 8 (17:38):
Yeah, so you're referring to the partnership we have with
MAME Mobility and Autonomous Vehicle group or company that's on
track for this summer. So super excited to launch right
in the middle of downtown Atlanta.
Speaker 2 (17:50):
On track for this summer, being commercially on track or
this is a kind of toe in the water.
Speaker 6 (17:54):
Well, it's on track.
Speaker 8 (17:55):
For us to start operationally this summer in Atlanta and
then you know it'll grow from there. But first we've
got to get you know, riders in the cars, and
that'll be sometime.
Speaker 2 (18:04):
This summer because I have the term to do so
two years in What would you score yourself or grade
yourself on the job you've done as the Lift CEO.
Speaker 8 (18:13):
Look, I am a self critical person.
Speaker 2 (18:15):
I am.
Speaker 8 (18:16):
I guess maybe one of the things that I do
is always look for the next thing. But I do
have to say I'm proud of what we've accomplished as
a team over two years, you know, getting to profitability,
seven hundred million dollars plus in free cash and maybe
most importantly, picking up riders faster than ever and drivers
making more on the platform than ever. So if I
look at it from the customer's point of view, we're
doing super well. It's up to other people to tell
(18:37):
me how I'm doing as a.
Speaker 2 (18:38):
CEO, and the street gives you a lot of credit
for that. M and A maybe they didn't see coming
so much. Maybe we'll see some more Lift CEO David Risha,
thank you for joining us here on Bloomberg Technology. Now
coming up, Americans are still using Chinese e commerce apps
to shop cheap alternatives to some high end brands. We're
going to drive into the surge in sales for Timu
(18:58):
and Sian.
Speaker 9 (19:00):
This is Bloomberg Technology.
Speaker 2 (19:23):
A trade war won't stop Americans from shopping on Chinese apps.
Revenue surge for both she and and Timu this month
as US shoppers anticipate price increases due to tariffs. Bloomberg's
Lily Maya joins US and covers the retail Beat. It's
really interesting data. A lot of people in my world
use both of those apps. I don't what are we learning.
Speaker 10 (19:42):
Yeah, it seems like these apps are seeing a lot
of success and people are going to them as tariffs
are starting to loom.
Speaker 2 (19:52):
The eco data kind of comes in here right when
you think about tariffs, we think about passing on the
costs of the consumer through your beat, through the tech
companies that are in the ecomma space. What are we
learning about the consumer and that march data? Yeah, absolutely so.
It seems like the consumer is looking to spend right now.
Speaker 10 (20:11):
The EGO data showed a lot of spending, and it
seems like people might be stocking up or buying now
before prices might get more expensive.
Speaker 2 (20:19):
Lily, you cover retail, specialty retail in particular. What are
you learning about tariffs? Like, how do companies really think
about what happens next? They even know?
Speaker 10 (20:30):
Yeah, so a lot of companies are doing different things.
A lot of the companies I cover report in the
next month, so that will be really interesting to hear,
you know, what they're looking to say to investors and shareholders.
But it seems like a lot of people are in
kind of a wait and see mode. They're not exactly
sure how tariffs are going to impact their business, and
they're trying to figure that out.
Speaker 2 (20:51):
Bloomers really might great to have you on here on
Bloomberg Technology. Thank you very much. Now, coming up, Mark
Zuckerberg's email reveals his Instagram and what's strategies from the past.
We're going to go back to that antitrust case next.
Let's get to markets as well. It is the semiconductor
space that's dragging down technologies to shares broadly, but the
NASDAQ one hundred is under pressure generally speaking, and by
(21:14):
association some of the other key names in our world.
The Hyperscala's consumer tech under pressure. Bitcoin is going in
the opposite direction eighty five thousand US dollars per token
upper percent or so in the session, but it's not
behaved uniformly like as risk on risk off. It doesn't
sort of take into account the same fact as tech does.
(21:37):
We'll dig into that later in the week. Be right back.
This is Bloomberg Technology. Welcome back to Bloomberg Technology. I'm
(22:27):
Ed Ludlow in San Francisco. The market's picture is very clear.
We are under pressure and that largely comes from the
chip sector. New US restrictions on technology imports to China,
specifically for Nvidia and AMD, that is causing pain. But
by association you see a lot of the mag seven
megacap names down. Earning season is right around the corner.
(22:48):
The underperformance of the Philadelphia Semiconductor Index distills that chip pain.
The single names we know about Nvidia, AMD. Very interesting
discussion throughout the show on how long that pain will last.
But ASML is an earning story at missed bookings by
one billion dollars. Later in the program, per Ferregue, New
Street Research is going to come on and give us
(23:09):
deeper and more granular context about this name. There is
other news elsewhere. In his second day on the FDC's
antitrust trial, Mark Zuckerberg revealed that he once considered spinning
off Instagram back in twenty eighteen. In a letter to
senior leaders, he writes, quote, I'm beginning to wonder whether
spinning out Instagram is the only structure that will accomplish
(23:31):
a number of important goals. We should keep in mind
that there's a real chance that all our work to
build a family of apps may be something we don't
get to keep for more. Bloombers Kirk Wagner, who has
been in the courtroom at that trial, joins us, let's
go back over it and explain it. At one time
in twenty eighteen, of his own volition, Mark Zuckerberg considered
(23:54):
spinning off Instagram. What does that mean in the context
of this trial, Well.
Speaker 11 (24:00):
It's very prophetic, right, Obviously he was sort of foreseeing
the issue that he's facing right now coming down the
road for him, you know, six seven years ago. I
don't think the fact that he thought about doing this really,
you know, hurts him so much today. I think it
was shared in the context of the FTC trying to
show that Instagram has perhaps harmed users.
Speaker 2 (24:22):
Right, That's part of their play here, is.
Speaker 11 (24:24):
That they want to show that buying Instagram buying WhatsApp
was actually bad for consumers. And if they can show that,
you know, Mark Zuckerberg even thought, Hey, maybe we shouldn't
be doing this seven years ago, maybe that's a sign
that they weren't you know, employing the best strategy for consumers.
But it is a very interesting thing, in part because
it was so foreshadowing of where he is today.
Speaker 2 (24:45):
This is a multi week but potentially multi month process.
What else does the audience need to know about the
trial and proceedings? Where his META focused and where have
the FTC focused.
Speaker 11 (24:56):
It really hinges on this definition of what you know.
The FTC is considering the friends and family sharing social
networking market, right, So so they're saying, hey, look, there's
a lot of places you can spend time online. There's
very few places where you actually go specifically to share
with your friends and family, and that is where META
has their monopoly.
Speaker 2 (25:15):
This is the FTC's case.
Speaker 11 (25:17):
Meta, on the other hand, is arguing, hey, wait a minute,
we have tons of competitors, right. TikTok is a competitor.
Well's I message is a competitor, obviously, x Elon Musk's
X and none of those, by the very narrow definition
that the FTC is going with, are considered competitors. And
so this is basically a fight to determine what the
(25:37):
market should be and if you know, the FTC succeeds
and keeping it very very narrow. They may have a
good case, but as Facebook has pointed out repeatedly, they
consider their competition very wide.
Speaker 2 (25:50):
Being bes Kutwagner, who I am sure we will come
back to multiple times over the course of proceedings. Thank
you very much. Let's break down more on what the
FTC's trial against Meta could mean in regulation the future
of digital markets. Joining us now is Jennifer Huddleston, Technology
Policy Senior Fellow at the Cato Institute, and as a
piece of documentary evidence in a trial like this, the
(26:13):
CEO at the center of it in a letter six
years ago, seven years ago saying maybe we should spin
off Instagram. How does that play in this environment? What
is this environment of antitrust that this trial represents.
Speaker 12 (26:31):
We've seen a lot of animosity towards some of America's
leading tech companies and this presumption that big is automatically bad.
One of the key elements of the FTC's case is
it's basically imagining a world that never existed. It's trying
to ask for a do overall on an acquisition it
approved more than a decade ago. And at the same time,
(26:51):
the social media dynamics have been changing. They were changing
in twenty eighteen when that letter came about. They were
also changing more recently with the emergence of the like TikTok.
We have to remember that at the time Meta acquired
Instagram and WhatsApp, these were not surefire successes. In fact,
there were jokes, particularly about the acquisition of Instagram at
the time, kind of why are they doing this? Why
(27:13):
are they paying all this money. We don't want to
see a world where government enforcers penalize businesses for taking
risky chances that turn out to be good bets and
turn out to allow more innovation and more benefits for
consumers in the market.
Speaker 2 (27:29):
This is a trial, and it is contested between the
FTC and Meta. But we are a few months into
this new administration. In the White House. Prior to the
election and after the inauguration of President Trump, many put
emphasis on Vice President JD. Vance's views on big tech
(27:50):
and antitrust. How does that context play here in the trial.
It seems as if this administration will follow through with
the general attitude towards big tech that the prior administration did.
Speaker 12 (28:03):
If you look at the history of many of these cases,
many of them began in the first Trump administration. Then
we saw further gasoline on the fire during the Biden administration,
particularly under Chair Lena Kahn at the FTC, and this
real push towards this big as bad mentality. It seems
like so far, both with the remedies proposed in the
Google cases as well as with what we're seeing in
(28:25):
the medic caase, that this administration seems determined to continue
that shift away from the kind of law and economics,
consumer welfare based approach to anti trust, to something that
makes more presumptions about competitors than consumers, and something that
perhaps is using anti trust enforcement for other policy goals.
Speaker 2 (28:44):
And that should be.
Speaker 12 (28:45):
Concerning because if we lose focus on the consumers whom
anti trust was designed to protect, we risk losing the
purpose behind anti trust and making this powerful tool more subjective.
Speaker 2 (28:57):
Jennifer, why would a breakup of Meta in its family
of apps be bad for the consumer?
Speaker 12 (29:03):
I think that's what's really at the heart that we
need to remember when it comes to this case. You'd
lose certain cross functionality that consumers like, but you also
would have companies with fewer resources to engage in research
and development technology to engage in rolling out new features
that consumers want in the time that AI is disrupting things,
but also fewer resources to do some of the things
(29:25):
that consumers have expected around things like young people's online safety.
And finally, you might have companies that have to rely
more on data and advertisers because they no longer can
share those resources, and so they would have to actually
shift more towards using their consumer data and more on
doing what the advertisers want rather than what their consumers want.
Speaker 2 (29:47):
Jennifer, the core of Meta's argument or defense is that
the FTC has this narrow definition, but they're misunderstanding the marketplace,
that Meta's competition is TikTok and that it is you too.
How successful do you think that defense will be.
Speaker 12 (30:06):
The FDC is seeking a really narrow definition of personal
friends and family social media networks, which is a definition
I don't think the average consumer thinks about, and it's
something that, if it's successful, could potentially lead to larger
disruptive disruption in the social media marketplace. Not only does
this definition exclude companies like TikTok that are incredibly popular
(30:29):
with gen Z, it also excludes other messaging apps like Signal.
It excludes platforms like Snap that have grown in popularity,
so it doesn't seem to reflect the experience of the
average consumer when it comes to social media and messaging,
let alone when it comes to broader conversations around things
like advertising or entertainment more generally.
Speaker 2 (30:49):
In your research and your review of policy pending the
outcome of this trial, do you expect actions against other
big tech names, and if so.
Speaker 12 (30:58):
Who We have already seen cases against four of America's
leading tech companies, Google, which is now in a remedy
phase in one of its case. There are also penning
cases against Amazon and Apple, and of course this case
against Facebook and Meta. All of these cases really raise
concerns about the potential government intervention into what has been
(31:19):
a very dynamic ecosystem. Not only could these cases have
consequences for consumers, but there's going to be a question
as well of what are we missing out on while
companies spend their time dealing with enforcement actions instead of
innovating and trying to provide better things for consumers. What
sort of messages this side to the startup ecosystem.
Speaker 2 (31:39):
Jennifer Alison of the Cato Institute, thank you very much.
We'll be right back this is Bloomberg Technology. This is
(32:00):
Bloomberg Technology, and you're looking at a live shot of
the principal room. Check out the Bloomberg Technology podcast. You
can find it on the terminal as well as online
on Apple, Spotify, and iHeart this is Bloomberg. The United
(32:22):
States will have to make a creative R and D
push while making quote smart choices with budgets to stay
ahead in the AI race. Those were the first public
remarks by Michael Kratzios, Advisor to the President and White
House Office of Science and Tech Policy Director, since his
confirmation in March. The main message on strategy for tech
(32:43):
promote and protect. Mister Gratzios joins us. Now specifically, what
do you mean by smart choices? This is a time
where budgets across federal government are being cut. Some tools
and examples please, mister Grazios, thank you so much for
having me ed. I think if you zoom out a
little bit.
Speaker 13 (33:01):
The message that we were trying to share in Austin
a few days ago was this question of how does
the US ensure its position as the global leader in
critical and emerging technologies? And in order to do that,
you have to do two major things. You have to
do promotion and protection, and the key pillar of the
promote agenda is around being more creative in the way
(33:23):
that we spend fairly funded research and development dollars. For
far too long, these R and D dollars have been
spent in the same ways by the same agencies of the.
Speaker 2 (33:32):
Same types of research.
Speaker 13 (33:33):
And there's a lot more that we can do in
all sorts of things like prizes and challenges, advanced market commitments,
or even fast track action grants where we can actually
worry a little bit less about how much and more
about how we actually deploy these dollars in ways that
we can ensure we're making in the best discoveries here
in the United States for years to come.
Speaker 2 (33:54):
We've reported a lot on DOGE that's the context right,
the work to cut wasting government. But very specifically, mister Kretsios,
do you call for support an increase in R and
D budgets? Growth in R and D budgets?
Speaker 13 (34:09):
Again, the most important thing we have to do is
make sure that we are prioritizing our R and D budgets.
Spending a lot of money on the wrong things is
far worse than spending less money on the right things.
Speaker 2 (34:20):
So what we do at the White House.
Speaker 13 (34:22):
In coordination with the Office of Management and Budget, is
helped set research and development priorities for the country. The
President spelled these out and a letter that he sent
to me two weeks ago, and the ones that he
did call out were artificial intelligence, quantum computing, and nuclear
to name three. And you can imagine that in future
budget cycles these areas that we're going to be prioritizing
(34:43):
because those are key to our national economic security.
Speaker 2 (34:47):
Are those priorities achievable AI leadership from America with the
tariffs that we have in place and the technology export controls,
some of which were amplified overnight on the likes of
and Video and AMD. Absolutely.
Speaker 13 (35:03):
If you think back to the strategy that we discussed
a couple of days ago, in order to achieve this
leadership position, we have to do both promotion and protection.
On the promote side, we talked a little about the
R and D pillar. The second piece of that is
around deregulation. For far too long, especially in the last administration,
you know, a lot of our regulatory policy has been
driven by the spirit of fear, this idea that we
(35:25):
should be worried about these emerging technologies, and what the
President in the White House has said many times is
we have to make sure that we lead in this
technology and actually deploy it, and then on the promote
on the protect side of the equation, we have to
make sure that we're not giving our adversaries the critical
tools that could help.
Speaker 2 (35:44):
Them try to catch up to us in this race.
Speaker 13 (35:46):
We know that the PRC is attempting to catch up
with us and things like artificial intelligence, and there's no
reason why we should be helping them do so. So
that's why in order to kind of achieve this US
position of leadership in artificial intelligence and other emerging technologies,
you have to have a balanced promotion and protection agenda.
Speaker 2 (36:06):
In Nvidia and AMD now face the situation where they
have to apply for licenses to be able to explore
H twenty and I THREEH eight to China, and the
administration's argument was they could end up in supercomputers. The
company's argument is these are much lower performance, and one
idea is that if they haven't got access to American technology,
China will simply champion a domestic name. Huawei has a
(36:29):
similar ACCE accelerator. How will you advise the President on
whether or not AMD and Nvidia should be granted those
license to export lower performance accelerators to China.
Speaker 13 (36:41):
Yeah, I'm not going to opine on the specifics there,
but I will say that there has been a track
record of a wide variety of chips being used to
drive the development and training of what are almost frontier
level open source models by companies within the PRC, And
as we think about our protect agenda, it's critical that
(37:02):
we develop an export control regime that is simple and
clear and is one that we enforce very very strongly.
Speaker 2 (37:13):
One of the elements of PROMOTE is to bring manufacturing
of lead edge chips and assembling of compute systems to America, Right,
mister Crassios and ASML is in the splotlight as an
example because of its earnings report overnight, with this administration,
consider an exemption of tariffs on the leading chip equipment
(37:33):
maker in order that they might be able to do
that bring more of their activity to the United States.
Speaker 13 (37:39):
Again, I can't oppine on specifics, but I think what
we saw from the news last week on in Nvidia,
there is a continual effort and we see that from
all around the world of people wanting to bring manufacturing
and these core sort of bleeding edge technologies back here
to the United States. And that's something that the White
House is very proud of and something that we have
(38:00):
seen across industry. The policies that the President in our
trade team have implemented is one that is actually proving true.
And just a few short days we've had so many
great announcements about companies coming here to build and manufacture
these critical technologies in the US, and I suspect that
we'll be seeing a lot more of those in the
months in.
Speaker 2 (38:19):
Weeks ahead, there is some confrontation between the administration and
leading academic and research institutions. Harvard is an example. How
does the potential of cutting budgets at institutions like that
impact America's competitiveness in the field of research. I reflect
(38:39):
on Jensen Wong's comments. I believe in March at GtC
that well more than fifty percent of the AI research
is either being done in China or by Chinese nationals,
and yet here in America we have some debate about
funding for these institutions.
Speaker 13 (38:56):
Yeah, I want to make sure we don't necessarily conflate
to such issues. To me, I don't think this is
particularly hard. There is no reason why we should be
supporting anti semitism on college campuses or tolerate that. I
think we can be intolerant of anti semitism on university
campuses and also support the academic research enterprise. Those two
(39:21):
things can happen simultaneously. And I think first and foremost
these universities think very carefully about about Title six, and
I leave that to the DOJ and to DOE Department
of Education.
Speaker 2 (39:32):
To think about.
Speaker 13 (39:33):
On my end, and what I've advocated very strongly is
we continue to need great universities to work on basic
research that has funded and fueled or innovation ecosystem for decades,
and that's something the White House will continue to advocate
for well. At the same time, we can never stand
for anti semitism on our university campuses.
Speaker 2 (39:53):
Mister Kretzios. Is part of your offices request for information,
several AI companies submitted responses to you, you asking basically
to preserve their ability to learn from copyrighted material. We're
talking about those training frontier models, foundation models, very simple
yes or no if you will. Is copyright reform on
(40:15):
the table as part of this President's AI action plan
and how would you advise him on that? Please?
Speaker 13 (40:21):
Yeah, we were so delighted with how many responses we
got to the I Action Plan RFI. I think in
the coming days we'll hopefully be able to release all
of those responses. It was many, many thousands, and it
just showed how far and wide the community is that
wants to think about and help shape the national agenda
for artificial intelligence. And obviously copyright is going to be
(40:42):
one of the issues that many people commented on over
the last few months.
Speaker 2 (40:47):
Mister Christio's copyright reform yes or no again. I think
we could not be more.
Speaker 13 (40:53):
Thrilled with how many people commented on all sorts and
all facets of the AI agenda, And this is one
that we had a lot of commenters send us some
very interesting and detailed thoughts on.
Speaker 2 (41:05):
The President has spoken with admiration about Jensen Wong and
in Nvidia's leadership. Just as our audience Boombog Technology gets
to know you, mister Kratzios and your work in the
White House, Have you had the opportunity to meet with
Jensen Wong and his peers about what they plan to
do in America and also critical markets for them. Which
once included China. I have yeah.
Speaker 13 (41:26):
In the first two weeks after my confirmation, I had
the opportunity to meet with most of the leading technology
industry CEOs and chat with them about how we can
together usher in this golden age of American innovation that
the President has called for. With Jensen specifically, he's a
tremendous thinker, and one of the great things that we
connected on is the question of AI for science. There's
(41:48):
been this almost this extreme fixation on thinking about the
protect side of the agenda when it comes to specific semiconductors.
But I think another equally more and maybe even more
important part of the are the problems we face ahead
of us and our challenges is how can we actually
implement this technology to drive transformational change for the American people.
Speaker 2 (42:08):
And Jensen and Nvidia he.
Speaker 13 (42:10):
Was extraordinarily excited to help us think through and see
what we can do more on driving scientific discoveries through AI.
And it's something that I will be encouraging Secretary right
with our labs and punch at National Science Foundations so
many of our other leaders to stick more seriously because
we have to do better.
Speaker 2 (42:28):
Michael Kratzio's White House Office of Science and Tech Policy Director,
Thank you, look forward to speaking more over the coming years. Okay,
I mentioned ASML shares trading significantly lower, the company posting
a sales miss that was almost a billion euros less
than expected. Per Fareger of New Street Research, head of
Global Tech Infrastructure is with us. There are people out there, Pierre,
(42:48):
and it's good to see you again that a bit
more sanguine. Right, Orders can be lumpy, But the thing
that's spooky to many is the inability to quantify tariff impact.
How are you modeling for that in ASML's case. Yeah,
I think you're making a good point.
Speaker 14 (43:04):
The way I modeled it is by actually modeling orders
coming down in the nearter, Because while you're not too
certain bout tariffs in some industries, you could see people
like front loading orders before time it gets into place.
Doesn't work very well with these very large pieces of equipment.
And then the second approach is to actually wait and
see and be more careful in the long run. Modeling
(43:30):
like tariffs requires you to take a view on what
the tariffs are here for. You know what the US
administration want to do with these tariffs, and so if
you listen to them. You know, they want to encourage
changes in behavior with straight partners. They want to bring
back to the US or to reliable partners manufacturing, and
(43:52):
they want to create additional revenues. And if you put
that into into motion around SEMITAP equipments, what you see
is that none of these objectives are going to go
against the ability for the US to build actually the
AI infrastructure and to continue to, let you know, the
manufacturing of leading h semiconductors like memory chips and logic chips.
Speaker 2 (44:16):
Yes, as they built up in the US.
Speaker 14 (44:19):
You still need to continue to have like technology advancing
everywhere in the world. So I'm not too worried about
the impact of tariff's on SEMITAP equipments.
Speaker 2 (44:28):
You heard mister Kratziosk decline to answer my question on
whether there would be an exemption for chip equipment makers,
but mister Fouquet was very clear, we will assemble in
the Netherlands. Does the administration have a say on what
a SML does in this case, Pierre.
Speaker 14 (44:46):
They definitely have a say. I think if they if
they give a phone call, the phone call will be
will be taken. The specifics of ASML tools is that
it's very unlikely to see like the final assembly of
these tools moving away from the Netherlands. The same way
it's very unlikely to see like the most leading edge
(45:06):
manufacturing node of TSMC moving away from from Taiwan. Is
probably like a hard limit that cannot be surpassed. Now,
what must said as well is that you know, increasing
the amount of manufacturing done in the US, which is
already very significant. Yes, where I live, you you already
have like very critical stages that have been manufactured, Like
(45:30):
the light source, which is the most critical piece of
the IVY tool, is manufactured in the US, and seeing
that going up is a possibility. Like changing like the
final assembly of these tools is yes, probably probably a
stype and particularly in practical terms, not doable.
Speaker 2 (45:48):
Right PF Faeryg of New Street Research. Good to catch
up have you back here on Bloomberg Technology. But that
does it for this edition of Bloomberg Technology. A huge
thanks to those of you that submitted questions for some
of our key interviews throughout the hour. There is a
lot to recap. Don't forget to check out the podcast.
You know where to find it on the Bloomberg terminal
as well as online on Apple, Spotify, and iHeart. What
(46:11):
a week from San Francisco. This is Bloomberg technology
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde and Ed Ludlow.
Speaker 2 (00:27):
Live from San Francisco. This is Bloomberg Technology coming up
in Nvidia drives a global route in chip stocks after
new US government restrictions on tech exports to China. Plus
Lift buys its way into the European market with an
eye on rolling out autonomous driving. And we speak to
the President's Chief Technology Advisor and Director of the White
(00:48):
House Office of Science and Technology Policy, Michael Kratzios. Again,
it is the chip sector, semiconductors, where our focus is
new export controls and license requirements on two big names
for the export of specific technologies designed for the Chinese market.
This is the picture at the index level. We're down
(01:08):
three and a half percent. Clearly some pain across the
industry that's spreading the key names of this in Video
and AMD, both of them taking write downs in the
first quarter. We'll get to the numbers very soon. Elsewhere
ASML is an earning story out of Europe. It missed
its bookings by almost a billion dollars and it's saying
we don't know how to quantify the impact of tariff's
(01:29):
on our business. Their business. They are the biggest and
most important maker of the machines that make the chips
chip making equipment. Again, we will go deep on that
story in the show. Let's get to our top story
and Video and AMD have been hit hard by new
US restrictions on semiconductor exports to China. Bluebow Technology editor
Michael Shepherd joins us from DC give us the details
(01:51):
the license requirements and I guess, Michael, what happens next
for these two names.
Speaker 3 (01:56):
Well, what happened just now is the write downs that
the company had to report.
Speaker 2 (02:00):
First of all, they are not small.
Speaker 3 (02:02):
In video report out of five point five billion dollar
dollar charge for the first quarter, AMD eight hundred million,
and all from these new restrictions that they are now
facing on the chips that they have designed specifically for
the Chinese market. And these were designed to comply with
previous rounds of US restrictions on sales of advanced semiconductors
(02:24):
to China. The goal for the administration and for the
prior administration too, has been to try to keep those
sophisticated semiconductors out of Chinese hands where they can help
Beijing gain an edge militarily and give Chinese companies perhaps
a way to gain ground on American hyperscalers, an American
advantage in artificial intelligence. Now, the catch with these chips
(02:47):
is that while they have been scaled down our lower
power for the Chinese market AD, they are also useful
in inference and this is an emerging area in AI
where it is helping companies develop models faster and more effectively,
something that we saw with Deep Seek, and that was
one of the wake up calls for the Trump administration
as it took offices.
Speaker 4 (03:07):
I'm sure you'll recall, and we heard Commerce.
Speaker 3 (03:09):
Secretary Howard Lutner articulate.
Speaker 4 (03:12):
This and make clear that restrictions like these would be coming,
and now we're seeing them today and the companies, of
course are feeling the pain. And this is compounded, of
course by all the concerns about tariffs and elsewhere.
Speaker 2 (03:24):
In Bloomberg's Mike Shepherd in Washington, d C. Thank you
very much. The other big downward pressure on the semiconductor
space is ASML, the world's biggest chip equipment maker, posting
orders that missed estimates in a very big way. It
has dimmed the outlook for the semiconductor sector overall, particularly
with regards to anxiety about tariffs. Bloomberg's executive editor, Peter
(03:45):
Elstrom is in London and it's a one billion dollar
miss basically on bookings. But what accounted for the miss
and what did ASML say about the impact of tariffs
principally and efforts by the United States for ASML to
bring some manufacturing to this country.
Speaker 5 (04:01):
Peter, Yeah, it's a big miss by ASML. And ASML
of course makes the machines that produce chips for the
likes of TSMC and Intel and Samsung, so they're kind
of a bell weather for chip demand in particular. Now,
the CEO, Christoph Fouquet, was pressed pretty hard on the
earnings call that we were just listening to now, asking
(04:22):
questions about what's driving this, what are the implications. One
key factor is certainly this tariff uncertainty that we're seeing.
It's not exactly clear what kind of demand is going
to be generated in some of these areas, including artificial
intelligence and other areas. Another key question is whether tariffs
are going to be levied on the machines that ASML
makes as they're getting shipped into the United States. The
(04:44):
Biden administration now the Trump administration both want to build
up the chip capacity within the United States, but that's
going to be more difficult if TSMC and Intel and
other companies have to pay more for these machines. At
the same time, you're seeing some weakness in some of
the key players here. Intel, of course, is struggling quite
a bit. Even Samsung Electronics now is having a bit
(05:04):
of a difficult time building up its capacity. Has slowed
things down, so you don't want to add additional costs
on top of that. Just to give a sense of
the scale, ASML's machines can go for three hundred and
eighty million dollars, if you put a terrif on top
of that, in the range that the Trump administration is
talking about, it could be ninety five million dollars in
tariff costs.
Speaker 6 (05:23):
Now.
Speaker 5 (05:24):
Fo K was very clear to say that the customers
are going to bear the brunt of those costs. It's
not going to be ALML themselves. But even if the
customers bear those costs, it may slow them down a
bit in terms of buying these machines and then deploying them.
They may have to think twice about how quickly they're
going to move ahead in building the kind of capacity
that the administration actually does want in the United States.
Speaker 2 (05:44):
Bloomberg's Pizza Elstrom in London, Thank you very much. Denny
Fish is a tech investor with skin in the game.
His funds at Janis Henderson count Nvidia and ASML among
its top holdings. There's also TSMC, Broadcom, some of the hyperscalers.
Let's get the investors take on technology, export controls and tariffs.
(06:05):
Good morning, Denny Fish. Were you ready for those headlines
on in video and AMD.
Speaker 7 (06:11):
No. I wasn't, particularly because there was reporting just a
couple of days ago that they had come to an
agreement the administration within video that they weren't going to
have these restrictions. Obviously, that was just a report, but
it definitely took the market by surprise.
Speaker 2 (06:28):
I want to show a chart which is the proportion
of Nvidia's revenue that comes from China, and clearly the
chart tells a clear story. In twenty twenty two, China
revenues around twenty six percent, currently twenty twenty five with
down the thirteen percent. I think many except that this
(06:49):
is headed towards single digit because of the impact of
technology export controls. Does that matter to you as an
Nvidia investor, Denny, do you sort of worry about that
and lay awake at night thinking about in Vidia's business
in China?
Speaker 7 (07:04):
Well, two parts of that question. One is whether it
matters to me as an investor. In two, I lay
awake thinking about China. I think the important thing is
it's actually good to just get it out of the model. Okay,
So I mean we're kind of wiping it clean. We're
taking a clean cut to estimates. And to your point,
the revenue contribution from China has come down materially over
(07:26):
the last few years. I think something else that's important
is that you know, there's something that's it's called the
diffusion Rule that is supposed to come into effect in
the month of May, and effectively with that is that
just puts a quota on the number of GPUs that
certain countries can actually buy. Now, one might think that
(07:47):
potentially the diffusion rule could be relaxed somewhat.
Speaker 6 (07:51):
That could benefit in video.
Speaker 7 (07:53):
The other thing that's just kind of puzzling about all
of this is that in some ways this makes no
sense at all for.
Speaker 6 (08:01):
The administration to do. And why is that.
Speaker 7 (08:04):
Huawei already produces a chip it's somewhat comparable to the
H twenty that is actually the customized chip that Nvidia
has been selling in to China, and as a result,
they're just giving the market to Huawei. And so they're
penalizing a US company by you know, restricting a chip
that's not even that competitive relative to a locally supplied chip. So,
(08:29):
you know, we've already thought about this, you know, pretty extensively.
We didn't know if we would get a full cut,
but I think, you know, the direction of travel was clear.
Contribution from China was going to go way down, and
you know, because we're still supply constrained, and Nvidia has
the benefit of being able to read direct wafers to
(08:50):
other areas where they can actually sell more powerful chips
and chips with higher gross margins.
Speaker 2 (08:57):
The goal of this administration appays to be to shift
mores of the United States, be it localized fabrication of
the core chip assembly, whatever it may be. And so
the companies will face the higher cost of doing business
in this country, or they will face twenty thirty five
percent net tariff somewhere else. What are the pros and
(09:20):
cons of just going with what this administration was and saying, Okay,
we're going to do this in America.
Speaker 7 (09:26):
Well, the pros are that to the extent that we
actually have the capacity to manufacture leading edge.
Speaker 6 (09:35):
Chips, that's a good thing.
Speaker 7 (09:37):
And it's a good thing because those are the types
of chips that are used in our most important industries
for national security and for maintaining our competitive advantage globally
as we you know, race towards artificial general intelligence. The
cons are it is more expensive, but nonetheless, you would
think that the productivity gains that we get in agg
(10:00):
it from deploying AI probably more than offsets what the
aggregate costs would be for manufacturing the chips in the
United States. And I just say, you know, thank goodness,
TSMC put a shovel in the ground, you know several
years ago in Arizona that they're actually in a position
now for companies like Nvidian a MD to actually announce
(10:20):
that they're going to be producing leading edge two nanometer
chips with TSMC in Arizona as well as configuring full
systems in the United States.
Speaker 6 (10:31):
From a manufacturing standpoint, a story.
Speaker 2 (10:34):
We put heavy emphasis on this week. So in video
is your top holding across a couple of funds, right,
TSMC is always in there? You said, Thank goodness, that's
the case basically, But how does your your thinking now change?
Speaker 6 (10:47):
Right?
Speaker 2 (10:47):
Do you stick with this this idea that capital expenditures
will continue to grow in twenty five, twenty six, twenty seven,
the hyperscalers will continue to take from Nvidia or are
you now going to adjust where you put your end assist.
Speaker 6 (11:00):
Any Well, we take the data as it comes.
Speaker 7 (11:04):
But most importantly, I think if you just look at
the most recent comments out of Nvidia where they just
had their GtC conference, if you actually parsed through the
comments from ASML today and you pars through the comments
that we've heard from hyperscalar CEOs, we don't see signs
(11:27):
of a slow down in AI capex and so now
the growth may slow, but nonetheless the signs still support
healthy growth in AI capex. Well, like I said, we'll
take the data as it comes. But ASML was still
optimistic about AI. And you know, it's really the lagging
(11:49):
edge stuff, you know, analog chips and so forth that
go into industrial and auto and things like that that
still you know, continue to be soft. And I will
remind you, you know, I know this is different with
the tariffs and the geopolitical situation, but just rewind the
clock one year and asml same thing happened, they missed bookings,
the stock was down, and then all they because the
(12:10):
bookings are really lumpy, and then bookings just reaccelerated throughout
the year and they're doing some really cool stuff. And
you know, one of the things they talked about is,
you know, one of the reasons that you know they
can continue to drive higher pricing for their EUV and
high NA EUV is because they're starting to do what's
called single layer and what that effectively does it increases
the throughput, it's more valuable, and therefore they can charge
(12:33):
a higher price that.
Speaker 2 (12:35):
A technology charge a higher price. Danny Fisher, Jannis Henderson
is great to have you back on the program. Thank
you very much. Now coming up here on Bloomberg Technology,
list is expanding outside of the US and Canada. We
have CEO David Risha on the company's European acquisition. That's next.
This is Bloomberg Technology. Some deal news. Lift has agreed
(13:08):
to buy the European Multi Mobility and taxi ailing app
Free Now for about one hundred and ninety seven million dollars.
It marks its first global expansion beyond the US and Canada.
Lift CEO David Risha joins US. Now, I've been using Uber,
your main competitor in Europe for a really long time.
I've been going in taxis in Europe for a really
long time. Why acquire free now and not just launch
(13:29):
the Lift app in that jurisdiction.
Speaker 8 (13:32):
Because Frenal is a great company that's got great relationships
all across Europe in the really important taxi industry. I mean, look,
so Lift, as you know ed you've been following us
for a while. We're in a stronger position than we've
ever been. We're picking riders up faster than we've ever
picked them up before. Drivers are making billions on the
platform in the US and Canada, and so now's the
right time for us to go global. And what's great
(13:53):
about it is it expands our market, doubles our market,
and it allows us to plug into, as you say,
the taxi world, which is a huge, huge part of
the European mobility scene.
Speaker 2 (14:03):
Tomorrow. I think I'm right in saying it's your two
year anniversary at Lyft, good memories and you have fixed
the finances of that company to an extent. But the
data is so key, right, Uber has what one million
drivers in Europe and I think free now has about
one hundred and fifty thousand registered taxi drivers nine cities.
How do you bridge the gap? Are you confident you
(14:24):
can bridge the gap? Yeah?
Speaker 8 (14:26):
I am the goodness So free Now is a great
company and one of the things that makes them so
strong is they really understand the local dynamics, market by
market by market. Here's that thing. The mobility market in
Europe for this this kind of you ride heiling is
about forty billion euros.
Speaker 6 (14:43):
Half of that are offline taxes.
Speaker 8 (14:46):
This are literally still people calling up a taxi company
and saying, come take me to the airport, come take me,
I'm going on a business trip.
Speaker 6 (14:52):
Whatever it is.
Speaker 8 (14:52):
So well, it's true, there are other companies there. Free
Now is the leader in the taxi space. And remember
is you know, taxi is kind of an elevat experience
to a lot of Europe think of the London Blackpam.
So we think that the company is really well positioned
to really sort of you know, continue to grow and
take over the much bigger space.
Speaker 2 (15:09):
But it is a company that's only recently broken even
it's had historic losses. What are you modeling for in
terms of what it adds to your top line and
bottom line and how immediately.
Speaker 8 (15:19):
Yeah, so it's a profitable company. It hasn't been a
billion dollars in bookings, which is significant. Now I've left,
of course, has sixteen billion in booking. So you know,
there's a lot of growth, you know, ahead of both
of us. But it'll be financially creative for us, which
is wonderful. And I think as we you know, they've
been owned by Mercedes and BMW, two great sort of
storied bottom manufacturers, but I think combining with US is
(15:40):
going to give them some new energy, some new expertise
to really allow.
Speaker 2 (15:44):
Both of us to grow. There is zero mention in
the release about autonomous driving, and every cell side note
about this deal says it's your plan to roll out
autonomous driving in Europe with those two OEMs that you
just mentioned. Yeah, so here's how we.
Speaker 8 (16:01):
Think about autonomous as we've said, I mean, first of all,
of course it's happening in the US.
Speaker 6 (16:05):
We're actually a.
Speaker 8 (16:06):
Little bit further ahead Europe a little bit not so much.
One of the great things free Now has is well too,
they've got great relationships with European regulators, and they've got
great fleet management and as you and I have discussed before,
fleet management is so important to autonomous So yeah, we
think it sets this up really well. Let's be clear,
this is going to be years down the road, but
it's a really important part of the overall strategy for
(16:28):
being a global player.
Speaker 2 (16:30):
Two years in you've done some M and A, will
you do more M and A?
Speaker 6 (16:34):
And where.
Speaker 8 (16:37):
I mean, never say never, but this really is our
focus right now, right, I mean, the good news is,
you know again free Now is a great, strong company
and we've got.
Speaker 6 (16:43):
So much to build on.
Speaker 8 (16:44):
So we're going to be really focused on our European expansion,
obviously making sure it's a big success. And then who knows,
we'll talk later about someone else.
Speaker 2 (16:54):
Engine capital activists, investor they want to change your board.
Your reaction please, I mean, we.
Speaker 8 (17:00):
Interact with shareholders all the time and you know, listen
to their feedback. Take it seriously. You know, there's a
whole process for dealing with activist investors that were involved
in but probably speaking if you look at what shareholders want,
you know, capital return. We're giving out five hundred million
dollars in a share buyback. Growth, we're growing, We're now expanding,
We're strengthening our business by going international.
Speaker 6 (17:20):
I think we're really.
Speaker 8 (17:21):
Well positioned to address all of the issue.
Speaker 2 (17:22):
Have you that shareholders bring Sorry to interrupt, David. Have
you spoken to them about the free now deal since
it happened? No, Okay, that's kind of interesting. Final questions
on technology Atlanta technology partnerships, MAME Mobility operationally give me
an update please.
Speaker 8 (17:38):
Yeah, so you're referring to the partnership we have with
MAME Mobility and Autonomous Vehicle group or company that's on
track for this summer. So super excited to launch right
in the middle of downtown Atlanta.
Speaker 2 (17:50):
On track for this summer, being commercially on track or
this is a kind of toe in the water.
Speaker 6 (17:54):
Well, it's on track.
Speaker 8 (17:55):
For us to start operationally this summer in Atlanta and
then you know it'll grow from there. But first we've
got to get you know, riders in the cars, and
that'll be sometime.
Speaker 2 (18:04):
This summer because I have the term to do so
two years in What would you score yourself or grade
yourself on the job you've done as the Lift CEO.
Speaker 8 (18:13):
Look, I am a self critical person.
Speaker 2 (18:15):
I am.
Speaker 8 (18:16):
I guess maybe one of the things that I do
is always look for the next thing. But I do
have to say I'm proud of what we've accomplished as
a team over two years, you know, getting to profitability,
seven hundred million dollars plus in free cash and maybe
most importantly, picking up riders faster than ever and drivers
making more on the platform than ever. So if I
look at it from the customer's point of view, we're
doing super well. It's up to other people to tell
(18:37):
me how I'm doing as a.
Speaker 2 (18:38):
CEO, and the street gives you a lot of credit
for that. M and A maybe they didn't see coming
so much. Maybe we'll see some more Lift CEO David Risha,
thank you for joining us here on Bloomberg Technology. Now
coming up, Americans are still using Chinese e commerce apps
to shop cheap alternatives to some high end brands. We're
going to drive into the surge in sales for Timu
(18:58):
and Sian.
Speaker 9 (19:00):
This is Bloomberg Technology.
Speaker 2 (19:23):
A trade war won't stop Americans from shopping on Chinese apps.
Revenue surge for both she and and Timu this month
as US shoppers anticipate price increases due to tariffs. Bloomberg's
Lily Maya joins US and covers the retail Beat. It's
really interesting data. A lot of people in my world
use both of those apps. I don't what are we learning.
Speaker 10 (19:42):
Yeah, it seems like these apps are seeing a lot
of success and people are going to them as tariffs
are starting to loom.
Speaker 2 (19:52):
The eco data kind of comes in here right when
you think about tariffs, we think about passing on the
costs of the consumer through your beat, through the tech
companies that are in the ecomma space. What are we
learning about the consumer and that march data? Yeah, absolutely so.
It seems like the consumer is looking to spend right now.
Speaker 10 (20:11):
The EGO data showed a lot of spending, and it
seems like people might be stocking up or buying now
before prices might get more expensive.
Speaker 2 (20:19):
Lily, you cover retail, specialty retail in particular. What are
you learning about tariffs? Like, how do companies really think
about what happens next? They even know?
Speaker 10 (20:30):
Yeah, so a lot of companies are doing different things.
A lot of the companies I cover report in the
next month, so that will be really interesting to hear,
you know, what they're looking to say to investors and shareholders.
But it seems like a lot of people are in
kind of a wait and see mode. They're not exactly
sure how tariffs are going to impact their business, and
they're trying to figure that out.
Speaker 2 (20:51):
Bloomers really might great to have you on here on
Bloomberg Technology. Thank you very much. Now, coming up, Mark
Zuckerberg's email reveals his Instagram and what's strategies from the past.
We're going to go back to that antitrust case next.
Let's get to markets as well. It is the semiconductor
space that's dragging down technologies to shares broadly, but the
NASDAQ one hundred is under pressure generally speaking, and by
(21:14):
association some of the other key names in our world.
The Hyperscala's consumer tech under pressure. Bitcoin is going in
the opposite direction eighty five thousand US dollars per token
upper percent or so in the session, but it's not
behaved uniformly like as risk on risk off. It doesn't
sort of take into account the same fact as tech does.
(21:37):
We'll dig into that later in the week. Be right back.
This is Bloomberg Technology. Welcome back to Bloomberg Technology. I'm
(22:27):
Ed Ludlow in San Francisco. The market's picture is very clear.
We are under pressure and that largely comes from the
chip sector. New US restrictions on technology imports to China,
specifically for Nvidia and AMD, that is causing pain. But
by association you see a lot of the mag seven
megacap names down. Earning season is right around the corner.
(22:48):
The underperformance of the Philadelphia Semiconductor Index distills that chip pain.
The single names we know about Nvidia, AMD. Very interesting
discussion throughout the show on how long that pain will last.
But ASML is an earning story at missed bookings by
one billion dollars. Later in the program, per Ferregue, New
Street Research is going to come on and give us
(23:09):
deeper and more granular context about this name. There is
other news elsewhere. In his second day on the FDC's
antitrust trial, Mark Zuckerberg revealed that he once considered spinning
off Instagram back in twenty eighteen. In a letter to
senior leaders, he writes, quote, I'm beginning to wonder whether
spinning out Instagram is the only structure that will accomplish
(23:31):
a number of important goals. We should keep in mind
that there's a real chance that all our work to
build a family of apps may be something we don't
get to keep for more. Bloombers Kirk Wagner, who has
been in the courtroom at that trial, joins us, let's
go back over it and explain it. At one time
in twenty eighteen, of his own volition, Mark Zuckerberg considered
(23:54):
spinning off Instagram. What does that mean in the context
of this trial, Well.
Speaker 11 (24:00):
It's very prophetic, right, Obviously he was sort of foreseeing
the issue that he's facing right now coming down the
road for him, you know, six seven years ago. I
don't think the fact that he thought about doing this really,
you know, hurts him so much today. I think it
was shared in the context of the FTC trying to
show that Instagram has perhaps harmed users.
Speaker 2 (24:22):
Right, That's part of their play here, is.
Speaker 11 (24:24):
That they want to show that buying Instagram buying WhatsApp
was actually bad for consumers. And if they can show that,
you know, Mark Zuckerberg even thought, Hey, maybe we shouldn't
be doing this seven years ago, maybe that's a sign
that they weren't you know, employing the best strategy for consumers.
But it is a very interesting thing, in part because
it was so foreshadowing of where he is today.
Speaker 2 (24:45):
This is a multi week but potentially multi month process.
What else does the audience need to know about the
trial and proceedings? Where his META focused and where have
the FTC focused.
Speaker 11 (24:56):
It really hinges on this definition of what you know.
The FTC is considering the friends and family sharing social
networking market, right, So so they're saying, hey, look, there's
a lot of places you can spend time online. There's
very few places where you actually go specifically to share
with your friends and family, and that is where META
has their monopoly.
Speaker 2 (25:15):
This is the FTC's case.
Speaker 11 (25:17):
Meta, on the other hand, is arguing, hey, wait a minute,
we have tons of competitors, right. TikTok is a competitor.
Well's I message is a competitor, obviously, x Elon Musk's
X and none of those, by the very narrow definition
that the FTC is going with, are considered competitors. And
so this is basically a fight to determine what the
(25:37):
market should be and if you know, the FTC succeeds
and keeping it very very narrow. They may have a
good case, but as Facebook has pointed out repeatedly, they
consider their competition very wide.
Speaker 2 (25:50):
Being bes Kutwagner, who I am sure we will come
back to multiple times over the course of proceedings. Thank
you very much. Let's break down more on what the
FTC's trial against Meta could mean in regulation the future
of digital markets. Joining us now is Jennifer Huddleston, Technology
Policy Senior Fellow at the Cato Institute, and as a
piece of documentary evidence in a trial like this, the
(26:13):
CEO at the center of it in a letter six
years ago, seven years ago saying maybe we should spin
off Instagram. How does that play in this environment? What
is this environment of antitrust that this trial represents.
Speaker 12 (26:31):
We've seen a lot of animosity towards some of America's
leading tech companies and this presumption that big is automatically bad.
One of the key elements of the FTC's case is
it's basically imagining a world that never existed. It's trying
to ask for a do overall on an acquisition it
approved more than a decade ago. And at the same time,
(26:51):
the social media dynamics have been changing. They were changing
in twenty eighteen when that letter came about. They were
also changing more recently with the emergence of the like TikTok.
We have to remember that at the time Meta acquired
Instagram and WhatsApp, these were not surefire successes. In fact,
there were jokes, particularly about the acquisition of Instagram at
the time, kind of why are they doing this? Why
(27:13):
are they paying all this money. We don't want to
see a world where government enforcers penalize businesses for taking
risky chances that turn out to be good bets and
turn out to allow more innovation and more benefits for
consumers in the market.
Speaker 2 (27:29):
This is a trial, and it is contested between the
FTC and Meta. But we are a few months into
this new administration. In the White House. Prior to the
election and after the inauguration of President Trump, many put
emphasis on Vice President JD. Vance's views on big tech
(27:50):
and antitrust. How does that context play here in the trial.
It seems as if this administration will follow through with
the general attitude towards big tech that the prior administration did.
Speaker 12 (28:03):
If you look at the history of many of these cases,
many of them began in the first Trump administration. Then
we saw further gasoline on the fire during the Biden administration,
particularly under Chair Lena Kahn at the FTC, and this
real push towards this big as bad mentality. It seems
like so far, both with the remedies proposed in the
Google cases as well as with what we're seeing in
(28:25):
the medic caase, that this administration seems determined to continue
that shift away from the kind of law and economics,
consumer welfare based approach to anti trust, to something that
makes more presumptions about competitors than consumers, and something that
perhaps is using anti trust enforcement for other policy goals.
Speaker 2 (28:44):
And that should be.
Speaker 12 (28:45):
Concerning because if we lose focus on the consumers whom
anti trust was designed to protect, we risk losing the
purpose behind anti trust and making this powerful tool more subjective.
Speaker 2 (28:57):
Jennifer, why would a breakup of Meta in its family
of apps be bad for the consumer?
Speaker 12 (29:03):
I think that's what's really at the heart that we
need to remember when it comes to this case. You'd
lose certain cross functionality that consumers like, but you also
would have companies with fewer resources to engage in research
and development technology to engage in rolling out new features
that consumers want in the time that AI is disrupting things,
but also fewer resources to do some of the things
(29:25):
that consumers have expected around things like young people's online safety.
And finally, you might have companies that have to rely
more on data and advertisers because they no longer can
share those resources, and so they would have to actually
shift more towards using their consumer data and more on
doing what the advertisers want rather than what their consumers want.
Speaker 2 (29:47):
Jennifer, the core of Meta's argument or defense is that
the FTC has this narrow definition, but they're misunderstanding the marketplace,
that Meta's competition is TikTok and that it is you too.
How successful do you think that defense will be.
Speaker 12 (30:06):
The FDC is seeking a really narrow definition of personal
friends and family social media networks, which is a definition
I don't think the average consumer thinks about, and it's
something that, if it's successful, could potentially lead to larger
disruptive disruption in the social media marketplace. Not only does
this definition exclude companies like TikTok that are incredibly popular
(30:29):
with gen Z, it also excludes other messaging apps like Signal.
It excludes platforms like Snap that have grown in popularity,
so it doesn't seem to reflect the experience of the
average consumer when it comes to social media and messaging,
let alone when it comes to broader conversations around things
like advertising or entertainment more generally.
Speaker 2 (30:49):
In your research and your review of policy pending the
outcome of this trial, do you expect actions against other
big tech names, and if so.
Speaker 12 (30:58):
Who We have already seen cases against four of America's
leading tech companies, Google, which is now in a remedy
phase in one of its case. There are also penning
cases against Amazon and Apple, and of course this case
against Facebook and Meta. All of these cases really raise
concerns about the potential government intervention into what has been
(31:19):
a very dynamic ecosystem. Not only could these cases have
consequences for consumers, but there's going to be a question
as well of what are we missing out on while
companies spend their time dealing with enforcement actions instead of
innovating and trying to provide better things for consumers. What
sort of messages this side to the startup ecosystem.
Speaker 2 (31:39):
Jennifer Alison of the Cato Institute, thank you very much.
We'll be right back this is Bloomberg Technology. This is
(32:00):
Bloomberg Technology, and you're looking at a live shot of
the principal room. Check out the Bloomberg Technology podcast. You
can find it on the terminal as well as online
on Apple, Spotify, and iHeart this is Bloomberg. The United
(32:22):
States will have to make a creative R and D
push while making quote smart choices with budgets to stay
ahead in the AI race. Those were the first public
remarks by Michael Kratzios, Advisor to the President and White
House Office of Science and Tech Policy Director, since his
confirmation in March. The main message on strategy for tech
(32:43):
promote and protect. Mister Gratzios joins us. Now specifically, what
do you mean by smart choices? This is a time
where budgets across federal government are being cut. Some tools
and examples please, mister Grazios, thank you so much for
having me ed. I think if you zoom out a
little bit.
Speaker 13 (33:01):
The message that we were trying to share in Austin
a few days ago was this question of how does
the US ensure its position as the global leader in
critical and emerging technologies? And in order to do that,
you have to do two major things. You have to
do promotion and protection, and the key pillar of the
promote agenda is around being more creative in the way
(33:23):
that we spend fairly funded research and development dollars. For
far too long, these R and D dollars have been
spent in the same ways by the same agencies of the.
Speaker 2 (33:32):
Same types of research.
Speaker 13 (33:33):
And there's a lot more that we can do in
all sorts of things like prizes and challenges, advanced market commitments,
or even fast track action grants where we can actually
worry a little bit less about how much and more
about how we actually deploy these dollars in ways that
we can ensure we're making in the best discoveries here
in the United States for years to come.
Speaker 2 (33:54):
We've reported a lot on DOGE that's the context right,
the work to cut wasting government. But very specifically, mister Kretsios,
do you call for support an increase in R and
D budgets? Growth in R and D budgets?
Speaker 13 (34:09):
Again, the most important thing we have to do is
make sure that we are prioritizing our R and D budgets.
Spending a lot of money on the wrong things is
far worse than spending less money on the right things.
Speaker 2 (34:20):
So what we do at the White House.
Speaker 13 (34:22):
In coordination with the Office of Management and Budget, is
helped set research and development priorities for the country. The
President spelled these out and a letter that he sent
to me two weeks ago, and the ones that he
did call out were artificial intelligence, quantum computing, and nuclear
to name three. And you can imagine that in future
budget cycles these areas that we're going to be prioritizing
(34:43):
because those are key to our national economic security.
Speaker 2 (34:47):
Are those priorities achievable AI leadership from America with the
tariffs that we have in place and the technology export controls,
some of which were amplified overnight on the likes of
and Video and AMD. Absolutely.
Speaker 13 (35:03):
If you think back to the strategy that we discussed
a couple of days ago, in order to achieve this
leadership position, we have to do both promotion and protection.
On the promote side, we talked a little about the
R and D pillar. The second piece of that is
around deregulation. For far too long, especially in the last administration,
you know, a lot of our regulatory policy has been
driven by the spirit of fear, this idea that we
(35:25):
should be worried about these emerging technologies, and what the
President in the White House has said many times is
we have to make sure that we lead in this
technology and actually deploy it, and then on the promote
on the protect side of the equation, we have to
make sure that we're not giving our adversaries the critical
tools that could help.
Speaker 2 (35:44):
Them try to catch up to us in this race.
Speaker 13 (35:46):
We know that the PRC is attempting to catch up
with us and things like artificial intelligence, and there's no
reason why we should be helping them do so. So
that's why in order to kind of achieve this US
position of leadership in artificial intelligence and other emerging technologies,
you have to have a balanced promotion and protection agenda.
Speaker 2 (36:06):
In Nvidia and AMD now face the situation where they
have to apply for licenses to be able to explore
H twenty and I THREEH eight to China, and the
administration's argument was they could end up in supercomputers. The
company's argument is these are much lower performance, and one
idea is that if they haven't got access to American technology,
China will simply champion a domestic name. Huawei has a
(36:29):
similar ACCE accelerator. How will you advise the President on
whether or not AMD and Nvidia should be granted those
license to export lower performance accelerators to China.
Speaker 13 (36:41):
Yeah, I'm not going to opine on the specifics there,
but I will say that there has been a track
record of a wide variety of chips being used to
drive the development and training of what are almost frontier
level open source models by companies within the PRC, And
as we think about our protect agenda, it's critical that
(37:02):
we develop an export control regime that is simple and
clear and is one that we enforce very very strongly.
Speaker 2 (37:13):
One of the elements of PROMOTE is to bring manufacturing
of lead edge chips and assembling of compute systems to America, Right,
mister Crassios and ASML is in the splotlight as an
example because of its earnings report overnight, with this administration,
consider an exemption of tariffs on the leading chip equipment
(37:33):
maker in order that they might be able to do
that bring more of their activity to the United States.
Speaker 13 (37:39):
Again, I can't oppine on specifics, but I think what
we saw from the news last week on in Nvidia,
there is a continual effort and we see that from
all around the world of people wanting to bring manufacturing
and these core sort of bleeding edge technologies back here
to the United States. And that's something that the White
House is very proud of and something that we have
(38:00):
seen across industry. The policies that the President in our
trade team have implemented is one that is actually proving true.
And just a few short days we've had so many
great announcements about companies coming here to build and manufacture
these critical technologies in the US, and I suspect that
we'll be seeing a lot more of those in the
months in.
Speaker 2 (38:19):
Weeks ahead, there is some confrontation between the administration and
leading academic and research institutions. Harvard is an example. How
does the potential of cutting budgets at institutions like that
impact America's competitiveness in the field of research. I reflect
(38:39):
on Jensen Wong's comments. I believe in March at GtC
that well more than fifty percent of the AI research
is either being done in China or by Chinese nationals,
and yet here in America we have some debate about
funding for these institutions.
Speaker 13 (38:56):
Yeah, I want to make sure we don't necessarily conflate
to such issues. To me, I don't think this is
particularly hard. There is no reason why we should be
supporting anti semitism on college campuses or tolerate that. I
think we can be intolerant of anti semitism on university
campuses and also support the academic research enterprise. Those two
(39:21):
things can happen simultaneously. And I think first and foremost
these universities think very carefully about about Title six, and
I leave that to the DOJ and to DOE Department
of Education.
Speaker 2 (39:32):
To think about.
Speaker 13 (39:33):
On my end, and what I've advocated very strongly is
we continue to need great universities to work on basic
research that has funded and fueled or innovation ecosystem for decades,
and that's something the White House will continue to advocate
for well. At the same time, we can never stand
for anti semitism on our university campuses.
Speaker 2 (39:53):
Mister Kretzios. Is part of your offices request for information,
several AI companies submitted responses to you, you asking basically
to preserve their ability to learn from copyrighted material. We're
talking about those training frontier models, foundation models, very simple
yes or no if you will. Is copyright reform on
(40:15):
the table as part of this President's AI action plan
and how would you advise him on that? Please?
Speaker 13 (40:21):
Yeah, we were so delighted with how many responses we
got to the I Action Plan RFI. I think in
the coming days we'll hopefully be able to release all
of those responses. It was many, many thousands, and it
just showed how far and wide the community is that
wants to think about and help shape the national agenda
for artificial intelligence. And obviously copyright is going to be
(40:42):
one of the issues that many people commented on over
the last few months.
Speaker 2 (40:47):
Mister Christio's copyright reform yes or no again. I think
we could not be more.
Speaker 13 (40:53):
Thrilled with how many people commented on all sorts and
all facets of the AI agenda, And this is one
that we had a lot of commenters send us some
very interesting and detailed thoughts on.
Speaker 2 (41:05):
The President has spoken with admiration about Jensen Wong and
in Nvidia's leadership. Just as our audience Boombog Technology gets
to know you, mister Kratzios and your work in the
White House, Have you had the opportunity to meet with
Jensen Wong and his peers about what they plan to
do in America and also critical markets for them. Which
once included China. I have yeah.
Speaker 13 (41:26):
In the first two weeks after my confirmation, I had
the opportunity to meet with most of the leading technology
industry CEOs and chat with them about how we can
together usher in this golden age of American innovation that
the President has called for. With Jensen specifically, he's a
tremendous thinker, and one of the great things that we
connected on is the question of AI for science. There's
(41:48):
been this almost this extreme fixation on thinking about the
protect side of the agenda when it comes to specific semiconductors.
But I think another equally more and maybe even more
important part of the are the problems we face ahead
of us and our challenges is how can we actually
implement this technology to drive transformational change for the American people.
Speaker 2 (42:08):
And Jensen and Nvidia he.
Speaker 13 (42:10):
Was extraordinarily excited to help us think through and see
what we can do more on driving scientific discoveries through AI.
And it's something that I will be encouraging Secretary right
with our labs and punch at National Science Foundations so
many of our other leaders to stick more seriously because
we have to do better.
Speaker 2 (42:28):
Michael Kratzio's White House Office of Science and Tech Policy Director,
Thank you, look forward to speaking more over the coming years. Okay,
I mentioned ASML shares trading significantly lower, the company posting
a sales miss that was almost a billion euros less
than expected. Per Fareger of New Street Research, head of
Global Tech Infrastructure is with us. There are people out there, Pierre,
(42:48):
and it's good to see you again that a bit
more sanguine. Right, Orders can be lumpy, But the thing
that's spooky to many is the inability to quantify tariff impact.
How are you modeling for that in ASML's case. Yeah,
I think you're making a good point.
Speaker 14 (43:04):
The way I modeled it is by actually modeling orders
coming down in the nearter, Because while you're not too
certain bout tariffs in some industries, you could see people
like front loading orders before time it gets into place.
Doesn't work very well with these very large pieces of equipment.
And then the second approach is to actually wait and
see and be more careful in the long run. Modeling
(43:30):
like tariffs requires you to take a view on what
the tariffs are here for. You know what the US
administration want to do with these tariffs, and so if
you listen to them. You know, they want to encourage
changes in behavior with straight partners. They want to bring
back to the US or to reliable partners manufacturing, and
(43:52):
they want to create additional revenues. And if you put
that into into motion around SEMITAP equipments, what you see
is that none of these objectives are going to go
against the ability for the US to build actually the
AI infrastructure and to continue to, let you know, the
manufacturing of leading h semiconductors like memory chips and logic chips.
Speaker 2 (44:16):
Yes, as they built up in the US.
Speaker 14 (44:19):
You still need to continue to have like technology advancing
everywhere in the world. So I'm not too worried about
the impact of tariff's on SEMITAP equipments.
Speaker 2 (44:28):
You heard mister Kratziosk decline to answer my question on
whether there would be an exemption for chip equipment makers,
but mister Fouquet was very clear, we will assemble in
the Netherlands. Does the administration have a say on what
a SML does in this case, Pierre.
Speaker 14 (44:46):
They definitely have a say. I think if they if
they give a phone call, the phone call will be
will be taken. The specifics of ASML tools is that
it's very unlikely to see like the final assembly of
these tools moving away from the Netherlands. The same way
it's very unlikely to see like the most leading edge
(45:06):
manufacturing node of TSMC moving away from from Taiwan. Is
probably like a hard limit that cannot be surpassed. Now,
what must said as well is that you know, increasing
the amount of manufacturing done in the US, which is
already very significant. Yes, where I live, you you already
have like very critical stages that have been manufactured, Like
(45:30):
the light source, which is the most critical piece of
the IVY tool, is manufactured in the US, and seeing
that going up is a possibility. Like changing like the
final assembly of these tools is yes, probably probably a
stype and particularly in practical terms, not doable.
Speaker 2 (45:48):
Right PF Faeryg of New Street Research. Good to catch
up have you back here on Bloomberg Technology. But that
does it for this edition of Bloomberg Technology. A huge
thanks to those of you that submitted questions for some
of our key interviews throughout the hour. There is a
lot to recap. Don't forget to check out the podcast.
You know where to find it on the Bloomberg terminal
as well as online on Apple, Spotify, and iHeart. What
(46:11):
a week from San Francisco. This is Bloomberg technology
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