DirecTV and Dish to Merge, Beijing Wants to Ditch Nvidia | 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. ♪ CAROLINE: THIS IS "BLOOMBERG TECHNOLOGY." [INAUDIBLE] BEIJING STEPS A PRESSURE ON DOMESTIC COMPANIES TO DITCH NVIDIA CHIPS. GAVIN NEWSOM BLOCKS A PROPOSED AI SAFETY BILL. [INAUDIBLE] LET'S CHECK IN ON THE MARKETS. TECHNICAL ISSUES WITH MY MICROPHONE. WE ARE ALL AWAITING FED CHAIR
POWELL, WHAT HE WILL BE SAYING REGARDING THE ECONOMY. THE GOLDEN DRAGON INDEX IN CHINA UP ANOTHER 4%. TECH STOCKS ON FIRE AMID THE STIMULUS. FEELING OF FOMO CONTINUED TO PERPETUATE ON THE MARKET. WE HAVE A MERGER MONDAY ON OUR HANDS.
AT&T ONLY UP .1%, BUT DIRECTV AND DISH COMBINING TO MAKE THE BIGGEST PAY-TV PROVIDER IN THE U.S. AT&T IS SELLING ITS STAKE IN DIRECTV TO TPG.
MEANWHILE, EARNING IT $7.6 BILLION. ECHOSTAR, THE OWNER OF DISH, IS DODGING BANKRUPTCY BY OFFLOADING THE DEBT ASSOCIATED WITH PAY-TV ASSETS, SET TO SELL MORE SHARES ITSELF. LET'S DISCUSS ALL OF THIS WITH MICHELLE DAVIS. YOU WERE AHEAD OF THE CURVE ON THIS. THIS IS WHY AT&T WAS NOT MOVING
MUCH, BECAUSE WE ANTICIPATED THIS OFFLOADING OF DIRECTV. TALK ABOUT WHAT THEY ARE CREATING HERE BY MERGING THE COMPANIES. MICHELLE: AS YOU SAID, LONG TIME COMING. THE NEWS CAME OUT THIS MORNING THROUGH A SERIES OF PRESS RELEASES, FILINGS. DISH AND DIRECTV WILL COMBINE. DIRECTV IS ACQUIRING DISH TO FORM THE BIGGEST PAY-TV PROVIDER IN THE U.S. DIRECTV IS PAYING ONE DOLLAR IN EQUITY AND THEN ASSUMING $10 BILLION OF DISH DEBT IN ORDER TO ACQUIRE THE BUSINESS.
AS PART OF THAT, DIRECTV HAS TO GET DISH BONDHOLDERS TO TAKE A HAIRCUT ON SOME OF THEIR DEBT. IF THIS GOES THROUGH, IT WILL MEAN A STRONGER BALANCE SHEET BEHIND THOSE LENDERS THAT ARE AGREEING TO THIS, BUT THE BONDHOLDERS HAVE TO AGREE TO TAKE THE HAIRCUT. CAROLINE: THAT IS WHY SOME OF THESE BOND PRICES ARE SIGNIFICANTLY UNDER PRESSURE TODAY. ECHOSTAR MEANWHILE IS GOING MORE INTO THE INFRASTRUCTURE SIDE, 5G , SELLING $5 BILLION WORTH OF STOCK. THERE IS SOME OF THE OUTSTANDING DEBT INVOLVED IN THIS EXCHANGE.
WHY DID AT&T EXIT IT'S HOLDING UP DIRECTV, DO THEY NOT SEE A FUTURE OF A BIGGER DEAL? MICHELLE: THIS IS PART OF A BIGGER THEME THAT WE ARE SEEING IN M&A, CORPORATE AMERICA, WHERE COMPANIES ARE LOOKING TO SIMPLIFY THEIR BUSINESSES. AT&T, YEARS AGO THEY GOT INTO THE CONTENT GAME. A COUPLE YEARS AGO, THEY SOLD WARNER BROS. TO DISCOVERY. NOW WITH DIRECTV, THEY ARE LOOKING TO EXIT THAT. THIS IS THEM WANTED TO FOCUS ON THEIR CORE, WIRELESS, BROADBAND. THEY DON'T SEE VALUE IN CONTENT THE WAY THEY DID BEFORE.
UNDER TPG, DIRECTV HAS DONE WELL. TPG HAS BEEN ABLE TO CUT COSTS. THE THOUGHT IS MAYBE IT IS BETTER IN THEIR HANDS THAN A SPLIT DEAL. CAROLINE:
I LIKE THAT YOU ARE SAYING THIS IS PART OF A TREND TO SIMPLIFY. YOU ALSO HAVE A VERIZON STORY WHERE WE SAY A $3.3 BILLION DEAL TO SALE, LEASEBACK ACCESS TO ITS TOWERS. MICHELLE: IT IS A WAY FOR VERIZON TO GET SOME CASH.
THEY ANNOUNCED A DEAL A COUPLE WEEKS AGO TO BUY FRONTIER, A BIG BROADBAND INTERNET PLAYER. WE ARE SEEING A BIG THEME OF WATERLESS PLAYERS TAPPING OUT ON CELL PHONE, TRYING TO FIND MORE CUSTOMERS. THE WAY THEY ARE DOING THAT IS OFFERING INTERNET ACCESS. THIS IS A WAY TO PAY FOR THAT
WITHOUT BOOSTING THEIR LEVERAGE, GIVES THEM A LITTLE BIT OF CASH. CAROLINE: WE APPRECIATE IT. MEANWHILE, CHIEF INVESTMENT STRATEGIST MARTA AUSTIN IS HERE. ARE WE GOING TO SEE MORE DEALS MOVE THROUGH AS WE SEE RATES GO LOWER? >> WE HAVE SEEN SOME PICKUP IN DEALS THIS YEAR. ONE OF THE CHALLENGES HAS BEEN HIGHER RATES, SO THE EXPECTATION THAT AS THE FED ENTERS THE DEFINITIVE CUTTING CYCLE WE WILL SEE SOME SHIFTS. THAT COULD IMPACT THE M&A ENVIRONMENT AS WELL. THERE IS ALSO THE REGULATORY
ANGLE, GETTING DEALS THROUGH. THAT HAS BEEN HARDER IN RECENT YEARS. THAT IS SOMETHING THAT INVESTORS AND COMPANIES WILL HAVE TO CONTINUE TO CONTEND WITH. LOWER RATES IS A BIT OF A
TAILWIND. CAROLINE: THAT HE M&A, IPOS ARE ALL GOING TO BE HELD BACK UNTIL THE POST POLITICAL ANXIETY, POSTELECTION. IS THAT YOUR VIEW? >> I DO THINK REGULATORY IMPACT HAS BEEN FELT. IT DOESN'T MEAN THAT COMPANIES WILL NOT ENGAGE IN DEALS WHEN IT MAKES STRATEGIC SENSE. THAT IS WHAT WE ARE SEEING WITH THE DISH-DIRECTV DEAL. I DO THINK THERE HAS POTENTIALLY BEEN LESS ACTIVITY THAN THERE OTHERWISE MIGHT BE.
AS WE TURNED THE CORNER AND HAVE SOME CLARITY ON WHAT THAT LOOKS LIKE, WE MAY START TO SEE A PICKUP IN ACTIVITY ON THE M&A FRONT. CAROLINE: WHAT ABOUT OWNERSHIP OF BIG TECH RIGHT NOW? THERE IS TALK THAT HEDGE FUNDS ARE SELLING OUT OF TECHNOLOGY NAME TO GET INTO CHINESE NAMES. HOW ARE WE SEEING THAT PLAY OUT IN TERMS OF PEOPLE'S COMMITMENT TO STAY WITH THE MAGNIFICENT SEVEN? MARTA: SUCH AN INTERESTING QUESTION BECAUSE A LOT OF TIME TALKING ABOUT THE ENVIRONMENT WE ARE IN, TWO DRIVERS OF RETURN. THERE HAS BEEN THE AI THEME WHICH HAS BENEFITED THE BIG TECH SPACE. THERE HAS ALSO BEEN THE SOFT LANDING THEME. NOW WE ARE ADDING THE CUTTING CYCLE TO THE MIX. WITHIN THE U.S., THAT IS
BROADENING OUT THE TRADE. NOT THAT PEOPLE NEED TO ABANDON BIG TECH. LOWER RATES ARE NOT BAD FOR BIG TECH, BUT IT BRINGS UP OTHER AREAS LIKE SMALL CAPS INTO THE FRONT OF INVESTORS MINDS. WHAT IS HAPPENING IN CHINA IS SO FASCINATING. THIS IS AN AREA THAT'S BEEN UNDER PRESSURE, MULTIPLE FALSE DAWNS. NOW AS BLOOMBERG HAS REPORTED, THE MONETARY AND FISCAL SIDE ARE COMING TOGETHER TO PUSH THESE STOCKS HIGHER.
GIVING INVESTOR ENTHUSIASM TO ASSESS THAT HAD BEEN DEPRESSED, YOU CAN FIND SOME HEALTHY BIG TECH NAMES IN CHINA, AND THE OVERHANG HAS MADE IT DIFFICULT FOR INVESTORS THAT WANT TO GET INVOLVED. CAROLINE: WE HAVE ALREADY SEEN THE FOMO KICK IN. IS THERE STILL JUICE TO GO HERE OR DO YOU WAIT TO SEE HOW BIG AN IMPACT STIMULUS HAS FROM THE FUNDAMENTAL PERSPECTIVE? MARTA: I WOULD ARGUE THE VALUATIONS ARE STILL THERE. WHEN YOU LOOK AT SOMETHING LIKE A CRANE SHARES ETF, CHINA MARKET, WHERE IT PEAKED IN FEBRUARY 2021, AROUND 130. COMING DOWN TO 18, NOW IN THE 30'S. YOU CAN SEE A LITTLE BIT OF ROOM LEFT ON THE VALUATION SIDE.
THE SENTIMENT HAS BEEN SO BLEAK. THERE HAVE BEEN NUMEROUS PIECES OF RESEARCH OVER THE PAST SEVERAL YEARS SAYING THIS IS A NO GO SPACE. NOW THAT YOU HAVE THE SUPPORT FOR THE DEMAND SIDE -- I AM NOT SAYING THEY ARE NOT STILL ISSUES LEFT, BUT AT LEAST YOU CAN TAKE SOME OF THE CONCERNS AWAY FROM INVESTOR MINDS. CAROLINE: WE HAVE HAD SUCH A, U.S. IS THE ONLY GAME IN TOWN, FOR
THE TECHNOLOGY TRADE. IS THAT STILL THE CASE? MARTA: IT IS HARD TO FIND SIMILAR OPPORTUNITIES FROM A FINANCIAL OR DOMINANCE PERSPECTIVE FROM WHEN YOU HAVE IN SILICON VALLEY. THERE IS A LOT OF UNIQUENESS WITH THOSE NAMES. THE CLOSEST COROLLARY I SEE IS IN CHINA WHERE YOU HAVE THE SIMILAR TYPES OF COMPANIES WITH REALLY HEALTHY BALANCE SHEETS. I THINK THIS IS THE COMPETITIVE TRADE. OF COURSE, THEY HAVE CONCERNS AROUND THE REGULATORY ENVIRONMENT, GEOPOLITICAL RISKS, A NUMBER OF THINGS THAT SPOIL THE APPLE CARD. FROM AN ASSET PERSPECTIVE, THEY
ARE PRETTY COMPETITIVE. CAROLINE: I JUST WANT TO DOUBLE-CLICK ON THE REGULATORY CONCERNS. THERE ARE GEOPOLITICAL REGULATORY CONCERNS AS WELL WITH CHINA PUSHING BACK ON NVIDIA CHIPS. THAT HAS BENEFITED CHINESE CHIPMAKERS. HOW MUCH ARE YOU FACTORING IN FOR YOUR INVESTORS THE IDEA THAT CHINESE-U.S. TENSIONS WILL CONTINUE? MARTA:
I THINK THAT IS ONE OF THE EXOGENOUS EVENTS OUT THERE THAT AFFECTS TECH BUT ALSO THE BROADER MARKET. WE HAD TALKS ABOUT TARIFFS AND THE LIKE. A LOT OF QUESTIONS ABOUT THE COOPERATION OF DIFFERENT COMPANIES AND HOW THEY WILL PLAY WELL. WITH SOMETHING LIKE AI, THE SECURITY RISK, HOW THAT FACTORS INTO THINGS. WHEN FOLKS ARE THINKING ABOUT THESE ASSETS, THINK ABOUT THE VALUATION AND WHETHER IT IS ACCOUNTING FOR THOSE RISKS. EVEN POST-SUMMER STORM,
VALUATIONS ARE A BIT HIGH, NOT TAKING INTO ACCOUNT THESE OUTSIDE EVENTS THAT COULD BE PROBLEMATIC. CAROLINE: EMPOWER ACHIEVE CHIEF INVESTMENT STRATEGIST, MARIA NORTON, THANK YOU. WHY HEZBOLLAH DRONES COULD BE THE NEXT BIG THREAT. MEANWHILE, WE PUSH AHEAD TO WHAT IS HAPPENING IN NEW YORK. GOVERNOR KATHY HOCHUL SPEAKING ABOUT THE STATE'S PREPARATIONS AHEAD OF POTENTIAL EAST COAST PORT DISRUPTIONS. YOU CAN WATCH THIS ON THE
CAROLINE: PRESIDENT BIDEN MAKE REMARKS ON THE ADMINISTRATION'S RESPONSE TO HURRICANE HELENE. PRESIDENT BIDEN: THE BROAD AND DEVASTATING IMPACTS OF HURRICANE HELENE. IT IS AT HISTORIC, HISTORY MAKING STORM. THE ENTIRE SOUTHEAST AND APPALACHIA DAMAGE FROM THE HURRICANE STRETCHES ACROSS AT LEAST 10 STATES. WIND OVER 120 MILES PER HOUR IN SOME PLACES. STORM SURGES UP TO 15 FEET,
RECORD FLOODING. COMMUNITIES ARE DEVASTATED. LOVED ONES WAITING, NOT SURE IF THEIR LOVED ONES ARE OK BECAUSE THEY CANNOT CONTACT THEM BECAUSE THERE ARE NO CELL PHONE CONNECTIONS. MANY MORE FOLKS DISPLACE WITH NO IDEA ON WHEN THEY CAN RETURN TO THEIR HOME IF EVER, IF THERE IS A HOME TO RETURN TO. WE ARE KEEPING THEM IN OUR PRAYERS AND ALL THE LIVES LOST. THOSE PARTICULARLY UNACCOUNTED FOR. THERE IS NOTHING LIKE WONDERING
IS MY MOTHER, DAUGHTER, SISTER, BROTHER ALIVE? MANY MORE WITHOUT COMMUNICATIONS. HOMES AND BUSINESSES HAVE WASHED AWAY IN AN INSTANT. I WANT THEM TO KNOW WE ARE NOT LEAVING UNTIL THE JOB IS DONE. I ALSO WANT YOU TO KNOW I'M COMMITTED TO TRAVELING TO THE IMPACTED AREAS AS SOON AS POSSIBLE, BUT I'VE BEEN TOLD IT WOULD BE DISRUPTIVE IF I DID SO RIGHT NOW. WE WILL NOT DO THAT AT THE RISK OF DIVERTING OR DELAYING ANY OF THE RESPONSE ASSETS NEEDED TO DEAL WITH THIS CRISIS. MY FIRST RESPONSIBILITY IS TO GET ALL THE HELP NEEDED TO THOSE IMPACTED AREAS.
I EXPECT TO BE THERE LATER THIS WEEK. I AND MY TEAM ARE IN CONSTANT CONTACT WITH THE GOVERNORS AND OTHERS, THE HEAD OF FEMA IS ON THE GROUND RIGHT NOW IN NORTH CAROLINA. SHE WILL STAY IN ASHEVILLE AND THAT REGION FOR THE FORESEEABLE FUTURE. THERE HAVE BEEN REPORTS OF OVER 100 DEAD. GOD WILLING, THEY ARE ALIVE BUT THERE IS NO WAY TO CONTACT THEM BECAUSE OF LACK OF CELL PHONE COVERAGE. I DIRECTED MY TEAM TO PROVIDE EVERY AVAILABLE RESOURCE AS FAST AS POSSIBLE TO YOUR COMMUNITIES TO RESCUE, RECOVER, AND BEGIN REBUILDING. IN ADDITION TO FEMA, INCLUDING
THE FEDERAL COMMUNICATIONS COMMUNICATION TO ESTABLISH COMMUNICATIONS, NATIONAL GUARD, ARMY CORPS OF ENGINEERS, DEPARTMENT OF DEFENSE WILL PROVIDE ALL THE RESOURCES AT HIS DISPOSAL TO ASSIST IN CLEARING DEBRIS AND DELIVERING LIFESAVING SUPPLIES. SO FAR, THAT IS OVER 3600 PERSONNEL DEPLOYED. THAT NUMBER IS GROWING BY THE DAY. I QUICKLY APPROVE A REQUEST FROM GOVERNORS FROM FLORIDA, NORTH CAROLINA, SOUTH CAROLINA, TENNESSEE, GEORGIA, AND ALABAMA THROUGH AN EMERGENCY DECLARATION.
I APPROVED ADDITIONAL REQUEST FOR THE GOVERNORS OF NORTH CAROLINA, SOUTH CAROLINA, DISASTER DECLARATION TO PAY FOR DEBRIS REMOVAL, PROVIDE FINANCIAL ASSISTANCE DIRECTLY TO SURVIVORS. FEMA AND THE SMALL BUSINESS ADMINISTRATION ARE THERE TO HELP THE RESIDENTS WHOSE HOMES AND BUSINESSES WERE LITERALLY DESTROYED, WASHED AWAY, BLOWN AWAY. THE FEDERAL SEARCH AND RESCUE TEAMS HAVE BEEN WORKING SIDE-BY-SIDE WITH STATE AND LOCAL OFFICIALS AND PARTNERS IN VERY TREACHEROUS CONDITIONS TO FIND THOSE THAT ARE MISSING. THEY WILL NOT REST UNTIL EVERYONE IS ACCOUNTED FOR. I WANT TO THANK ALL THE FIRST RESPONDERS AND EVERYONE WHO HAD BEEN WORKING AROUND THE CLOCK.
ONE OF THE BRAVE TEAMS THAT VOLUNTEERED TO BE THERE IS FROM SAN DIEGO COUNTY FIRE DEPARTMENT, SET TO TRAVEL ALL THE WAY TO NORTH CAROLINA TO HELP. ON THE WAY, THEY WERE IN A TERRIBLE CAR ACCIDENT IN LOUISIANA. WE PRAY FOR THEIR FULL RECOVERY. IT WAS A BAD ACCIDENT. WE KNOW THERE IS MORE TO DO AND WE WILL CONTINUE TO SURGE RESOURCES INCLUDING FOOD, WATER, LIFESAVING EQUIPMENT. WE WILL BE THERE BEFORE, AND I MEAN IT, AS LONG AS IT TAKES TO FINISH THE JOB. LET ME CLOSE WITH THIS. AS PRESIDENT, I'VE SEEN FIRSTHAND THE DEVASTATING TOLL THAT SUCH DISASTERS LIKE THAT CAN HAVE ON FAMILIES AND COMMUNITIES. ON THE GROUND, MANY DISASTER
AREA SINCE I BECOME PRESIDENT. I HAVE HEARD DOZENS OF STORIES FROM SURVIVORS ABOUT HOW IT FEELS TO BE LEFT WITH NOTHING, NOT EVEN KNOWING HOW TO GET BACK ON TRACK. I'M HERE TO TELL EVERY SINGLE SURVIVOR IN THESE IMPACTED AREAS THAT WE WILL BE THERE WITH YOU AS LONG AS IT TAKES. FOR THE SAKE OF YOURSELVES AND YOUR FAMILY, I URGE EVERYONE TO LISTEN TO LOCAL OFFICIALS AND FOLLOW ALL SAFETY INSTRUCTIONS. TAKE THIS SERIOUSLY. PLEASE BE SAFE.
YOUR NATION HAS YOUR BACK AND THE BIDEN-HARRIS ADMINISTRATION WILL BE THERE UNTIL THE JOB IS DONE. GOD BLESS YOU ALL. ESPECIALLY THOSE STILL WONDERING WHERE YOUR LOVED ONES ARE. >> ASKED CONGRESS FOR A SUPPLEMENTAL? PRESIDENT BIDEN: THAT IS MY EXPECTATION, YES. THIS IS AN HISTORIC STORM. DEVASTATING. NEVER SEEN ANYTHING LIKE THAT BEFORE. SOME OF THEM ARE BACK-TO-BACK, THREE STORMS IN A ROW.
>> ASKING CONGRESS TO COME BACK FOR A SPECIAL SESSION? PRESIDENT BIDEN: THAT IS SOMETHING I MAY HAVE TO REQUEST. NO DECISION HAS BEEN MADE YET. >> DO YOU HAVE A SENSE OF WHEN YOU WILL BE ABLE TO GO? PRESIDENT BIDEN: I TOLD THE GOVERNOR OF NORTH CAROLINA I EXPECT TO BE DOWN THERE WEDNESDAY OR THURSDAY WHEN IT IS CLEAR FOR ME TO GO. YOU GUYS THAT TRAVEL WITH ME KNOW THERE IS AN ENTOURAGE. IT CAN BE DISRUPTIVE. >> TRUMP DOWN IN GEORGIA TODAY, IS THAT DISRUPTIVE? >> ON THE OTHER SIDE OF THE BREAK IN THE MIDDLE EAST -- PRESIDENT BIDEN: I WAS GOING TO STICK WITH THE SUBJECT. >> ISRAEL MAY NOT BE LAUNCHING A LIMITED OPERATION INTO LEBANON. ARE YOU COMFORTABLE WITH THEIR
PLANS? PRESIDENT BIDEN: I AM MORE AWARE THAN YOU KNOW, AND I'M COMPARABLE WITH THEM STOPPING. WE SHOULD HAVE A CEASE FIRE NOW. >> ON THE HURRICANE, WHY WERE YOU AND VICE PRESIDENT HARRIS NOT IN WASHINGTON COMMANDING THIS? PRESIDENT BIDEN: I WAS COMMANDING. TWO HOURS THE DAY BEFORE YESTERDAY.
I WAS ON THE TELEPHONE WITH MY SECURITY PEOPLE. CAROLINE: PRESIDENT BIDEN THERE DISCUSSING HURRICANE HELENE. LET'S GO TO WASHINGTON FOR MORE WITH KAILEY LEINZ IN D.C. WHAT DID YOU MAKE OF THE COMMENTS? >> HE WAS OBVIOUSLY ADDRESSING HIS DESIRE TO VISIT THESE AFFECTED AREAS. WE HEARD THE PRESIDENT SAY HE DOESN'T WISH TO DO SO UNTIL HE KNOWS THAT AS IT WILL NOT BE DISRUPTED. HE IS COMMITTED TO TRAVELING TO
THOSE AREAS, EXPECTED TO VISIT LATER THIS WEEK. IN THE MEANTIME, THE PRESIDENT SAYING HE HAS SPOKEN TO GOVERNORS OF SOME OF THE STATES AFFECTED INCLUDING GOVERNOR BRIAN KEMP IN GEORGIA, ROY COOPER OF NORTH CAROLINA, NOTED HE HAS MADE DISASTER DECLARATIONS IN THREE STATES, EMERGENCY DECLARATIONS IN SEVEN STATES. INTERESTING TO HEAR JOE BIDEN TALK ABOUT THE NEED FOR SUPPLEMENTAL FUNDING. AS WE LOOK AT A DEATH TOLL NORTH OF 100, ALSO POTENTIALLY TENS OF BILLIONS OF DOLLARS IN DAMAGES THAT MAY NEED TO BE ADDRESSED.
THE PRESIDENT SAID HE EXPECTS THEY WILL NEED TO MAKE A SUPPLEMENTAL FUNDING REQUEST TO CONGRESS, NOTING CONGRESS IS CURRENTLY ON RECESS UNTIL MID NOVEMBER AFTER THE ELECTION. THE PRESIDENT ASKED WHETHER HE WOULD NEED TO CALL CONGRESS BACK FOR A SPECIAL SESSION TO ADDRESS THAT SUPPLEMENTAL FUNDING. HE SAID THEY MIGHT HAVE TO MAKE THAT REQUEST ALTHOUGH THAT IS NOT OFFICIAL YET. PRESIDENT BIDEN MAKING THESE REMARKS AFTER GETTING CRITICIZED -- AS WE HEARD THE LAST QUESTION -- WHY WASN'T HE IN WASHINGTON OVER THE WEEKEND? HE WAS IN DELAWARE.
DONALD TRUMP POINTED THAT OUT, AT A RALLY SAYING THAT JOE BIDEN WAS SLEEPING IN PENNSYLVANIA. ALSO TALKING ABOUT KAMALA HARRIS, FUNDRAISING RATHER THAN BEING THERE. OF COURSE, BOTH HARRIS AND BIDEN ARE EXPECTED TO VISIT THE AFFECTED AREAS THIS WEEK. CAROLINE: THANK YOU. LET'S TURN OUR ATTENTION TO THE U.S. AND CHINA. BEIJING IS STEPPING UP PRESSURE
ON DOMESTIC COMPANIES TO STEP UP PROCESSING IN FAVOR OF OTHER COMPANIES. LET'S DISCUSS MORE WITH MCKENZIE HAWKINS WHO HELPED BREAK THE STORY ON FRIDAY EVENING AROUND THE PUSHBACK AGAINST NVIDIA. THIS IS TODAY'S MARKET REACTION. REMIND US AS TO WHY THEY ARE TRYING TO CURTAIL THESE NOT MOST POWERFUL CHIPS FROM NVIDIA. MCKENZIE: BEIJING, FOR YEARS, HAS BEEN AIMING FOR SELF-SUFFICIENCY IN SEMICONDUCTORS, THE BUILDING BLOCKS OF EVERY ADVANCED TECHNOLOGY INCLUDING ARTIFICIAL INTELLIGENCE. CHINESE CHIPMAKERS HAVE BEEN
TRYING TO MAKE STRIDES AGAINST FOREIGN RIVALS BUT HAVE STRUGGLED TO KEEP UP. NVIDIA IS STILL THE GOLD STANDARD, EVEN THE LESS POWERFUL ONES AT THE COMPANY IS ALLOWED TO SELL TO CHINA UNDER U.S. RESTRICTIONS. BEIJING, ON THE ONE HAND, WANT TO PROP UP DOMESTIC COMPANIES AND ENCOURAGE CHINESE DEVELOPERS TO USE CHINESE CHIPS. ON THE OTHER HAND, THEY DON'T WANT TO HANDICAP THESE STARTUPS, SO THEY ARE NOT BANNING THEM FROM BUYING THE BEST ON THE MARKET, WHICH ARE NVIDIA, BUT IF YOU CAN, PLEASE BY LOCAL. CAROLINE: INTERESTINGLY, ON CAMERA, JEN-HSUN HUANG IN WASHINGTON DOING WHAT HE CAN TO SUPPORT SALES IN CHINA. MARTA: CHINA -- MCKENZIE: CHINA IS INCREDIBLY IMPORTANT MARKET FOR ANY CHIPMAKER. THE U.S.
RESTRICTED SALES OF CHIPS WITH ANY U.S. TECHNOLOGY TO CHINA IN 2022, AT THE CRACK DOWN ON THOSE SALES THE PAST COUPLE YEARS. BUT NVIDIA AND OTHER COMPANIES RESPONDED BY DESIGNING NEW CHIPS FOR THE MARKET, WHICH THE COMMERCE DEPARTMENT CRACK DOWN ON THOSE. THIS IS STILL A HUGE ELECTRONICS MARKET. AN ENORMOUS AMOUNT OF MANUFACTURING HAPPENS THERE. COMPANIES ARE TRYING TO ABIDE
BY RESTRICTIONS IN WASHINGTON WHILE TRYING TO MAINTAIN ACCESS TO THE CRITICAL CUSTOMER BASE. CAROLINE: THANK YOU. MANUFACTURERS SELLING THAT FEWEST ELECTRIC VEHICLE CARS IN A MONTH. CRAIG TRUDELL IS HERE FROM LONDON. THIS IS A CONTINUING THEME. >> THAT'S RIGHT. THIS IS A CASE WHERE WE HAVE STILL YET TO SEE TERRACE COME INTO PLACE AND BE IMPLEMENTED.
THERE HAS BEEN A PROVISIONAL ADDITIONAL CHARGE PUT ON VEHICLES BUT IT WILL NOT ACTUALLY BE CHARGED UNTIL NOVEMBER. THIS IS MAY BE EARLY TASTE OF THE IMPACTS THAT THESE ADDITIONAL TARIFFS COULD HAVE ON CHINESE MANUFACTURERS AND INTERNATIONAL CAR COMPANIES LIKE TESLA WHO ARE FACING ADDITIONAL TARIFFS AS A RESULT OF THE FACT THAT THE EU IS CONCERNED ABOUT HOW MUCH LOWER COSTS ARE IN CHINA, HOW MUCH COMPANIES EXPORTING OUT OF CHINA MAYBE HAVE A LEG UP OVER LOCAL MANUFACTURERS. CAROLINE: MG HAD A LOT OF SUCCESS. BYD AS WELL. CURRENTLY LOOKING AT SOME AUTO AMERICAN COMPANIES IN THE U.S. ALL OF THIS COMES INTO THE CONTEXT OF A TOUGH ENVIRONMENT FOR AUTOMAKERS. STELLANTIS IS THE LATEST TODAY. CRAIG: THAT'S RIGHT.
THE PROFIT WARNING TODAY WAS REALLY DRAMATIC. THEY WENT FROM SEEING MORE THAN 10% PROFIT MARGIN ON THE YEAR TO A FIVE TO 7% MARGIN. FOR THEM TO LOWER THAT AND DRAMATICALLY REDUCE THEIR EXPECTATION FOR FREE CASH FLOW. INITIALLY THEY WERE SEEING THAT TO BE POSITIVE. NOW THEY SEE A NEGATIVE $5
BILLION TO $10 BILLION, THAT HAS REALLY CAUGHT THE MARKET OFF GUARD. IT WAS WELL UNDERSTOOD THE COMPANY WAS HAVING ISSUES, PARTICULARLY WITH THEIR INVENTORY GETTING OUT OF WHACK IN NORTH AMERICA. THEY HAVE BEEN MAKING MORE CARS THAN THERE IS DEMAND FOR. BUT FOR THEM TO HAVE THIS CLEARING EVENT, WARN IN A DRAMATIC WAY HAS REALLY ALARMED INVESTORS AND ANALYSTS TODAY. CAROLINE: THE CONTEXT, THANK YOU, FROM CRAIG TRUDELL. COMING UP, WE WILL BE JOINED BY THE ARKESTRO CEO, NEIL LUSTIG , ON THE EAST COASTPORT STRIKES -- EAST COAST PORT STRIKES. WE WILL BRING YOU THAT.
THIS IS BLOOMBERG. >> I URGE U.S. TO COME TO AN AGREEMENT THAT RESPECTS WORKERS, THAT ENSURES THE FLOW OF COMMERCE THROUGH OUR PORTS, AND THE STAKES ARE VERY HIGH. THE POTENTIAL FOR DISRUPTION IS SIGNIFICANT. CAROLINE: THE GOVERN ANOTHER HOCHUL EARLIER THIS HOUR.
WORKERS THREATENING STRIKE TOMORROW OVER A NEW CONTRACT. BLOOMBERG’S DANI BURGER JOINS US FROM RIGHT OUTSIDE NEW YORK SHIPPING PORT IN NEW JERSEY. WE’RE HEARING IN A FACEBOOK POST FROM THE I.L.A. THAT USMX CONTINUES TO GO TO A
SETTLEMENT, THEY CURRENTLY ARE SAYING. THIS COMING FROM THE INTERNATIONAL LONG SHOREMAN’S ASSOCIATION. IT FEELS LIKE A DEAL IS NOT NEAR DONE. >> NO, THEY ARE STILL A LONG WAYS AWAY. GIVEN THAT POST THAT SEEMS LIKE THE STRIKE WILL LIKELY BE ON 12:01 A.M., ONE MINUTE PAST MIDNIGHT ON TUESDAY, WHEN THE
CONTRACT EXPIRES AND WHEN A STRIKE WILL HAPPEN. 45,000 MEMBERS TO THIS UNION, THAT IS SOME 36 PORTS, IT’S ABOUT HALF OF THE GOODS IMPORTED INTO THE U.S. THE STICKING POINTS ARE TWO VERY BIG ONES, CAROLYN. IT IS ONE PAY. THEY WANT SOME 80% PAY RISE
OVER THE NEXT SIX YEARS. THEY SAY THE CURRENT OFFER THEY ARE BEING GIVEN IS "STINGY." THEY ALSO WANT LANGUAGE DRAFTED INTO THE CONTRACT THAT PREVENTS MORE AUTOMATION ON THESE PORTS. AUTOMATION, I SHOULD SAY, THAT IS VERY PREVALENT ELSEWHERE. IT IS IN ASIA, IT IS IN PLACES LIKE AMSTERDAM.
BUT THEY DON’T WANT THAT OVER FEAR OF LOSING THEIR JOBS. SO THE HEAD OF THE LONG SHOREMAN’S ASSOCIATION, THE UNION REPRESENTING THEM, SAYING THAT COME TUESDAY MORNING THEY ARE READY TO, IN HIS WORDS, AWAKEN A SLEEPING GIANT. CAROLINE: AND WE SAW THAT AWAKENED ON THE WEST COAST ABOUT A YEAR OR SO AGO, DANI, AND A LOT CAME DOWN TO TECHNOLOGY, INNOVATION.
AS WE SAY, PORT ASSOCIATION BASICALLY THE UNITED STATES MARITIME ALLIANCE, ANYTHING FROM THAT SIDE IN TERMS OF THEIR TALKS WITH THE I.L.A. DANI: WELL, I MEAN, THIS IS A PROBLEM THAT WE’VE HEARD FROM MANY UNIONS. YOU CAN EVEN REFER TO WHAT HAPPENED IN THE HOLLYWOOD STRIKE OVER FEAR OF TECHNOLOGY. WHEN IT COMES TO THE WEST COAST, IT IS A SEPARATE UNION.
SO THESE TALKS ARE DIFFERENT. NOW, YOU CAN LOOK AT THE WEST COAST AND SAY, LOOK, THIS IS A MODEL FOR HOW TALKS CAN GO. EVEN TO INCORPORATE AUTOMATION. ESSENTIALLY THEY WANT A GUARANTEE PUT IN THAT WORKERS WILL BE PROTECTED. THAT’S THE KIND OF LANGUAGE THEY WANT IF MORE AUTOMATION DOES COME. THERE HAS BEEN SOME HOPE THAT
MAYBE IF GOODS CAN’T COME THROUGH THE EAST COAST, THEY CAN COME THROUGH THE WEST COAST, WHICH IS STILL OPEN. UNFORTUNATELY, THE CAPACITY THERE IS NOT ENOUGH. THE HEAD. UNIONS OAT WEST COAST SAYS THERE’S SOLIDARITY AND SOME OF THE WORKERS THERE WON’T ACCEPT THE SHIPMENTS COMING IN. SO YES, IT IS THE STICKING POINT OF TECHNOLOGY. MANY PEOPLE SAY THIS IS A TIDE THAT CANNOT BE STOPPED. IT IS AUTOMATION THAT IS NECESSARY AND MAKES THE JOB EASIER, QUICKER, AND YES, SOME JOBS WILL BE LOST, BUT IT’S THAT RESCALING THAT’S REALLY NOSE MAKE SURE THAT DOESN’T HAPPEN AND PEOPLE STAY EMPLOYED, EVEN IF THERE IS AUTOMATION. CAROLINE: DANI BURGER, THANK YOU.
MEANWHILE, AS TALK ABOUT TECHNOLOGY HELPING IN THIS CURRENT SUPPLY CHAIN ISSUE, NEIL LUSTIG JOINED US, THE THE PLATFORM WHICH HELPS COMPANIES PROACTIVELY RE-ROUTE SHIPMENTS AND SECURE ALTERNATIVE SUPPLIERS BEFORE THE DISRUPTIONS ARE GOING TO BE FELT. I HAVE A FEELING YOU’RE GETTING A FEW CALLS. >> YEAH, IT’S A TOUGH TIME TO BE A SUPPLY CHAIN EXECUTIVE THIS WEEK, AND I THINK MOST OF OUR CUSTOMERS RIGHT NOW ARE FOCUSED ON ALTERNATIVES. WHERE THEY’RE GOING TO FIND NEW ROUTES, HOW WE’RE GOING TO MOVE THINGS THROUGH AIR. THIS IS SOMETHING THEY WOULD HAVE BEEN FOCUSED ON FOR A FEW DAYS ALREADY.
IF YOU VANITY FIGURED THIS OUT, YOU’RE A BIT LATE. ON THE LONGER TERM, YOUR HELP IS HOW TO MAKE YOURSELF TO BE MORE RESILIENT. SOFTWARE CAN’T PREDICT BLACK SWAN EVENTS LIKE THIS, BUT IT CAN HELP YOU BECOME MORE ADAPTABLE, RESPOND MUCH FASTER, SO OUR CUSTOMERS CAN REACH OUT TO HUNDREDS OF THOUSANDS OF CONTRACTORS, THE ORDER OF MAGNITUDE FASTER. BUT REALLY, THIS IS WHAT THIS IS ABOUT, FROM OUR CUSTOMERS’ PERSPECTIVE, ADAPTING TO THE ISSUE THAT CUSTOMERS AREN’T GOING TO BE INVOLVED IN THE LABOR DISCUSSION. BUT HOW YOU ADAPT AND ADJUST QUICKER THAN YOU DID IN THE PAST, AND MORE IMPORTANTLY, QUICKER THAN YOUR COMPETITORS. CAROLINE:
WILL THEY LIKELY BE FEELING MONEY LOST? WE’RE EXPECTING A BIG ECONOMIC IMPACT ON THIS. >> ABSOLUTELY. THERE’S NO QUESTION THIS IS GOING TO BE DAMAGING TO EVERYONE. THERE ISN’T ENOUGH ALTERNATIVE -- THERE AREN’T ENOUGH ALTERNATIVE SUPPLIERS OR CHANNELS.
THERE’S JUST NOT THE CAPACITY. SO THIS MAKES IT TWICE AS IMPORTANT FOR YOU TO BE THE FIRST ONE TO MOVE. AND IF YOU MOVE, AS I SAID, THIS IS KIND OF LIKE THE JOKE WITH THE BEAR IN THE WOODS. YOU DON’T HAVE TO OUTRUN THE BEAR, YOU HAVE TO OUTRUN YOUR BUDDY. AND IF YOU CAN ADAPT FASTER THAN YOUR COMPETITORS, YOU CAN FIND THOSE ALTERNATIVE ROUTES. YOU CAN ARRANGE AIR SHIPPING
FOR CRITICAL IMPORTS. IT’S A SHORT-TERM BIT, BUT SPEED MATTERS. CAROLINE: LET’S TALK ABOUT THE SPEED AND HOW MACHINE LEARNING OR HOW GAME THEORY ARE AIDING YOUR CLIENTS. WHAT PUTS THEM ABLE TO FRONT
RUN HERE? >> SO A.I. IS GOOD AT A FEW THINGS. IN THE ENTERPRISE MARKET, A.I. IS GOOD AT SIFTING THROUGH LARGE AMOUNTS OF DATA, AND A.I. IS GOOD AT AUTOMATING THINGS THAT OTHERWISE A HUMAN BEING WOULD HAVE HAD TO DO, LIKE REACHING OUT AND MANAGING A CODE PROCESS FOR FINDING AN ALTERNATIVE SHIPPER OR SUPPLIER. BEING ABLE TOE TAKE THAT AND SHRINK THAT TIME TO 20% OF WHAT IT WAS BEFORE MEANS YOU CAN NOW DO THIS JUST MORE, FIVE TIMES AS MUCH AS YOU COULD BEFORE.
OUR CUSTOMERS ARE FINDING, FOR EXAMPLE, WE HAD A CUSTOMER A FEW MONTHS AGO, WENT OUT TO THE ENTIRE NORTH AMERICAN TRUCKING MARKET AT ONCE, 4,000 LANES, 350 CARRIERS, A JOB THAT WOULD HAVE TAKEN NINE MONTHS AND A DOZEN PEOPLE, WAS COLLAPSED INTO THREE PEOPLE, THREE WEEKS. SO THIS IS THE KIND OF NIMBLENESS THAT A.I. GETS YOU BROADLY, AND DELIVERING FOR OUR CUSTOMERS. CAROLINE: HOW DO YOU RESPOND TO A SUDDEN WAVE OF DEMAND ON YOUR END? DOES ANYTHING GET STRESSED OR STRETCHED? DO YOU HAVE TO THINK ABOUT INVESTING IN YOUR OWN PLATFORM? >> WE’RE LUCKY WE USE A SET OF CLOUD-BASED PLATFORM THAT IS DO AUTO SCALING. OUR INFRASTRUCTURE IS ABLE TO
EXPAND AND CONTRACT DYNAMICALLY. SO FOR US, THIS IS IS NOT A CRISIS, IT’S AN OPPORTUNITY. CAROLINE: THIS IS WHAT YOU’RE BUILT FOR. NEIL LUSTIG, GREAT TO HAVE YOU HERE ON A BUSY DAY. MEANWHILE, WE’RE GOING TO BE
JOINED BY SCOTT WEANER TO WEIGH IN ON THE A.I. SAFETY BILL WHICH WAS JUST VETOED BY GAVIN NEWSOM. THAT’S NEXT. TUNE IN AT 8:00 P.M. EASTERN. THIS IS BLOOMBERG.
>> THUNDERSTORM AN A.I. P.C. CAROLINE: CALIFORNIA GOVERNOR GAVIN NEWSOM HAS VETOED WHAT WOULD BECOME ONE OF THE MOST COMPREHENSIVE POLICIES GOVERNING THE SAFETY OF A.I. IN THE UNITED STATES. THE BILL, WHICH WOULD HAVE HELD A.I. DEVELOPERS ACCOUNTABLE FOR ANY SEVERE HARM CAUSED BY THE TECHNOLOGY, DREW STRONG CRITICISM FROM OPEN A.I., V.C. FIRM, AND MANY MORE, WHO WARNED
IT COULD STALIN OVATION. SENATOR SCOTT WIENER CALLED NEWSOM’S VETO A SETBACK AND A MISSED OPPORTUNITY. IN A STATEMENT ON X, SAYS, "WE ARE ALL LESS SAFE AS A RESULT."
HE JOINS US NOW FOR M MORE. SENATOR, I START WITH YOU. YOUR REACTION, DISAPPOINTMENT, BUT WHY LESS SAFE? >> SURE, YES, THE GOVERNOR’S VETO IS VERY DISAPPOINTING. THIS IS A VERY THOUGHTFUL, FOCUSED PIECE OF LEGISLATION THAT WOULD HAVE ADDRESSED CATASTROPHIC RISK FROM ONLY THE LARGEST MOST POWERFUL MODELS. AND WHAT IT DID WAS VERY BASIC. IT WOULD REQUIRE THE LARGEST A.I. COMPANIES, LARGEST TECH COMPANIES, TO PERFORM SAFETY VALUATIONS ON MASSIVE, POWERFUL MODELS BEFORE THEY RELEASE THEM, AND ALSO TO BE ABLE TO SHUT DOWN THOSE MODELS IF SOMETHING GOES AWRY.
THEY’VE ALL COMMITTED TO PERFORM THESE SAFETY EVALUATIONS, BUT INSTEAD OF JUST TRUST US, WE WANT TO PUT IT IN STATUTE. SO THERE WAS NOTHING EXTREME OR UNREASONABLE ABOUT THIS. THE VETO SENDS A VERY BAD MESSAGE ABOUT THE FUTURE OF A.I. SAFETY. >> SENATOR, WHAT DO YOU MAKE OF GOVERNOR NEWSOM’S RATIONALE FOR VETOING THIS BILL? HE SAID IT’S WORRIED IT COULD PROVIDE A FALSE SENSE OF SECURITY, THAT SMALLER MODELS COULD BE EXEMPT. WE ALSO SAW NANCY PELOSI PUT OUT A STATEMENT ABOUT HOW SHE’S HAPPY THE BILL HAS BEEN VETOED. WHAT DO YOU MAKE OF THEIR RATIONALES? >> WELL, I RESPECTFULLY, TO THE GOVERNOR, AT LEAST THE GOVERNOR ACKNOWLEDGED THAT THESE RISKS ARE REAL.
BECAUSE SOME OF THE OPPOSITION THROUGHOUT WERE SAYING, OH, THIS IS JUST SCIENCE FICTION. IT’S NOT SCIENCE FICTION. THESE ARE VERY, VERY REAL, TANGIBLE RISKS THESE MODELS COULD HELP FACILITATE. SO THE GOVERNOR DID ACKNOWLEDGE THAT, THIS IS GOOD. I DID YOU NOT FULLY UNDERSTAND
THE VETO MESSAGE. IT SAID, WELL, THE BILL IS TOO BROAD, BUT THE BILL IS ALSO TOO NARROW. THE VETO MESSAGE, IT’S UNCLEAR WHAT THE GOVERNOR ACTUALLY WANTS. WE’LL SEE WHAT THIS WORKING
GROUP THAT HE’S SETTING UP, WHAT COMES OUT OF THAT. BUT AND I MANY OTHERS ARE COMMITTED TO REALLY MOVING FORWARD TO SUPPORT A.I. INNOVATION, BECAUSE A.I. CAN MAKE THE WORLD A BETTER PLACE.
BUT TRYING TO GET AHEAD OF THE RISKS POSED BY THIS VERY POWERFUL TECHNOLOGY. >> AND TALKING ABOUT THE WORKING GROUP, THE GOVERNOR HAS SAID HE’S CONSULTING WITH OUTSIDE EXPERTS, INCLUDING SOME OTHERS TO POTENTIALLY COME UP WITH GUARD RAILS, MAYBE EVEN NEW LEGISLATION IT SOUNDS LIKE IN A FUTURE SESSION. WHAT DO YOU MAKE OF THAT? DO YOU THINK THOSE ARE THE RIGHT PEOPLE FOR THIS GROUP? SOME PEOPLE HAVE BROUGHT UP IT DOES HAVE FUNDING FOR A STARTUP FROM THE V.C. FIRM WHICH HAS BEEN VERY AGAINST THEM. ARE THEY THE RIGHT PEOPLE TO BE ADDRESSING THIS? >> ALSO, A FORMER CALIFORNIA SUPREME COURT JUSTICE IS ON THERE, WHO I ADMIRE GREATLY. AND I HAVE A LOT OF RESPECT FOR
THE INCREDIBLY SMART, TALENTED PERSON, IT’S ALSO IMPORTANT THAT FOLKS WHO SUPPORTED THE BILL ALSO BE INVOLVED, BECAUSE WE HAD SOME OF THE GREATEST MINDS IN A.I. WHO ARE SUPPORTING THE BILL. I HOPE THAT THEY ARE INCLUDED AS WELL. CAROLINE: SENATOR, WHAT OF THE INFLUENCE OF THOSE THAT WERE AGAINST, WHAT OF THE LOBBYING? DID IT MAKE AN IMPACT? >> WELL, IT DID NOT HAVE SIGNIFICANT IMPACT IN THE LEGISLATIVE PROCESS. THE LEGISLATURE WITH VERY
STRONG VOTES IN BOTH THE SENATE AND THE ASSEMBLY PASSED THIS. SO DEMOCRATS OVERWHELMINGLY SUPPORTED THIS LEGISLATION, DESPITE THE INTENSE LOBBYING BY LARGE TECH COMPANIES AND BY LARGE VENTURE CAPITAL FIRMS. YOU KNOW, THE GOVERNOR WENT THROUGH HIS OWN PROCESS, AND I AM CONFIDENT WE’LL BE HEARING A LOT, BOTH SUPPORT AND OPPOSITION, AND ULTIMATELY MADE HIS DECISION. I STRONGLY DISAGREE WITH THE GOVERNOR’S DECISION, BUT AGAIN, AT LEAST HE ACKNOWLEDGED THESE RISKS ARE REAL AND THAT THEY’RE NOT MADE UP. CAROLINE: WILL YOU RE-INTRODUCE THE BILL IN THE NEXT SESSION? >> WE’RE GOING TO EVALUATE NEXT STEPS. WE CERTAINLY WANT TO ENGAGE WITH THE GOVERNOR AND WITH OTHERS. THIS ISSUE IS NOT GOING AWAY.
IT’S IMPORTANT. CONGRESS HAS SHOWN NO SIGNS OF ACTING. CONGRESS COULD NOT EVEN GET IT TOGETHER TO PASS A DEEP FAKES BILL BEFORE THIS ELECTION, SO CALIFORNIA, AS THE HEARTLAND OF TECH AND A.I. INNOVATION, HAS A RESPONSIBILITY TO LEAD ON A.I. SAFETY. >> SENATOR, WHILE THIS BILL DID YOU NOT PASS, IT DID SPARK A NATIONAL AND INTERNATIONAL COMPETITION ABOUT A.I. LEGISLATION. WHAT DO YOU THINK THE IMPACT
HAS BEEN? HAS IT SURPRISED YOU HOW BIG THE DEBATE OVER THIS BILL BECAME AND HOW MUCH IT DIVIDED THE TECH COMMUNITY? >> YEAH, I KNEW THIS BILL WOULD BE CONTROVERSIAL. ANY TECH REGULATION BILL IS. I DID NOT ANTICIPATE THE SCALE OF THE CONVERSATION. IT’S ALWAYS DISAPPOINTING WHEN
A BILL FAILS OR GETS VETOED, BUT SOMETIMES YOU HAVE TO INTRODUCE A BIG CONTROVERSIAL BILL TO SPARK A LONG OVERDUE CONVERSATION. I’VE SEEN THAT HAPPEN IN SOME OF THE HOUSING WORK THAT WE’VE DONE, WHERE YOU INTRODUCE A HUGE BILL, IT DOESN’T PASS, BUT IT MOVES THE CONVERSATION FORWARD. I THINK THE SAME IS TRUE HERE. THE FACT THE GOVERNOR ISSUED A VERY WILL NOTE AND DETAILED VETO MESSAGE, THE FACT THAT HE ACKNOWLEDGED THE RISKS WERE REAL AND THE FACT HE COMMITTED TO FORMING, NOT JUST FORMING A WORKING GROUP, BUT SAYING SPECIFICALLY WHO’S GOING TO BE ON IT AND WHAT IT’S GOING TO FOCUS ON. THAT’S A BIG STEP FORWARD. AND SO, YES, IT’S DISAPPOINTING THAT THIS VETO HAPPENED, BUT THIS ISSUE ISN’T GOING AWAY, AND WE’RE GOING TO GET THE JOB DONE. CAROLINE: CALIFORNIA SENATOR SCOTT WIENER, WE THANK YOU.
NOW LET’S TALK ABOUT SOFT BANK’S VISION FUND, PLANNING TO INVEST $500 MILLION IN OPEN A.I. AS PART OF A LARGER FUNDER ROUND. BLOOMBERG PREVIOUSLY REPORTED OPEN A.I. IS IN TALKS TO RAISE $6.5 BILLION FROM INVESTORS AT A VALUATION OF $150 BILLION. REPRESENTATIVES OF OPEN A.I. AND SOFT BANK DECLINED TO COMMENT. COMING UP, EPIC GAMES GOES HEAD
TO HEAD WITH GOOGLE. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: EPIC GAMES IS EXPANDING ITS ANTITRUST FIGHT WITH GOOGLE. THE GAMING GIANT IS ACCUSING THE ANDROID PARENT WITH CONSPIRING WITH SAMSUNG TO BLOCK RIVAL APPS ON ITS MARKETPLACE BY DEFAULT GLOBALLY.
FOR MORE, HERE’S MORE. THIS IS YET FURTHER ANTITRUST FIGHT WITH ALPHABET, THE PARENT COMPANY OF GOOGLE, AND, OF COURSE, THE ANDROID OFFERING. WHAT’S AT STAKE HERE FOR EPIC? >> SO THIS IS VERY INTERESTING, BECAUSE THE FIGHT IS COMING AFTER LAST YEAR’S TRIAL WHERE EPIC FOUGHT AGAINST GOOGLE’S POLICIES, CHALLENGED THEM, AND THEN ONE JURY TRIAL WHERE THE JURORS FIND IT WAS ANTI-COMPETITIVE.
NOW WE HAVE THE LATEST MOVE WHERE GOOGLE SAYS, SORRY, EPIC SAYS WHILE GOOGLE, A JUDGE IS FIGURING OUT REMEDIES AND HOW TO FIX IT POLICIES, IT WANTS, GOOGLE WANTS SAMSUNG TO BLOCK GAMERS FROM FINDING THE GAMES EASILY. SO IT’S SORT OF AN INTERESTING SORT OF NEW EFFORT THAT’S HAPPENING WHILE A JUDGE IS ABOUT TO RULE ANY TIME ON HOW TO CHANGE GOOGLE PLAY POLICIES TO MAKE THEM LESS OF A MONOPOLY, WHICH IS WHAT A JURY FOUND LAST YEAR, THAT THE GOOGLE WAS A MONOPOLY. CAROLINE: SAMSUNG IN JULY SAID ALL OF IT’LL PHONES WILL HAVE THIS DEFAULT SETTING. THEY SAY IT’S BASICALLY TO PREVENT MALWARE, BUT ULTIMATELY IT BLOCKS DOWNLOADS OF ANDROID APPS THAT COMPETE WITH THE GOOGLE PLAY STORE. WHAT DOES GOOGLE SAY THEY’RE DOING HERE NOT CONSTRAINING COMPETITION? >> SURE, THE LAWSUIT WAS FILED THIS MORNING, AND SAMSUNG SAYS THIS AUTO BLOCKER FEATURE THAT EPIC SAYS IS NOW BLOCKING GAMERS FROM DOWNLOADING EPIC GAMES AND EPIC PRODUCTS IS ACTUALLY SOMETHING THAT THEY SAY WORKERS HAVE AN OPTION TO TURN IT ON OR OFF, BUT ACCORDING TO EPIC, IN JULY, SAMSUNG TURNED THIS FEATURE INTO A DEFAULT SETTING AFTER AN UPDATE, WHERE NOW EVERY TIME YOU TURN ON YOUR PHONE, ALSO BLOCKERS AUTOMATICALLY ARE ON, SO IT’S NOT UP TO THE USER ANYMORE. THAT’S WHY EPIC SAYS THEY’RE ANTI-COMPETITIVE. SAMSUNG SAYS, HEY, USE
CONSIDERS STILL TURN OFF THIS FEATURE IF THEY WANT, AND WE HAVEN’T HEARD FROM GOOGLE YET, SO WAITING TO HEAR THE RESPONSE. IT’S GOING TO BE INTERESTING, BECAUSE THIS IS SORT OF THE NEXT FIGHT AFTER A FIGHT THAT IS ALREADY ONGOING, SO IT’S SORT OF INTERESTING TO SEE WHAT HAPPENS. CAROLINE: REPRESENTATIVE FROM GOOGLE DECLINED TO COMMENT, AND WE PLAN TO VIGOROUSLY CONTEST EPIC GAMES’ CLAIMS, SO SAYS SAMSUNG. THANK YOU SO MUCH FOR BRINGING US THE LATEST IN THE ANTITRUST FIGHT. MEANWHILE, THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." DO NOT FORGET TO CHECK OUT OUR PODCAST. YOU’LL FIND IT ON THE
TERMINAL, AS WELL AS ON APPLE, SPOTIFY AND I HEART. FROM NEW YORK, THIS IS "BLOOMBERG TECHNOLOGY."
2024-10-01 23:43
