Google, DeepMind on AI future, Deepseek; Trump Plans 25% Metals Tariffs | Bloomberg The Pulse
>> NEWSMAKERS AND MARKET MOVERS. THIS IS "THE PULSE" WITH FRANCINE LACQUA. FRANCINE: WELCOME TO THE PULSE. THESE ARE YOUR TOP STORIES.
DONALD TRUMP THREATENS SOME OF AMERICA'S BIGGEST TRADING PARTNERS AS HE PROMISES 25% TARIFFS ON STEEL AND ALUMINUM IMPORTS. THE DOLLAR RISES BUT STOCKS HAVE A MUTED RESPONSE TO THE LATEST TERRORIST THREATS. SHARES IN BP JUMP AFTER BLOOMBERG REPORTS ACTIVIST INVESTOR ELLIOT HAS BUILT A SIGNIFICANT STAKE IN THE STRUGGLING BRITISH OIL GIANT. IT IS QUITE INTERESTING TO SEE THE REGION -- THE MUTED RESPONSE. MARKETS ACROSS THE WORLD TRY TO DIGEST SOME OF THE THINGS THAT TRUMP TARIFFS MEAN FOR THE YOU -- FOR THE RESPECTIVE ECONOMIES. WE ARE SEEING SIMILAR GAINS ACROSS THE BOARD.
IT IS CLEAR SOME OF THE RESPONSE IS ACTUALLY BENEFICIARY TO GOLD. THERE IS A BIT OF A RISK OFF MOOD. WE LOOK AT IRON ORE SPECIFICALLY. IF YOU LOOK AT IRON ORE AND ALUMINUM, THEY MOVED ON THE BACK OF TRUMP IMPOSING THE 25% TARIFFS ON STEEL AND ALUMINUM.
THE OTHER THING WE WATCH OUT FOR IS DOLLAR. THE DOLLAR INDEX, 1300TH THREE. -- 1303. IRON ORE AND GOLD INCREASINGLY POPULAR AS IT IS ALWAYS A GOOD HEDGE AGAINST EVERYTHING ELSE GOING ON IN THE WORLD. PRESIDENT TD POP PROPOSES -- DONALD TRUMP PROPOSES 25% TARIFFS. LET'S GET MORE WITH LAURA COOPER, AND BRENDAN MURRAY, WHO HEADS UP OUR TRADE COVERAGE. MAYBE LET'S START WITH YOU.
WHAT DID WE LEARN OVERNIGHT? IT SEEMS MARKETS IF NOT GIVEN A HEADS UP, THEY WERE PREPARED FOR THE SORT. DID IT SURPASS YOUR EXPECTATION, OR WERE WE IN LINE WITH WHAT WE THOUGHT THE PRESIDENT WOULD DO? >> IT DOES FIT THAT BROAD PATTERN OF PATCHWORK OF TARIFF ANNOUNCEMENTS BY THIS NEW ADMINISTRATION IN THE U.S., BUT ALSO A PATTERN WHERE STUFF GETS ANNOUNCED AND MAYBE IT GETS DEFERRED OR ALTERED, AND MAYBE THAT EXPLAINS A BIT OF THE MARKET REACTION TODAY, BECAUSE WE ACTUALLY DON'T KNOW A LOT OF DETAIL. WE DON'T KNOW WHEN THIS IS SUPPOSED TO TAKE EFFECT. WE DON'T KNOW ON CHINA, DOES IT OUT ONTO THE 10% TARIFFS DONALD TRUMP HAS ALREADY ANNOUNCED ON CHINA? ARE THERE GOING TO BE EXEMPTIONS FOR CERTAIN COUNTRIES IN THE END THAT ARE NEGOTIATED OUT OF THIS? THERE IS A LOT WE STILL DON'T KNOW ABOUT WHAT THIS MIGHT LOOK LIKE IN THE END. YOU CAN SEE FROM THE KEY TRADING PARTNERS THEIR LEVEL OF CONCERN ABOUT THIS, INCLUDING OF COURSE CANADA, WHO IS STARTING TO GET HARD-HIT HIT ON BOTH FRONTS, STEEL AND ALUMINUM. THE INTERESTING THING AS IT
EXTENDS THE MESSAGE THAT TRUMP WILL PUT TARIFFS ON YOU EVEN IF YOU ARE CONSIDERED TO BE A U.S. ALLY. HE LOOKS AT ALLIES AND ADVERSARIES THE SAME WAY WHEN IT COMES TO TRADE OR BUSINESS. IT DOESN'T MATTER IF YOU ARE GERMANY OR JAPAN OR CHINA OR CANADA, HE WILL TAKE ACTION AGAINST YOU EITHER WAY. FRANCINE: BRENDAN, WHO WILL BE HIT HARD THE MOST? I KNOW WE HAVE SEEN A MOVE FOR THE AUSTRALIAN DOLLAR AND COMPANIES THAT WILL SUFFER MORE THAN OTHERS. >> EXACTLY. I THINK CANADA IS REALLY THE MAIN TARGET HERE THAT STANDS TO LOSE THE MOST. IF YOU REMEMBER
IN THE FIRST TRUMP ADMINISTRATION, THE STEEL TARIFFS AT 25%, THE ALUMINUM TARIFFS AT 10%. THE PRESIDENT SAID YESTERDAY THE ALUMINUM TARIFFS ARE 25% IN CANADA. IT IS A KEY EXPORTER TO THE U.S. WE WILL HAVE TO SEE. THERE IS A PATCHWORK OF TRADE POLICIES BEING ROLLED OUT. THE PRESIDENT DEFERRED THE 20 5% TARIFF ACROSS THE BOARD ON CANADA. THIS BAKES INTO THE NEGOTIATION THAT IS GOING TO TAKE PLACE.
THE OTHER ISSUE IS HOW THE EUROPEAN UNION RESPONSE. THERE IS AS WE HAVE REPORTED A LIST OF U.S. PRODUCTS THAT THEY WILL RETALIATE AGAINST. SO, THE EUROPEANS ARE NOT SAYING MUCH YET BECAUSE THIS WAS JUST -- IT WASN'T A FORMAL FILING OF TARIFFS. BUT THE EUROPEANS WILL MOST DEFINITELY RESPOND IN A WAY THAT WOULD TARGET SOME KEY U.S. INDUSTRIES. FRANCINE: BRENDAN, IT IS VERY DIFFICULT TO RETALIATE BECAUSE DONALD TRUMP HAS SAID IF YOU RETALIATE, WE WILL GO HARDER ON YOU. DOES THAT CHANGE HOW YOU
NEGOTIATE? >> DEFINITELY. THE LAST TIME AROUND, THEY TARGETED THE EUROPEANS -- THE EUROPEANS TARGETED IN INDUSTRIES LIKE HARLEY-DAVIDSON MOTORCYCLES AND BOURBON AND LEVI JEANS, ALL AMERICAN PRODUCTS. THIS TIME AROUND, THEY HAVE A LOT MORE TOOLS TO GO AT THE U.S. WITH. THEY HAVE TOLD US THEY PLAN TO USE THEM AND THEY PLAN TO USE THEM QUICKLY.
WE COULD SEE THIS ESCALATE WITHIN DAYS OR EVEN WEEKS. FRANCINE: LAURA, WHY ARE THE MARKETS SO COOL ABOUT ALL OF THIS? >> I THINK WHAT WE ARE SEEING IS THIS CONFLUENCE OF HEADLINES ADDING TO THE UNCERTAINTY FACING MARKET PARTICIPANTS, AND I THINK WHY WE ARE SEEING SUCH A MUTED MARKET REACTION IS BECAUSE MARKETS ARE INCREMENTALLY BECOMING LESS SENSITIVE TO THESE HEADLINES. I THINK MARKETS WILL WANT TO SEE ACTUAL OUTCOMES ON THE BACK OF THIS. IT IS NOT CLEAR WHAT THE EXCEPTIONS COULD BE, WHETHER WE COULD SEE THIS AS A NEGOTIATING TOOL TO GET A DEAL. AT THIS POINT, MARKETS ARE WAITING TO SEE CLEAR OUTCOMES AMID THIS UNCERTAINTY. FRANCINE: SO IT IS NOT THAT IT IS PRICED
IN, THEY JUST WANT TO MAKE SURE THEY GO IN PLACE INSTEAD OF SOME KIND OF REFERRAL OR NEGOTIATOR? >> AND I THINK ONE OF THE REASONS WHY WE HAVE SEEN SOME EQUITY MARKETS OUTPERFORM THE U.S. YEAR TO DATE, WHICH HAS BEEN QUITE SURPRISING, PREDOMINATELY EUROPEAN EQUITIES, IT IS IN PART BECAUSE OF THIS BENIGN INFLATIONARY BACKDROP. ON THE BACK OF THESE STEEL AND ALUMINUM HEADLINES, PERHAPS EUROPE IS NEXT IN THE SIGHTS. I WOULD SUGGEST THAT WILL POTENTIALLY CHALLENGE SOME OF THIS EUROPEAN PERFORMANCE THAT HAS BEEN UNDERPINNED BY THIS TARIFF BENIGN BACKDROP, BUT AS WELL AS THESE ROBUST EARNINGS COMING THROUGH THAT ARE NOT FACTORING IN THIS TARIFF RISK YET TO COME. FRANCINE: WHEN TRUMP WAS TALKING ABOUT U.S. GOVERNMENT DEBT, WHEN HE TALKED ABOUT U.S. IRREGULARITIES WITH TREASURIES,
WAS HE TALKING ABOUT GOVERNMENT DEBT? IT IS UNCLEAR TO ME EXACTLY WHAT HE MEANT. >> THAT'S RIGHT. IT IS UNCLEAR BECAUSE HE WAS REFERRING TO TREASURIES. PROBLEMS WITH TREASURIES.
YOU CAN SEE ELON MUSK AND HIS DOGE GROUP HAVE BEEN FOCUSING ON INFRASTRUCTURE, ON THE PAYMENT NETWORKS OF TREASURY, BE IT FOR CONTRACTORS OF THE GRANT PROGRAMS. NOT REALLY TALKING ABOUT DEBT ITSELF. BUT DONALD TRUMP DID REFER DIRECTLY TO TREASURIES. IS HE TALKING ABOUT SOMETHING
ELSE THAT IS HAPPENING AND THE WAY DEBT IS ISSUED WITH TREASURY? BECAUSE HE WAS TALKING ABOUT DEBT NOT BEING AS BIG AS EVERYBODY THOUGHT IT WAS. IT WAS A LITTLE UNCLEAR WHAT HE WAS TALKING ABOUT WITH THAT. IT IS ALSO A QUESTION OF WHERE DOES DOGE BEGIN AND END? WE KNOW THEY HAVE BEEN POKING AROUND IN THE CUPBOARD AT TREASURY. THEY ARE FACING SEVERAL LEGAL
CHALLENGES TO THEIR ABILITY TO GAIN ACCESS TO INFORMATION AND WHAT THEY DO WITH IT. BUT THE CONCERN HAS BEEN, WHAT IS THIS ALL ABOUT? IS THIS ABOUT SAUCING OUT CERTAIN PAYMENTS THAT GO THROUGH TREASURY AND CHANGING THOSE? IF SO, IN WHAT WAY? OR IS THERE SOMETHING MORE FUNDAMENTAL ABOUT THE WAY DEBT IS ISSUED AND THE MARKET FUNCTIONS? THAT IS WHERE YOU HAVE SEEN THE INCOMING SECRETARY SCOTT BESSENT TRY TO REASSURE, WE ARE NOT MUCKING ABOUT WITH THAT. BUT THESE KIND OF COMMENTS POSSIBLY JUST FEED AGAIN INTO THOSE CONCERNS. FRANCINE: I GUESS THAT IS SOMETHING MARKETS WILL WAKE UP AND TRY TO UNDERSTAND AND FIGURE OUT WHAT THAT MEANS.
LAURA, WITH THINGS LIKE THIS ON TREASURIES, IT IS REALLY IMPOSSIBLE FOR THE MOMENT FOR MARKETS TO REACT. BUT COULD THERE BE A GOVERNMENT EVENT ON TIED TO THIS IF THERE IS FISCAL SPENDING AND WE ARE NOT SURE WHETHER TRADE GOES FROM HERE? >> I THINK THAT IS ONE OF THE REASONS WHY WE HAVE NOT SEEN A STRONG BID FOR TREASURIES DESPITE THIS UNCERTAIN BACKDROP. WE HAVE SEEN RATES RALLY SINCE MID-JANUARY. THAT HAS LARGELY BEEN DOMINATED BY A BENIGN CPI PRINT. WE HAD THAT SOFTER THAN EXPECTED SERVICES INFLATION.
BUT I STRIKER -- STRUGGLE TO SEE THE 10 YEAR YIELD BREAK OUT OF THAT FOUR .5% RANGE. POTENTIALLY THIS WEEK, IF WE SEE A SOFTER THAN EXPECTED CPI PRINT, PERHAPS TACTICALLY WE COULD SEE THE 10 YEAR TRADE DOWN TO THE 4.25% MARK. BUT I THINK IN THIS BACKDROP WHERE THE FISCAL UNCERTAINTY REMAINS UNCLEAR, IT IS UNCLEAR WHAT SOME OF THESE POLICIES COULD GET COME THROUGH, I THINK THAT IS WHY WE WILL STRUGGLE TO SEE INVESTORS BID FOR THE LONG END OF THE IN THE U.S. FRANCINE:
BRENDAN, WHAT DO WE KNOW ABOUT U.S.-CHINA? THIS IS PROBABLY THE MOST COMPLICATED BUT IMPORTANT RELATIONSHIP FOR THE REST OF THE WORLD. >> EXACTLY. THE 10% TARIFFS THAT PRESIDENT TRUMP PUT ON CHINA LAST WEEK WERE QUICKLY RETALIATED AGAINST IN A WAY THAT A LOT OF ANALYSTS THOUGHT WAS MORE MEASURED THAN CHINA COULD HAVE DONE. BUT THEN CHINA WENT TO THE WTO
AND SAID THE U.S.'S 10% TARIFFS ARE NOT LEGAL IN AN INTERNATIONAL SENSE. THAT SEEMS TO BE A SLOWER BREWING TRADE WAR WITH MUCH MORE LONGER-TERM CONSEQUENCES.
WHAT WE SAW FROM THE U.S. WAS AN ACROSS-THE-BOARD TARIFF. IF YOU ARE IN A SUPPLY-CHAIN INDUSTRY RIGHT NOW, YOU ARE RECALCULATING WHAT YOUR COSTS ARE. THEY ALSO BLOCKED THE DE MINIMIS LOOPHOLE, BUT THEN TOOK THAT BACK. THERE'S A LOT OF FITS AND STARTS WITH THIS IN THE EARLY THREE WEEKS OF THIS ADMINISTRATION, AND THEY ARE NOT REALLY UNDERSTANDING SOME OF THE REPERCUSSIONS OF THEM AND ARE HAVING TO BACKPEDAL IN SOME INSTANCES. FRANCINE: ON THE GROUND, WE HAVE JD VANCE, THE FIRST TIME HE ACTUALLY ARRIVES IN A EUROPEAN CAPITAL.
PARIS, HE ARRIVED ABOUT 20 MINUTES AGO AND WE ARE EXPECTING HIM TO STAY RIGHT ACROSS FROM WHERE THE BLOOMBERG OFFICE IS AS HE ATTENDS THIS AI SUMMIT. WE ALSO HAVE QUESTIONS WHETHER DONALD TRUMP IS SPEAKING TO VLADIMIR PUTIN. BUT IF THE VICE PRESIDENT IS IN EUROPE, ARE WE EXPECTING ANYMORE SANCTIONS OR FRICTION WITH THE EU? OR WILL THEY HOLD OFF? >> WHAT IS INTERESTING, AS BRENDAN WAS SAYING, THE EU IS TAKING THE TACTICAL APPROACH TO SIT AND WAIT, AND NOT WANTING TO PUT THE BEAR COMING OUT WITH SOMETHING STRONG.
BUT PREPARED FOR WHAT MIGHT COME DOWN THE TRACKS, WAITING TO SEE SOME CLARITY ON WHAT DONALD TRUMP WAS TALKING ABOUT, BUT READY TO RESPOND AS TIME IS NEEDED. IT WILL BE INTERESTING TO SEE JD VANCE IN THE REGION COMMENTING ON AI, AND THAT IS SOMETHING VERY MUCH FRONT OF MINE FOR DONALD TRUMP. BUT ALSO THE RELATIONSHIPS IN THE REGION. WE HAVE SEEN SOME IN DONALD
TRUMP'S INNER CIRCLE LOOKING TO COMMENT ON GERMAN POLITICS. ALSO A LOT OF TALK AROUND UKRAINE AND WHETHER DONALD TRUMP DID SPEAK WITH VLADIMIR PUTIN. WHEN, IF SO? IT IS POSSIBLY IT IS THIS NOVEMBER CALL THAT WAS RUMORED BEFORE DONALD TRUMP TOOK OFFICE. BUT POINTING TO THE IDEA THAT DONALD TRUMP WANTS TO GET TRACTION ON UKRAINE.
HE WANTS SOME KIND OF CEASE-FIRE AGREEMENT SOONER RATHER THAN LATER ON UKRAINE. AND AHEAD OF THE UKRAINE -- THE MUNICH SECURITY CONFERENCE, IS JD VANCE GOING TO BE PUSHING ON THAT WHILE HE IS IN EUROPE? FRANCINE: SO INTERESTING. ROSALYN BATTERSON, LAURA COOPER. LAURA STAYS WITH US. WE WILL TALK MORE ABOUT COMPETITIVENESS. SHARES IN U.S.
STEEL JUMPING IN PREMARKET TRADING AFTER A CLOSELY WATCHED SUMMIT BETWEEN PRESIDENT TRUMP AND THE JAPANESE PRIME MINISTER OVER HEIGHTENED TENSIONS OVER NIPPON'S PLAN TO ACQUIRE U.S. STEEL. YOU CAN SEE PREMARKET U.S. STEEL, 8% HIGHER. MUCH MORE TO COME. THIS IS BLOOMBERG. ♪ FRANCINE: PRESIDENT DONALD TRUMP PLANS TO IMPOSE 25% TARIFFS ON ALL IMPORTS OF STEEL AND ALUMINUM INTO THE U.S.. LET'S BRING BACK LAURA COOPER.
THANK YOU FOR STICKING AROUND. WE WERE TALKING ABOUT THE FACT THAT THE MARKET IS IN A WAIT AND SEE SITUATION. IS THERE ANYTHING YOU WOULD BUY RIGHT NOW GIVEN ALL THE UNCERTAINTY? WE WERE TALKING ABOUT TREASURIES DIDN'T GET THE BIT THEY USED TWO IN THESE KINDS OF OCCASIONS. LAURA: I THINK THERE IS STILL A TRACK TO COME IF WE CAN LOOK AT THE BELLY OF THE CURVE BUT WHAT IS BECOMING INTERESTING AS WE ARE SEEING THIS DIVERGENCE TREND BECOMING ENTRENCHED, AND THAT IS WHEN WE LOOK AT THE GROWTH AND INFLATION OUTLOOKS ACROSS EUROPE RELATIVE TO THE U.S.
SIGNS OF THE U.S. EXCEPTIONALISM STILL PERSIST, BUT YET IN EUROPE THE RISK TO GROWTH ARE TILTED TO THE DOWNSIDE. TO OUR MIND, THERE ARE STILL ATTRACTIVE OPPORTUNITIES LOOKING ACROSS THE EUROPEAN GOVERNMENT BOND SPACE, PREDOMINANTLY IN GERMAN BUNDS, BUT ALSO IN THE PERIPHERY WHERE WE THINK THE ECB WILL HAVE TO CONTINUE TO EASE POLICY RATES, POTENTIALLY BELOW THAT NEUTRAL RATE, WHEREAS THE U.S. IS CLEARLY ON AN EXTENDED PAUSE
AMID THIS POLICY UNCERTAINTY. FRANCINE: WHAT IS YOUR TAKE ON EUROPE RIGHT NOW? AGAIN, IT HAS BEEN SUCH A LAGGER IN THE PAST AND IT SEEMS IT COULD BE BEAT UP BECAUSE OF TRUMP POLICIES. IS THERE ANYTHING YOU SEE AS ATTRACTIVE RIGHT NOW? LAURA: AS YOU MENTIONED, SENTIMENT HAS BEEN SO DEPRESSED IN EUROPE. IT IS ONE OF THE REASONS WHY WE HAVE SEEN INVESTORS FLOCK TO EQUITIES THIS YEAR. AND THIS HAS BEEN SUPPORTED BY A FAVORABLE EARNINGS BACKDROP. PREDOMINATELY IF WE THINK ABOUT
HEALTH CARE AND FINANCIALS. BUT WE THINK IT IS STILL A CHALLENGING ENVIRONMENT DESPITE THESE VALUATIONS IN PART BECAUSE OF THIS TARIFF UNCERTAINTY. SO PROBABLY STAYING AWAY FROM THAT HEALTH CARE INDUSTRIALS COMPONENTS THAT WILL BE MOST VULNERABLE TO TARIFFS, BUT INSTEAD LOOKING FOR POCKETS OF DEFENSIVE SECTORS.
ENERGY WE THINK WILL CONTINUE TO BENEFIT FROM A STRUCTURAL TREND AROUND THE ELECTRIFICATION OF GRIDS. EVEN IN THE TECHNOLOGY SPACE, THE SEMICONDUCTORS CONTINUING TO BENEFIT FROM THAT AUTOMATION TREND. FRANCINE: LET'S ALSO BRING IN OUR BRUSSELS BUREAU CHIEF KEVIN WHITELAW. WHEN YOU LOOK AT THE RELATIONSHIP BETWEEN THE U.S. AND EU, IT HAS BEEN PRETTY FRAUGHT. THERE HAS BEEN SPECULATION THAT EXTRA EU TARIFFS COULD COME AS SOON AS THIS WEEK. DOES THAT MAKE SENSE TIMING WISE? JD VANCE IS HERE IN PARIS, THEN HE GOES TO THE MUNICH SECURITY CONFERENCE OVER THE WEEKEND.
KEVIN: TRUMP IS GOING TO DO EVERYTHING ON HIS OWN SCHEDULE, AND HE DOES LIKE TO DO SHOWS OF FORCE. IT IS VERY POSSIBLE WE WILL SEE IT WHENEVER TRUMP WANTS IT TO, AND HAVING VANCE HERE AND DOING IT WHILE HE IS HERE IS TRUMP SHOWING HE IS NOT SCARED OF ANYTHING AND HE IS READY TO TAKE ON EUROPE, AT LEAST FROM HIS VIEW. EUROPEAN OFFICIALS ARE BRACING FOR SOMETHING.
THEY HAVE BEEN BRACING FOR SOMETHING FOR A WHILE. IT LOOKS LIKE, JUMPING -- JUDGING BY TRUMP'S WORDS, IT WILL BE ON STEEL AND ALUMINUM. BUT WE MAY SEE MORE ACROSS THE BOARD'S EFFORTS. FRANCINE: WHO IS THE RIGHT PERSON TO DE-ESCALATE ON THE EUROPEAN SIDE? WE KNOW THE PRESIDENT WANTS TO NEGOTIATE INDIVIDUALLY, BUT TRADE IS SET UP FOR THE COMMISSION TO TAKE THAT SPACE.
KEVIN: IT WILL BE AN INTERESTING CHALLENGE FOR THE EU BECAUSE THEY DO TRY TO USE THEIR COLLECTIVE MIGHT WHEN IT COMES TO TRADE. THEY DO TRY TO MAKE IT ABOUT THE SINGLE MARKET. BUT IT MAY WELL BE TEMPTING FOR INDIVIDUAL COUNTRIES TO TRY TO CUT INDIVIDUAL DEALS, AND TRUMP MAY ENJOY THE EFFORTS OF TRYING TO SPLIT THE BLOC ON TRADE. FOR URSULA VON DER LEYEN, AS WELL AS THE TRADE COMMISSIONER, THEY ARE HOPING TO BE ABLE TO HOLD THE BLOC TOGETHER. THEY HAVE A SET OF RETALIATORY PLANS. THEY CAN SCALE UP OR DOWN BASED ON HOW FAR TRUMP GOES.
THAT IS THE CURRENT PLAN. BUT ONCE THINGS ARE IN PLACE, IF SPECIFIC INDUSTRIES OR SECTORS ARE HIT HARD, THERE COULD BE A LOT OF PRESSURE FOR INDIVIDUAL GOVERNMENTS TO SEEK THEIR OWN DEALS. FRANCINE: THANK YOU BOTH FOR JOINING US. LAURA COOPER AND BLOOMBERG'S KEVIN WHITELAW. COMING UP, WE TALK INFLATION AND THE ECB. THIS IS BLOOMBERG.
FRANCINE: ECB GOVERNING COUNCILMAN HAS TOLD US MARKET EXPECTATIONS FOR THREE ECB -- THREE MORE ECB CUTS THIS YEAR ARE REASONABLE. >> ARE PROJECTIONS DON'T HAVE TARIFFS. IT IS A BIG UNCERTAINTY THESE DAYS.
WE DON'T KNOW WHAT IS GOING TO HAPPEN WITH IT. BUT FOR THE TIME BEING, WE ARE SEEING THE ECONOMY GROWING. NOT STRONGLY, BUT STILL RECOVERING IN 2025, WITH THE INFLATION RATE COMING DOWN, AS YOU KNOW. OTHERWISE WE GET OTHER NEWS, THIS IS WHERE WE WILL STAY, I THINK.
>> WHAT YOU ARE TELLING ME IS VERY TRUE BUT IT MEANS THERE IS A LOT MORE UNCERTAINTY. THE RIGHT PATH AHEAD, BUT ALSO THE MISTAKE FROM CENTRAL BANKS COULD BE MORE LIKELY IN THIS KIND OF SCENARIO. >> THAT IS FOR SURE. THERE IS MUCH MORE UNCERTAINTY THESE DAYS. IN ITSELF, UNCERTAINTY LEADS TO PROBABLY SLOWING OF THE INVESTMENT DECISIONS, SLOWING OF THE GROWTH. BUT I HOPE IN A FEW WEEKS OR MONTHS WE WILL HAVE A CLEARER PICTURE, AND THE UNCERTAINTY WILL BE REDUCED. FRANCINE:
WHAT DO YOU MAKE OF THE RATE PATH OR THE MARKET EXPECTATION OF THE RATE PATH BEING THREE CUTS OR 25 BASIS POINTS THIS YEAR? >> NOW IT IS THREE CUTS BY THE END OF THE YEAR. I WOULD SAY FROM THE POINT WHERE WE ARE AT THE MOMENT AND WHAT WE KNOW WITH ALL THE DATA WE HAVE HAD, IT IS NOT AN UNREASONABLE EXPECTATION THAT WE ARE SEEING IN THE MARKETS. WE ARE NOW AT A SENSITIVE POINT IN TIME WHERE WE DO EXPECT THE INFLATION TO START TO COME DOWN, PARTICULARLY SERVICES INFLATION, WHICH HAVE BEEN HIGH, AS YOU KNOW. WE WILL SEE. FRANCINE: COME MARCH, WILL YOUR
EXPECTATIONS IN MARCH OF A CLEAR PICTURE OF A RECESSION BECAUSE OF EXTRA TARIFFS FROM THE U.S.? >> I THINK MARCH, APRIL, WE WILL GET A CLEAR PICTURE BOTH IN TERMS OF THE DATA, PARTICULARLY ON THE SERVICES INFLATION IN THE FIRST QUARTER, BUT ALSO I HOPE THE UNCERTAINTY AROUND POSSIBLE TRADE RESTRICTIONS WILL ALSO DISAPPEAR, OR AT LEAST BE REDUCED. THAT WOULD BE GOOD FOR EVERYONE, INCLUDING US CENTRAL BANKERS. FRANCINE: NO COMING UP, WE WILL BE LIVE FROM THE AI ACTION SUMMIT IN PARIS, SPEAKING TO OUR GUESTS. THAT IS NEXT. AND THIS IS BLOOMBERG. ♪ >> GOOD MORNING, EVERYONE AND WELCOME TO BE POLLS.
I AM FRANCINE LACQUA IN THESE ARE YOUR TOP STORIES. DONALD TRUMP THREATENS SOME OF AMERICA'S BIGGEST TRADING PARTNERS AS HE PROMISES 25 PERCENT TARIFFS ON STEEL AND ALUMINUM IMPORTS. -- -- A SIGNIFICANT STAKE IN THE STRUGGLING BRITISH GIANT.
THE PRESIDENT IS SET TO ANNOUNCE MAJOR INVESTMENT PROJECTS. THIS COMES AS WORLD LEADERS AND TAKE GIANTS ME IN PARIS FOR THE AI ACTION SUMMIT. TOM MACKENZIE IS THERE. HI, TOM. TOM: FRAN, GOOD MORNING. THERE ARE TWO TECH GIANTS STANDING RIGHT BY.
THANK YOU, GENTLEMEN. THERE IS A LOT OF TOPICS TO GO THROUGH. LET ME START WITH DEEPSEEK AND THE IMPACT OF THIS TO YOU. WHAT HAVE YOU IN THE TEAM FOUND?
DO YOU BELIEVE IT WHEN THEY SAY -- AT $6 MILLION, DO YOU BELIEVE THAT? >> IT'S A VERY IMPRESSIVE MODELING PIECE OF WORK. THE TEAM IS PROBABLY THE BEST TEAM I'VE SEEN COME OUT OF CHINA. A LOT OF THE CLAIMS ARE EXAGGERATED AND MISLEADING. WHEN YOU REPORT HOW MUCH IT COSTS TO DO A TRAINING RUN, THEY SEEM TO REPORT THE FINAL TRADING RUN, WHICH IS A FRACTION OF WHAT IT TAKES TO EXPLORE AND TRAIN. WE THINK THAT HAS BEEN UNDERESTIMATED. THE OTHER THING IS THEY SEEM TO RELY ON SOME WESTERN MODELS TO DISTILL FROM OR A SICKLY FINE TUNE AGAINST THE OUTPUT.
FINALLY, IT'S AN IMPRESSIVE PIECE OF WORK BUT WE DIDN'T SEE ANY NEW SILVER BULLET TECHNOLOGIES OR TECHNIQUES WE HAVE NOT SEEN BEFORE OR INVENTED BEFORE. THEY HAVE JUST APPLIED IT VERY WELL. IT'S IMPRESSIVE BUT IT IS NOT SOME NEW OUTLIER ON THE EFFICIENCY CURVE.
GEMINI IS MORE EFFICIENT THAN DEEPSEEK IN TERMS OF ITS PERFORMANCE OR COST TO PERFORMANCE. TOM: JAMES, TO YOU, THE PLAN TO SPEND 75% ON SHIPS, DOES ANY OF THAT CHANGE THE SPENDING PLAN FOR ALPHABET? DO YOU SCALE BACK THE SPEND? >> NO, IT DOESN'T. WE ARE EXCITED ABOUT THE POTENTIAL OF THIS TECHNOLOGY. THE AMOUNT OF PROGRESS WE ARE SEEING IS EXTRAORDINARY. THINK ABOUT WHAT IT WILL DO FOR PEOPLE, THE ECONOMY ADVANCING SCIENCE AND SO ON.
AND THINK ABOUT THE THINGS WE CAN TACKLE TO IMPROVE MASSIVE PRESSING CHALLENGES IN SOCIETY. THE POTENTIAL WE SEE IS EXTRAORDINARY. I THINK AT SOME POINT IT IS WORTH TALKING ABOUT WHAT THIS COULD MEAN FOR ECONOMIES IN PRODUCTIVITY GROWTH. THAT'S WHAT WE ARE EXCITED ABOUT. >> DOES AN INVESTMENT STILL MAKE SENSE? EXCLUSIVELY, IT SEEMS DATA CENTERS FOR OPENAI. DOES NOT GIVE THEM AN ADVANTAGE? >> WE WILL SEE WHAT IT TRANSPIRES TO WHEN IT GETS BUILT. TO ECHO WHAT JAMES SAID,
COMPUTE IS STILL AT A CRITICAL PART OF WHAT THE INFRASTRUCTURE IS NEEDED FOR AI, NOT ONLY FOR EXPLORING NEW IDEAS AND THE FRONTIER. YOU HAVE TO EXPERIMENT AS SCALE. OTHERWISE THE RESULT OF THE EXPERIMENT DON'T NECESSARILY HOLD. ALSO, WE NEED IT FOR -- WE ARE SEEING INCREDIBLE DEMAND FOR MODELS LIKE GEMINI 2.0 MODELS. AND THEN THE FINAL THING IS WITH THE ADVENT OF MORE THINKING MODELS OR INFERENCE TYPE MODELS, THE MORE TIME YOU SPEND AT THE POINT OF PROCESSING INFERENCE, YOU CAN HAVE MORE POWERFUL AND BETTER ANSWERS.
FOR ALL OF THOSE REASONS, YOU NEED MORE THAN EVER. >> IT SOUNDS LIKE THEY ARE IN A SAFE POSITION. >> WE ARE HAPPY WITH RTP USE AS WELL. -- OUR TPUS AS WELL. >> THE CURRENT GENERATION OF THE TPU, THE SIXTH GENERATION IS FOUR TIMES MORE EFFICIENT THAN THE LAST TWO GENERATIONS. >> IN TERMS OF THE PRODUCTIVITY GAINS, WHEN DO WE START? FOR INVESTORS, A KEY QUESTION IS ROI. WHEN DO WE SEE BROAD-BASED PRODUCTIVITY GAINS? >> I THINK IT DEPENDS ON ALL OF US.
WE SEE ENORMOUS POTENTIAL ESTIMATES FROM GOLDMAN SACHS. IT WILL RELY ON A FEW THINGS. FIRST, ADOPTION. WE KNOW UNTIL YOU GET THE LARGE SECTORS OF THE ECONOMY'S, IT DOESN'T HAPPEN. SECOND, WE KNOW IT WILL BE IMPORTANT TO FOCUS ON PRODUCTIVITY. WE WILL HAVE ANOTHER PARADOX. UNTIL THOSE THINGS HAPPEN, WE MAY NOT SEE THE GAINS.
>> DO YOU -- YOU HAVE EXPERIENCE WITH THE OBAMA ADMINISTRATION. WAS TRUMP RIGHT TO CUT OR SLASH AI REGULATION. >> WE SAID REGULATION IS IMPORTANT.
IT IS IMPORTANT TO REGULATE WELL. IN OUR MINDS, REGULATIONS SHOULD DO A COUPLE OF THINGS. IT SHOULD ADDRESS THE RISKS WE HAVE SEEN BUT ENABLE THE THINGS WE WANT.
ONE OF THE THINGS WE HOPE HAPPENS IS THAT IT IS FOCUSED. FOCUSED ON APPLICATIONS, FOCUSED ON GAPS IN THE EXISTED REGULATIONS. FOCUSED ALSO ON THE PARTICULAR USE CASES AND SECTORS. WE ALSO NEED SOME COHERENCE. WE DON'T NEED PATCHWORK REGULATIONS THROUGHOUT THE WORLD. THE MORE WE CAN GET COHERENCE, THAT'S GOING TO BE IMPORTANT. I WILL SAY ONE FINAL THING.
THERE HAS TO BE BALANCED TOO. -- BALANCE TOO. ENABLING THE INNOVATION AND PRODUCTIVITY WE HOPE WILL HAPPEN. >> THAT E.U. JAYLAND IS COMING TO FORCE. HOW TOUGH IS THAT? >> -- ALL OF THE AMAZING THINGS THAT ARE ADVANCING SCIENCE WHICH IS THE MOTIVATION FOR WHY WE STARTED OFF THIS JOURNEY WITH AI , INCREASED PRODUCTIVITY. I THINK WE WILL SEE ALL OF THOSE THINGS AND BADLY NEED THEM. BUT ALSO, ADDRESSING THE RISKS THAT COME OF IT.
>> HOW HAS YOUR ASSESSMENT OF THE RISKS CHANGED? >> THERE ARE TWO MAIN THINGS I WORRY ABOUT. ONE IS HOW DO WE MAKE SURE THAT WE ENABLE THE GOOD ACTORS TO USE THESE INCREDIBLE TECHNOLOGIES FOR THE BENEFIT OF THE WORLD. BUT ALSO RESTRICT ACCESS TO BAD ACTORS DOING HARM? WE ARE PUBLISHING THE SAME TECHNOLOGIES FOR HARM. THAT IS A HUGE CONUNDRUM FOR THE TECHNOLOGIES TO SOLVE.
IN A YEAR OR TWO OR THREE'S TIME AS WE GET AGENTS TO ACCOMPLISH TASKS ON THEIR OWN THAT WE SET FOR THEM, ADDRESSING THE KIND OF THINGS THAT ARE RISK INHERENT IN THE SYSTEMS, MAKING SURE THEY ARE CONTROLLABLE, UNDERSTANDABLE AND VERIFIABLE. ALL OF THAT IN MY OPINION, THE KEY PART OF THAT IS INTERNATIONAL CORPORATION. WE HAVE TO DO THAT AS A WHOLE. AS AN INTERNATIONAL COMMUNITY
WITH ACADEMICS AND GOVERNMENT ALTOGETHER. >> BRIEFLY, YOU HAVE CHANGED THE AI PRINCIPLES. CAN WE ASSUME THAT ALPHABET IS WILLING TO WORK ON AI WEAPONS SYSTEMS. >> WE ARE FOCUSED ON APPLICATION OF THE TECHNOLOGY WHERE THE BENEFITS FAR OUTWEIGH THE RISKS. WE WILL STAY CONSISTENT WITH INTERNATIONAL LAW.
WE WANT TO FOCUS WHERE WE HAVE UNIQUE, DISTINCT EXPERTISE AND INCREDIBLE SCIENTIFIC WORK . WE WILL ALSO CONTINUE TO MAKE SURE OUR PRODUCT POLICIES AS WELL AS OUR TERMS OF USE CONTINUE. THAT'S WHAT WE ARE FOCUSING ON. >> THANK YOU VERY MUCH, JAMES AND OF COURSE, DENNIS. THANK YOU BOTH. BACK TO YOU, FRAN. FRANCINE:
THAT WAS A GREAT CONVERSATION. WE WILL SEE WHAT COMES OUT OF THE AI SUMMIT WHERE WE ARE EXPECTING QUITE A LOT OF MONEY GOING TOWARD INVESTMENTS. THEN WE HAVE JD VANCE WHO ARRIVED IN PARIS A SHORT WHILE AGO, STAYING A COUPLE OF MINUTES FROM THE OFFICE AT THE PARIS HEADQUARTERS FOR BLOOMBERG. WE WILL SEE WHAT MESSAGE HE BRINGS AS THE WORLD LEADERS GATHER AT THE COMPANY. WE WILL HAVE MORE FROM THE AI ACTION SUMMIT IN PARIS. INCLUDING INTERVIEWS WITH THE FRENCH PRIME MINISTER.
COMING UP, BP SHARES JUMP. WE WILL BRING YOU THE DETAILS, NEXT. THIS IS BLOOMBERG. ♪ FRANCINE: BP SHARES HAVE SURGED THE MOST SINCE 2020 AFTER ELLIOTT BUILT A STAKE IN THE COMPANY. WILL KENNEDY JOINS US. THANK YOU FOR JOINING US.
WHY DOES ELLIOTT SEE AN OPPORTUNITY HERE AND NOW? WILL: IT'S IDEA IS THAT BP HAS SIGNIFICANTLY UNDERPERFORMED ITS PEERS OVER THE LAST COUPLE OF YEARS. BP SHARES HAVE FALLEN WHEREAS SHELL IS UP MORE THAN 30%. I THINK THEY BELIEVE IT IS DUE TO A MISGUIDED STRATEGY AND THAT BY SHAKING THINGS UP AGAIN, THEY CAN CLOSE THAT VALUATION GAP AND TAKE ADVANTAGE OF WHAT REMAINS A STRONG UNDERLYING OIL AND GAS BUSINESS. FRANCINE: HOW CAN BP NOW RESPOND? WILL: WELL, WE DON'T KNOW. THEY ARE NOT SAYING ANYTHING. BUT THIS IS AN IMPORTANT MONTH
FOR BP. THE CEO AS WELL. THEY HAVE EARNINGS TOMORROW MORNING AT 7:00. WE EXPECT THOSE TO BE IN LINE WITH THE INDUSTRY. PERHAPS MORE IMPORTANT, THEY HAVE A STRATEGY CAPITAL MARKETS UPDATE ON FEBRUARY 26 WHERE HE'S GOING TO UNVEIL HIS THINKING ON A STRATEGY TO INVESTORS.
THAT TAKES ON EVEN MORE URGENCY. WE PRESUME HE WILL BE SPEAKING ON BP. FRANCINE: THERE IS SO MUCH TALK ABOUT THE STEEL TARIFFS. DOES THAT IMPACT THEM IN GENERAL? WILL: YES TO THE END CERTAINTY -- UNCERTAINTY IN MARKETS. PEOPLE WILL PROBABLY BE FOCUSED ON CANADA.
CANADA'S STEEL INDUSTRY IS VERY IMPORTANT, AS WELL AS ITS ALUMINUM INDUSTRY AS WELL. THE BROADER IMPACT IS NOT HUGE IN THE SHORT TERM. BUT CLEARLY, PEOPLE WILL BE THINKING ABOUT WHETHER THEY NEED TO RETALIATE. AND IT ADDS TO MORE COMPLICATED POLICY AND SUPPLY CHAINS. ULTIMATELY, IT WILL ADD COSTS. FRANCINE: THANKS SO MUCH, WILL KENNEDY. IN THE MEANTIME, OLAF SCHOLZ
STRUGGLED TO LAND THE DECISIVE BLOW HE URGENTLY NEEDS ON THE FRONT RUN OR. -- FRONT RUNNER. BOTH CANDIDATES DETAILED THEIR STRATEGIES FOR DEALING WITH THE UNPREDICTABLY OF -- UNPREDICTABILITY OF DONALD TRUMP. WHO WON? >> I DON'T THINK ANYBODY WAS ABLE TO LAND THE DECISIVE BLOW. THESE ARE NOT THE MOST CHARISMATIC AND ENGAGING AND BEST COMMUNICATING POLITICAL LEADERS ON THE PLANET. YOU CONTRASTED TO THE U.S. ELECTION WHERE THE DEBATES WERE
BASED ON VIBE AND NOT SO MUCH IN NUMBERS. THIS WAS BASED ON NUMBERS AND NOT SO MUCH ON VIBE. WE GOT A FOCUS ON MIGRATION. THIS IS ONE OF THE POINTS THAT WAS IMPORTANT IN GERMANY, PARTICULARLY WITH THE RISE OF THE FAR-RIGHT, AFD PARTY. MERR Z -- OLAF SCHOLZ IMPLIED THAT MERZ WOULD VOTE WITH THE AFD. HAVE A LISTEN TO WHAT ALL OF SCHULZ SET ABOUT DEAL -- OLAF SCHOLZ SET ABOUT DEALING WITH DONALD TRUMP.
>> WE SHOULD NOT DELUDE OURSELVES. WHAT THE AMERICAN PRESIDENT SAYS, HE ALSO MEANS. WHICH IS WHY THINK IT WAS IMPORTANT THAT I WAS THE FIRST HEAD OF GOVERNMENT IN EUROPE TO SAY AFTER THE DISCUSSION ABOUT GREENLAND, THIS IS NOT HOW IT WORKS. WE ARE DEFENDING UKRAINE BECAUSE WE SAY BORDERS W MUST NOT BE MOVED BY FORCE. >> OLAF SCHOLZ HAS SOME IDEA OF WHAT IT'S LIKE TO WORK WITH DONALD TRUMP AND THE ADMINISTRATION AND HAS SOME SORT OF TRACK RECORD, PARTICULARLY WITH ELON MUSK.
ONLY BECAUSE OF HOW VIGOROUS ELON MUSK HAS BEEN OF DENOUNCING OLAF SCHOLZ, CALLING HIM A FOOL. IT'S REALLY UP TO FREDERICK MERZ TO ESTABLISH HOW HE WOULD DEAL WITH THAT QUESTION. FRANCINE: HOW DOES HE PLAN TO TAKE ON TRUMP AND HOW ARE THE GOALS EVOLVING? >> I THINK HE'S HOPING TO GET BETTER IN THE GRACES OF THE TRUMP ADMINISTRATION, PARTICULARLY BEING WITH THE RIGHT-LEANING PARTY. HAVE A LISTEN TO WHAT HE HAD TO SAY IN TERMS OF HIS OWN POSITIONING VERSUS TRUMP. >> WELL, HE'S PREDICTABLY UNPREDICTABLE. MOST OF THE THINGS HE'S SAYING NOW ARE NOT NEW.
HE HAS REPEATEDLY SPOKEN ABOUT THEM BEFORE. THERE ARE SIGNIFICANT CONCERNS ON THE SIDE OF THE ATLANTIC ABOUT WHAT ELSE IS COMING. IT'S ALL THE MORE IMPORTANT THAT WE, ON THE SIDE OF THE ATLANTIC, ARE UNITED AS POSSIBLE. >> WE GET A STRONG MESSAGE OF EUROPEAN UNITY. EXPPARTICULARLY AT TIMES WHEN HE IS ACCUSED OF CAUSING UP TO THE FAR-RIGHT. HE'S NOT PUSHING THAT MESSAGE
WHEN IT COMES TO THE EUROZONE. THE AFD WANTS TO LEAVE THE EURO ZONE. HE UNDERSTANDS THEY NEED TO WORK AS A COLLECTIVE AS THE U.S. BECOMES LESS RELIABLE. I THINK IT'S A MARK WHILE THAT
DESPITE ALL OF THE THINGS WE HAVE SEEN, THE POLLS HAVE NOT MOVED THAT MUCH. THE CDU LEADING AT 30 POINTS. THE AFD COMING IN AT 21 POINTS. THIS COULD CREATE ANOTHER SORT OF CORRELATION OF PARALYSIS FOR JOURNEY -- COALITION OF PARALYSIS FOR GERMANY. FRANCINE: THE LATEST IN GERMANY AHEAD OF THE ELECTION ON FEBRUARY 23. WE WILL BRING YOU THE NEWS MARKETS, ANALYSIS AND MARKET MOVES AS WE BUILD UP TO THE GERMAN ELECTION LATER THIS MONTH. ALSO, A SPECIAL EDITION WHEN
THE POLLS CLOSE. WE WILL TALK MORE ABOUT THE IMPACT OF TRUMP'S TARIFFS ON THE AUTO SECTOR. THAT IS NEXT. THIS IS BLOOMBERG.
♪ FRANCINE: ON FEBRUARY 20 THIRD, GERMANY AND HEADS TO THE POLLS AHEAD OF THE COLLAPSE OF CHANCELLOR SHOALS. HOW WILL THE GERMAN BALANCE OF POWER SHIFT? BLOOMBERG HAS CONTINUING COVERAGE LEADING UP TO THE ELECTION AND WILL BRING YOU THE RESULTS. TWO IN FEBRUARY 23, STARTING AT 5:00 P.M. LONDON TIME, ONLY ON BLOOMBERG. CONTEXT CHANGES EVERYTHING. ♪ >> MY FOCUS COMING IN IS GOING TO BE TO SPEND TIME WITH ALL OF OUR MAJOR STAKEHOLDERS. ONE OF THOSE WILL BE OUR
CUSTOMERS. TO UNDERSTAND HOW WE ARE SERVING THEM WELL AND WHAT WE CAN DO TO CONTINUE TO SERVE THEM BETTER AND DRIVE GROWTH. THE WAY I THINK ABOUT IT IS WE HAVE A STRONG AND BROAD PORTFOLIO TODAY.
SOME OF WHICH IS BEING TOUCHED BY AI TODAY. THE WAY I THINK ABOUT THE AI CYCLE IS IT WILL BE A SUPER CYCLE. MUCH LIKE WE SAW WITH THE INTERNET, IT'S THE MOBILE INTERNET. IT'S BOND CLOUD. I BELIEVE WE WILL SEE THAT SAME THING WITH AI. FRANCINE:
THE CHINESE CARMAKER BYD GIVING AN UPDATE ON ITS SMART DRIVE TECHNOLOGY A FEW HOURS FROM NOW. THE COMPANY HAD ITS BEST WEEK, GAINING 21% OVER FIVE SESSIONS. CRAIG TRUDELL IS HERE. WHAT ARE WE EXPECTING? ESPECIALLY IN THIS NEW ERA OF TARIFFS, HOW DOES THAT CHANGE EVERYTHING? >> FOR BYD, FOR THE MOST PART, WHEN PEOPLE THINK ABOUT THEM AND THEIR BRAND, THEY THINK ABOUT VALUE FOR MONEY AND THE ABILITY TO OUT PRICE THE COMPETITION WITHOUT GIVING UP A LOT IN TERMS OF QUALITY OR RELIABILITY. WE DON'T NECESSARILY THINK ABOUT THEM AS A PEER TO TESLA ON DRIVER ASSISTANCE TECHNOLOGY. I THINK PART OF THE REASON FOR ALL OF THIS OPTIMISM LAST WEEK, GOING INTO THIS EVENT WAS ALL IT TOOK WAS THE SORT OF SUGGESTION THAT THIS COMPANY WAS GOING TO BE MUCH MORE COMPETITIVE IN THIS DOMAIN. THAT COULD PERHAPS MEAN BETTER PRICING FOR THEM IN TERMS OF CHARGING CUSTOMERS FOR A BIT OF ADDITIONAL TECHNOLOGY.
IT ALSO JUST PERCEPTIONS. IF THEY CAN CHANGE HOW PEOPLE THINK OF THEIR BRAND AND -- AS NOT JUST A MAKER OF AFFORDABLE CARS WOULD ALSO AFFORDABLE HIGHER TECH CARS, IT ONLY HAS THE POTENTIAL TO ADD TO THE MOMENTUM OF THIS COMPANY THAT HAS BEEN ON FIRE LAST FEW YEARS. FRANCINE: CRAIG, IS THAT EASY TO HAPPEN? IS THE PERCEPTION CHANGING? CRAIG: I THINK IT WILL BE CHALLENGING.
AND OF COURSE, IT'S IMPORTANT TO NOTE THAT THERE IS DIFFERENT REGULATORY CHALLENGES WITH THIS TECHNOLOGY. I THINK THEY WILL HAVE NO TROUBLE DEPLOYING IT IN CHINA, GIVEN THEIR SORT OF STANDING IN THE MARKET. I ALSO THINK THAT I WOULD BE SURPRISED IF THEY TRIED TO DEPLOY HANDS-FREE OR EYES OFF SYSTEMS IN PLACES LIKE EUROPE, WHERE THOSE SORTS OF OFFERINGS ARE SORT OF MORE STRICTLY REGULATED. I DO THINK IT IS IMPORTANT FOR THIS COMPANY THAT, JUST GETTING ON PEOPLE'S RADAR AT ALL. ESPECIALLY OVER HERE IN EUROPE. AND FOR ALL THE MOMENTUM THEY
HAVE IN CHINA, I THINK THEY ARE STILL STRUGGLING TO GET A LOT OF TRACTION HERE IN EUROPE. FRANCINE: CRAIG, THANK YOU SO MUCH. UP NEXT, BLOOMBERG BRIEF WITH DANI BURGER AND MANUS CRANNY. THIS IS BLOOMBERG.
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