Nvidia, ASML Drive Global Tech Rout, Lyft Buys Into Europe | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE IN LOOK IN VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY," WITH CAROLINE HYDE AND ED LUDLOW. ED: LIVE FROM SAN FRANCISCO, THIS IS "BLOOMBERG TECHNOLOGY." NVIDIA DRIVES A GLOBAL ROUT IN TECH STOCKS AFTER NEW GOVERNMENT RESTRICTIONS ON TECH EXPORTS TO CHINA. PLUS, LYFT BUYS ITS WAY INTO
THE EUROPEAN MARKET, ROLLING OUT AUTONOMOUS DRIVING. WE SPEAK TO THE PRESIDENT'S CHIEF TECHNOLOGY ADVISOR AND DIRECTOR OF THE WHITE HOUSE OFFICE ON SCIENCE AND TECHNOLOGY POLICY. AGAIN, IT IS THE CHIP SECTOR, SEMICONDUCTORS, WHERE OUR FOCUS IS. NEW EXPORT CONTROLS AND LICENSE REQUIREMENTS ON BIG NAMES FOR THE EXPORT-SPECIFIC TECHNOLOGIES DESIGNED FOR THE CHINESE MARKET. THIS IS THE PICTURE AT THE
INDEX LEVEL, DOWN 3.5%. CLEARLY SOME PAIN ACROSS THE INDUSTRY THAT IS SPREADING. KEY NAMES -- NVIDIA AND AMD. BOTH INTEND A WRITE-DOWN OF THE FIRST QUARTER. ASML IS AN EARNINGS STORY OUT OF EUROPE. IT MISSED ITS BOOKINGS BY ALMOST A BILLION DOLLARS AND IS SAYING WE DON'T KNOW HOW TO QUANTIFY THE IMPACT OF TARIFFS ON OUR BUSINESS.
THEY ARE THE BIGGEST AND MOST IMPORTANT MAKER OF THE MACHINES THAT MAKE THE CHIPS. CHIPMAKING EQUIPMENT. WE WILL GO DEEP ON THAT STORY IN THE SHOW. LET'S GET TO OUR TOP STORY, NVIDIA AMD HIT HARD BY NEW U.S. RESTRICTIONS ON SEMICONDUCTOR EXPORTS TO CHINA. BRICK TECHNOLOGY EDITOR MICHAEL SHEPARD JOINS US FROM D.C.
GIVE US THE LICENSE REQUIREMENTS AND WHAT HAPPENS NEXT FOR THESE NAMES. MICHAEL: WHAT HAPPENED JUST NOW IS THE WRITE-DOWNS COMPANIES HAD TO REPORT. FIRST OF ALL, THEY ARE NOT SMALL. NVIDIA REPORTED A $5.5 BILLION CHARGE FOR THE FIRST QUARTER.
AMD, 800 MILLION. ALL FROM THESE NEW RESTRICTIONS THEY ARE NOW FACING ON THE CHIPS THAT THEY HAD DESIGNED SPECIFICALLY FOR THE CHINESE MARKET. THESE WERE DESIGNED TO COMPLY WITH PREVIOUS ROUNDS OF U.S.
RESTRICTIONS. THE GOAL FOR THE ADMINISTRATION AND THE PRIOR ADMINISTRATION HAS BEEN TO TRY TO KEEP THOSE SOPHISTICATED SEMICONDUCTORS OUT OF CHINESE HANDS, WHERE THEY CAN HELP GIVE CHINESE COMPANIES PERHAPS A WAY TO GAIN GROUND ON AMERICAN HYPERSCALERS AND AMERICAN ADVANTAGE IN ARTIFICIAL INTELLIGENCE. THE CATCH WITH THESE CHIPS IS THAT WHILE THEY HAVE BEEN SCALED DOWN FOR LOWER POWER FOR THE CHINESE MARKET, THEY ARE ALSO USEFUL IN AN EMERGING AREA IN AI WHERE IT IS HELPING COMPANIES DEVELOP MODELS FASTER AND MORE EFFECTIVELY, SOMETHING WE SAW WITH DEEPSEEK. THAT WAS ONE OF THE WAKE-UP CALLS FOR THE TRUMP ADMINISTRATION AS IT TOOK OFFICE. WE HEARD HOWARD LUTNICK ARE TO DELETE THIS AND MAKE IT CLEAR THAT INSTRUCTIONS LIKE THESE WOULD BE COMING. WE ARE SEEING THEM TODAY. THE COMPANIES ARE FEELING THE
PAIN AND THIS IS COMPOUNDED I ALL THE CONCERNS ABOUT TARIFFS AND ELSEWHERE. CAROLINE: THE OTHER -- ED: THE OTHER BIG DOWNWARD PRESSURE IS ASML, THE WORLD'S BIGGEST CHIP EQUIPMENT MAKER, LISTING ESTIMATES THAT MISSED IN A BIG WAY. IT HAS DIMMED THE OUTLOOK FOR THE SEMICONDUCTOR SECTOR OVERALL. PETER IS IN LONDON. IT IS A ONE DOLLAR MISS ON BOOKINGS. WHAT ACCOUNTED FOR THE MIX, AND
WHAT DID THEY SAY ABOUT THE IMPACT OF TARIFFS AND EFFORTS BY THE UNITED STATES FOR ASML TO BRING MANUFACTURING TO THIS COUNTRY LATER? PETER: IT IS A BIG MESS BY ASML, AND THEY MAKE CHIPS FOR THE LIKES OF TSMC AND THE LIKES OF INTEL AND SAMSUNG. THEY ARE A BELLWETHER FOR CHIP DEMAND. THE CEO WAS PRESSED PRETTY HARD ON THE EARNINGS CALL WE WERE JUST LISTENING TO, ASKING QUESTIONS ABOUT WHAT IS DRIVING THIS. ONE KEY FACTOR IS THIS TARIFF UNCERTAINTY WE ARE SEEING. IT IS NOT CLEAR WHAT KIND OF DEMAND IS GOING TO BE GENERATED AND SOME OF THESE AREAS, INCLUDING ARTIFICIAL INTELLIGENCE.
AND WHETHER TARIFFS WILL BE LEVIED ON MACHINES ASML MAKES. THE BIDEN ADMINISTRATION AND TRUMP ADMINISTRATION WANT TO BUILD UP CAPACITY, BUT THAT IS GOING TO BE DIFFICULT IF COMPANIES HAVE TO PAY MORE FOR THESE MACHINES. INTEL IS STRUGGLING QUITE A BIT. SAMSUNG IS HAVING A DIFFICULT
TIME BUILDING UP TO CAPACITY TO SNOW -- TO SLOW THINGS DOWN. YOU DO NOT WANT TO ADD ADDITIONAL COSTS ON TOP OF THAT. ASML MACHINES CAN GO FOR $380 MILLION. YOU PUT THAT IN THE RANGE THE TRUMP ADMINISTRATION IS TALKING ABOUT, IT WOULD BE $95 MILLION IN TARIFF COSTS.
THEY SAY THE CUSTOMERS ARE GOING TO BEAR THE BRUNT OF THOSE COSTS. EVEN IF THE CUSTOMERS BEAR THOSE COSTS, IT MAY SLOW THEM DOWN A BIT IN TERMS OF BUYING THESE MACHINES, AND THEY HAVE TO THINK ABOUT HOW QUICKLY THEY WILL MOVE AHEAD IN BUILDING THE CAPACITY THAT THE ADMINISTRATION DOES WANT. ED: THANK YOU VERY MUCH. DENNY IS A TECH INVESTOR WITH SKIN IN THE GAME. THERE IS ALSO TSMC, BROADCOM, SOME OF THE HYPERSCALERS, AND APPLE. LET'S GET SOME INVESTOR TAKE ON TECHNOLOGY IMPACT CONTROLS AND TARIFFS.
ARE YOU READY FOR HEADLINES ON NVIDIA AND AMB -- AMD? >> I WAS NOT. THERE WAS REPORTING A COUPLE DAYS AGO THAT THEY WOULD -- THAT THEY HAD COME TO AN AGREEMENT, THE ADMINISTRATION WITH NVIDIA, THAT THEY WERE NOT GOING TO HAVE THOSE RESTRICTIONS. IT WAS JUST A REPORT, BUT IT DEFINITELY TOOK THE MARKET BY SURPRISE. ED: I WANT TO SHOW A CHART WHICH IS THE PROPORTION OF NVIDIA REVENUE THAT COMES FROM CHINA. CLEARLY, THE CHART TELLS A
STORY. IN 2022, CHINA REVENUE IS AROUND 26%. CURRENTLY, WE ARE DOWN TO 13%. I THINK MANY ACCEPT THIS IS HEADED TOWARD SINGLE DIGIT BECAUSE OF THE IMPACT OF TECHNOLOGY EXPORT CONTROLS. DOES THAT MATTER TO YOU AS AN NVIDIA INVESTOR? DO YOU LAY AWAKE AT NIGHT WORRIED ABOUT NVIDIA'S BUSINESS IN CHINA? >> TWO PARTS TO THAT QUESTION. ONE IS WHETHER IT MATTERS TO ME
AS AN INVESTOR TO LAY AWAKE THINKING ABOUT CHINA. IT IS GOOD TO GET IT OUT OF THE MODEL. WE ARE KIND OF WIPING IT CLEAN. WE ARE TAKING A CUT TO ESTIMATES. THE REVENUE FROM CHINA HAS COME
DOWN MATERIALLY OVER THE LAST FEW YEARS. I THINK SOMETHING ELSE THAT IS IMPORTANT IS THAT THERE IS SOMETHING -- IT IS CALLED THE DIFFUSION RULE THAT IS SUPPOSED TO COME INTO EFFECT IN THE MONTH OF MAY. EFFECTIVELY WHAT THAT IS -- THAT PUTS A QUOTA ON THE NUMBER OF GPO'S -- GP USE THAT COUNTRIES CAN BUY. ONE MIGHT THINK THAT POTENTIALLY THE DIFFUSION RULE COULD BE RELAXED SOMEWHAT. THAT COULD BENEFIT NVIDIA.
THE OTHER THING THAT IS PUZZLING ABOUT THIS IS THAT IN SOME WAYS THIS MAKES NO SENSE AT ALL FOR THE MINISTRATION TO DO. WHY IS THAT? WHILE ALREADY PRODUCES A CHIP THAT IS SOMEWHAT COMPARABLE THAT IS ACTUALLY THE CUSTOMIZED CHIP THAT NVIDIA HAS BEEN SELLING TO CHINA. AS A RESULT, THEY ARE JUST GIVING THE MARKET TO HUAWEI.
THEY ARE PENALIZING A U.S. COMPANY BY RESTRICTING A CHIP THAT IS NOT EVEN THAT COMPETITIVE COMPARED TO A LOCALLY SUPPLIED CHIP. WE HAVE ALREADY THOUGHT ABOUT THIS RUDY EXTENSIVELY. WE DID NOT KNOW IF WE WOULD GET
A FULL CUT. I THINK THE DIRECTION OF TRAVEL WAS CLEAR. THE CONTRIBUTION FROM CHINA WAS GOING TO GO WAY DOWN. BECAUSE WE ARE STILL SUPPLY CONSTRAINED, NVIDIA HAS THE ABILITY OF BEING ABLE TO REDIRECT WAFERS TO OTHER AREAS WHERE THEY CAN ACTUALLY SELL MORE POWERFUL CHIPS WITH HIGHER GROSS MARGINS. ED:
THE GOAL OF THIS ADMINISTRATION SEEMS TO BE TO SHIFT MORE TO THE UNITED STATES, BE IT LOCALIZED FABRICATION OF THIS COURTSHIP, ASSEMBLY, WHATEVER IT MIGHT BE. COMPANIES WILL FACE THE HIGHER COST OF DOING BUSINESS IN THIS COUNTRY, OR THEY WILL FACE 35% NET TARIFF SOMEWHERE ELSE. WHAT ARE THE PROS AND CONS OF GOING WITH WHAT THIS ADMINISTRATION WAS, AND SAYING WE ARE GOING TO DO THIS IN AMERICA? >> TO THE EXTENT THAT WE ACTUALLY HAVE THE CAPACITY TO MANUFACTURE LEADING EDGE CHIPS, THAT IS A GOOD THING. 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 RACE TOWARDS ARTIFICIAL GENERAL INTELLIGENCE. THE CONS ARE IT IS MORE EXPENSIVE. BUT YOU WOULD THINK THE PRODUCTIVITY GAINS WE GET IN AGGREGATE FROM DEPLOYING AI PROBABLY MORE THAN OFFSETS WITH THE AGGREGATE COST WOULD BE FOR MANUFACTURING THE CHIPS IN THE UNITED STATES.
THANK GOODNESS THEY ARE IN A POSITION NOW FOR COMPANIES LIKE NVIDIA AND AMD TO ACTUALLY ANNOUNCE THEY ARE GOING TO BE PRODUCING LEADING EDGE TWO NANOMETER CHIPS, AS WELL AS CONFIGURING FULL SYSTEMS IN THE UNITED STATES FROM A MANUFACTURING STANDPOINT. ED: A STORY WE PUT HEAVY EMPHASIS ON THIS WEEK. TSMC IS ALWAYS IN THEIR. YOU SAID THANK GOODNESS THAT IS THE CASE, BASICALLY. BUT HOW DOES YOUR THINKING
CHANGE? DO YOU STICK WITH THIS IDEA THAT CAPITAL EXPENDITURES WILL CONTINUE TO GROW, AND HYPERSCALERS WILL CONTINUE TO TAKE FROM NVIDIA? ARE YOU GOING TO ADJUST WHERE YOU PUT YOUR EMPHASIS? >> WE TAKE THE DATA WHERE IT COMES. IF YOU LOOK AT THE MOST RECENT COMMENTS OUT OF NVIDIA, WHERE THEY JUST HAD THEIR CONFERENCE, AND YOU ACTUALLY PARSE THROUGH THE COMMENTS TODAY. AND YOU PARSE THROUGH THE COMMENTS WE HAVE HEARD FROM HYPERSCALER CEO'S, WE DON'T SEE SIGNS OF A SLOWDOWN IN AI CAPEX. THE GROWTH MAY SLOW. SCIENCE STILL SUPPORT HEALTHY GROWTH IN AI CAPEX. WE WILL TAKE THE DATA AS IT COMES, WE ARE STILL OPTIMISTIC ABOUT AI AND IT IS REALLY THE LAGGING EDGE STUFF, GOING TO INDUSTRIAL AND AUTO AND THINGS LIKE THAT, THAT STILL CONTINUE TO BE SOFT. I WILL REMIND YOU -- THIS IS
DIFFERENT WITH THE TARIFFS AND THE GEOPOLITICAL SITUATION. JUST REWIND THE CLOCK ONE YEAR. ASML, SAME THING HAPPENED. THEY MISSED BOOKINGS. THE STOCK WAS DOWN.
BOOKINGS ARE REALLY LUMPY. LOOKING'S WE ACCELERATED THROUGHOUT THE YEAR. THEY'RE DOING COOL STUFF. ONE OF THE REASONS THAT THEY CAN CONTINUE TO DRIVE HIGH PRICING IS BECAUSE THEY ARE STARTING TO DO WHAT IS CALLED SINGLE LAYER. THAT INCREASES THROUGHPUT. IT IS MORE VALUABLE. THEY CAN CHARGE A HIGHER PRICE. ED: IT IS GREAT TO HAVE YOU BACK ON THE PROGRAM.
LYFT IS EXPANDING OUTSIDE THE U.S. AND CANADA. WE HAVE THE CEO ON THE COMPANY'S EUROPEAN ACQUISITION, NEXT. ED: LYFT HAS AGREED TO BUY TAXI HAILING APP FREE NOW. IT MARKS ITS FIRST GLOBAL EXPANSION BEYOND THE U.S. AND CANADA. THE CEO JOINS US NOW.
I'VE BEEN USING UBER, YOUR MAIN COMPETITOR, IN EUROPE FOR A LONG TIME. I'VE BEEN GOING IN TEXAS FOR A LONG TIME. WHY NOT JUST LAUNCH THE APP IN THAT DIRT -- THAT JURISDICTION? >> IT HAS GREAT RELATIONSHIPS ACROSS EUROPE IN THE TAXI INDUSTRY. YOU HAVE BEEN FOLLOWING THIS FOR A WHILE. WE ARE IN A STRONGER POSITION THAN WE HAVE EVER BEEN. DRIVERS ARE MAKING BILLIONS ON THE PLATFORM IN THE U.S. AND CANADA.
NOW IS THE RIGHT TIME FOR US TO GO GLOBAL. IT DOUBLES OUR MARKET AND ALLOWS US TO PLUG INTO, AS YOU SAY, THE TAXI WORLD, IT IS A HUGE PART OF THE EUROPEAN MOBILITY SCENE. ED: TOMORROW IS YOUR TO AIR -- YOUR TWO YEAR ANNIVERSARY AT LYFT, AND YOU HAVE FIXED THE FINANCES TO AN EXTENT, BUT THE DATA IS CLEAR. THE -- THE DATA IS KEY. EUROPE HAS ABOUT 150,000 REGISTERED TAXI DRIVERS IN NINE CITIES. HOW DO YOU BRIDGE THE GAP? ARE YOU CONFIDENT YOU CAN BRIDGE THE GAP? >> FREE NOW IS A GREAT COMPANY AND ONE OF THE THINGS THAT MAKES THEM SO STRONG AS THEY REALLY UNDERSTAND THE LOCAL DYNAMICS, MARKET BY MARKET. HERE IS THE THING. THE MOBILITY MARKET IN EUROPE FOR THIS RIDE-HAILING IS ABOUT 40 BILLION EUROS. THESE ARE STILL PEOPLE CALLING
UP A TAXI COMPANY AND SAYING, COME TAKE ME TO THE AIRPORT. WHILE IT IS TRUE THERE ARE OTHER COMPANIES, THIS IS THE LEADER IN THE TAXI SPACE. TAXI IS AN ELEVATED EXPERIENCE IN LONDON. THINK OF THE LONDON BLACK CAB.
THE COMPANY IS WELL POSITIONED TO TAKE OVER A BIGGER SPACE. ED: IT IS A COMPANY THAT HAS ONLY RECENTLY BROKEN PEOPLE -- BROKEN EVEN. IT HAS HISTORIC LOSSES. WHAT DOES IT ADD TO YOUR BOTTOM LINE.
>> HAS ABOUT A BILLION DOLLARS IN BOOKINGS, WHICH IS SIGNIFICANT. LYFT HAS $16 BILLION IN BOOKINGS, SO THERE IS GROWTH AHEAD FOR BOTH OF US. I THINK AS WE -- THEY HAVE BEEN OWNED BY MERCEDES AND BMW, STORIED AUTOMAKER -- AUTO MANUFACTURERS. I THINK COMBINING WITH US WILL THEM NEW EXPERTISE TO ALLOW BOTH OF US TO GROW. ED: THERE IS ZERO MENTION IN THE RELEASE ABOUT AUTONOMOUS DRIVING, AND EVERY SIDE NOTE ABOUT THE DEAL SAYS IT IS YOUR PLAN TO ROLL OUT AUTONOMOUS DRIVING IN EUROPE. >> HERE IS HOW WE THINK ABOUT AUTONOMOUS.
FIRST OF ALL, IT IS HAPPENING. IN THE U.S., WE ARE A LITTLE FURTHER AHEAD. EUROPE, NOT SO MUCH. ONE OF THE GREAT THINGS FREE NOW HAS IS -- THEY HAVE GREAT RELATIONSHIPS WITH EUROPEAN REGULATORS, AND THEY HAVE GREAT FLEET MANAGEMENT. FLEET MANAGEMENT IS SO
IMPORTANT TO AUTONOMOUS. WE THINK THIS SETS UP WELL. THIS IS GOING TO BE YEARS DOWN THE ROAD. THIS IS PART OF THE OVERALL
STRATEGY FOR BEING A GLOBAL PLAYER. ED: TWO YEARS AND, YOU HAVE DONE SOME M&A. WILL YOU DO MORE, AND WHERE? >> NEVER SAY NEVER, BUT THIS IS NOT THE FOCUS RIGHT NOW.
FREE NOW IS A GREAT, STRONG COMPANY. WE HAVE SO MUCH TO BUILD ON. WE ARE GOING TO BE FOCUSED ON EUROPEAN EXPANSION, MAKING SURE IT IS A BIG SUCCESS. WE WILL TALK LATER ABOUT SOMETHING ELSE. ED:
ENGINE CAPITAL, ACTIVIST INVESTOR -- THEY WANT TO CHANGE YOUR BOARD. >> WE INTERACT WITH SHAREHOLDERS ALL THE TIME AND LISTEN TO THE FEEDBACK, TAKE IT SERIOUSLY. THERE IS A WHOLE PROCESS WE ARE DEALING WITH ACTIVIST INVESTORS. IF WE LOOK AT WHAT SHAREHOLDERS WANT -- THEY WANT A RETURN.
WE ARE NOW EXPANDING. WE ARE STRENGTHENING OUR BUSINESS. WE ARE WELL-POSITIONED TO ADDRESS THE ISSUES SHAREHOLDERS BRING. ED: HAVE YOU SPOKEN TO THEM ABOUT THE FREE NOW DEAL SINCE IT HAPPENED? THAT IS INTERESTING. >> NO. ED: ATLANTA, OPERATIONALLY, TO ME
AN UPDATE. >> WE HAVE A PARTNERSHIP WITH AN AUTONOMOUS VEHICLE COMPANY. THAT IS ON TRACK FOR THIS SUMMER.
I'M SUPER EXCITED TO LAUNCH IN THE MIDDLE OF DOWNTOWN ATLANTA. ED: COMMERCIALLY ON TRACK, OR THIS IS A TOE IN THE WATER? >> WE WILL START OPERATIONALLY IN ATLANTA AND IT WILL GROW FROM THERE. FIRST, WE HAVE TO GET WRITERS IN THE CARS. ED: TWO YEARS AND, WHAT WOULD YOU SCORE YOURSELF ON THE JOB YOU HAVE DONE AS THE CEO? >> I AM A SELF-CRITICAL PERSON. I ALWAYS LOOK FOR THE NEXT THING. I'M PROUD OF WHAT WE HAVE ACCOMPLISHED AS A TEAM, GETTING THE PROFITABILITY. $700 MILLION IN FREE CASH.
AND PICKING UP WRITERS -- RIDERS. FROM THE CUSTOMER POINT OF VIEW, WE ARE DOING SUPER WELL. IT IS UP TO OTHER PEOPLE TO TELL ME HOW I AM DOING AS CEO.
ED: IN THE STREET GIVES YOU CREDIT FOR THAT. THE LIFT CEO -- THANK YOU FOR JOINING US. COMING UP, AMERICANS ARE STILL USING CHINESE E-COMMERCE APPS TO SHOP CHEAP ALTERNATIVES TO HIGH-END BRANDS. YOUR GOING TO DRIVE INTO THE SURGE IN SALES BY TEMO AN -- TEMU AND SHIEN. ED: A TRADE WAR WON'T STOP AMERICANS SHOPPING ON CHINESE APPS. REVENUE SEARCHED FOR TEMU AND
SHIEN THIS MONTH AS CONSUMERS ANTICIPATE PRICE INCREASES DUE TO TARIFFS. THIS IS REALLY INTERESTING DATA. A LOT OF PEOPLE IN MY WORLD USE BOTH OF THOSE. WHAT ARE WE LEARNING? >> IT SEEMS LIKE THESE APPS ARE SEEING A LOT OF SUCCESS AND PEOPLE ARE GOING TO THEM AS THE TARIFFS ARE STARTING TO BLOOM.
ED: THE ECO-DATA COMES IN. WHEN YOU THINK ABOUT TARIFFS, YOU THINK ABOUT PASSING ON THE COSTS TO THE CONSUMER. THROUGH YOUR BEAT, THROUGH THE TECH COMPANIES IN THE SPACE, WHAT ARE WE LEARNING ABOUT THE CONSUMER AND THAT MARCH DATA? >> IT SEEMS LIKE THE CONSUMER IS LOOKING TO SPEND RIGHT NOW THAT ECO-DATA SHOWED A LOT OF SPENDING. PEOPLE MIGHT BE STOCKING UPPER BUYING NOW FOR PRICES MIGHT GET MORE EXPENSIVE. ED: YOU COVER SPECIALTY RETAIL.
WHAT ARE YOU LEARNING ABOUT TARIFFS? HOW DO COMPANIES REALLY THINK ABOUT WHAT HAPPENS NEXT? DO THEY EVEN KNOW? LILY: A LOT OF COMPANIES ARE DOING DIFFERENT THINGS. A LOT OF THE COMPANIES I COVER REPORT IN THE NEXT MONTH, SO THAT WILL BE INTERESTING TO HEAR. WHAT THEY ARE LOOKING TO SAY TO INVESTORS AND SHAREHOLDERS -- IT SEEMS LIKE A LOT OF PEOPLE ARE IN WAIT AND SEE MODE. THEY ARE NOT SURE HOW TARIFFS
ARE GOING TO IMPACT THEIR BUSINESS AND THEY ARE TRAINED TO FIGURE THAT OUT. CAROLINE: GREAT TO HAVE YOU ON BLOOMBERG TECHNOLOGY. THANK YOU VERY MUCH. COMING UP, ARK SUCKER'S EMAIL REVEALS HIS INSTAGRAM AND WHATSAPP STRATEGIES FROM THE PAST. WE GO BACK TO THE ANTITRUST CASE WITH MARK
ZUCKERBERG. IT IS THE SEMICONDUCTOR INDUSTRY THAT IS DRAGGING DOWN SHARES, BUT THE NASDAQ IS UNDER PRESSURE, AND SOME OF THE OTHER KEY NAMES -- HYPERSCALERS, CONSUMER TECH -- UNDER PRESSURE. BITCOIN IS GOING IN THE OPPOSITE DIRECTION. A 5000 U.S. DOLLARS PER TOKEN, UP A PERCENT OR SO IN THE SESSION.
BUT IT HAS NOT BEHAVED UNIFORMLY, LIKE AS A RISK ON, RISK OFF. TAKE INTO ACCOUNT THE SAME FACTORS TECH DOES. WE WILL DO WITH THAT LATER IN THE WEEK. ♪ ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY."
THE MARKETS PICTURE IS CLEAR. WE ARE UNDER PRESSURE. THAT LARGELY COMES FROM THE CHIP SECTOR. NEW U.S. RESTRICTIONS ON TECHNOLOGY IMPORTS TO CHINA FOR NVIDIA AND AMD CAUSING PAIN BY ASSOCIATION. YOU SEE A LOT OF THE MAG SEVEN MEGA CAP NAMES DOWN. EARNINGS SEASON IS RIGHT AROUND THE CORNER WITH THE PHILADELPHIA SEMICONDUCTOR INDEX, THERE IS STILL CHIP PAIN. THE SEMICONDUCTOR NAMES,
INTERESTING DISCUSSION THROUGHOUT THE SHOW ON HOW LONG THAT PAIN WILL LAST. ASML IS AN EARNINGS STORY. LATER IN THE CORNER, NEW STREET RESEARCH IS GOING TO COME ON AND GIVE US DEEPER AND MORE GRANULAR CONTEXT ABOUT THIS NAME. THERE IS OTHER NEWS ELSEWHERE IN THE ANTITRUST TRIAL. MARK ZUCKERBERG REVEALED THAT HE ONCE CONSIDERED SPINNING OFF INSTAGRAM BACK IN 2018. IN A LETTER TO SENIOR LEADERS, HE WRITES "I'M BEGINNING TO WONDER WHETHER SPINNING OUT INSTAGRAM IS THE ONLY STRUCTURE THAT WILL ACCOMPLISH A NUMBER OF IMPORTANT GOALS. WE SHOULD KEEP IN MIND THERE IS A REAL CHANCE THAT ALL OUR WORK TO BUILD A FAMILY OF APPS MAY BE SOMETHING WE DON'T GET TO KEEP. FOR MORE, KURT WAGNER, WHO HAS
BEEN IN THE COURTROOM AT THE TRIAL JOINS US. AT ONE TIME IN 2018, OF HIS OWN VOLITION, ARK SUCKER CONSIDERED SPINNING OFF INSTAGRAM. WHAT DOES THAT MEAN IN THE CONTEXT OF THE TRIAL? >> IT IS VERY PROPHETIC, RIGHT? HE WAS FORESEEING THE ISSUE HE IS FACING RIGHT NOW COMING DOWN THE ROAD FOR HIM, 6, 7 YEARS AGO. I DON'T THINK HE THOUGHT ABOUT DOING THIS REALLY HURTS HIM TODAY. I THINK IT WAS SHARED IN THE CONTEXT OF THE FTC TRYING TO SHOW THAT INSTAGRAM HAS PERHAPS HARMED USERS. BUYING WHATSAPP IS ACTUALLY BAD FOR CONSUMERS.
MAYBE IT IS A SIGN THAT THEY WERE NOT EMPLOYING THE BEST STRATEGY FOR CONSUMERS, BUT IT IS INTERESTING BECAUSE IT WAS SO FORESHADOWING. 8 -- ED: THIS IS POTENTIALLY A MULTI-MONTH PROCESS. THE TRIAL AND PROCEEDINGS -- WHERE HAS MET A FOCUSED AND WHERE HAVE THE FTC FOCUSED? KURT: IT HINGES ON THIS DEFINITION OF WHAT THE FTC IS CONSIDERING THE FRIENDS AND FAMILY SHARING SOCIAL NETWORKING MARKET. THEY ARE SAYING THERE ARE A LOT OF PLACES YOU CAN SPEND TIME ONLINE. THERE ARE VERY FEW PLACES WHERE YOU GO SPECIFICALLY TO SHARE WITH YOUR FRIENDS AND FAMILY. THAT IS WHERE META HAS THEIR MONOPOLY. THIS IS THE FTC CASE.
ON THE OTHER HAND, IT IS ARGUING WE HAVE TONS OF COMPETITORS. TIKTOK IS A COMPETITOR. I MESSAGE IS A COMPETITOR. ELON MUSK'S X. NONE OF THOSE ARE THE VERY NARROW DEFINITION THE FTC IS GOING WITH, AND ARE CONSIDERED COMPETITORS. THIS IS BASICALLY A FIGHT TO DETERMINE WHAT THE MARKET SHOULD BE. IF THE FTC SUCCEEDS IN KEEPING IT VERY, VERY NARROW, THEY MAY HAVE A GOOD CASE.
AS FACEBOOK HAS POINTED OUT REPEATEDLY, CONSIDER THEIR COMPETITION VERY WIDE. ED: KURT WAGNER, WHO I'M SURE WE WILL COME BACK TO MULTIPLE TIMES OVER THE COURSE OF PROCEEDINGS. LET'S BREAK DOWN MORE ON WHAT THE FTC TRIAL AGAINST META COULD MEAN FOR THE FUTURE OF DIGITAL MARKETS. JOINING US NOW IS JENNIFER HUDDLESTON, SENIOR FELLOW AT THE CATO INSTITUTE. AS A PIECE OF DOCUMENTARY EVIDENCE IN A TRIAL LIKE THIS, THE 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 THAT ENVIRONMENT? WHAT IS THIS ENVIRONMENT OF ANTITRUST THAT THIS TRIAL REPRESENTS? JENNIFER: WE HAVE SEEN A LOT OF ANIMOSITY TOWARD SOME OF AMERICA'S LEADING TECH COMPANIES, AND THIS PRESUMPTION THAT BIG IS AUTOMATICALLY BAD. ONE OF THE KEY ELEMENTS OF THE
FTC CASE IS IT IS BASICALLY IMAGINING A WORLD THAT NEVER EXISTED. IT IS TRYING TO ASK FOR A DO OVER ON THAT ACQUISITION CREATED MORE THAN A DECADE AGO. THE SOCIAL MEDIA DYNAMICS HAVE BEEN CHANGING. WE WERE CHANGING IN 2018 WHEN THE LETTER CAME ABOUT. THERE WERE ALSO CHANGING MORE RECENTLY WITH THE EMERGENCE OF THINGS LIKE TIKTOK. WE HAVE TO REMEMBER THAT AT THE
TIME META ACQUIRED INSTAGRAM AND WHATSAPP, THESE WERE NOT SUREFIRE SUCCESSES. THEY WERE JOKES PARTICULARLY ABOUT THE ACQUISITION OF INSTAGRAM AT THE TIME. WHY ARE THEY DOING THIS? WHY ARE THEY PAYING ALL THIS MONEY? WE DON'T WANT TO SEE A WORLD WHERE GOVERNMENT ENFORCERS PENALIZE BUSINESSES OR 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. ED: 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 AND ANTITRUST. HOW DOES THAT CONTEXT PLAY IN THE TRIAL? IT SEEMS AS IF THIS ADMINISTRATION WILL FOLLOW THROUGH WITH THE GENERAL ATTITUDE TOWARD BIG TECH THAT THE PRIOR ADMINISTRATION DID. JENNIFER: 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 LINA KHAN AT THE FTC , AND THIS PUSH TOWARD THIS "BIG IS BAD" MENTALITY. IT SEEMS LIKE SO FAR, WITH THE REMEDIES PROPOSED IN BOTH CASES, THAT THIS ADMINISTRATION SEEMS DETERMINED TO CONTINUE THE SHIFT AWAY FROM THE KIND OF LAW AND ECONOMICS CONSUMER WELFARE BASED APPROACH TO ANTITRUST, SOMETHING THAT MAKES MORE PRESUMPTIONS ABOUT COMPETITORS AS CONSUMERS. AND IT USES ANTITRUST ENFORCEMENT FOR OTHER POLICY GOALS. THAT SHOULD BE CONCERNING. WE FOCUS ON CONSUMERS. WE RISK LOSING THE PURPOSE BEHIND ANTITRUST. ED:
WHY WOULD A BREAKUP OF META AND ITS FAMILY OF APPS BE BAD FOR THE CONSUMER? JENNIFER: I THINK THAT IS AT THE HEART OF WHAT WE NEED TO REMEMBER WHEN IT COMES TO THIS CASE. YOU ALSO WOULD HAVE COMPANIES WITH FEWER RESOURCES TO ENGAGE IN RESEARCH AND DEVELOPMENT. ROLLING OUT NEW FEATURES CONSUMERS WANT IN THE TIME THAT AI WAS DISRUPTING THINGS. YOU HAVE RESOURCES THAT CONSUMERS WOULD EXPECT, RUN THINGS LIKE ONLINE SAFETY.
COMPANIES CAN NO LONGER SHARE THE RESOURCES ON DATA AND ADVERTISERS, SO THEY WOULD HAVE TO SHIFT MORE TOWARD USING THEIR CONSUMER DATA AND MORE ON DOING WHAT THE ADVERTISERS WANT, RATHER THAN WHAT THE CONSUMERS WANT. ED: THE CORE OF META' IS ARGUMENT IS THAT THE FTC ARE MISUNDERSTANDING THE MARKETPLACE. THE COMPETITION IS TIKTOK AND YOUTUBE. A SUCCESSFUL DO YOU THINK THAT DEFENSE WILL BE? JENNIFER: THE FTC IS SEEKING A REALLY NARROW DEFINITION OF FRIENDS AND FAMILY. IT IS A DEFINITION I DON'T THINK THE AVERAGE CONSUMER THINKS ABOUT. IF IT IS SUCCESSFUL, IT COULD POTENTIALLY LEAD TO LARGER DISRUPTION IN THE SOCIAL MEDIA MARKETPLACE.
NOT ONLY DOES THIS DEFINITION EXCLUDE COMPANIES LIKE TIKTOK THAT ARE INCREDIBLY POPULAR WITH GEN Z. IT ALSO EXCLUDES OTHER MESSAGING APPS LIKE SIGNAL, PLATFORMS LIKE SNAP THAT HAVE GROWN IN POPULARITY. IT DOES NOT SEEM TO REFLECT THE EXPERIENCE OF THE AVERAGE CONSUMER AND IT COMES TO SOCIAL MEDIA AND MESSAGING, THAT ALONE BROADER CONVERSATIONS AROUND THINGS LIKE ADVERTISING OR ENTERTAINMENT MORE GENERALLY. ED: IN YOUR RESEARCH AND YOUR REVIEW OF POLICY, PENDING THE OUTCOME OF THIS TRIAL, DO YOU EXPECT ACTION AGAINST OTHER BIG TECH NAMES? IF SO, WHO? JENNIFER: WE HAVE ALREADY SEEN CASES AGAINST FOUR OF AMERICA'S TECH COMPANIES -- GOOGLE, AND PENDING CASES AGAINST AMAZON AND APPLE, AND THIS CASE AGAINST FACEBOOK AND META. ALL OF THESE CASES REALLY RAISE CONCERNS ABOUT THE POTENTIAL GOVERNMENT INTERVENTION INTO WHAT HAS BEEN A DYNAMIC ECOSYSTEM.
NOT ONLY COULD THESE CASES HAVE CONSEQUENCES FOR CONSUMERS, BUT THERE IS GOING TO BE A QUESTION OF WHAT ARE WE MISSING OUT ON WHILE COMPANIES SPEND THEIR TIME DEALING WITH ENFORCEMENT ACTIONS. THEY ARE TRYING TO PROVIDE BETTER THINGS FOR CONSUMERS. WHAT ABOUT THE STARTUP ECOSYSTEM? ♪ CHECK OUT THE PODCAST. THIS IS BLOOMBERG.
THE UNITED STATES WILL HAVE TO MAKE A VERY CREATIVE R&D PUSH WHILE MAKING "SMART CHOICES WITH BUDGETS" TO STAY AHEAD IN THE AI RACE. THESE WERE THE FIRST PUBLIC REMARKS BY MICHAEL CASIO'S, ADVISOR TO THE PRESIDENT, WHITE HOUSE OFFICE OF TECH POLICY DIRECTOR. THE MAIN MESSAGE ON STRATEGY FOR TECH -- PROMOTE AND PROTECT. HE JOINS US NOW. WHAT DO YOU MEAN BY SMART CHOICES? THIS IS A TIME WHERE BUDGETS ACROSS FEDERAL GOVERNMENT ARE BEING CUT. SOME TOOLS AND EXAMPLES, PLEASE? >> THANK YOU FOR HAVING ME.
THE MESSAGE WE WERE TRYING TO SHARE IN AUSTIN A FEW DAYS AGO WAS THIS QUESTION OF HOW DOES THE U.S. INSURE ITS POSITION AS THE GLOBAL LEADER IN EMERGING TECHNOLOGIES. IN ORDER TO DO THAT, YOU HAVE TO DO TWO MAJOR THINGS. YOU HAVE TO DO PROMOTION AND PROTECTION. THE KEY PILLAR OF THE PROMOTE
AGENDA IS AROUND BEING CREATIVE IN THE WAY THAT WE SPEND FAIRLY FUNDED RESEARCH AND DEVELOPMENT DOLLARS. FOR FAR TOO LONG, THESE R&D DOLLARS HAVE BEEN SPENT IN THE SAME WAYS BY THE SAME AGENCIES TO DO THE SAME TYPES OF RESEARCH. THERE IS MORE WE CAN DO IN ALL SORTS OF THINGS LIKE PRICES AND CHALLENGES, ADVANCED MARKET COMMITMENTS, OR FAST-TRACK ACTION GRANTS. WE CAN WORRY A LITTLE BIT LESS ABOUT HOW MUCH, AND MORE ABOUT HOW WE ACTUALLY DEPLOY THESE DOLLARS, IN WAYS WE CAN ENSURE WE ARE MAKING THE BEST DISCOVERIES HERE IN THE UNITED STATES FOR YEARS TO COME. ED:
WE HAVE REPORTED A LOT ON DOGE, THE WORK TO CUT WASTE IN GOVERNMENT. BUT VERY SPECIFICALLY, DO YOU CALL FOR OR SUPPORT AN INCREASE IN R&D BUDGETS, GROWTH IN R&D BUDGETS? >> THE MOST IMPORTANT THING WE HAVE TO DO IS PRIORITIZE OUR AND THE BUDGETS. SPENDING A LOT OF MONEY ON THE WRONG THINGS IS FAR WORSE THAN SPENDING LESS MONEY ON THE RIGHT THINGS. WHAT WE DO AT THE WHITE HOUSE, IN COORDINATION WITH THE OFFICE OF MANAGEMENT AND BUDGET, HIS HELP SET RESEARCH AND DEVELOPMENT PRIORITIES FOR THE COUNTRY. THE PRESIDENT SPELLED THESE OUT IN A LETTER HE SENT TO ME TWO WEEKS AGO.
THE ONES HE DID CALL OUT OUR ARTIFICIAL INTELLIGENCE, QUANTUM COMPUTING, AND NUCLEAR, TO NAME THREE. YOU CAN IMAGINE THAT IN FUTURE BUDGET CYCLES, THESE AREAS, WE ARE GOING TO BE PRIORITIZING, AND THESE ARE GOING TO BE A KEY TO NATIONAL ECONOMIC SECURITY. ED: ARE THESE ACHIEVABLE, AI LEADERSHIP FROM AMERICA, WITH THE TARIFFS WE HAVE IN PLACE AND THE TECHNOLOGY EXPORT CONTROLS, SOME OF WHICH WERE AMPLIFIED WITH THE LIKES OF NVIDIA AND AMD? >> ABSOLUTELY. IF YOU THINK BACK TO THE STRATEGY WE DISCUSSED A COUPLE DAYS AGO, TO RECEIVE THIS LEADERSHIP POSITION, WE HAVE TO DO BOTH PROMOTION AND PROTECTION. TALKED ABOUT THE RMD PILLAR.
THE SECOND PIECE IS AROUND THE REGULATION. THE LAST ADMINISTRATION, A LOT OF REGULATORY POLICY HAS BEEN DRIVEN BY THE SPIRIT OF FEAR. I DON'T THINK WE SHOULD BE WORRIED ABOUT THESE EMERGING TECHNOLOGIES. WHAT THE PRESIDENT AND WHITE HOUSE HAVE SAID MANY TIMES IS WE HAVE TO MAKE SURE WE LEAD IN THIS TECHNOLOGY AND ACTUALLY DEPLOY IT. ON THE PROTECT SIDE OF THE EQUATION, WE HAVE TO MAKE SURE WE ARE NOT GIVING OUR ADVERSARIES THE CRITICAL TOOLS THAT COULD HELP THEM TRY TO CATCH UP TO US IN THIS RACE. WE KNOW THE PRC IS ATTEMPTING
TO CATCH UP WITH US AND THINGS LIKE ARTIFICIAL INTELLIGENCE, AND THERE IS NO REASON WE SHOULD BE HELPING THEM DO SO. TO ACHIEVE THE U.S. POSITION OF LEADERSHIP IN ARTIFICIAL INTELLIGENCE AND OTHER EMERGING TECHNOLOGIES, YOU HAVE TO HAVE A BALANCED PROMOTION AND PROTECTION AGENDA. ED: NVIDIA AND AMD NOW HAVE TO APPLY FOR LICENSES TO BE ABLE TO EXPORT TO CHINA.
THE ADMINISTRATION' IS ARGUMENT IS THEY COULD END UP WITH SUPERCOMPUTERS. THE COMPANY'S ARGUMENT IS THESE ARE MUCH LOWER PERFORMANCE. IF THEY HAVE NOT GOT ACCESS TO AMERICAN TECHNOLOGY, CHINA WILL SIMPLY CHAMPION A DOMESTIC NAME. HUAWEI HAS A SIMILAR ACCELERATOR. HOW WILL YOU ADVISE THE PRESIDENT ON WHETHER AMD AND NVIDIA SHOULD BE ALLOWED TO EXPORT LOWER PERFORMANCE ACCELERATORS TO CHINA? >> I'M NOT GOING TO OPINE ON THE SPECIFICS, BUT THERE HAS BEEN A TRACK RECORD OF A WIDE VARIETY OF CHIPS BEING USED TO DRIVE THE DEVELOPMENT AND TRAINING OF TIER LEVEL OPEN-SOURCE MODELS BY COMPANIES WITHIN THE PRC.
WHEN WE THINK ABOUT OUR PROTECT AGENDA, IT IS CRITICAL THAT WE DEVELOP AN EXPORT CONTROL REGIME THAT IS SIMPLE AND CLEAR, AND IS ONE THAT WE ENFORCE VERY, VERY STRONGLY. ED: ONE OF THE ELEMENTS OF PROMOTE IS TO BRING ASSEMBLING OF COMPUTER SYSTEMS TO AMERICA. ASML IS IN THE SPOTLIGHT AS AN EXAMPLE BECAUSE OF ITS EARNINGS REPORT OVERNIGHT. WITH THIS ADMINISTRATION, WOULD THEY CONSIDER AN EXEMPTION OF TARIFFS ON THE LEADING CHIP EQUIPMENT MAKER, IN ORDER THAT THEY MIGHT BE ABLE TO DO THAT, BRING MORE OF THEIR ACTIVITIES TO THE UNITED STATES? >> I CAN'T OPINE ON SPECIFICS. WHAT WE SAW FROM THE NEWS LAST
WEEK ON NVIDIA, THERE IS A CONTINUAL EFFORT. WE SEE THAT FROM ALL AROUND THE WORLD, OF PEOPLE WANTING TO BRING MANUFACTURING AND THESE CORE BLEEDING EDGE TECHNOLOGIES BACK HERE TO THE UNITED STATES. THAT IS SOMETHING THE WHITE HOUSE IS VERY PROUD OF, AND SOMETHING WE HAVE SEEN ACROSS INDUSTRIES. THE POLICIES THE PRESIDENT AND
OUR TRADE TEAM HAVE IMPLEMENTED IS ONE THAT IS ACTUALLY PROVING TRUE IN A FEW SHORT DAYS. WE HAVE HAD GREAT ANNOUNCEMENTS ABOUT COMPANIES COMING HERE TO BUILD AND MANUFACTURE THESE CRITICAL TECHNOLOGIES IN THE U.S. I SUSPECT WE WILL BE SEEING MORE OF THESE IN THE MONTHS AND WEEKS AHEAD. ED: THERE IS SOME CONFRONTATION BETWEEN THE ADMINISTRATION AND LEADING ACADEMIC RESEARCH INSTITUTIONS.
HARVARD IS AN EXAMPLE. HOW DOES THE ATTENTIONAL OF CUTTING BUDGETS OF INSTITUTIONS LIKE THAT IMPACT AMERICA'S COMPETITIVENESS IN THE FIELD OF RESEARCH? I REFLECT ON JENSEN HUANG'S COMMENTS IN MARCH AT GDC THAT MORE THAN 50% OF THE AI RESEARCH IS BEING DONE IN CHINA OR WITH CHINESE NATIONALS. HERE IN AMERICA, WE HAVE SOME DEBATE ABOUT FUNDING FOR THESE INSTITUTIONS. >> I WANT TO MAKE SURE WE DO NOT CONFLATE SEPARATE ISSUES. I DON'T THINK THIS IS PARTICULARLY HARD.
THERE IS NO REASON 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. THESE TWO THINGS CAN HAPPEN SIMULTANEOUSLY. I THINK FIRST AND FOREMOST, THESE UNIVERSITIES THINK ABOUT TITLE VI. I LEAVE THAT TO THE DOJ AND THE DOE TO THINK ABOUT. WHAT I HAVE ADVOCATED VERY
STRONGLY AS WE CONTINUE TO NEED TO BRING UNIVERSITIES TO WORK ON BASIC RESEARCH THAT HAS FUNDED AND FUELED OUR ECOSYSTEM FOR DECADES. AT THE SAME TIME, WE CAN NEVER STAND FOR ANTI-SEMITISM ON OUR UNIVERSITY CAMPUSES. ED: IT'S PART -- AS PART OF YOUR OFFICE REQUEST, SEVERAL AI COMPANIES HAVE SUBMITTED RESPONSES ASKING YOU TO PRESERVE THEIR ABILITY TO LEARN FROM COPYRIGHTED MATERIAL. WE ARE TALKING ABOUT THOSE TRAINING FRONTIER MODELS, FOUNDATION MODELS. A VERY SIMPLE YES OR NO, IF YOU
WILL. IS COPYRIGHT REFORM ON THE TABLE AS PART OF THIS PRESIDENT'S AI ACTION PLAN? >> WE WERE DELIGHTED BY THE RESPONSES WE GOT TO THE ACTION PLAN RFI. IT WAS MANY THOUSANDS OF RESPONSES, AND IT JUST SHOWED HER FAR AND WIDE THE COMMUNITY IS THAT WANTS TO THINK ABOUT AND HELP SHAPE THE NATIONAL AGENDA FOR UP -- FOR ARTIFICIAL INTELLIGENCE.
COPYRIGHT IS GOING TO BE ONE OF THE ISSUES THAT MANY PEOPLE COMMENTED ON IN ONE OF THE LAST FEW MONTHS. ED: COPYRIGHT REFORM, YES OR NO? >> WE COULD NOT BE THRILLED HOW MANY PEOPLE COMMENTED ON ALL FACETS OF THE AI AGENDA. WE HAD A LOT OF COMMENTERS. SOME VERY INTERESTING AND DETAILED THOUGHTS. ED: THE PRESIDENT HAS SPOKEN WITH ADMIRATION ABOUT JENSEN HUANG AND NVIDIA'S LEADERSHIP. AS BLUMER TECHNOLOGY GETS TO
KNOW YOU AND YOUR WORK IN THE WHITE HOUSE, HAVE YOU HAD THE OPPORTUNITY TO MEET JENSEN HUANG AND HIS PENS -- AND HIS PEERS ABOUT WHAT THEY PLAN TO DO IN AMERICA, AND CRITICAL MARKETS FOR THEM, WHICH ONCE INCLUDED CHINA? >> I HAVE. IN THE FIRST TWO WEEKS AFTER MY CONFIRMATION, I HAD THE OPPORTUNITY TO MEET WITH THE LEADING TECHNOLOGY INDUSTRY CEO'S, AND CHAT WITH THEM ABOUT HOW WE CAN, FOREVER, USHER IN THIS GOLDEN AGE OF INNOVATION. WITH JENSEN SPECIFICALLY, HE IS A TREMENDOUS THINKER. ONE THING WE CONNECTED ON WAS THE QUESTION OF AI FOR SCIENCE.
THERE HAS BEEN THIS EXTREME FIXATION ON THINKING ABOUT THE PROTECT SIDE OF THE AGENDA AND IT COMES TO SPECIFIC SEMICONDUCTORS. AN EVEN MORE IMPORTANT PART OF THE PROBLEM WE FACE AHEAD OF US, OUR CHALLENGES, IS HOW CAN YOU IMPLEMENT THIS TECHNOLOGY TO DRIVE TRANSFORMATIONAL CHANGE FOR THE AMERICAN PEOPLE? JENSEN AND NVIDIA THAT SHE WAS EXTRAORDINARILY EXCITED TO HELP US THINK THROUGH, AND SEE IF WE COULD DO MORE ON DRIVING SCIENTIFIC DISCOVERIES THROUGH AI. I WILL BE ENCOURAGING SECRETARY RIGHT WITH OUR LABS, AND SO MANY OF OUR OTHER LEADERS, TO TAKE SERIOUSLY. ED: THE WHITE HOUSE OFFICE OF
SCIENCE AND TECHNOLOGY DIRECTOR -- THANK YOU. FORWARD TO SPEAKING MORE OVER THE COMING YEARS. SHARES TRADING SIGNIFICANTLY LOWER. THE COMPANY POSTING A SALES MIX THAT WAS ALMOST A BILLION EUROS LESS THAN EXPECTED. THE HEAD OF GLOBAL TECH INFRASTRUCTURE IS WITH US. THERE ARE PEOPLE OUT THERE -- IT IS GOOD TO SEE YOU AGAIN -- THAT ARE A BIT MORE SANGUINE.
ORDERS CAN BE LUMPY. THE THING THAT IS SPOOKY TOO MANY IS THE INABILITY TO QUANTIFY TARIFF IMPACT. HOW ARE YOU MODELING FOR THAT IN ASML'S CASE? >> YOU ARE MAKING A GOOD POINT, BASED ON WHAT IS COMING DOWN IN THE NEAR TERM. IN SOME INDUSTRIES, YOU CAN SEE
PEOPLE ARE FRONTLOADING ORDERS. BEFORE THE TARIFF GETS INTO PLACE. IT DOES NOT WORK WELL WITH THESE LARGE PIECES OF EQUIPMENT. THE SECOND APPROACH IS TO WAIT AND SEE AND BE MORE CAREFUL. IN THE LONG RUN, MODELING LIKE TARIFFS REQUIRES YOU TO TAKE A VIEW ON WHAT THE TARIFFS ARE HERE FOR, WITH THE U.S. ADMINISTRATION WANTS TO DO WITH
THESE TARIFFS. IF YOU LISTEN TO THEM, THEY WANT TO ENCOURAGE CHANGES IN BEHAVIOR WITH TRADE PARTNERS. THEY WANT TO BRING THE U.S. UP TO PARTNERS IN MANUFACTURING. AND THEY WANT TO CREATE ADDITIONAL REVENUES. IF YOU PUT THAT INTO MOTION AROUND CERTAIN CAPEX FUNDS, BUT YOU SEE IS THAT NONE OF THESE OBJECTIVES ARE GOING TO GO AGAINST THE ABILITY IN THE U.S. TO BUILD THIS AI INFRASTRUCTURE
AND TO CONTINUE TO MANUFACTURE LITTERING -- LEADING EDGE SEMICONDUCTORS AND LOGIC CHIPS. YOU HAVE TO CONTINUE TO HAVE THAT TECHNOLOGY ADVANCING. THAT HAS TO DO WITH TARIFFS ON SEMI CAP EQUIPMENT. ED: ASKING WHETHER THERE WOULD BE AN EXEMPTION FOR CHIP EQUIPMENT MAKERS -- IT WAS VERY CLEAR WE WILL ASSEMBLE IN THE NETHERLANDS. DOES THE ADMINISTRATION HAVE A
SAY ON WHAT ASML DOES IN THIS CASE? >> THEY DEFINITELY HAVE A SAY. I THINK THE PHONE CALL WILL BE TAKEN. WITH ASML TOOLS, IT IS LIKELY TO SEE THE FINAL ASSEMBLY MOVING AWAY FROM THE NETHERLANDS, THE SAME WAY IT IS VALUED WITH TMC MOVING AWAY FROM TAIWAN. IT IS LIKE A HARD LIMIT.
INCREASING THE AMOUNT OF MANUFACTURING DONE IN THE U.S. -- IT IS ALREADY VERY SIGNIFICANT. YOU ALREADY HAVE CRITICAL STAGES LIKE THE LIGHT SOURCE, WHICH IS THE MOST PARTICULAR PIECE. IT IS MANUFACTURED IN THE U.S. SEEING THAT GOING UP IS A POSSIBILITY. WITH THESE TOOLS, IT IS PROBABLY A STRETCH. ED:
GOOD TO CATCH YOU UP AND HAVE YOU BACK ON BLOOMBERG TECHNOLOGY. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." THANK YOU TO THOSE OF YOU WHO SUBMITTED QUESTIONS TO SOME OF OUR KEY INTERVIEWS. CHECK OUT THE PODCAST. ONLINE ON APPLE, SPOTIFY, AND I HEART -- WHAT A WEEK. FROM SAN FRANCISCO, THIS IS BLOOMBERG TECHNOLOGY.
2025-04-18 08:57
