Tech Rebounds, Tesla Investors on the Sidelines | Bloomberg Technology
>> THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK, I AM SONALI BASAK. >> THIS IS BLOOMBERG TECHNOLOGY. COMING UP, STOCKS REBOUND AFTER
A POSITIVE INFLATION READING. THE RELIEF COMES AFTER SOME MARKET TURMOIL THIS WEEK ON THE BACK OF PRESIDENT TRUMP'S TARIFFS. WE WILL DIVE INTO WHAT IS BEHIND THE RETREAT FROM LUSK'S EV COMPANY WITH TESLA BEING THE BIGGEST DECLINER IN THE INDEX THIS YEAR.
SPACEX'S CREW X IS LAUNCHING THIS EVENING FOR A RELIEF MISSION FOR NASA ASTRONAUTS AT THE INTERNATIONAL SPACE STATION. FIRST, LET'S CHECK ON THE MARKETS. SOLANI: I WANT TO BRING YOU INTO THE NASDAQ 100, JACKIE. WE STARTED STRONG. WE ARE LOSING SOME OF THAT
STEAM. LOOKING AT THE NASDAQ 100 COME CURRENTLY UP WHITE 4%. REMEMBER, WE HAVE HAD A LOT OF MALAISE IN RECENT DAYS. LET'S LOOK AT THE PHILADELPHIA SEMICONDUCTOR INDEX BECAUSE THAT HAS BEEN HARDER HIT THIS YEAR. YOU ARE SEEING A LITTLE BIGGER AGAIN IN THE INDEX, UP ALMOST 2% TODAY.
PART OF THAT IS BECAUSE OF INTEL, STILL UP 2.6%. AGAIN, NOT AS MUCH WAS UP EARLIER IN THE DAY, BUT STILL UP OFF THE HEELS OF A REPORT FROM REUTERS SAYING THAT PARTNERS ARE BEING FORMED AROUND THE FOUNDRY BUSINESS, POTENTIAL JOINT VENTURES, LED BY TSMC, BROADCOM. INTEL SNAPPING SEVEN DAYS OF LOSSES. JACKIE:
SOME OF THE INTEL MOVES WITH MIKE SHEPPARD. THERE IS STILL A LOT THAT WE DON'T KNOW ABOUT SOME OF THIS REPORT COMING FROM REUTERS ON INTEL. FILL US IN ON WHAT WE DO KNOW. MIKE: ONE QUESTION IS HOW MUCH THIS WOULD BEAR FRUIT.
WE REPORTED A MONTH AGO THAT THE TRUMP ADMINISTRATION APPROACHED TSMC TO PERHAPS TAKE OVER INTEL'S FOUNDRY BUSINESS, BIG UNDERTAKING GIVING A LOT OF THE MALAISE SURROUNDING INTEL AND THE BUSINESS COMPLICATIONS THEREIN. IT OPENED THE DOOR TO WORKING WITH OTHER COMPANIES AND THIS REPORT WOULD CERTAINLY FIT INTO THAT. MORE RECENT EVENTS SUGGEST A DIFFERENT DIRECTION OF TRAVEL. INTEL ANNOUNCED THIS $100 BILLION ADDITIONAL INVESTMENT IN THE U.S. A LITTLE MORE THAN A WEEK AGO WITH PRESIDENT TRUMP. THAT IS THE KIND OF THING THAT DOESN'T SEEM TO INCLUDE INTEL. THERE ARE ALSO THORNY PROBLEMS
INVOLVED. ONE WAS INTELLECTUAL PROPERTY. WOULD TSMC BE WILLING TO SHARE PRECIOUS TRADE SECRETS WITH A COMPANY THAT COULD IN OTHER WAYS BE ARRIVAL WHEN IT COMES TO ITS BUSINESS? LIKEWISE, INTEGRATING SOME OF INTEL'S OPERATIONS INTO TSMC WOULD ALSO INVOLVE A LOT OF WORK. SO, THERE'S A LOT OF SKEPTICISM SURROUNDING THIS REPORT.
WE'LL HAVE TO SEE WHAT DEVELOPS. SOLANI: I WANT TO BRING IN YOUR BROADER VIEW BECAUSE YOU ARE SEEING A MARKET REACTING TO SOME OF THE RELIEF RELATIVE TO WHERE WE WERE 24 HOURS AGO IN THE TARIFF STORY. YET, YOU ARE SEEING RETALIATORY TARIFFS FROM AROUND THE WORLD, LOOKING AT THE EU AND CANADA. HOW ARE INVESTORS AND MARKETS
DIGESTING THE LATEST COMING OUT OF WASHINGTON, AND WHAT IS STILL ABSOLUTELY UNCERTAIN? MIKE: THERE IS A LOT OF UNCERTAINTY. AS YOU PUT IT EARLIER IN THE INTRO, MALAISE. THAT SEEMS TO BE ONE OF THE OPERATIVE WORDS RIGHT NOW WHEN IT COMES TO INVESTORS, ESPECIALLY IN THE TECH SECTOR. THE NASDAQ 100 HAS REALLY TAKEN
THE BRUNT OF THIS DOWNDRAFT IN MARKETS. OBVIOUSLY, THERE WAS A LOT OF RUN-UP AHEAD OF TIME IN THE PAST YEAR OR SO ON ENTHUSIASM ABOUT ARTIFICIAL INTELLIGENCE. WHAT GOES UP IS NOW COMING DOWN. A LOT OF IT IS BEING FUELED BY UNCERTAINTY SURROUNDING THE PRESIDENT'S TARIFF POLICIES.
DURING A MEETING WITH TOP CEOS IN WASHINGTON, HE SIGNALED THAT THEY SHOULD BE PREPARED FOR MORE. HE SEES TARIFFS AS A TOOL FOR GETTING COMPANIES TO INVEST IN THE U.S. HE HAS CITED IN THE PAST APPLE'S DECISION TO INVEST $500 BILLION IN THE U.S.
WE TALKED ABOUT TSMC'S PLANS. BOTH OF THOSE HE CREDITED TO HIS OWN TARIFF POLICIES. JACKIE: THAT MEETING, THERE WAS A LOT OF ANTICIPATION. CHIP STOCKS TOOK A BEATING LAST WEEK BUT NOW THEY ARE GETTING RELIEF COME UP BY ABOUT 1.6%.
WHAT DID WE LEARN FROM THAT MEETING FROM TECH CEOS? MIKE: THE TECH CEOS MEETING ON MONDAY SEEMED TO BE LESS OF A FIREWORKS EVENT. THE BUSINESS ROUNDTABLE MEETING LAST NIGHT SEEMED TO BE MORE OF A MORE CORDIAL GIVE AND TAKE GIVEN THE CIRCUMSTANCES THAT WE ARE SEEING IN THE MARKET AND CONCERNS THAT CEOS MAY HAVE ABOUT WHERE TO TAKE THEIR BUSINESS IN LIGHT OF THE WAY TARIFFS COULD AFFECT THEIR SUPPLY CHAINS. WE HEARD THE CEO OF HEWLETT-PACKARD ENTERPRISES TELL INVESTORS ON A CALL LAST WEEK, LOOK, WE DON'T KNOW WHERE THIS IS GOING EXACTLY. THERE MAY BE PRICING CHANGES.
WE WILL DO THE BEST WE CAN THROUGH OUR SUPPLY CHAIN TO MINIMIZE THE IMPACT, BUT THEY DON'T KNOW WHERE IT'S GOING. THAT WAS ECHOED BY THE HEAD OF BROADCOM ON A CALL WITH INVESTORS SUGGESTING THAT, HEY, THIS IS REALLY EARLY AND WE DON'T KNOW WHERE THIS IS GOING. SOLANI: WE APPRECIATE YOUR TIME AND ANALYSIS. I QUICKLY WANT TO CHECK IN ON SHARES OF TESLA.
AS MIKE WAS TALKING ABOUT, A LOT OF MALAISE IN THE TECH SECTOR. TESLA IS THE ONE LEADING THE NASDAQ 100 HIGHER. IT IS STILL UP MORE THAN 5%, BUT IT WAS DOWN 15% ON MONDAY. BETWEEN TUESDAY AND WEDNESDAY'S GAIN, WE HAVEN'T RECOUPED ALL OF THOSE LOSSES BUT IT HELPS THAT IT'S UP FOR THE BROADER NASDAQ 100. TO ZOOM OUT WE WILL BRING IN THE CIO OF PNC ASSET MANAGEMENT GROUP. YOU THINK ABOUT WHAT IS HAPPENING IN THE TECH SECTOR, TODAY IS A DAY OF RELIEF, BUT THE MAG 7, RELATIVE UNDERPERFORMANCE THAT YOU'VE SEEN, AT WHAT POINT DO YOU SEE THE OVERHANG START TO DISAPPEAR? REALLY, THE ONLY MEMBER OF THE MAG 7 THAT IS UP YEAR-TO-DATE IS META. AMANDA: THAT'S RIGHT. IT IS GREAT TO BE WITH YOU.
THE OVERHANG WILL STICK AROUND FOR A WHILE. THE CHALLENGE IS WE ARE IN A PURPLE HAZE OF FISCAL POLICY UNCERTAINTY. IT'S NAMELY TARIFF AND TRADE-RELATED POLICY. IT IS NOT SO MUCH OF A DIRECT HIT TO THE UNDERLYING FUNDAMENTALS OF THE MAG 7. IN FACT, FOR THE MOST PART THEIR BUSINESS MODELS TEND TO BE SOMEWHAT INSULATED FROM IT. THE CHALLENGE IS, IN THIS
PURPLE HAZE OF UNCERTAINTY THERE ARE EXTREME VALUATION MULTIPLE COMPRESSION. THE MAG 7 HAVE BEEN PRICED TO NEAR PERFECTION. WE ARE NOT SEEING FUNDAMENTALS DETERIORATE, JUST MULTIPLES COME DOWN MATERIALLY UNTIL WE GET PAST SOME OF THIS GROWTH SCARE NARRATIVE THAT HAS BEEN GRIPPING MARKETS I THINK IT WILL BE A OVERHANG. JACKIE: YOU MENTIONED FUNDAMENTALS. THEY LOOK STRONG. THERE WAS SO MUCH REASSURANCE
FROM COMPANIES AND APPEASED INVESTORS THAT A LOT OF THE CAPEX GOING IN IS IT GOING TO STOP. THE SPEC IT IS GOING TO KEEP GOING. -- THE SPIGOT IS GOING TO KEEP GOING. ARE WE BRACING FOR A MORE FRAGILE TECH SECTOR? WHAT DO YOU SEE PROVIDING MORE INSURANCE TO INVESTORS THAT THEY AREN'T GOING TO BE THAT EASY TO BREAK? AMANDA: IT'S A REALLY GREAT QUESTION AND A REALLY HARD ONE TO ANSWER. I THINK THAT'S WHY TECH
INVESTORS IN PARTICULAR ARE STRUGGLING IN THIS ENVIRONMENT, BECAUSE WE ARE CRAVING MORE CATALYST. WE ARE IN A LITTLE BIT OF A LULL IN TERMS OF INNOVATION.THE FOCUS THE PAST FEW YEARS HAS REALLY BEEN ON SHIPS. ONE STOCK IN PARTICULAR, BUT WHERE ARE THE USE CASES? WE NEED BROADER BASED USE CASES, NEW BUSINESS MODELS DEVELOPING AND BROADENING AN ADOPTION ACROSS THE MARKET.
I THINK THAT IS THE CRITICAL CATALYST OR NEXT STEP TO THIS NEXT WAVE OF INNOVATION, AND PERHAPS EVEN GETTING THE MARKET RALLY CATALYZED AGAIN. I THINK YOU'LL TAKE A LITTLE TIME GIVEN SOME OF THE POLICY UNCERTAINTY, BUT I THINK IT ABSOLUTELY COULD BECOME A TAILWIND IN THE SECOND HALF OF THIS YEAR INTO 2026. WE ARE JUST IN A LITTLE BIT OF A VOID AT THE MOMENT, WHICH IS VERY FRUSTRATING CERTAINLY. SOLANI: ONE INTERESTING PART OF THE TECH TRADE IS HOW MUCH IT HAS CONTRIBUTED TO THE WEAKNESS IN THE CONSUMER DISCRETIONARY SECTOR THROUGH THE S&P 500.
YOU THINK ABOUT AMAZON, TESLA. IN REALITY, HOW LEVERED ARE SOME OF THOSE GIANT TECH NAMES TO THE U.S. CONSUMER? AND ANY POTENTIAL FURTHER WEAKENING? AMANDA: I SAY THAT THE U.S. CONSUMERS IN THE DRIVER SEAT.
70% OF GDP OR SPENDING IS TIED TO THE CONSUMER IN SOME WAY, SHAPE, OR FORM. THE PATH TO THE CONSUMER AND THE HEALTH OF THE U.S. CONSUMER IS CRITICAL TO ALL OF US IN TERMS OF THE MARKET AND ECONOMIC CYCLE.
YOU'RE RIGHT TO MAKE A DISTINCTION IN TERMS OF HOW MUCH INFLUENCE DIRECTLY HITS BUSINESS MODELS.THE STORY AND CONCERN IS MUCH MORE AROUND, DO CONSUMERS GET MORE PARALYZED BY THIS POLICY UNCERTAINTY? SO, THEY SLOW DOWN OR EVEN STOP SPENDING, WHICH CASCADES INTO A MORE MATERIAL SLOWDOWN THAN WE ARE SEEING. THE EARNINGS GROWTH BACKDROP IS CONTINUING TO BE STRONG. IT IS NOT SO MUCH ABOUT ONE QUARTER.
THE FULL YEAR EXPECTATION LOOKS STRONG, THE ECONOMIC CYCLE LOOK STRONG, CONSUMER SPENDING-RELATED DATA LOOKS SOLID. IT IS ALL ABOUT THE NARRATIVE AND SENTIMENT CONCERN. IT IS NOT SO MUCH TRANSLATING INTO THE UNDERLYING FUNDAMENTALS BREAKING DOWN YET.
SOLANI: THE CONSUMER, THINKING ABOUT THE U.S. CONSUMER SO MUCH, YOU HAVE TO WONDER IF EUROPE, CHINA IS A BIGGER HEADWIND OR TAILWIND FOR THIS GROUP? DO YOU SEE ANY RISK? AMANDA: I AM MOSTLY CONCERNED ABOUT DEVELOPED INTERNATIONAL EXPOSURE. EUROPE IN PARTICULAR, GIVEN SOME OF THE CONTINUED GEOPOLITICAL TENSIONS AND CONFLICT. ARE WE GOING TO GET A RESOLUTION OUT OF RUSSIA AND UKRAINE OR NOT? THAT IS A REALLY CRITICAL THING I THINK NEEDS TO HAPPEN TO SEE SIGNS OF LIFE IMPROVE IN A MORE MATERIAL WAY ACROSS THE EURO ZONE. I THINK IT'S POSSIBLE TO SEE A BIT OF A RELIEF RALLY. WE STARTED TO GET IT AT THE BEGINNING OF THE YEAR AND WE HAVE SEEMINGLY SEEN IT FALTER A BIT.
I'M MOST CONCERNED ABOUT THAT AREA. I THINK IN TERMS OF EMERGING MARKETS MORE BROADLY, THERE IS A REALLY ATTRACTIVE VALUATION OPPORTUNITY FOR INVESTORS WHO CAN BE PATIENT. I THINK THIS IS A VERY ATTRACTIVE ENTRY POINT, EVEN IN THE MIDST OF ADDITIONAL TARIFF POLICY AIMED SPECIFICALLY AT CHINA. I THINK THERE IS A REAL OPPORTUNITY THERE FOR INVESTORS TO BE FOCUSED ON IN TERMS OF ALLOCATING CAPITAL EARLY THIS YEAR. JACKIE:
ON THAT EMERGING MARKETS STORY, CHINA IS A HUGE COMPETITOR IN THE TECH SPACE. ARE YOU SEEING ANY INTERESTING OPPORTUNITIES WITH SOME OF THOSE UP AND COMING COMPANIES UNVEILING NEW FEATURES AND AI MODELS EVERY WEEK THAT COULD PERHAPS GIVE INVESTORS ANOTHER CHOICE OUTSIDE OF THE TRADITIONAL U.S.-BASED TECH PLAYERS? AMANDA: I WILL NEVER BET AGAINST OUR U.S. TECH INDUSTRY AS A GENERAL RULE. I HAVE A VERY HOME COUNTRY BIAS. OF COURSE, I THINK INNOVATION SHOWS UP IN ALL DIFFERENT SHAPES AND FORMS. EVEN WHAT IS SEEMINGLY OLD NEWS NOW, THE DEEPSEEK STORY THAT CAME OUT OF NOWHERE RECENTLY, I THINK IT'S FASCINATING IN TERMS OF THIS INNOVATION STORY BEING BORN OUT OF ANYWHERE. THIS NATURAL COMPARATIVE,
COMPETITIVE ADVANTAGE THAT WE HAVE AS IT RELATES TO AI, AUTOMATION, ROBOTICS, ETC., THE STORY CONTINUES. I THINK IT'S HEALTHY AND IMPORTANT FOR INVESTORS TO THINK BIGGER AND MORE HOLISTICALLY THAN ONE OR TWO NAMES. THIS CYCLE IS VERY EARLY INNINGS. WE HAVE A LONG RUNWAY AND WE ARE ABSOLUTELY BELIEVERS IN THE SECULAR TAILWINDS HERE. FROM A MULTI-ASSET INVESTOR PERSPECTIVE, I THINK YOU HAVE TO LOOK BEYOND U.S.
EQUITIES IN THIS ENVIRONMENT, AND EVEN IN PRIVATE MARKETS THERE IS A TREMENDOUS AMOUNT OF OPPORTUNITY IN BC -- IN VC LAND. JACKIE: WE WILL HAVE YOU DOWN IS NOT BIDDING AGAINST THE U.S. THANK YOU FOR JOINING US. GOOGLE DEEP MIND LAUNCHES A NEW BRANCH OF ITS AI MODEL TO HELP ROBOTS NAVIGATE THE PHYSICAL WORLD. DETAILS AFTER THE BREAK. JACKIE: DEEP MIND HAS UNVEILED A NEW GEMINI MODEL THAT IT SAYS HELPS ROBOTS UNDERSTAND THE PHYSICAL WORLD AROUND THEM. MARK GURMAN JOINS US NOW. IT SEEMS LIKE EVERY BIG TECH COMPANY HAS BEEN UNVEILING SOME KIND OF NEW ROBOTICS VENTURE. HOW DOES GOOGLE STACK UP. ?
MARK: CONSUMER ROBOTICS IS THE NEXT BIG THING IN THE INDUSTRY. WE HAD A THOMAS CARS, MIXED REALITY AR GLASSES, WE HAVE VOICE, BUT ARTIFICIAL INTELLIGENCE IS GOING TO BE AT THE CORE OF EVERYTHING. THE ULTIMATE HARDWARE EXPRESSION OF AI IS ROBOTICS. BEING ABLE TO UNDERSTAND HOW A HUMAN ACTS, ARTIFICIALLY LEARNS FROM DATA AND MIMIC A HUMAN. THAT IS WHAT IS ROBOTICS, RIGHT?
YOU HAVE SEEN TESLA PLAY IN THIS SPACE, NOW YOU'RE SEEING META MAKE A BIG INVESTMENT IN THAT SPACE, AND TODAY GOOGLE IS ANNOUNCING NEW GEMINI MODELS IN INFRASTRUCTURE SPECIFICALLY TO POWERING ROBOTS.ALL OF THESE COMPANIES WANT TO PLAY IN THIS SPACE. META ANNOUNCED VERSIONS OF LLAMA IN AN INVESTMENT TO BUILD CONSUMER ROBOTS AND BE AT THE CENTER OF EVERYTHING. META WANTS TO BE THE FUTURE OPERATING SYSTEM TO POWER THESE ROBOTS, BUT THEY WILL HAVE A BIG COMPETITOR WITH GOOGLE, WHO HAS EXPERIENCE BUILDING OPERATING SYSTEMS FOR FIRST AND THIRD PARTY HARDWARE. GEMINI IS RIGHT UP THERE WITH
LLAMA AND CHATGPT AND OTHER AI SYSTEMS. THIS IS A BIG DEAL FOR GOOGLE IN THE INDUSTRY AT LARGE. SOLANI: HOW CONVINCING IS THIS PUSH? WE'VE SEEN GOOGLE OR ALPHABET TRY TO GET INTO THE ROBOT WORLD BEFORE.
MY UNDERSTANDING IS THAT THEY SHUT DOWN A SPINOFF COMPANY THAT WAS ASSOCIATED WITH THIS. THIS TIME AROUND, WHAT IS THE DIFFERENCE IN HOW BIG IS THE PUSH? MARK: THE DIFFERENCE IS GEMINI. THE UNDERLYING AI TECHNOLOGY IS MUCH DIFFERENT, MUCH MORE ADVANCED, MORE REPUTABLE.
NOW APPEARS TO BE THE TIME WHEN COMPANIES ARE WILLING TO PUT IN THE PROPER INVESTMENT, THE NECESSARY INFRASTRUCTURE TO MAKE ROBOTICS HAPPEN. WAYMO HAS BEEN PRETTY SUCCESSFUL COMPARATIVELY IN THE INDUSTRY. WHAT YOU ARE SEEING IS A LOT OF DATACOLLECTION, A LOT OF EXPERIENCE IN AUTONOMY AND CAMERAS, AND THAT IS TECHNOLOGY GOOGLE COULD USE IF IT WANTED TO BUILD ITS OWN HUMANOID.
DO NOT COUNT OUT APPLE. APPLE HAS TEAMS ON HUMANOID ROBOTS AS WELL. THE DIFFERENCE IS THEY WON'T PUBLICLY RELEASE AN UNDERLYING ROBOTIC MODEL TO SUPPORT THIRD-PARTY ROBOTS AND OTHER CONSUMER HARDWARE. THEY WILL GO IN HOUSE FOLLOWING THE TESLA METHOD THAT YOU'VE SEEN FROM THE TESLA BOT OVER THE LAST COUPLE OF YEARS. AT SOME POINT IN THE NEXT FIVE TO 10 YEARS YOU WILL SEE REAL COMPETITION BETWEEN GOOGLE, META, APPLE, TESLA, CHINESE COMPANIES, AND OTHERS IN CONSUMER ROBOTS. STAY TUNED, THIS IS GOING TO BE A BIG DEAL. SOME OF THE MOVIES OVER THE
LAST SEVERAL DECADES ARE STARTING TO COME TO REALITY. SOLANI: THANK YOU FOR YOUR TIME, BREAKING IT DOWN. THAT IS MARK GURMAN. I'M EXCITED ABOUT HAVING A ROBOT AT HOME. WE WILL TALK MORE ABOUT ROBOTS. NOT AS PLEASANT OF A STORY, SHARES OF A CONSUMER ROBOTICS COMPANY ARE SLIDING TODAY AFTER IT WARNED OF "SUBSTANTIAL DOUBT" OVER ITS ABILITY TO CONTINUE TO OPERATE.
YOU MIGHT REMEMBER THE COMPANY WAS ONCE SOUGHT AFTER BY AMAZON FOR MORE THAN A BILLION DOLLARS AND IT HAS BEGUN A STRATEGIC REVIEW TO EVALUATE OPTIONS. WAS THIS MORNING A SURPRISE? ESPECIALLY GIVEN THE UNICORN STANDING THAT IT ONCE HAD? >> NOT TOTALLY. THE COMPANY HAS BEEN LOSING MONEY AND BURNING CASH FOR THE PAST THREE YEARS.
WHEN THE AMAZON DEAL FAILED IN THE LAST YEAR, THE COMPANY LOST BIG OPTION. IT STARTED A STRATEGIC REVIEW LAST YEAR. IT HAS CUT LOSSES. IT HAS CUT EXPENSES, BUT IT IS STILL STRUGGLING. JACKIE: WHAT DOES THIS TELL US ABOUT THE STATE OF CONSUMER DEMAND IN THIS SPACE? AS WE WERE HEARING, IT SEEMS LIKE THE TIME HORIZON FOR SOME OF THESE TECHNOLOGIES TO REALLY GET INTO THE HANDS OF CONSUMERS TAKES TIME, ESPECIALLY FOR THOSE TO GET USED TO THEM. WHAT DOES THIS TELL US? >> I GUESS IT IS ANOTHER EXAMPLE OF CONSUMERS CUTTING DISCRETIONARY SPENDING. WE HAVE SEEN IT IN OTHER NAMES LIKE A BROAD RANGE OF RETAILERS STRUGGLING.
THE COMPANY, A GROWING CONCERN THAT CONSUMER SPENDING COULD BE -- WEAKER CONSUMER SPENDING COULD BE ONE REASON IT DOESN'T MANAGE TO SURVIVE. TARIFFS WAS ANOTHER ONE THEY MENTIONED AS A POTENTIAL THREAT TO THE COMPANY'S VIABILITY. JACKIE: THANK YOU SO MUCH FOR JOINING US. COMING UP, TESLA INVESTORS MAY BE SITTING ON THE SIDELINES AS SHARES OF TESLA FALL OVER 42% SO FAR THIS YEAR. MORE, NEXT. SOLANI: SOME LONG-TERM TESLA INVESTORS ARE BACKING AWAY FROM THE STOCK AFTER FALLING AS MUCH AS 42% THIS YEAR. THIS AS QUESTIONS ARISE ABOUT
THE COMPANY'S FUTURE. FOR MORE, MAX CHAFKIN JOINS US. I WANT TO POINT OUT THAT PEOPLE ARE BUYING THE DIP. PEOPLE ARE BELIEVING THE STORY TODAY. YOU HAVE THE PRESIDENT HIMSELF LOOKING TO DEFEND MUSK IN MANY WAYS. WHAT IS THE TROUBLE IN PARADISE? MAX: MORE THAN DEFEND. HOLDING A SALES EVENT ON THE
WHITE HOUSE LAWN. THE TROUBLE IS THAT TESLA'S CUSTOMER BASE IS NOT ESPECIALLY TRYRUMPY. THAT IS PROBABLY AN UNDERSTATEMENT. THE TYPICAL TESLA OWNER IS AN UPPER-CLASS URBAN PROGRESSIVE, AT LEAST A CENTRIST. SOMEONE
WHO CARES ABOUT THE ENVIRONMENT. THESE ARE NOT TRUMP VOTERS, THESE ARE THE CONSTITUENCY WHO BACKED BARACK OBAMA, JOE BIDEN, AND TO A LARGE EXTENT KAMALA HARRIS. THOSE PEOPLE, WHO INCLUDE A LOT OF TESLA CUSTOMERS, ARE VERY MAD AT ELON MUSK RIGHT NOW. WE SEEN PROTESTS AROUND THE COUNTRY AND THE WORLD, INCLUDING ACTS OF VANDALISM, AND THIS TONE OF MOCKERY. OF SEEING ELON MUSK AS A LIGHTNING ROD FOR THE -- FOR WHAT THESE TESLA CUSTOMERS SEE AS THE WORST OF THE TRUMP ADMINISTRATION SO FAR. JACKIE:
IT'S NOT JUST THE POLITICAL LEANINGS OF WHO IS BUYING THE CARS, BUT THEY HAVE RECENTLY GOTTEN SOME PRETTY GOOD SUPPORT, ESPECIALLY UNDER THE BIDEN ADMINISTRATION, FOR EV CREDITS. I'M HAVING TROUBLE RECONCILING HOW ELON MUSK CAN BACK TRUMP IN SOME WAYS WHEN HIS COMPANY IS SOMEWHAT DEPENDENT ON THE GOVERNMENT SUPPORTING THE TRANSITION TO ELECTRIC VEHICLES. HOW IS THAT WORKING OUT? MAX: TRUMP RAN TO SOME EXTENT AS AN OPPONENT OF ELECTRIC VEHICLES TALKING ABOUT ENDING THE "ELECTRIC VEHICLE MANDATE." IN FACT, HE SIGNED AN EXECUTIVE ORDER EARLY ON SIGNING AN INTENTION TO PULLBACK REGULATIONS.HE BROUGHT THIS UP
DURING THE EVENT YESTERDAY, OFFERING IT AS AN EXAMPLE OF HOW SELFLESS MUSK IS. FROM THE PERSPECTIVE OF WIDE TESLA INVESTORS COULD POTENTIALLY BE OK WITH THIS IS THAT TESLA HAS A LEADING MARKET POSITION. IF YOU REMOVE THE SUBSIDIES FROM ELECTRIC CARS, IT ARGUABLY HURTS GM, FORD, AND OTHER COMPETITORS MORE THAN TESLA.
TESLA HAS WIDER MARGINS ON EV'S END IS BETTER ABLE TO ABSORB THIS. THAT SAID, THOSE COMPANIES ARE BRINGING OUT NEW MODELS AND ARE STEALING CUSTOMERS AWAY FROM TESLA. JACKIE: COMING UP, ANOTHER NASA SPACEX MISSION TO LAUNCH LATER TODAY HOPING TO BRING BACK TWO NASA ASTRONAUTS WHO HAVE BEEN STUCK THERE SINCE JUNE. THIS IS BLOOMBERG. SOLANI: WELCOME BACK TO BLOOMBERG TECHNOLOGY. I'M SONALI BASAK IN NEW YORK. JACKIE: I'M JACKIE DUVAL IN WASHINGTON. SOLANI: WE HAVE A NASDAQ 100 THAT HAS BEEN FLUCTUATING, UP .6%, AND IT IS TRYING TO FIGHT FOR
DOMINANCE. YOU HAVE THE NASDAQ 100 WITH ONLY ROUGHLY HALF OF ITS COMPONENT PARTS UP ON THE DAY. THE OTHER HALF IS DOWN. ONE THIRD OF THE SEMICONDUCTOR INDEX MAINTAINING ITS LEAD AFTER A BRUTAL STRETCH THE LAST COUPLE WEEKS. IT IS NOW UP 2.3% INTO MIDDAY.
A CHECK ON OTHER MOVERS THIS MORNING, WE WILL BRING IN ISABELLE LEE. ISABELLE: THERE'S A TON OF UNCERTAINTY IN THE MARKETS. SHIFTING FROM RISK-ON TO RISK-OFF IN SIX WEEKS.
HEADLINES FROM CANADA TO INFLATION, IT IS CAUSING MORE. INFLATION TODAY'S SHOWED SIGNS OF EASING, BUT EVEN SO, ECONOMISTS AREN'T DISSIPATING THAT THE ESCALATING TRADE WAR WILL DRIVE UP PRICES, REDUCING WAVES OF SELLING EVEN IN TECH HIGH FLYERS. THEREBY, OR THAN A QUARTER OF THEIR VALUE IN THE LAST 14 TRADING SESSION SINCE THEY PEAKED. THEIR LOSSES ARE MORE THAN TRIPLE THE DECLINE OF THE S&P, SO IT'S REALLY A TOUGH MARKET RIGHT NOW. JACKIE: TALK TO US ABOUT THE MAG 7 NAMES. TESLA SEEING RELIEF. WHAT ELSE ARE WE SEEING WHEN IT COMES TO THE BIG TECH GIANTS THAT GOT BATTERED EARLIER THIS WEEK? ISABELLE: TESLA IS LEADING THE LOSSES OF THE MAGNIFICENT 7 INDEX, AND YOU CAN SEE THE RALLY BROADENING OUT. A NOTE EARLIER THIS MORNING
SAID MALEFICENT 7. PEOPLE ARE QUESTIONING IF U.S. EXCEPTIONALISM HAS CRACKED. I TALKED TO A BANK YESTERDAY, AND THEY SAID THAT THEY ARE UNDERWEIGHT THE MAGNIFICENT 7 SEVEN, WHICH IS IN STARK CONTRAST TO WHEN EVERYONE WAS PILING IN, BECAUSE IF YOU DON'T YOU UNDERPERFORM THE BENCHMARK. WE HAVE JP MORGAN, DAVID LEVEL WITH, WHOM I TALKED TO YESTERDAY, SAYING THAT THE PRIVATE MARKET IS YET TO CRACK, ECONOMIC DATA FOR NOW POINTS TO EXPANSION I'M SO BULLISH IN THE LONG TERM. JACKIE: THANK YOU FOR JOINING US.
TWO ASTRONAUTS STRANDED AT THE INTERNATIONAL SPACE STATION SINCE ARRIVING ABOARD BOEING'S STARLINER IN JUNE COULD FINALLY BE HEADING HOME. THAT IS PART OF THE GOAL FOR THE SPACEX CREW X MISSION SCHEDULED TO LAUNCH LATER TODAY. JOINING US IS THE DEPUTY DIRECTOR OF THE AEROSPACE SECURITY PROJECT AND SENIOR FELLOW AT THE CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES. CLAYTON, EVERYONE HAS BECOME SO ENDEARED TO THEM. WHAT DID THIS TELL US ABOUT WHAT WENT WRONG AND WILL THIS HAPPEN AGAIN? CLAYTON: I WAS THINKING, TOO, THE ONE THING I HAVE AS A TAKE AWAY IS IT IS ABOUT SONNY AND BUTCH, THEIR ENDURANCE, THEIR PATIENTS, AND THEIR GRACE.
IT IS SOMETHING THAT I ADMIRE. I'M SURE A LOT OF AMERICANS ADMIRE THAT. PROBABLY YOU, LIKE ME, I GET UPSET WHEN I'M THREE HOURS DELAYED AT THE AIRPORT AND THEY HAVE BEEN THERE SINCE JUNE. IT IS HARD TO THINK OF EVERYTHING THEY HAVE BEEN THROUGH, BUT THEY'VE HAD THAT POISE THROUGHOUT.
WE HAVE LEARNED THAT SPACE CAN STILL THROW US CURVEBALLS. WE HAVE FLEXIBILITY AND ADAPTABILITY. WE CAN STILL DO HUMAN SPACEFLIGHT SAFELY AT SCALE. THAT IS A LOT OF CREDIT TO NASA AND TO SPACEX, ON WHOSE TECHNOLOGY WE RELIED ON TO MAKE IT HAPPEN. SOLANI:
THE NEXT STEPS MOVING FORWARD WHEN IT COMES TO THE STARLINER? WHAT DO YOU THINK IS THE FUTURE FROM HERE? CLAYTON: THERE ARE A LOT OF THINGS THAT WE DON'T KNOW. BOEING HAS SAID THAT THEY WANT TO STAY IN THE SPACE GAME. IT IS LESS CLEAR WHAT HAPPENS FOR STARLINER SPECIFICALLY. THAT WILL DEPEND ON WHAT NASA DEPENDS WITH BOEING ON CERTIFYING THE CAPSULE TO CERTIFY CAPSULE IN SPACE. WE ARE PLANNING FOR IT TO DE- ORBIT IN 2030, AND THAT WINDOW IS QUICKLY CLOSING. JACKIE: THERE HAS BEEN A LOT IN THE SPACE-FIELD AND ARE WE IN A NEW SPACE RACE OF SOME KIND? HOW DOES THE U.S.
TECH UP WITH WHAT WE ARE DOING VERSUS OTHER COUNTRIES? CLAYTON: IT IS HARD NOT TO THINK ABOUT CHINA AND THEIR ACHIEVEMENTS IN SPACE. THERE ARE SEVEN ASTRONAUTS AND COSMONAUTS -- SOLANI: HOLD THAT THOUGHT. WE WANT TO BRING OUR AUDIENCE LIVE IMAGES OF PRESIDENT TRUMP GREETING THE PRIME MINISTER OF IRELAND. THE TWO MEN ARE ABOUT TO TAKE PART IN A BILATERAL MEETING AT THE OVAL OFFICE. WE WILL BRING YOU THOSE
HEADLINES AS THEY COME IN. YOU CAN CHECK FOR LIVE UPDATES ON LIVE<GO> ON YOUR BLOOMBERG TERMINAL. BACK TO YOU. JACKIE: TALK TO US ABOUT HOW CHINA IS GETTING TO THE SPACE RACE. CLAYTON: THERE ARE THREE CHINESE ASTRONAUTS ON THEIR SPACE STATION RIGHT NOW. SO, THEY HAVE MADE SPACE LOOK
ROUTINE IN A LOT OF WAYS THAT AMERICA HAS ALSO BEEN ABLE TO DO. THEY ALSO WANT TO LAND CHINESE ASTRONAUTS ON THE MOON BY 2030 AND SO IS NASA. IT IS HARD TO AVOID THE NOTION THAT THIS IS A SPACE RACE, A MOON RACE 2.0. THE U.S. IS STILL THE UNDENIABLE SPACE POWER IN THE WORLD, BUT CHINA IS NIPPING AT OUR HEELS. JACKIE: WHO IS MAKING US THE SPACE POWER? WE HEAR ABOUT SPACEX BUT IN SILICON VALLEY THERE ARE A LOT OF CONTENDERS COMING INTO THE FORE. WHAT ARE YOU SEEING IN TERMS OF CONCENTRATION OF WHO IS TAKING US TO THE NEXT LEVEL? CLAYTON: SPACEX IS THE MAIN PLAYER WHEN IT COMES TO LAUNCH, BROADBAND, LOWER ORBIT, THINGS THAT WE RELY ON TO GET PEOPLE AND CARGO TO THE SPACE STATION, BUT OTHER COMPANIES ARE INNOVATING IN SILICON VALLEY AND AROUND THE COUNTRY.
COMPANIES IN PITTSBURGH, TEXAS, AND FLORIDA ARE TRYING TO COME UP WITH NEW WAYS TO DO SPACE. TO DO IT CHEAPER, MORE EFFICIENTLY, AND EVEN MINE ASTEROIDS. A LOT OF UP AND COMERS WILL CHALLENGE SPACEX'S DOMINANCE. IT WILL BE THEIR GAME TO LOSE BECAUSE THERE ARE A LOT OF SMART PEOPLE BEHIND THEM. JACKIE: ELON MUSK HAS BEEN MAKING WAVES IN WASHINGTON FOR OTHER REASONS, BUT ONE AREA WHERE HE IS POISED TO BENEFIT OUR HIS RELATIONS IN WASHINGTON, SPACEX POTENTIALLY GETTING MORE CONTRACTS. DOES HIS POLITICS IN ANY WAY DETRACT FROM THE PROGRESS THAT SPACEX CAN MAKE, OR DOES IT OPERATE INDEPENDENTLY? CLAYTON: SPACEX HAS LED THE WAY FOR WHAT WE CALL COMMERCIAL SPACE TODAY. IT HAS TAKEN A NUMBER OF YEARS
TO GET WHERE THEY ARE TODAY. THIS ISN'T SOMETHING THAT HAPPENED WITH PRESIDENT TRUMP'S INAUGURATION IN JANUARY. NASA, THE DEPARTMENT OF DEFENSE, THEY HAVE GROWN TO DEPEND ON SPACEX FOR LUNCH AND A BROADBAND FROM SPACE. THESE ARE AREAS THAT HAVE BEEN TRENDING IN THAT DIRECTION FOR A LONG TIME. THOSE BUSINESS OPPORTUNITIES THAT EXIST IN SPACE, SPACEX BUILT PROBABLY STARTING AROUND 2008. IT IS NOT SOMETHING NEW AND THEY ARE TAKING ADVANTAGE OF ALL OF THAT TIME AND EFFORT THAT THEY PUT INTO THIS FOR ALMOST SEVEN TO EIGHT YEARS AT THIS POINT. SOLANI:
THANK YOU FOR JOINING US, FASCINATING ESTABLISHMENTS IN THE SPACE RACE. NOW, COMING UP, CELESTIAL AI HITS A $2.5 MILLION VALUATION AND WE WILL SPEAK WITH THE CEO. THIS IS BLOOMBERG. ♪
PODCAST ON THE TERMINAL AS WELL AS ONLINE ON APPLE, SPOTIFY, AND IHEART. THIS IS BLOOMBERG. JACKIE: START UP CELESTIAL AI HAS RAISED $250 MILLION IN ITS LATEST SERIES ROUND VALUING THE COMPANY AT $2.5 BILLION. THE FABRIC TECHNOLOGY AIMS TO IMPROVE THE SPEED AND EFFICIENCY OF AI COMPUTING. FOR MORE, DAVE LAZOVSKY JOINS
US. HELP OUR VIEWERS UNDERSTAND HOW YOUR TECHNOLOGY IS ACTUALLY MAKING THIS PART OF AI COMPUTING THAT MUCH MORE EFFICIENT. DAVE: THANKS SO MUCH FOR HAVING ME. CELESTIAL AI ARE THE CREATORS
OF THE PHOTONIC FABRIC, THE OPTIMAL INTERCONNECTIVITY PLATFORM FOR ACCELERATED COMPUTING. WE ARE INTERCONNECTING AI PROCESSORS WITH LIGHT. WHAT IS HAPPENING IN AI RIGHT NOW IS THE ARTIFICIAL INTELLIGENCE WORKLOADS ARE GROWING EXPONENTIALLY. THEY ARE NOW SO LARGE, TRILLIONS OF PARAMETERS, THAT THEY NEED TO BE PARTITIONED OVER HUNDREDS OF PROCESSORS, WHICH PUTS MORE AND MORE DEMAND ON THE NETWORK AS THE PROCESSOR DOING THE WORK NEEDS TO MOVE ACROSS THE NETWORK TO FETCH INFORMATION FROM ANOTHER PROCESSOR'S MEMORY AND MOVE IT BACK TO WHERE THE WORK GETS DONE.
THERE IS NO MORE EFFICIENT WAY TO MOVE INFORMATION THAN PHOTONIC LEAGUE. JACKIE: YOU MANAGED TO SNAG 250 MILLION DOLLARS FROM INSTITUTIONAL INVESTORS BY THE LIKES OF FIDEL FIDELITY, BLACKROCK, HOW DO YOU PLAN TO PUT THIS MONEY TO USE? DAVE: WE ARE FOCUSED ON SCALING. WE HAVE MULTIPLE DEEP COLLABORATIVE DEVELOPMENT ENGAGEMENTS WITH THE LARGEST HYPER SCALE DATA COMPANIES ON EARTH. WE ARE COLLABORATING WITH THEM TO INTEGRATE OUR PHOTONIC FABRIC TECHNOLOGY INTO THEIR NEXT-GENERATION AI ACCELERATORS, PROGRAMS THAT ARE ON THE ORDER OF 18 MONTHS. THROUGH THE BALANCE OF 2025 INTO THE FIRST HALF OF NEXT YEAR WE ARE WORKING TOGETHER TO GET THIS TECHNOLOGY SCALED AND QUALIFIED. THE FOCUS IS ON OUR VOLUME MANUFACTURING SUPPLY CHAIN, BECAUSE OUR CUSTOMERS ARE IMMENSE SCALE REQUIRING HUNDREDS OF THOUSANDS OF UNITS TO SERVE THEIR DEMAND. SOLANI: BACK TO THE FUNDRAISING
QUESTION, NOT ONLY DO YOU HAVE THE BLUE-CHIP OF FINANCE INVOLVED IN THIS ROUND, FIDELITY AND BLACKROCK, BUT THE MAVERICKS AND TIGER PART OF THIS IS INTERESTING WHEN YOU HAVE TRADITIONAL HAD -- TRADITIONAL HEDGE FUNDS GETTING INVOLVED. THEY'VE BEEN CAUTIOUS WITH A DEARTH OF PUBLIC MARKET EXITS. WHAT IS IT ABOUT YOU AND THEM THAT SERVED AS A GOOD MATCH? DAVE: SO, WE TOOK A HARD LOOK AT THE TYPES OF INVESTORS WE WANTED TO HAVE INVOLVED AT THIS STAGE IN THE COMPANY'S LIFECYCLE. AS YOU DEVELOP THE TECHNOLOGY FOR SUCCESSFUL QUALIFICATION AND IMPLEMENTATION IN A LARGE MARKET, LIKE ARTIFICIAL INTELLIGENCE, WE ARE DEVELOPING AND OPTIMIZING OUR TIMETABLE FOR HAVING THE RIGHT INVESTORS INVOLVED. NOT JUST AT THIS PHASE IN THE COMPANY'S LIFECYCLE, BUT THROUGH AN IPO SHOULD WE MAKE THE DECISION TO TAKE THE COMPANY PUBLIC OVER THE NEXT FEW YEARS, AND HAVE THE RIGHT INVESTORS WHO CAN INVEST WITH US OVER THE COURSE OF THE NEXT DECADE OR MORE. ON THEIR ENDS, THEIR DECISIONS
WERE MADE ON THE FACT THAT WE ARE THE ONLY COMPANY IN EXISTENCE WITH THE ABILITY TO PROVIDE OPTICAL INTERCONNECTIVITY THAT MEETS THE REQUIREMENTS OF ARE CALLED SCALE-UP NETWORKS. THESE ARE PROCESSOR TO PROCESSOR INTERCONNECTS. THE GOLD STANDARD IS NVIDIA TODAY. ALL OF THAT IS RUN OVER PROCESSORS, SO DATA COMMUNICATION TODAY IS ENTIRELY ELECTRONICALLY OVER COPPER.
WITH PHOTONIC FABRIC WE ARE CHANGING THAT. WE ARE MOVING INFORMATION OPTICALLY AT A FRACTION OF THE ENERGY AND AT MUCH HIGHER BANDWIDTHS AND LOWER LATENCY. SOLANI: AN INTERESTING PART THAT I'VE NOTICED AS AN EXISTING INVESTOR IS PORSCHE. WORRIES ABOUT THE CONSUMER, ABOUT INTERNATIONAL TRADE, AUTO PARTS FACING A RISK OF TARIFFS, I WONDER WHAT ROLE YOU PLAY IN THE AUTOMOBILE STORY? HAVE THEY LEAD TO MEANINGFUL WORK WITH YOU AS AN INVESTOR? DAVE: THERE NEED -- THERE ARE TWO DIFFERENT BRANCHES OF PORSCHE. ONE IS MY FAVORITE BRAND AND THE OTHER IS SE, THE MOTHERSHIP, THE HOLDING COMPANY FOR ALL OF THE PORSCHE FAMILY MONEY AS WELL AS THEY CONTROL ABOUT 50% OF THE ASSETS OF THE VOLKSWAGEN GROUP. THIS IS THE FINANCIAL ARM OF
PORSCHE. PORSCHE CAN AND WE CERTAINLY ANTICIPATE WILL BE A STRATEGIC PARTNER FOR US AS WELL ON THE AUTOMOTIVE GROUP SIDE, AS THEIR REQUIREMENTS FOR ARTIFICIAL INTELLIGENCE TRAINING AND INFERENCE WILL BE SIMILAR TO THAT OF TESLA, WHO HAS PLAYED A LEADING ROLE EARLY ON IN BUILDING OUT AI INFRASTRUCTURE AND SUPPORT OF AUTONOMOUS VEHICLES. JACKIE: HOW DO YOU FEEL ABOUT DIVERSIFYING YOUR CUSTOMER BASE? YOU NOTED THAT YOUR TARGET CLIENTELE, THOSE EFFECTIVELY CONTROLLED MORE THAN 90% OF THE TRILLION DOLLAR END MARKET. DO YOU GET TO EXPAND PAST THAT AS THE COMPANY GROWS OR ARE YOU DEPENDENT ON THOSE SELECT FEW? DAVE: THOSE SELECT FEW REPRESENT -- EIGHT COMPANIES REPRESENT ROUGHLY 90% OF THIS TRILLION DOLLAR MARKET AND WE WOULD BE FINE WITH JUST THOSE. THAT IS A GOOD PROBLEM FOR US TO HAVE. YOU HAVE FOUR MAJOR HYPER SCALARS, THE WORLD KNOWS WHO THEY ARE, THAT REPRESENT ROUGHLY 70% OF THE ADDRESSABLE END MARKET. THEN YOU HAVE THE ECOSYSTEM
AROUND THEM. WHICH INCLUDE NVIDIA AND AMD, STRATEGIC INVESTORS AS WELL. AND THEN THERE ARE A COUPLE OF DESIGN SERVICES COMPANIES THAT INCLUDE BROADCOM. BROADCOM IS PLAYING A LARGER ROLE. YOU'VE HEARD FROM THEIR EARNINGS ANNOUNCEMENT OF THE
PAST WEEK AND A HALF THAT THEY ARE GAINING TRACTION IN BUILDING CUSTOM SILICON FOR THE HYPER SCALARS. SOLANI: THANK YOU FOR YOUR TIME TODAY AND CONGRATULATIONS ON THAT FUND RAISE. WE'RE LOOKING FORWARD TO SEEING WHERE IT GOES. THAT IS DAVE LAZOVSKY OF
CELESTIAL AI. ANOTHER AI STORY THAT WE ARE WATCHING AS ALIBABA. THEY ARE ACCELERATING THEIR EFFORTS TO LEAD IN THE AI SPACE AND PUSHING OUT AN AI MODEL THAT CAN READ EMOTIONS. FOR MORE, PETER JOINS US NOW. I THINK BACK TO A COUPLE OF DAYS AGO, I TRIED SO HARD TO READ THIS STORY THAT SAM ALTMAN POSTED ONLINE ABOUT THE CREATIVE WRITING EXERCISE THAT YOU SAW THROUGH OPENAI. THAT DOES GO DOWN TO THE ABILITY TO READ BEYOND THE OBJECTIVE INTO THE SUBJECTIVE. WHEN YOU THINK ABOUT ALIBABA,
HOW SUCCESSFUL ARE THEY IN EMOTIONAL INTELLIGENCE? PETER: WE ARE SEEING A VERY RAPID INNOVATION OF AI MODELS AROUND THE WORLD, BUT NOW CHINA IN PARTICULAR HAS GAINED A LOT OF ATTENTION BECAUSE OF THE BREAKTHROUGH WITH DEEPSEEK A FEW WEEKS AGO. OF COURSE, ALIBABA IS BEST KNOWN FOR ITS E-COMMERCE BUSINESS. IT COMPETES WITH AMAZON IN THAT MARKET. THE PAST COUPLE OF MONTHS, THEY
HAVE COME OUT WITH A NUMBER OF AI MODELS THAT ARE QUITE INNOVATIVE. ONE CALLED GWEN THEY COMPARED TO DEEPSEEK AND IT IS AHEAD ON CERTAIN METRICS, AND THEY ARE STRIKING AN ALLIANCE WITH APPLE TO PROVIDE AI FEATURES FOR IPHONES IN CHINA. NOW WE SEE THE MODEL THAT IS ABLE TO DETECT EMOTIONS WITHIN PEOPLE ASKING QUESTIONS AND GIVE BETTER ANSWERS BECAUSE OF THAT. THEY CAN CUSTOMIZE COME IN CERTAIN WAYS. THIS FOLLOWS RAPIDLY ON THE HEELS OF OPENAI, WHICH HAS TRIED SOMETHING LIKE THIS WITH GPT 4.5. OPENAI IS CHARGING $200 A MONTH FOR THAT SERVICE.
ALIBABA IS PUTTING THIS OUT FOR FREE. IT DOESN'T HAVE ALL OF THE BELLS AND WHISTLES THAT YOU WOULD SEE AND OTHER MODELS, BUT IT'S A PRETTY AGGRESSIVE MOVE. THE CHINA MARKET ISN'T ONE WHERE YOU'LL SEE THE AMERICAN COMPANIES PLAY, SO IT'S PRETTY FAR STEP AHEAD FOR ALIBABA. JACKIE: WE HAVE ABOUT 30 SECONDS. TALK TO US ABOUT HOW THIS STACKS ALIBABA AGAINST SOME OF THE PLAYERS IN THE U.S.. IS IT GOING TO DEPEND ON THINGS LIKE EMOTIONAL INTELLIGENCE? PETER: IT IS IMPORTANT TO UNDERSTAND HOW BIFURCATED THE MARKETS ARE. WESTERN MARKETS CANNOT GET INTO
CHINA. THESE MARKETS ARE LARGELY NOT COMPETING OUTSIDE OF THEIR OWN MARKET. THEY'RE PRETTY SEPARATE. WHAT HAS BEEN SURPRISING TO A LOT OF OBSERVERS IS HOW QUICKLY SOME OF THESE CHINESE COMPANIES HAVE BEEN ABLE TO EVOLVE THEIR AI MODELS, ESPECIALLY BECAUSE THEY ARE CUT OFF FROM THE MOST FINANCED CHIPS. WE TALKED ABOUT THE NVIDIA CHIPS USED TO TRAIN AI MODELS. MOST CHINESE COMPANIES CAN NO
LONGER BUY THOSE. SO THEY ARE DOING THIS WITH HARD-CORE ENGINEERING. DEEPSEEK IN PARTICULAR SHOW THAT THEY COULD MAKE ADVANCES THAT WOULD BE VERY DIFFICULT IN THE WESTERN WORLD PARTLY BECAUSE OF THE CONSTRAINTS THAT THEY HAVE ON THE CHIP SIDE. SOLANI: THANK YOU FOR ALL OF YOUR REPORTING. JACKIE, SOMETHING THAT I'VE BEEN THINKING ABOUT THAT'S INTERESTING ABOUT THE EMOTIONAL INTELLIGENCE ASPECT IS, IF YOU BELIEVE THAT LEADERSHIP NEEDS EQ , MAYBE AI CAN BE YOUR NEXT BOSS. JACKIE: LET'S HOPE NOT. I DON'T KNOW ABOUT YOU, BUT I WOULDN'T WANT AI GIVING ME MY EVAL. SOLANI: SPEAKING OF COMPANIES, COMING
OUT WITH ADOBE EARNINGS AFTER THE CLOSING BELL. IT HAS HELD UP RELATIVELY WELL IN THE TECH DELAYS WE HAVE SEEN THROUGH THE BROADER MARKET. SOLANI: I EARNINGS ARE OUT AFTER THE CLOSING BELL AND WE WILL NOW BRING IN BLOOMBERG INTELLIGENCE FOR WHAT TO EXPECT. ADOBE HAS HELD UP WELL RELATIVE TO SOME MAGNIFICENT 7 NAMES, RELATIVE TO WHAT YOU'VE SEEN IN A LOT OF THE PHILADELPHIA SEMICONDUCTOR INDEX. IS THERE SOMETHING TO BUY NOW OR ARE THERE REAL RISKS AFTER THE MARKET TODAY? >> ADOBE IS PROBABLY THE CHEAPEST LARGE-CAP SOFTWARE STOCK RIGHT NOW, MUCH CHEAPER THAN ANY OF ITS PEERS. THERE IS A REASON. IT'S ALSO THE MOST
CONTROVERSIAL ONE RIGHT NOW. THEY HAVE A HUGE SEGMENT, ONE OF THE MOST PROFITABLE BUSINESSES IN THE WORLD, THEIR PHOTOSHOP CREATIVE BUSINESS WHICH IS UNDER PERCEIVED THREAT BY OPEN-SOURCE MODELS. THE COMPANY HAS GUIDED TO ITS ANNUAL RECURRING REVENUE FOR THE MEDIA SEGMENT TO GO UP BY 11%, AND THAT'S THE ONLY NUMBER WE ARE LOOKING FOR WHEN THEY REPORT. ANY KIND OF DISTURBANCE IN THAT NUMBER TO THE DOWNSIDE ISN'T GOING TO BE GOOD FOR THE STOCK. MEANWHILE, IF THEY ARE ABLE TO HOLD ONTO IT OR RAISE IT, THAT WILL BE PERCEIVED WELL. THERE IS SOMETHING DIFFERENT THAT'S HAPPENING FROM THE MACRO SIDE RIGHT NOW. SOLANI:
THANK YOU SO MUCH FOR YOUR TIME. WE ARE LOOKING FORWARD TO YOUR READOUT AFTER THEY REPORT. TO YOUR POINT, VERY CONTROVERSIAL AT THE MOMENT, AND WE ARE HITTING THE TAIL END OF EARNINGS SEASON. AS WE HIT THE TAIL END, WE ARE KEEPING AN EYE ON MARKETS FOR YOU BEFORE WE LET YOU GO.
WE ARE LOOKING AT THE NASDAQ 100 TRYING TO MAINTAIN GAINS FOR THE DAY. IT HAS BEEN A VOLATILE MORNING BUT WE ARE BACK TO 1% WORTH OF GAINS ON THE NASDAQ 100. THE RUSSELL 2000 LOSING ITS GAINS ALONG THE DAY AND THE S&P 500 IS UP, BUT LESS THAN YOU'RE SEEING IN BIG TECH. THE SEMICONDUCTORS GETTING SOME
RELIEF, A NEARLY 3% RISE, 2.8% YOU'RE LOOKING AT THE COME BACK INTO THE MARKET. THE DIP BUYERS ARE HOPPING BACK IN. THAT DOES IT FOR BLOOMBERG TECHNOLOGY TODAY.
2025-03-15 02:24
