Tech Stocks Sell Off Amid Tariff Backlash | Bloomberg Technology
>> FROM THE HEART OF WHERE MONEY AND POWER COLLIDE IN SILKEN VALLEY AND BEYOND, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK, I AM CAROLINE HYDE AND THIS IS BLOOMBERG TECHNOLOGY. TARIFFS HAVE COME FOR BIG TECH AS HIGHER DUTIES TARGET THE ASIAN SUPPLY CHAIN AND INVESTORS BRACE FOR RETALIATION. BLOOMBERG SPOKE WITH THE TREASURY SECRETARY, WHO SAYS THE TECH SELLOFF IS NOT A MAGA PROBLEM.
>> I'M TRYING TO BE SECRETARY OF TREASURY, NOT A MARKET COMMENTATOR. ESPECIALLY THE NASDAQ PEAKED ON DEEPSEEK DAY, SO THAT IS A MAG SEVEN PROBLEM, NOT A MAGA PROBLEM. CAROLINE: LET'S CHECK IN ON THOSE MARKETS. WE FALL HARD ON THE NASDAQ 100. WE ARE UP BY ALMOST 5%, THE WORST DAY FOR THE BENCHMARK SINCE 2022. WE MOVE ON TO THE MAGNIFICENT SEVEN PLAYERS, WHICH ARE ALL ON THE RED, EVEN THE SOFTWARE SERVICES SECTOR BEING HIT BY ANTICIPATION OF E.U. LEVEES. META IS OFF. WE HAVE A LOOK AT WHAT THE
HARDWARE IMPACT IS. NVIDIA AND EVEN SEMI CONDUCTORS, EXEMPT FROM CURRENT TARIFFS, WE ANTICIPATE FURTHER TO COME AND RETALIATION. TESLA WIPES OUT 7% AND APPLE FALLS HARDEST. WE ARE OFF BY ALMOST 9%. WE ARE HAVING THE BIGGEST ARETE -- EROSION OF MARKET CAP FOR APPLE EVER. IT IS ON PACE FOR THE BIGGEST
SINGLE DAY WIPEOUT IN THE COMPANY'S HISTORY. OR THE $300 BILLION IN ONE GO. APPLE SUPPLY CHAIN WOES, WE DIG INTO THEM. WHY IS APPLE IN THE EYE OF THE STORM? WE THOUGHT THEY WERE DIVERSIFYING OUT OF CHINA, BUT THAT HAS BACKFIRED.
>> DIVERSIFYING OUT OF CHINA DOES NOT MEAN MUCH IN THIS MOMENT GIVEN THAT THE TRUMP ADMINISTRATION HAS TAKEN AIM AT IF NOT EVERY COUNTRY IN THE WORLD SEEMINGLY EVERY COUNTRY IN THE WORLD. IT HAS LEVIED HIGH TARIFFS ON SOME OF THE VERY COUNTRIES WHERE APPLE THOUGHT IT WAS MAKING PROGRESS BY DIVERTING SOME MANUFACTURING, COUNTRIES LIKE VIETNAM AND EVEN IRELAND. NOT NECESSARILY WANT TO THINK OF AS CORE TO THE APPLE SUPPLY CHAIN. APPLE DID SPEND YEARS TRYING TO REDUCE DEPENDENCE ON CHINA ONLY TO HAVE THIS IS THE OUTCOME. CAROLINE: ROSENBLATT SECURITIES SAYING THIS JUST BLOWS UP APPLE'S BUSINESS MODEL. THEY QUESTION HOW TRUMP COULD BE TARGETING SUCH AN ICONIC COMPANY AND SAY IT IS HARD FOR US TO IMAGINE TRUMP BLOWING UP AN AMERICAN ICON BUT AT THIS MOMENT IT LOOKS PRETTY TOUGH.
MANY OUT THERE THINK EVENTUALLY THEY WILL GET SOME SORT OF EXEMPTION, BUT FOR HERE AND NOW IT SEEMS AS THOUGH TIM COOK TRIED TO BE AT THE INAUGURATION. HE HAS PROMISED INVESTMENT IN UNITED STATES BUT IT IS NOT ENOUGH. DANA: I WOULD NOT GO SO FAR TO SAY THESE MEASURES WERE TARGETED AT APPLE, BUT WE CAN SEE APPLE IS ONE OF THE HARDEST HIT. TIM COOK'S PERSONAL EFFORTS TO CURRY FAVOR WITH THE TRUMP ADMINISTRATION CLEARLY DID NOT YIELD THE OUTCOMES HE OR INVESTORS WOULD HAVE WANTED OR EXPECTED. CAROLINE:
WE THANK YOU FOR THE UPDATE ON ALL THINGS APPLE. WE TURN TO THE SERVICES SIDE AND SOFTWARE SIDE. FRANCE AND GERMANY ARE PUSHING FOR A STRONGER RESPONSE AGAINST PRESIDENT TRUMP’'S TARIFFS, PUSHING FOR THE E.U. TO TARGET U.S. TECH COMPANIES. THIS SEEMS TO BE COMING DOWN TO
THE DIGITAL SERVICES TAX. THEY REALLY WANT TO TARGET BIG TECH AS THE WAY FORWARD HERE. >> THEY DO REALLY WANT TO TARGET BIG TECH, BUT IT IS BROADER THAN THAT. EMMANUEL MACRON IS MEETING WITH A VARIETY OF INDUSTRIES THAT WILL BE AFFECTED BY THE TARIFFS. SPEAKING JUST BEFORE THE MEETING, HE ASKED E.U.
COMPANIES DEPOSIT INVESTMENT IN THE UNITED STATES FOR THE MOMENT SO THIS IS NOT TECH SPECIFIC THIS IS ALL COMPANIES IN ALL SECTORS, SAYING IF THE U.S. IS HITTING US NOW HOW CAN YOU BE INVESTING IN THE UNITED STATES? YOU NEED COHESION AMONG THE SECTORS THAT ARE BEING AFFECTED BY THE UNITED STATES. BACK TO THE POINT ABOUT TECH, THE E.U. AND FRANCE REALLY THINK GOING AFTER DIGITAL SERVICES IS THE WAY TO HIT THE UNITED STATES. THIS HAS COME UP BEFORE.
IT HAS BEEN A FIGHT BEFORE BETWEEN FRANCE AND THE UNITED STATES. FRANCE HAS A DIGITAL SERVICES TAX ON COMPANIES LIKE GOOGLE AND AMAZON. IT WANTS TO USE THAT WORD THINKS THAT IS THE WAY TO RESPOND, THE BEST WAY TO RESPOND TO THE U.S. DECISION, TO PRESIDENT DONALD TRUMP'S DECISION.
IT WILL BE DIFFICULT TO GET EVERYONE TO AGREE. DIGITAL TAXES IN EUROPE ARE PRETTY DIFFERENT COUNTRY BY COUNTRY. SOME COUNTRIES HAVE BEEN VERY RELUCTANT WITHIN EUROPE TO IMPOSE THAT KIND OF TAX. IF FRANCE GETS EVERYBODY ON BOARD -- IT REALLY IS A TALL TASK. CAROLINE: GERMANY SEEMS TO BE ALIGNED ON WANTING TO GO HARD IN RESPONSE AND GERMANY WAS ONE OF THE COUNTRIES THAT HAD NOT WANTED TO ALIGN ITSELF ON THESE SORT OF ATTACKS.
WILL WE SEE BIG TECH RETRENCHED FROM EUROPE? ARE THEY WILLING TO GET AROUND THAT? ARE WE GOING TO SEE BIFURCATION HERE? ALAN: THAT IS A MULTI TRILLION DOLLAR QUESTION. IT WOULD BE IMPOSSIBLE TO SAY AT THE MOMENT. GERMANY WAS OPPOSED TO THE IDEA OF DIGITAL TAXATION BEFORE AND NOW IT SEEMS TO HAVE COME AROUND TO IT. THE ECONOMY MINISTER WAS STRONG IN HIS COMMENTS TODAY, SO DOES SEEM GERMANY AT LEAST IS ON BOARD WITH THE IDEA. THAT DOES NOT MEAN ALL OTHER
EUROPEAN COUNTRIES WILL BE ON BOARD AND EUROPE IS TRYING TO DO THIS WITH MORE OR LESS ONE VOICE BECAUSE IT THINGS IT WILL BE STRONGER IF IT RESPONDS THAT WAY. EVEN IF FRANCE AND GERMANY, TRADITIONALLY THE MOTOR FOR THE EUROPEAN UNION, EVEN IF THEY AGREE ON SOMETHING IT DOES NOT MEAN IT IS GOING TO HAPPEN. ON THE QUESTION OF BIFURCATION, FRANCE HAS FOR YEARS TRIES TO CREATE ALTERNATIVES TO SEARCH ENGINES AND AI COMPANIES AND IT GENERALLY HAS NOT WORKED OUT BECAUSE FRANCE HAS TOO SMALL A MARKET AND THERE HAS NOT BEEN ONE SINGLE EUROPEAN MARKET FOR THESE DIGITAL SERVICES. WILL THAT COME AS A RESULT OF THESE TARIFFS? THAT IS A GOOD QUESTION AND ONE MANY ARE ASKING THEMSELVES. WE DO NOT HAVE AN ANSWER YET. CAROLINE: THANK YOU FOR GIVING US THE TECH NUANCE. JOINING US FOR MORE ON THE GLOBAL TARIFF IMPACT, SENIOR MANAGER DIRECTOR.
I START WITH RETALIATION. MANY OF THE INTERNET NAMES THAT YOU COVER COULD WELL BE IN THE EYE OF THE STORM IF EUROPE DOES INCREASE DIGITAL SERVICES. >> I THINK THAT IS RIGHT. I DO NOT HAVE ANY PARTICULAR INSIGHT INTO THAT, BUT THAT MAKES LOGICAL SENSE TO ME.
I SENSE THE WAY THE STOCKS ARE TRADING TODAY, THE DEGREE OF SELLOFF IS DETERMINED BY RETALIATORY RISK AND SESSION RISK, SO THERE ARE COMPANIES THAT ARE JUST OFF MODESTLY BECAUSE THEY ARE PERCEIVED TO BE RELATIVELY RECESSIONARY RESILIENT. THAT IS THINGS LIKE NETFLIX OR SPOTIFY, WHICH ARE INEXPENSIVE CONSUMERS DESCRIPTION BUSINESSES BUT AT THE OTHER END ARE THE MEGA CAP NAMES, AMAZON, GOOGLE, AND META, WHICH ARE TRADING OFF 4% TO 9%. THERE IS -- MOST OF THOSE PRODUCTS THAT THEY SELL ARE PRODUCED AND MANUFACTURED AND EXPORTED FROM ASIA SO THERE WILL BE COSTS THAT AMAZON WILL HAVE TO DECIDE WHETHER TO EAT OR PASS TO CONSUMERS AND THEREFORE DEPRESSED DEMAND. META HAS EXPOSURE TO EXPORTERS AND RETAILERS THAT GOT HIT BY REMOVAL OF THE EXEMPTION SO THERE ARE DIFFERENT ISSUES HERE BUT RETALIATION AND RECESSIONARY RISKS ARE SORT OF BIFURCATING STOCK MOVEMENTS TODAY. CAROLINE: MANY HAVE BEEN SURPRISED BY THE AGGRESSION SHOWN IN THE RECIPROCAL TARIFFS, BUT DO WE THINK THIS IS KNEE-JERK? IS THIS AN OPPORTUNITY? >> I THINK IT IS A BUYING OPPORTUNITY.
IF YOU TELL ME I CAN BUY META AT LESS THAN 20 TIMES EARNINGS, EVEN I KNOW AND UNDERSTAND THERE WILL BE EARNINGS RISK FROM THE IMPOSITION OF TARIFFS FROM A SLOWED DOWN ECONOMY AND A RECESSION. YOU'RE TALKING ABOUT MID-SINGLE DIGIT PERCENT EARNINGS GROWTH. DO YOU STEP ON AND TAKE A FULL POSITION? ABSOLUTELY NOT, BUT AT THESE LEVELS -- DISLOCATED HIGH QUALITY COMPANIES. WE HAD A BULL MARKET TECH STOCKS PARTICULARLY IN INTERNET STOCKS AT THE END OF LAST YEAR. HERE'S YOUR NEGATIVE CATALYST AND YOU DID NOT HAVE ANY REAL GHQ AT THE BEGINNING OF THE YEAR BUT NOW YOU DO SO YOU WANT TO STEP IN ON THE HIGHEST-QUALITY NAMES SO I THINK YOU WANT TO BE PICKING AWAY AT THESE. YOU HAVE TO BE COGNIZANT OF
THIS TARIFF ISSUE IS GOING TO PLAY OUT FOR A WHILE WORTH -- WITH RETALIATIONS SO YOU HAVE INCREASED RISK OF RECESSION AND YOU HAVE TO BE CAREFUL ABOUT ESTIMATES. THEY ARE GOING TO COME DOWN, PROBABLY MID-SINGLE DIGIT PERCENT IN A MODEST RECESSIONARY ENVIRONMENT, BUT WITH THESE MULTIPLES YOU WANT TO START PICKING AWAY AT THEM. CAROLINE: COULD YOU IN THE NEXT EARNINGS SEASON SEE A RETRENCHMENT IN PURCHASING OF I.T.? MARK: WILL WE SEE THAT IN THE EARNINGS SEASON? I THINK MOST OF THESE COMPANIES ARE GOING TO BE REPORTING REASONABLY SOLID MARCH QUARTER RESULTS.
MY GUESS IS WHAT IS GOING TO BE CONSISTENT ACROSS ALMOST ALL THE TECH EARNINGS IS CAUTIOUS COMMENTARY ABOUT END MARKET DEMAND FOR THE JUNE QUARTER AND YOU ARE GOING TO SEE CAUTIOUS GUIDANCE BELOW FOR MOST OF THESE ESTIMATES. THE ONLY SILVER LINING IS CURRENCY, WHICH LOOKS TO BE A HEADWIND FOR THE YEAR AND DOES NOT LOOK LIKE IT WILL BE AS MUCH OF A HEADWIND AS THOUGHT SO THERE IS A LITTLE HELP THERE BUT I THINK THE MARCH QUARTER RESULTS ARE GOING TO BE FINE. THE GUIDANCE IS GOING TO BE CAUTIOUS ABOUT THE JUNE QUARTER SO I DO NOT THINK THERE'S ANY REASON FOR STOCKS TO TRADE UP. CAROLINE: YOU CAN UNDERSTAND WHY ENTERPRISES WOULD SLOW DOWN COMMITMENT TO SPEND ON SOME OF YOUR NAMES AND SOME OF THE TECHNOLOGY THEY SELL. WHAT ABOUT THE AI TRADE? IT DOES AFFECT NAMES LIKE AMAZON.
DOES THE WIND COME OUT OF THE SALES THERE? MARK: I THINK IT HAS BEEN COMING OUT. I SAW THE TREASURY SECRETARY'S COMMENTS ABOUT DEEPSEEK BEING ONE OF THE KEY FACTORS BEHIND THE MAG SEVEN TRADE AND I THINK THERE IS SOME TRUTH TO THAT. I THINK THERE IS ALSO POLICY THAT HAS BEEN AS MUCH, PROBABLY MORE OF A FACTOR IN THE MARKET SELL OFF AND THE MAG SEVEN UNWIND. THE AI TRADE -- I DO NOT THINK THESE COMPANIES ARE GOING TO BE SLOWING DOWN AI CAPEX ANY TIME SOON. I THINK WE WILL SEE MORE AND MORE EVIDENCE THEY ARE GETTING A RETURN ON THAT. WE WILL GET A LOT OF GOOD PRODUCTIVITY DATA POINTS.
GOOGLE WAS TELLING ME 25% OF THEIR CODE IS BEING GENERATED BY AI, SO THEIR PROGRAMMER HEADCOUNT WILL PROBABLY BE FLAT FOR A COUPLE YEARS. AMAZON WAS TELLING ME THEY HAVE LOWER COST TO SERVE AND THAT IS A MASSIVE EFFICIENCY GAIN FOR A NAME LIKE AMAZON SO THAT IS GOING TO COME THROUGH IN TERMS OF MARGINS. THE QUESTION IS WHAT IS HAPPENING TO DEMAND AND IF THAT IS GOING TO DEPRESS MARGIN EXPANSION WE WOULD NORMALLY EXPECT FROM THE AI TRADE BUT I DO NOT THINK THESE COMPANIES ARE GOING TO SLOW DOWN AI EXPENSES. CAROLINE: AS SOMEONE WHO IS EVERY DAY HAVING TO RESPOND TO HEADLINES, MANY FEEL NUANCE WILL COME AND THERE WILL BE CARVEOUTS . NEARLY EVERY ANALYST ANTICIPATES THAT FOR APPLE. HOW ARE YOU GOING TO KEEP ABREAST OF HOW THIS CHANGES AND HOW WE SEE OTHER COUNTRIES RESPOND AND CARVE OUT CERTAIN NAMES OR AT LEAST TRY AND CURRY FAVOR WITH THE ADMINISTRATION? MARK: THE SECTOR I LOOK AT HAS LITTLE DIRECT TARIFF EXPOSURE EXCEPT FOR RETAILERS LIKE AMAZON .
IT IS KIND OF THE INDIRECT EXPOSURE, WHAT IMPACT TARIFFS HAVE ON CONSUMER CONFIDENCE AND CONSUMER SPEND THOMAS SO WHAT YOU WANT TO DO IS LOOK AT THE STOCKS I LOOK AT AND I PUT IT TOGETHER, A RECESSIONARY SPECTRUM, WHO IS THE MOST RECESSIONARY EXPOSED AND I THINK NAMES LIKE NETFLIX AND SPOTIFY ARE THE LEAST -- MOST SESSION RESISTANT AND THAT IS WHY THEY ARE TRADING UP BETTER TODAY. THEY WILL HOLD UP BETTER. THEY HAVE OUTPERFORMED THE MARKET BECAUSE OF THIS. CAROLINE: BUT SHOPIFY WOULD BE ON THE OTHER END? MARK: IT WOULD BE.
TRAVEL NAMES AND CONSUMER DISCRETIONARY SPEND AND ADVERTISING NAMES -- BRAND ADVERTISING GETS CUT BEFORE PERFORMANCE MARKETING SO THAT IS WHY I FIND META INTRIGUING. YOU BROUGHT IT DOWN TO AN ATTRACTIVE PRICE POINT. IT IS THE LARGEST THAT IS NOT CALLED GOOGLE AND I THINK IT WILL HOLD UP FUNDAMENTALLY BETTER THAN MOST ASSETS SO THAT IS WHY I WOULD BE CHIPPING AWAY AT THE STOCK HERE. CAROLINE: THANK YOU. COMING UP, WE WILL LOOK AT HOW THE 25% AUTO TARIFF WILL IMPACT THE ELECTRIC VEHICLE MARKET. THIS IS BLOOMBERG TECHNOLOGY. ♪
CAROLINE: LET'S TAKE ACAROLINE:LOOK AT HOW TARIFFS FROM THE AUTO INDUSTRY ARE ALREADY TAKING EFFECT. EXPECTED TO INCREASE COSTS AND DISRUPT INDUSTRY SUPPLY CHAINS. THESE ARE NOT PROMISES. THESE ARE DELIVERED AND HOW MUCH ARE WE ALREADY SEEING AUTO SECTORS AND EV'S RESPOND? >> WE WILL SEE SIGNIFICANT DISRUPTIONS TO SUPPLY CHAINS. THAT IS PART OF WHY YOU ARE SEEING SOME STOCK TRADES DOWN.
THINK YOU ARE ALSO LIKELY GOING TO SEE SOME OF THESE COMPANIES CAUGHT UP IN RETALIATION POTENTIALLY IN THE DAYS AND WEEKS TO COME. WE HAVEN'T NECESSARILY SEEN THAT FROM COUNTRIES THAT ARE NEWLY FACING HIGHER TARIFFS FROM THE TRUMP ADMINISTRATION, BUT WE DID GET AT LEAST A WITH OF THAT WITH CANADA, FOR INSTANCE, KIND OF TAKING AIM AT ELON MUSK'S COMPANIES AS A RESULT OF THE TARIFFS THAT THE U.S. HAS PUT ON CANADA AND MEXICO IN THE LAST FEW WEEKS. CAROLINE: TESLA IS DOWN EVEN THOUGH MANY WOULD ANTICIPATE IT MAKES MORE OF ITS CARS HERE IN THE UNITED STATES. IT SHOULD BE LESS EXPOSED WHAT YOU THINK IT IS A RETALIATION TRADE. >> RETALIATION IS LIKELY SOMETHING THE MARKET WOULD BE CONCERNED ABOUT. TESLA SHARES WERE DOWN QUITE A
BIT YESTERDAY. THEY HAD THIS FURIOUS RALLY IN RESPONSE TO THE REPORT BY POLITICO THAT MAYBE ELON MUSK WOULD BE LOOKING TO EXIT HIS ROLES IN ADVISING THE TRUMP ADMINISTRATION. NOT ONLY DID THE WHITE HOUSE PRESS SECRETARY AND ELON MUSK HIMSELF KNOCK THAT DOWN, BUT YOU HEARD EIGHT EVENTS TODAY COME OUT AND SAY THAT HE WILL CONTINUE TO KIND OF HAVE OUR EAR EVEN AFTER HE OFFICIALLY LEAVES, SO THIS NOTION THAT TESLA IS GOING TO MAKE A CLEAN BREAK FROM THE SITUATION WHERE THE CEO IS SO CLOSELY TIED TO THE TRUMP ADMINISTRATION SEEMS MISGUIDED. THE ONE OTHER THING I WOULD POINT OUT IS TESLA LIKES TO TOUT HOW U.S.
-- MADE IN AMERICA ITS CARS ARE, BUT IN ORDER TO RELY ON ITS PARTS CONTENT TO SHARE THAT DATA WITH FOLKS, IT RELIES ON U.S. GOVERNMENT DATA THAT LOOPS IN U.S. AND CANADIAN PART CONTENT, SO THAT SPEAKS TO THIS NOTION THAT FOR DECADES WE HAVE SORT OF THOUGHT OF WHAT HAPPENS IN CANADA AND WHAT HAPPENS IN THE U.S. AS SORT OF ONE AND THE SAME IN THIS AUTOMOTIVE SUPPLY CHAIN. FOR US TO MOVE TO THIS NEW PARADIGM WHERE THAT IS NO LONGER THE CASE IS DISRUPTIVE TO EVERYBODY, EVEN COMPANIES THAT MAKE ALL THEIR VEHICLES IN THE U.S..
CAROLINE: LET'S GET MORE ON AUTO TARIFFS AND HOW THEY COULD IMPACT ELECTRIC VEHICLES. WITH US, THE COFOUNDER AND PRESIDENT OF AMPLE. WHAT IS INTERESTING ABOUT YOU IS SERIOUSLY OFFERED TO SWAP OUT THE ACTUAL BATTERIES TO MAKE CHARGING SWIFTER AND CLEANER, BUT YOU HAVE MADE REAL INROADS INTO BUILDING IN AMERICA. HOW WILL THIS BACKFIRE FOR YOU WITH TARIFFS? >> WITH TARIFFS, THERE ARE THREE THINGS YOU NEED TO LOOK AT. THE SECOND IS WHERE YOU GET YOUR MATERIALS FROM SO I THINK WE WERE AHEAD OF THE CURVE.
WE DO ALL OUR PRODUCTION IN THE U.S. AND CALIFORNIA. THE OTHER PARTS, ONE IS WHERE DO YOU GET THE GOODS. WHEN YOU DO NOT HAVE CAPACITY OR NECESSARY SKILL SET DOMESTICALLY TO GO THROUGH, YOU BUY THOSE THINGS ABROAD, SO THAT MEANS EVERYTHING YOU BRING INTO THIS COUNTRY -- BECAUSE WE ARE DOING ALL HER PRODUCTION IN THE U.S..
WE EXPORT AN EXPORT HELPS OUR TRADE SURPLUS, BUT ONE OF THE TARIFFS HAS A NEW PROVISION THAT GOES BACK TO DUTY DRAWBACKS. WHEN YOU ARE EXPORTED CUT YOU GET IT BACK. IF YOU TAKE THAT AWAY, IT MAKES GOODS EXPENSIVE SO AS WE THINK ABOUT THE FULL CYCLE IT IS IMPORTANT TO LOOK AT ALL THREE COMPONENTS. WE ARE DOING PRODUCTION IN THE U.S.. CAROLINE: HOW HARD DOES THIS MAKE YOUR DECISION-MAKING? >> WHAT COVID SHOWS IS THE FULL SUPPLY CHAIN IS COMPLICATED, SO THE THREE THINGS THAT MAKE IT DIFFICULT, ONE IS THE NUMBER OF DIFFERENT TARIFFS. SECOND IS THE SPEED AT WHICH
THEY COME OUT AND CHANGE. THE THIRD IS THE SPEED AT WHICH THEY ARE AND LAMENTE -- IMPLEMENTED. SUPPLY CHAINS HAVE A LONG LIFE CYCLE. WE TRY TO MAKE LONG-TERM DECISIONS ON SUPPLY CHAINS, BUT THE SPEED AT WHICH THEY CHANGE AND YOU DO NOT HAVE THE TIME TO REACT PUTS A LOT OF STRESS ESPECIALLY ON SMALLER COMPANIES. IT IS -- THE U.S.
IS KNOWN FOR THEIR INNOVATION. IT IS BURDENSOME FOR SMALL COMPANIES LIKE OURS. CAROLINE: WILL THE LONGER-TERM IMPACT BE FOR YOU TO MAKE EVEN MORE IN THE U.S.? DO YOU HAVE OPTIMISM YOU WILL BE ABLE TO GET SKILLED LABOR AND SOME OF THE RARE EARTH MINERALS YOU NEED IN THE U.S. OR ARE YOU ALWAYS GOING TO BE
EXPOSED? JOHN: I BELIEVE WE CAN IN THE U.S. BUT WE NEED TIME TO DO IT. IF YOU DO IT VERY QUICKLY, MANY COMPANIES WILL NOT SURVIVE TO DO IT. I THINK WE NEED TO HAVE A
PARTNERSHIP WITH THE GOVERNMENT TO MAKE SURE WE ARE WORKING IN CONCERT. I THINK THE GOALS ARE IMPORTANT, TO PRODUCE IN THE U.S. AND INCREASED EXPORTS. CAROLINE: THANK YOU. COMING UP, MORE ON HOW TARIFFS ARE HITTING THE TECH SECTOR. THIS IS BLOOMBERG TECHNOLOGY.
CAROLINE: MICROSOFTCAROLINE: HAS PULLED BACK ON DATACENTER PROJECTS AROUND THE WORLD, SUGGESTING THE COMPANY IS TAKING A HARDER LOOK AT HIS PLANS TO BUILD SERVER FARMS POWERING AI AND THE CLOUD. MICROSOFT SHARES ARE DOWN 11% THIS YEAR. THOSE CONCERNS OF AN AR INFRASTRUCTURE BUBBLE ARE WEIGHING ON GLOBAL TECH STOCKS IN RECENT WEEKS, ESPECIALLY NVIDIA, WHICH SUCKS A SIGNIFICANT SHARE OF DATACENTER BUDGETS.
LET'S TAKE A LOOK AT NVIDIA AND OTHER BIG TECH NAMES WHICH ARE UNDER DURESS TODAY. WE THINK ABOUT THE KNOCK ON EFFECT OF TARIFFS AND THE EXPOSURE COUNTRIES THAT HAVE DIVERSIFIED AWAY FROM CHINA AND THAT IS WHY EVEN WITH A CARVEOUT FOR SEMI CONDUCTORS THE SEMI CONDUCTOR INDEX IS OFF BY 8%. NVIDIA IS OFF BY 6%. LOOK AT WHAT IS HAPPENING AT THE NASDAQ 100 HAS WERE STASIS 2022. APPLE IS HAVING ITS BIGGEST
MARKET CAP SELLOFF IN ALMOST -- WITH ALMOST 300 BILLION DOLLARS WIPED OFF OF APPLE IN ONE TRADING DAY AS WE WORRY ABOUT EXPOSURE TO ASIA, VIETNAM, AND WHAT RECIPROCAL FROM OTHER COUNTRIES AND COMPANIES WILL MEAN. CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. A QUICK CHECK ON THESE MARKETS, WHICH ARE IN THE RED. WE ARE OFF BY 5% ON THE NASDAQ 100, WORST DAYS SINCE 2022. WE DRILL INTO INDIVIDUAL MOVES OF CERTAIN PLAYERS WITH THE MAGNIFICENT SEVEN IN PARTICULAR BECAUSE BIG TECH TARIFFS HAVE COME FROM MAGNIFICENT SEVEN.
META IS DOWN BY 7% AS WE EYE WHAT E.U. RESPONSE MIGHT BE. IS THIS GOING TO AFFECT META? AMAZON OFF BY 8%. IT IS IN THE EYE OF THE STORM WHEN IT COMES TO COMMERCE.
WE ARE OFF BY 8%, THE WORST SINCE 2024, AUGUST OF THAT YEAR. PRESIDENT TRUMP'S TARIFFS HAVE THE MARKETS ON EDGE AND GLOBAL STOCK SELLING OFF BUT THE U.S. TREASURY SECRETARY SAYS THE EQUITY PLUMMET IN THE MAGNIFICENT SEVEN IS A MAGNIFICENT SEVEN PROBLEM, NOT A MAGA PROBLEM. HE IS SAYING WE PEAKED INTACT WHEN DEEPSEEK HAPPENED AND IT HAS BEEN A SELLOFF SINCE THEN, NOT BECAUSE OF TARIFF POLICY. TODAY, IT FEELS LIKE IT IS MAGNIFICENT SEVEN'S PROBLEM.
>> I WOULD SAY TARIFFS ARE 100% DRIVING THE MOVE LOWER TODAY. A LOT OF THE MAGNIFICENT SEVEN COMPANIES, A LOT OF CHIPMAKERS HAVE A TON OF MANUFACTURING. OUT OF CHINA, VIETNAM, TAIWAN, COUNTRIES HIT WITH TARIFFS A LOT HIGHER THAN SOME PEOPLE WERE EXPECTING. THEY ARE NOW FACING A ROUGH
DECISION ASSUMING THEY DO NOT GET ANY KIND OF EXEMPTION OR THERE IS NO CHANGE IN POLICY. EITHER THEY HAVE TO RAISE PRICES, WHICH WOULD HURT DEMAND, OR THEY HAVE TO ABSORB HIGHER COSTS, WHICH WILL HURT PROFITABILITY. IT IS NOT A GREAT POSITION FOR THEM TO BE IN. CAROLINE: SUCH A BAD POSITION THAT YOU BROUGHT A QUOTE TO YOUR STORY. YOU HAVE ASSESSED SOME ANALYST REACTIONS. ROSENBLATT TOOK MY ATTENTION, THAT THEY ARE SAYING THIS IS BASICALLY -- THIS BASICALLY BLOWS UP APPLE IN MANY WAYS AND IT IS HARD FOR US TO IMAGINE TRUMP BLOWING UP AN AMERICAN ICON.
A LOT OF ANALYSTS FEEL THERE MIGHT BE EXEMPTIONS GOING FORWARD. RYAN: WE DID SEE THAT DURING THE FIRST ADMINISTRATION BUT I WOULD NOT SAY THE TARIFF POLICY WAS ANYWHERE NEAR AS AGGRESSIVE. A LOVE COMPANIES HAVE BEEN WORKING PROBABLY BEHIND THE SCENES TRYING TO GET SOME KIND OF EXEMPTION. ZUCKERBERG WAS AT THE WHITE HOUSE YESTERDAY LOOKING FOR HELP WITH ANTITRUST STUFF SO OBVIOUSLY THEY ARE HOPING FOR SOMETHING BUT SO FAR WE HAVE NOT SEEN ANYTHING YET AND THE LONGER WE HAVE TO WAIT OR UNTIL THERE IS CLARITY, I THINK WE WILL CONTINUE TO SEE UNCERTAINTY IN MARKETS. CAROLINE: THOSE INAUGURATION SEATS NOT PAYING OFF THUS FAR. NOW LET'S GET MORE ON THE MARKETS. RISK OFF EVERYWHERE YOU TURN.
IS THAT THE RIGHT MOVE? >> UNFORTUNATELY, WE ARE IN THE EYE OF THE STORM AND ENTERING A PERIOD OF SIGNIFICANT UNCERTAINTY AND I THINK THE THING IS THEY'RE STILL LIKELY TO BE RETALIATION AND -- MORE SEVERE ECONOMIC SLOWDOWN AND MORE BEHAVIORAL RESPONSE FROM COMPANIES, WHICH IS LIKELY TO BE A FREEZE IN INVESTMENT AND LOWER HIRING, SO I WILL SAY THE PATH DOWN HERE IS LIKELY TO BE VOLATILE AND ALSO BUMPY AND MORE LIKELY TO THE DOWNSIDE. CAROLINE: YOU THINK THERE IS MORE DOWNSIDE TO COME. YOU THINK WE HAVE NOT PRESSED IN ENOUGH RETALIATION. ALREADY WE GET FRANCE AND GERMANY SAYING THEY ARE NOT GOING TO INVEST AS MUCH IN THE U.S. IN PARTICULAR, MACRON ASKING FRENCH COMPANIES NOT TO INVEST IN UNITED STATES. THE PROBLEM IS THERE STILL SO
MUCH UNCERTAINTY. WE HAVE NEVER HAD THIS SORT OF TARIFFS GOING ON ACROSS THE GLOBE IN THE MODERN AGES. THIS IS UNCHARTED TERRITORY WE ARE TALKING ABOUT HERE AND THE MOST SIGNIFICANT AREA AFFECTED IS THE ASIAN NATIONS THAT HAVE DEEPLY EMBEDDED SUPPLY CHAINS. MULTINATIONALS HAVE BEEN INVESTING HEAVILY IN CHINA AND THE CHINA PLUS ONE STRATEGY.
THAT IS BEING UPENDED AT THE MOMENT, SO HUGE CHANGES TO THE TRADE FLOW AND HUGE COMPRESSION TO MARGINS IF THIS GOES ON FOR A LONGER TIME. WHERE WORRIED ABOUT PORTFOLIO FLOWS GOING FORWARD AS INVESTORS CONTEMPLATE WHETHER THEY SHOULD REDUCE U.S. EXPOSURE FOR A SUSTAINED PERIOD. CAROLINE: WHAT STILL NEEDS TO GO ON IS CLARITY WITH SEMI CONDUCTORS. THERE IS A CARVE OUT FROM THIS ROUND OF TARIFFS, BUT THERE IS ONGOING DISCUSSION AROUND SUPPORT FOR BUILDING IN UNITED STATES AS THE CHIPS ACT GETS REWORKED. HOW MANY MORE SHOES TO DROP ARE
THERE IN THE SEMI SPACE? JANET: IT IS A COMPLEX SUPPLY-CHAIN WE ARE TALKING ABOUT. THERE'S JUST SO MUCH UNCERTAINTY AND I THINK THEY'VE ALREADY PLEDGED OVER $100 BILLION OF INVESTMENT BUT TAIWAN IS ENGAGED WITH A 34% TARIFF. THAT IS JUST NOT MUCH CERTAINTY AND POTENTIAL ROOM FOR NEGOTIATION, SO IT IS A HIGHLY COMPLEX SUPPLY CHAIN RELATED. WE WILL HAVE TO SEE, BUT IS IT GOING TO INCREASE COSTS FOR A LOT OF SEMI CONDUCTOR COMPANIES IN THE STATES? I THINK THIS IS NOT A GREAT OUTCOME. CAROLINE: WE HAVE TO LEAVE IT THERE. WE NOW HAVE TO MOVE OVER TO WHERE THE LEADER IS SPEAKING.
>> PRESIDENT TRUMP CONFIRMED THAT THE TARIFFS ANNOUNCED LAST WEEK AGAINST OUR AUTO INDUSTRY WILL COME IN AND INDEED HAVE COME INTO EFFECT TODAY. SO WHILE IT IS PROGRESS THAT FURTHER TARIFFS WERE NOT IMPOSED ON CANADA YESTERDAY, THE PRESIDENT'S ACTIONS WILL REVERBERATE HERE IN CANADA AND ACROSS THE WORLD. THREE SETS -- THREE DIFFERENT SETS OF U.S. TARIFFS REMAIN IN PLACE AND WILL CONTINUE TO POSE SIGNIFICANT THREATS TO KATIE AND WORKERS AND CANADIAN BUSINESSES. -- CANADIAN WORKERS AND CANADIAN BUSINESSES. WHILE THEY HAVE BEEN IMPOSED
UNDER DIFFERENT PREMISES, SOME THINGS ARE CONSISTENT. THEY ARE ALL UNJUSTIFIED, UNWARRANTED, AND IN OUR JUDGMENT MISGUIDED. WE ARE ALREADY SEEING THE CONSEQUENCES. JUST LAST EVENING, WORKERS FROM LOCAL 444 WITH WHOM I MET LAST WEEK LEARNED THAT THERE AUTO ASSEMBLY PLANT WILL BE SHUTTING DOWN FOR AT LEAST THE NEXT TWO WEEKS. THAT IS 3600 WORKERS WHO ARE NOW OUT OF WORK, NOT BY THEIR CHOICE, WORKERS WHO NOW WORRY HOW THEY ARE GOING TO PUT FOOD ON THE TABLE AND PAY THEIR BILLS. I AND MY GOVERNMENT STAND IN SOLIDARITY WITH THOSE WORKERS AND ALL THOSE WORKERS HURT BY PRESIDENT TRUMP'S TARIFFS.
THAT IS WHY WE COMMITTED FROM THE START THAT ALL, I REPEAT ALL, OF OUR TARIFF PROCEEDS WILL GO TO PROTECT WORKERS AFFECTED BY THE TARIFFS. [SPEAKING FRENCH] CAROLINE: KADIAN PRIME MINISTER MARK CARNEY SPEAKING REGARDING U.S. TARIFFS AND THE IMPACT ON HIS COUNTRY. YOU CAN WATCH MORE IF YOU HAVE
A TERMINAL. COMING UP, THE HEAD OF VERIZON'S CONSUMER BUSINESS TALKS ABOUT WITH THE WIRELESS BUSINESS IS DOING TO ATTRACT CUSTOMERS IN THE FACE OF TARIFFS. THIS IS BLOOMBERG TECHNOLOGY. PRESIDENT TRUMP'S NEW TARIFFS ARE SENDING SHOCKWAVES ACROSS GLOBAL MARKETS, SPARKING TRADE WARS. CANADA JUST NOW SAYING THEY WILL MATCH U.S. TARIFFS ON PASSENGER VEHICLES. YOUR ECONOMIC EXPERTISE IS SO VALUABLE. SO IS YOUR EXPERIENCE IN ASIA.
THIS HAS COME AS A SURPRISE PARTICULARLY FOR COUNTRIES OTHER THAN CHINA. >> IS BEYOND THE WORST-CASE SCENARIO. THERE HAS BEEN A HAMMER BLOW TO BEGIN WITH. TALKING ABOUT TARIFF RATES AROUND 67% ACCORDING TO BLOOMBERG ECONOMICS AS OF NEXT WEEK, ACROSS ALL GOODS, THAT IS GOING TO HURT CHINESE ECONOMIC GROWTH, MAYBE TAKE ONE TO TWO PERCENTAGE POINTS OF GROWTH THERE, AND REALLY HAMMER THE VOLUME OF EXPORTS OUT OF CHINA TO THE U.S., MAYBE BY AS MUCH AS 80%. BY EXTENSION, IF THAT IS HAPPENING IN CHINA THAT IS GOING TO SPILL OVER TO THE REST OF THE REGION.
IN PARTICULAR YOU HAVE VIETNAM AND CAMBODIA AND BANGLADESH AMONG THOSE NOW FACING VERY HIGH TARIFF RATES UNDER GOODS THAT THEY DO SHIP TO THE U.S.. SOME OF THESE ECONOMIES HAVE BEEN CONNECTOR ECONOMIES BETWEEN THE U.S. AND ASIA, SO CERTAINLY A HAMMER BLOW FOR EXPORTS AND GROWTH IN THAT PART OF THE WORLD. CAROLINE: AND FOR U.S. GIANTS THAT HAVE WREAK -- THAT HAVE RELOCATED PRODUCTION FROM CHINA INTO VIETNAM AND MALAYSIA.
TOP OF MIND FOR US IS APPLE, BUT HOW MUCH ARE THESE COUNTRIES GOING TO HAVE TO WORRY THAT FOREIGN DIRECT INVESTMENT PULLS AWAY? >> THESE ECONOMIES HAD EMERGED AS CONNECTOR ECONOMIES. A LOT OF COMPANIES MOVED THERE TO GET OUT OF THE TARIFF DRAGNET AND HOPE THEY COULD STILL PRODUCE CHEAPLY IN ASIA AND SELL TO THE U.S. BUT THAT MODEL IS NOW UNDER SCRUTINY. THE QUESTION BECOMES DO THESE GOVERNMENTS RETALIATE AND THE TRADE WAR WORSENS? OR DO THEY NEGOTIATE WITH PRESIDENT TRUMP SO THE TARIFFS ARE REDUCED? A LOT OF OBSERVERS ARE SAYING IT WILL NOT BE SO SIMPLE. IT IS UNLIKELY TARIFFS WILL GO BACK TO ZERO GIVEN THE HIGHLY LOGICAL -- IF NOT, COMPANIES WILL HAVE TO FACE AGAIN VERY EXPENSIVE DECISIONS ON SUPPLY CHAINS. CAROLINE:
EVEN THOSE AREAS YOU THINK MIGHT BE MORE PROTECTED, FOR EXAMPLE CHINESE INTERNET GIANTS, IF THE CONSUMER IS HURT, THEY WILL BE HURT A LITTLE BIT, BUT TALK US THROUGH THE IMPACT AS WELL BECAUSE THAT IS ANOTHER ANNOUNCEMENT FROM PRESIDENT TRUMP. HE IS ENDING THE ABILITY FOR CHINESE GIANTS TO SHIP CHEAPLY TO THE U.S.. ENDA: THIS HAS BEEN LOST BY THE SIGNIFICANCE OF THE OTHER NEWS. THE IS CURRENTLY YOU CAN BUY AND GOODS ON E-COMMERCE PLATFORMS FROM CHINA WITHOUT PAYING A TARIFF ON IT UNTIL A THRESHOLD OF $800. THAT HAS BEEN POPULAR WITH
HOUSEHOLDS, ESPECIALLY WITH LOWER INCOME HOUSEHOLDS BUYING GOODS FROM CHINA AT A CHEAPER COST THAN THEY WOULD GET HERE. THE NEW RULE WILL TAKE AWAY THAT THRESHOLD AND BRING IT TO ZERO SO YOU'LL HAVE TO PAY TARIFF ON ALL THE GOODS COMING IN FROM CHINA. THAT WILL HAVE SPECIFIC COMPANY IMPACTS IN TERMS OF E-COMMERCE PLATFORMS BUT ALSO IMPACT CONSUMERS HERE WHO HAVE BEEN BUYING THOSE GOODS AT A CHEAPER PRICE. THE TRUMP ADMINISTRATION SAYS THIS IS NECESSARY AND IT IS ABOUT DRIVING INVESTMENT AND CREATING MORE MANUFACTURING AT HOME AND JOBS AT HOME IN THE U.S., BUT NEAR TERM ARE SAYING AT THE LEAST PRICES WILL GO UP FOR CONSUMERS. CAROLINE: LET'S TALK MORE ABOUT CONSUMER IMPACT.
VERIZON HAS JUST ANNOUNCED AN OFFER FOR A THREE-YEAR PRICE LOCK PHONE TRADE IN AS IT TRIES TO WIN CUSTOMERS IN A COMPETITIVE WIRELESS MARKET AND WHEN THEY ARE EXPERIENCING INFLATION. THE CEO OF VERIZON'S CONSUMER BUSINESS IS JOINING US ON THE BACK OF THESE ANNOUNCEMENTS. HAVE YOU CHANGED THE TIMELINE ON THIS BECAUSE OF A CONSUMER THAT IS CURRENTLY FACING A LOT OF INFLATIONARY HEADWIND? >> WE HAVE BEEN LISTENING TO CUSTOMERS AND THEY ARE TELLING US TWO THINGS CONSISTENTLY.
FIRST IS THEY WANT PRICE CERTAINTY. THEY'RE SO MUCH UNCERTAINTY IN THEIR LIVES BUT ON CONDUCTIVITY THEY WANT PRICE CERTAINTY. SECOND IS FLEXIBILITY. NO ONE WANTS TO PAY FOR THINGS THEY DO NOT USE. ACCOMMODATION OF THOSE MADE US GET TO THIS POINT WHERE WE HAVE THIS INCREDIBLE VALUE FOR OUR CUSTOMER THIS WAS ALWAYS IN OUR PLAN. WE HAVE HAD A SUSTAINED TURNAROUND STRATEGY FOR THE CONSUMER GROUP.
CAROLINE: THE INVESTORS LIKE IT, BUT TELL US ABOUT COSTS YOU INCUR BECAUSE OF IT. IF I'M SUDDENLY ABLE TO TRADE IN MY PHONE AND GET A NEW ONE FOR FREE AND LOCK AND PRICES, HOW DO YOU BEAR THAT FROM A COST PERSPECTIVE? SOWMYANARAYAN: LARGELY WE ARE AN AMERICAN COMPANY. WE HAVE ALMOST NO EXPORT REVENUE. WE RELY ON AMERICA FOR ALL OUR REVENUE, SO WE ARE COMFORTABLE WITH THAT. WE WORK WITH OUR PARTNERS ON THIS.
WE WORK AS SUPPLIERS SO WE WILL MITIGATE RISK ON INFLATIONARY PRESSURE THAT WE GET BUT MORE IMPORTANTLY WE WANT TO OFFER CUSTOMERS SOMETHING THEY LIKE AND LOVE. WE WANT TO TAKE AWAY UNCERTAINTY AT LEAST IN THE CATEGORY WE ARE INVOLVED IN. CAROLINE: I'M INTERESTED IN YOUR WORKING WITH PARTNERS.
APPLE -- ROSENBLATT SECURITIES IS SAYING THIS WILL BLOW UP THEIR BUSINESS MODEL IF THEY ARE EXPOSED TO THE SORT OF TARIFFS YOU ARE GETTING FROM CHINA IMPOSED ON VIETNAM AND INDIA AS WELL. DO YOU THINK APPLE WILL HAVE ANY MORE PRESSURE TO INCREASE PRICES ON PHONES? HOW DO YOU RESPOND? SOWMYANARAYAN: WE ARE A BIG PARTNER TO APPLE. IT CREATES A GOOD VALUE PROP FOR CUSTOMERS.
LAST YEAR, WE SAID OUR GREAT RATE IS PROBABLY ITS HIGHEST POINT IN 2024 AND IN 2025 WE WILL SEE THAT DROPPING. PEOPLE KEEP HANDSETS A LITTLE OVER 14 MONTHS NOW. WE THINK THE NUMBER WILL FALL A LITTLE BIT SO THE LOW POINT WAS LAST YEAR AND WE WORK WITH THEM TO MITIGATE PRICE AND OTHER RISKS THAT WE HAVE BUT WE DO THINK THERE WILL BE A SLIGHTLY HIGHER UPGRADE RATE IN 2025 COMPARED TO 2024 AND A LOT OF THAT HAS TO DO WITH HOW WELL WE WORK WITH PARTNERS. CAROLINE: YOU HAVE A LONG TENURE AS A MANAGEMENT CONSULTANT. YOU WERE AROUND THE BUSINESS SIDE BEFORE MOVING TO THE CONSUMER SIDE. DO YOU HAVE OPTIMISM THAT YOU WILL BE ABLE TO HAVE RESILIENCY FOR BUSINESSES YOU SERVE AND CONSUMERS THAT YOU SERVE? SOWMYANARAYAN: WE THINK SO. WE PROVIDE CONNECTIVITY AND
RESILIENCY AND CYBERSECURITY TO OUR BUSINESS CUSTOMERS AND RETAIL CUSTOMERS. THIS IS A CATEGORY WHERE PEOPLE DO NOT HAVE MUCH CHOICE. THEY HAVE TO RELY ON THE BEST OFFER THEY HAVE AND THAT IS WITH VERIZON SO I DO THINK IT CREATES A RESILIENT BUSINESS MODEL FOR US BUT YOU WILL SEE CUSTOMERS HAVING TO ZIGGED AND ZAGGED MORE TO MITIGATE RISK AND BE MORE FLEXIBLE WITH SUPPLY CHAINS BUT AS FAR AS OUR CATEGORIES CONCERNED WE SEE A LOT RESILIENCY. CAROLINE: AND INVESTORS LIKE IT BECAUSE YOU ARE DEEMED A HAVEN IN THIS TRADE BUT WHAT ABOUT YOUR WILLINGNESS TO INVEST IN YOUR BUSINESS RIGHT NOW, PARTICULARLY AROUND AI? HAVE YOU GOT THE CERTAINTY TO DO THAT? SOWMYANARAYAN: DEFINITELY. WE PLAY A LONG GAME HERE, WHETHER IT IS INVESTMENT IN FIBER OR AI. THOSE ARE BIG THINGS FOR US.
USING AI WILL GIVE YOU A SENSE FOR THIS ANNOUNCEMENT. WE HAVE HUNDREDS OF THOUSANDS OF CUSTOMERS EVERY DAY. WE ARE NOW USING GENERATIVE AI AND EVERY MORNING I GET A REPORT THAT TELLS ME WHAT THE SENTIMENT WAS YESTERDAY FROM CUSTOMERS. USE THAT IN REAL TIME TO MAKE
DECISIONS SO I THINK IT IS PART OF OUR OPERATING MODEL AND WE WANT TO BE THE BEST AI COMPANY SO WE ARE COMFORTABLE WITH OUR INVESTMENT PROFILE AND LONG-TERM STATUS. CAROLINE: IT IS ALWAYS GREAT TO CATCH UP WITH YOU. AMAZON IS ONE OF THE BIG NAMES THROWING HIS HAT IN THE RING TO BUY TIKTOK. WE WILL HAVE THE LATEST. THIS IS BLOOMBERG TECHNOLOGY. ♪ CAROLINE: CURRENTLY SEEING MARKET SELLOFF IN RESPONSE TO TARIFFS ANNOUNCED YESTERDAY BY THE WHITE HOUSE, MORE AGGRESSIVE THAT MANY HAD THOUGHT.
MASTEC 100 HAVING ITS WORST DAY SINCE SEPTEMBER 13 MONTH 2022. BITCOIN OFF BY ALMOST 5%. LET'S GET YOU TO ANOTHER STORY, GEOPOLITICAL NATURE MEANT ONE THAT MIGHT BE EMBROILED IN TARIFFS. TIKTOK'S OWNER SET TO BE HIT BY
A PRIVACY FINE FOR ILLEGALLY SHIPPING EUROPEAN USER DATA TO CHINA. THIS ADDS TO THE GROWING GLOBAL BACKLASH OVER THE VIDEO SHARING APP. THE APP FACES A POTENTIAL BAN IN UNITED STATES SATURDAY. FIRST, THAT E.U. FINE. THEY ARE TAKING ISSUE WITH WHAT THE U.S. HAS BEEN FEARING FOR A LONG WHILE.
>> THIS IS THE CONCERN AND THE DRIVER OF THIS BAND THAT YOU MENTIONED, WHICH IS CAN THE U.S. GOVERNMENT TODAY FEEL THEY CAN TRUST TIKTOK AND BYTEDANCE TO HANDLE AMERICAN USER DATA APPROPRIATELY? WHEN YOU SEE HEADLINES AND STORIES LIKE THIS, IT ADDS FUEL TO THE FIRE OF THE IDEA THIS COMPANY CANNOT BE TRUSTED. THAT IS WHAT WE SAW ELECTED OFFICIALS VOTE FOR LAST YEAR WHEN THEY PASSED THIS LAW THAT WILL BAN THE APP SATURDAY UNLESS THERE IS A DEAL STRUCK, SO THIS IS THE KIND OF THING PEOPLE WERE WORRIED ABOUT. CAROLINE: IF THERE IS A DEAL STRUCK. SUDDENLY, THAT HAS ACCELERATED. TALK TO US ABOUT THE AMAZON OFFER AND WHAT IS GOING ON WITH JD VANCE. KURT:
EVERYONE IS COMING OUT OF THE WOODWORK AT THE LAST MINUTE BECAUSE WE HAVE BEEN TALKING ABOUT A DEAL FOR MONTHS, BUT THE EXPECTATION AT THIS POINT IS THAT THE DEAL BEING CONSIDERED BY TRUMP IS A LOT OF THE EXISTING BYTEDANCE INVESTORS FROM THE U.S. -- ORACLE WOULD BE INVOLVED. BLACKSTONE WOULD BE INVOLVED. IT WOULD MINIMIZE BYTEDANCE'S OWNERSHIP STAKE IN TIKTOK BELOW THE 20% THRESHOLD THAT THE LAW REQUIRES, SO IT WOULD SORT OF FILL IN THE OTHER 80% WITH U.S. INVESTORS. I THINK WE ARE STILL A WAYS AWAY FROM AN ACTUAL RESOLUTION.
EVEN IF TRUMP RESENTS THIS SOLUTION, IT REQUIRES APPROVAL NOT ONLY FROM BYTEDANCE BUT FROM THE CHINESE GOVERNMENT AND WE DO NOT KNOW THE SPECIFICS AROUND THE ALGORITHM. DOES THAT CHANGE HANDS? SO WE ARE HEARING FROM ONE SIDE OF THE FENCE BUT WE DO NOT KNOW WHAT CHINA IS THINKING AND THAT IS A BIG PLAYER HERE. CAROLINE: META UNDER PRESSURE. KURT: I FEEL WE SAW THAT HEADLINE THAT MARK ZUCKERBERG TRIED TO ASK DONALD TRUMP TO HELP HIM WITH THE FTC TRIAL. NOT SURPRISING.
WHY ELSE WOULD HE BUILD THAT RELATIONSHIP IF YOU ARE NOT POINT TO MAKE THAT REQUEST? BUT I ALSO DO NOT THINK TRUMP HAS A LOT OF INCENTIVE TO DO THAT NOW. CAROLINE: META IN THE EYE OF THE STORM WHEN IT COMES TO TARIFFS. THANK YOU. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY.
2025-04-05 10:25
