US-China Tariff Tensions' Impact on Tech Sector | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, POWER AND MONEY COLLIDE, THIS IS "BLOOMBERG TECHNOLOGY." WITH CAROLINE HYDE AND ED LUDLOW. ♪ CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO, THIS IS BLOOMBERG TECHNOLOGY. THE TRADE WAR BETWEEN THE U.S. AND CHINA CONTINUES, CHINA RAISING ITS TARIFFS FROM 48% TO 125% AFTER THE U.S. RAISED TARIFFS TO 145 PERCENT
ON CHINA. CHINA SAYING YOUR CHE TARIFFS ARE A JOKE. WE ARE UP 6% OVER THE PAST FIVE TRADING DAYS.
ON THE NEST THAT, IT DOES NOT PAINT THE PICTURE OF THE EXTENT OF THE WHIPLASH WE HAVE SEEN. LOOK AT WHAT WE HAVE DONE ON THE MONTH. THIS CONTEXT IS NEEDED. SHORE UP ON THE WEEK. ON THE DOWNSIDE FOR THE COURSE
OF APRIL, WE ARE UP 5% ON THE NASDAQ 100. DIG INTO THE DETAILS, ED. ED: THERE IS DIVERGENCE IN THE SESSION BETWEEN THOSE AMERICAN COMPANIES THAT DESIGN CHIPS AND DON'T MAKE THEM AND THOSE WITH DOMESTIC OPERATIONS. BURIED AMONG THE HEADLINES WAS THE CHINESE REGULATOR INDUSTRY SAYING BY THE WAY, WHEN WE THINK ABOUT TARIFFS ON U.S. GOODS IMPOSED BY CHINA, THIS IS
HOW WE WILL DEFINE IT. YOU AND I WILL GET INTO THAT THROUGHOUT THE COURSE OF THE SHOW. WE HAVE TO TALK ABOUT APPLE. BLOOMBERG TECHNOLOGY AS A SHOW WAS EARLY ON THIS DISCUSSION ON MONDAY. WILL THE U.S.
BUILD AN IPHONE IN THE FUTURE? THE ANALYSIS FROM DIFFERENT CORNERS OF THE MARKET IS SO DIFFERENT. WE SHOULD GET INTO IT. CAROLINE: WE SHOULD. WE HAVE BEEN DEBATING TIME AND TIME AGAIN THE MADE IN AMERICA IPHONE IS THE GOAL OF PRESIDENT RATE IT COULD BE THE REALITY.
-- PRESIDENT. IT COULD BE THE REALITY. ANNA JOINS US. -- IVAN JOINS US. WHAT WOULD IT DO TO THE MARGIN OF APPLE IF THEY EVER BROUGHT PRODUCTION OF THE IPHONE TO THE UNITED STATES? >> A LOT WOULD DEPEND ON THE LABOR COSTS.
IT WOULD BE DIFFICULT TO RAISE THE PRICE OF THE PHONE TO TWO X AND THEN MAKE IT IN THE U.S. IT HAS TO BE DONE IN A WAY THAT KEEPS THE COST DOWN. THE REASON WHY APPLE SHINES COMPARED TO ANY OTHER CONSUMER ELECTRONICS COMPANY IS BECAUSE IT HAS VERY HIGH GROSS MARGINS COMPARED TO LET'S SAY SOMEBODY WHO SELLS AN ANDROID PHONE IN ASIA FOR EXAMPLE. ED: THOSE MARGINS ARE UNDER THREAT. LET'S BRING UP THE RESEARCH PUBLISHED ABOUT 20 OR 30 MINUTES AGO. OUR ANALYSIS SUGGESTS A MARGIN OF IMPACT OF 100 TO 170 BASIS POINTS FOR EVERY 10% INCREASE ON CHINA MANUFACTURED PRODUCTS.
APPLE COULD MITIGATE SOME OF THE IMPACTS THROUGH PRICE INCREASES. YOU HAVE TALKED ABOUT THIS ALL WEEK. THE KEY QUESTION SEEMS TO BE WHERE AND YOU THINK THAT WILL BE ON THE SURFACE INSIDE.
>> IT'S DIFFICULT TO TAKE A $1000 PHONE AND DOUBLE IT UP TO $2000. IT'S EASIER TO TAKE A $299 PLAN AND MAKE IT $500 OR SEVEN DOLLARS. SOME OF THOSE REVENUE STREAMS HAVE HIGH MARGINS. THESE ARE PROFITS WITH 75 TO 80% GROSS MARGINS.
THEY COULD PRAISE IT AS IT'S ONLY GOING TO -- PHRASE IT AS IT WILL BE DONE OVER THE NEXT SIX MONTHS. AND THEY CAN SCALE IT BACK. FROM A CONSUMER POINT OF VIEW, IT IS LESS -- IT HURTS THEM LESS.
THAT IS JUST ONE SERVICE I TALK ABOUT. THERE COULD BE OTHERS AS WELL. I FEEL VERY STRONGLY THAT I DON'T THINK THEY CAN RAISE THE PRICE OF THE PHONE UP BY 50%, 60 PERCENT. MAYBE SLIGHTLY, MAYBE 5%.
ANYTHING ABOVE THAT DESTRUCT DEMAND. -- DESTRUCT'S DEMAND. ED: LET'S STAY WITH APPLE AND THE IMPACT OF TARIFFS ON TECHNOLOGY. TONY WONG JOINS US NOW. APPLE, THE NUMBER ONE HOLDING. TONY, WHEN I WAS LEARNING ABOUT
THE TECHNOLOGY INDUSTRY AND THE MARKET AND MAKING MY WAY THROUGH BLOOMBERG TELEVISION'S NEWSROOM, I WAS ALWAYS TOLD THAT APPLE AND NAMES LIKE IT HAD AN ENTRENCHED MARKET POSITION. STRONG BALANCE SHEETS. AND IN CRISES OR RECESSION, THAT'S WHERE THEY WOULD SURVIVE AND THRIVE. I THINK RIGHT NOW, YOU CAN'T NECESSARILY LOOK BACK AT HISTORY AND PRECEDENT. HOW ON EARTH ARE YOU MODELING THE FUTURE OF THIS COMPANY? >> THAT'S A GREAT QUESTION, OBVIOUSLY. LET'S SAY HERE, I THINK THERE IS A LOT FEAR OF THE MARKET AND CONCERNS AROUND TRADE WAR.
WHAT DEGLOBALIZATION COULD POSSIBLY DO TO CUT APPLES MANUFACTURING IN CHINA. THEY HAVE THE ABILITY TO MOVE AROUND. WHEN YOU THINK ABOUT THE U.S. CONSUMPTION OF IPHONES IS ROUGHLY 25% TO 30%. I EXPECT THERE IS SOME FLEXIBILITY TO MOVE PRODUCTION TO INDIA MORE AND THEREFORE DIVERSIFY THAT RISK A BIT. AT THE END OF THE DAY, IT'S ABOUT HOW MUCH OF A STAPLE THE IPHONE IS.
THERE IS PRICE SENSITIVITY AMONG THE CUSTOMER TOO. THAT COULD BE BULLISH FOR THE STOCK THAT DEMONSTRATES IT'S MORE OF A STAPLE THAN WE APPRECIATE. THERE'S A LOT OF FEAR THERE. GENERALLY, HISTORICALLY BEEN REWARDED FOR LEANING INTO WEAKNESS. CAROLINE:
IN THIS WEAKNESS, ON THE DAY APPLE IS TRADING SOMEWHAT HIGHER, ON THE MONTH IT IS DOWN 14%. HAVE YOU BEEN ADDING TO YOUR NUMBER ONE HOLDING? HAS IT BEEN ATTRACTIVE TO GET BACK IN WITH MORE ADDITION? TONY: THE ECONOMY IS WELL POSITIONED OVER THE LONG-TERM. YOU LOOK AT THE EAST COAST SYSTEM -- ECOSYSTEM OF BIG BILLS , THE REPLACEMENT CYCLE HAS BEEN ON LOCK. IF YOU GET A NEW FORWARD FACTOR, THAT COULD BE ATTRACTIVE. THE EVALUATION HAS BECOME MORE ATTRACTIVE. ESPECIALLY AT THESE LEVELS, VERSUS WHERE THEY WERE SIX MONTHS OR NINE MONTHS AGO.
IN ADDITION, THEY HAVEN'T BEEN SPENDING TIME ON -- MILES. CAROLINE: GO THERE, TONY FOR A MOMENT. THERE WAS A LACK OF URGENCY ON AI AND THE IMPLEMENTATION WITHIN SIRI. THIS DISTRACTION THE TARIFFS BECAUSE, DOES THIS SET THEM BACK FURTHER ABOUT UPGRADING THE PRODUCT FROM AN AI PERSPECTIVE? TONY: I THINK THEY ARE CONSTANTLY OPTIMIZING THEIR SUPPLY CHAINS. THERE'S WORK ON THEIR PLATE. I DON'T THINK THEY ARE STANDING
STILL ON THE AI FROM. I THINK THEY ARE INVESTING MORE. I THINK ABOUT THE SPACE, THERE'S A LOT OF THINGS EVOLVING. WHAT WE THOUGHT A YEAR AGO HAS CHANGED IN TERMS OF WHO CAN PARTICIPATE IN AI AND WHAT THESE LANGUAGE MODELS CAN COST IN WHICH ONE IS THE BEST. IT FEELS LIKE EVERY MONTH THERE IS A NEW HEADLINE WITH WHO'S IN THE LEAD.
IT COULD BE PRUDENT OF APPLE TO FOCUS ON WHAT THEY ARE REALLY GOOD AT AND WHAT THEIR COMPETITIVE ADVANTAGE IS, WHICH IS DESIGNING HIGH QUALITY PRODUCTS THAT FIT INTO OUR LIVES THAT CAN BE INCORPORATED ELEGANTLY. THEY DO OWN THAT KIND OF ECOSYSTEM. OVER TIME, I THINK THEY CAN DERIVE VALUE FROM THAT FOR THEIR SHAREHOLDERS. ED: LET'S END THIS CONVERSATION ABOUT APPLE WITH A YES OR NO. DOES APPLE MANUFACTURE OR ASSEMBLE AN IPHONE IN THE UNITED STATES IN THE FUTURE? TONY: I THINK IT IS POSSIBLE IN THE KIND OF LONG-TERM FUTURE.
IN THE NEAR TERM, WHEN YOU LOOK AT WHAT IT TAKES TO MANUFACTURE AN IPHONE, THERE IS THOUSANDS OF PEOPLE WHO ARE LIVING IN A FACTORY THAT COULD BE WOKEN UP AT ANY TIME OF THE HOUR TO MAKE A CHANGE. IN THE LONG TERM, THAT COULD BE POSSIBLE WITH ADDITIONAL ADVANCEMENTS IN ROBOTICS AND AI BUT I DON'T THINK IT WILL BE A NEXT YEAR KIND OF THING. ED: I SAW A HEADLINE THAT WE THINK IS CRITICAL. CHINA ISSUED THIS EMERGENCY NOTICE AND THEY CLARIFIED THAT IN THE CONTEXT OF TARIFFS, THEY DEFINE POINTS OF ORIGIN WHERE A SEMI CONDUCTOR IS TAPED OUT. IN OTHER WORDS, WHERE THE ELECTRONIC EXTRACTIONS -- INSTRUCTIONS SET IS FORMULATED. THEY USE TSMC OR MAYBE SAMSUNG SO THE TAKE-OUT HAPPENS IN THOSE COUNTRIES AS WELL. HOW MUCH INSULATION DO YOU
THINK THAT GIVES THEM FROM THE HEAVY CHINA TARIFFS ON U.S. PRODUCTS? TONY: I THINK IF YOU TAKE A STEP BACK, THE TWO COUNTRIES HAVE BEEN TRYING TO DISCERN ANY OTHER FROM MAJOR KIND OF SUPPLY CHAINS AND AREAS WHERE YOU CAN SUBSTITUTE A DOMESTIC PRODUCT, THAT WOULD BE PREPARED -- PREFERRED. THAT IS NOTHING NEW OVER THE LAST FEW YEARS. THIS LATEST PIECE OF NEWS IS A FURTHER STEP IN THAT DIRECTION WHERE IT DOES NOT MAKE ANY SENSE TO HURT YOURSELF BY TERRIFYING -- TARIFFING THE ONLY SOURCE YOU HAVE. IT MAKES A LITTLE LESS SENSE TO PUT A HIGH TARIFF ON THAT. THAT IS MY PERSPECTIVE.
THAT IS THE CONTINUATION OF INDUSTRIAL POLICY THAT KIND OF MAKES SENSE. CAROLINE: LET'S TALK ABOUT THE OTHERS THAT ARE EXPOSED. I'M INTERESTED AS TO WHETHER YOU HAVE HOLDINGS IN THOSE THAT ARE MANUFACTURING IN THE UNITED STATES OR LOOKING TO EVEN MORE WITH THE COURSE MONEY COMING FROM FEDERAL GOVERNMENT AND WHAT THAT DOES TO THE BUSINESS MONEY IF THEY SHIPPED TO ASIA AND CHINA SPECIFICALLY. DO YOU HAVE TO GET OUT OF INTEL AND TEXAS INSTRUMENTS? TONY: OVER THE LONG-TERM, IT'S ABOUT THE TECHNOLOGY AND DIFFERENTIATION. IF YOU HAVE LEADERSHIP PRODUCTS, THAT IS STILL NUMBER ONE. NUMBER TWO, DIVERSIFY SUPPLY CHAINS LIKE SERVING THE LOCAL INDUSTRY IS PROBABLY GOING TO BE A GOOD THING.
AT THE END, IT'S THOSE TWO THINGS. THE MAIN THING IS PRODUCT LEADERSHIP. ED: LIKE ALL TECHNOLOGY INVESTORS, YOU HAVE HAD TO DIGEST AND UNDERSTAND COMMUNICATION FROM POLICYMAKERS. HOW WOULD YOU RATE AND RANK WHAT YOU'VE HEARD FROM THE PRESIDENT, TREASURY SECRETARY BESSON AND OTHERS? -- BESSENT AND OTHERS? TONY: GEOPOLITICS IS ABOVE MY PAY GRADE. I THINK THE U.S.
IN MINISTRATION AND THE LEADERS WE HAVE ELECTED WILL DO WHAT'S BEST FOR THE COUNTRY, FOR OUR COMPANIES HERE IN THE U.S.. WE CAN TRUST THEM AND THEY ARE TRYING THEIR BEST. I THINK AT THE END OF THE DAY, THEY WILL PROTECT AMERICAN INTERESTS. WHAT'S IMPORTANT IS KEEPING U.S. TECHNOLOGY AT THE FOREFRONT.
THAT IS WHAT I LOOK FOR AS AN INVESTOR. CAROLINE: SO IMPORTANT TO HAVE THE INVESTOR TAKE TODAY. WE WILL LOOK AT HOW CHINESE TECH INVESTMENTS ARE HANDLING TRADE TENSIONS FOR TIKTOK'S SALE TO A U.S. BUYER. MITCHELL GREEN WILL JOIN US.
THIS IS "BLOOMBERG TECHNOLOGY." ♪ ♪ CAROLINE: CHINESE SOCIAL MEDIA GIANT BYTEDANCE SAW ITS REVENUE JUMP 29% LAST YEAR. IT WAS DRIVEN BY THE GLOBAL EXPANSION OF TIKTOK. INTERNATIONAL SALES GREW 39 BILLION DOLLARS, CONTRIBUTING ABOUT A QUARTER OF THE COMPANY'S REVENUE. THAT IS THE CHINESE BUSINESS SLOWED.
TENSIONS BETWEEN WASHINGTON AND BEIJING EXPECT TO IMPACT THE ECONOMY AND THE SALE OF TIKTOK IN THE UNITED STATES. MITCHELL GREEN, LONGTIME INVESTOR IN NAMES LIKE BYTEDANCE IS WITH US. HAVE YOU BEEN ADDING TO BYTEDANCE? WHAT DO YOU MAKE OF WHERE WE STAND IN TERMS OF TIKTOK IN THE UNITED STATES? MITCHELL: THANKS SO MUCH FOR HEL HAVING ME ON. THE COMPANY CONTINUES TO DO WELL AS WE HAVE SAID IN THE PAST. IN THE GRAND SCHEME OF THINGS, UNCERTAINTY KILLS DEALS. I WISH I COULD TELL YOU WHERE THINGS STAND IN THIS NEGOTIATION BETWEEN THE WHITE HOUSE, BYTEDANCE AND THE CHINESE GOVERNMENT, ESPECIALLY ON TARIFFS.
WE'VE ALWAYS HAD QUESTIONS ON THE U.S. AT TIKTOK -- AND TIKTOK. IT COULD BE WORTH ZERO. I SUSPECT SOMETHING WILL COME UP.
I DON'T KNOW IF IT IS A MONTH FROM NOW, THREE MONTHS FROM NOW OR SIX MONTHS FROM NOW. IT'S VALUABLE AND CONSTITUENTS WANT TO FIGURE IT OUT. NOT ONLY BOARD HOLDERS AND SHAREHOLDERS AND THE CEO OF BYTEDANCE. THERE IS A GIANT TARIFF WAR AND THAT WILL GET DRAGGED INTO IT. CAROLINE: YOU'VE BEEN ON THE SECRETARY MARKET PICKING UP BYTEDANCE IN RECENT MONTHS.
WOULD YOU WANT EXPOSURE TO U.S. TIKTOK IF IT WAS INDEED EXTRICATED OUT OF BYTEDANCE AND HAD U.S. OWNERSHIP? MITCHELL: ABSOLUTELY. WE HAVE NOT BOUGHT ANY
BYTEDANCE SHARES THIS YEAR. THERE HAS BEEN SOME CHANGES WITH SIFY IUS. THEY CAME OUT AND PUT SOME RESTRICTIONS ON WHAT KINDS OF COMPANIES YOU COULD BUY GLOBALLY RELATING TO AI MODELS. IT'S A QUESTIONABLE AREA IF BYTEDANCE FALLS INTO THIS OR NOT. WE ARE BEING CONSERVATIVE. ED: I FIND THAT INTERESTING. MITCHELL:
WHAT I LIKE TO OWN TIKTOK USA? ABSOLUTELY. ABOUT 60% OF INVESTORS IN THE COMPANY ARE NON-CHINESE INVESTORS. IF WE COULD ADD TO OUR POSITION, IT DEPENDS ON PRICE. WE COULD BE QUITE INTERESTED. ED: STARTING MONDAY NIGHT INTO TUESDAY MORNING, I STARTED GETTING PHONE CALLS AND THERE WAS QUITE A LOT OF ACTIVITY ON THE SECONDARY MARKET FOR BYTEDANCE.
VALUATION RANGE, $280 -- $280 BILLION TO $320 BILLION. I WAS TOLD A LOT OF THE ACTIVITY WAS FROM ASIA. CHINA, MAYBE SINGAPORE. IT FOLLOWED THE PRESIDENT ON SUNDAY NIGHT. YOU MAY HAVE SEEN THE CLIP ON AIR FORCE ONE, SAYING IF IT WEREN'T FOR TARIFFS HE PUT IN PLACE, THEY HAD A DEAL. HOW DO YOU INTERPRET THAT
TRADING? IF THE OUTLOOK FOR THE DEAL IS POOR BUT YOU SEE PRIVATE MARKET INVESTORS IN ASIA TRYING TO GET MORE OF A FOOTHOLD? MITCHELL: THE CHINESE BUSINESS IS DOING PHENOMENALLY WELL. WHICH IS INCREDIBLE. I DON'T THINK THE CHINESE ECONOMY IS ROARING RIGHT NOW. NOT THAT IT'S FALLING APART BUT IT HAS BEEN WEEK. I WOULDN'T READ INTO -- I HAVE NO CLUE IF A DEAL IS ALMOST DONE ARE CLOSE TO DONE OR WHATEVER.
WHEN IT COMES TO POLITICS, I TEND TO JUST LISTEN AND NOT MAKE OPINIONS. THERE IS A HANDFUL OF PEOPLE THAT NEED TO BE INVOLVED. XI JINPING, THE PRESIDENT OF THE UNITED STATES AND THE CEO OF BYTEDANCE, I CAN'T SAY ANY OF THEM ARE GOOD FRIENDS OF MINE. I WILL LET YOU KNOW IF XI
JINPING CALLS ME. ED: THERE IS A TECHNOLOGY CONVERSATION, GOING BACK TO WHEN I WAS CES IN THE GT SEAT RECENTLY. -- GTC RECENTLY. WHAT KIND OF FUTURE IS THAT TO SORT OF WORK WITH THAT COUNTRY, CHINA, ON TECHNOLOGY AND FOUNDING NEW COMPANIES? MITCHELL: I STRONGLY BELIEVE WHETHER IT IS TECHNOLOGY TRANSFER OR TECHNOLOGY EXPORTS, IMPORTS, THE TRADE -- TRADE IS GLOBAL.
WE ALL NEED TO FIGURE OUT HOW TO WORK TOGETHER. CHINA PLUS THE U.S. WORKING TOGETHER IS A GOOD THING.
I AM A STRONG BELIEVER IN THE EDUCATION SYSTEM IN CHINA, THE ENTREPRENEUR -- ENTREPRENEURSHIP IN CHINA. WE -- I'VE TALKED ABOUT THIS ON BLOOMBERG AND OTHER SESSIONS. THE CHINESE REGULAR SOCIAL MEDIA. IN THE UNITED STATES, KIDS GO ON TIKTOK AND POST RIDICULOUS VIDEOS WITH ALL KINDS OF STUPID STUFF. IN CHINA, THEY LEARN ABOUT SCIENCE AND MATH ON TIKTOK.
I THINK WE SHOULD ASK SHOULD WE BE REGULATING STUFF MORE? BYTEDANCE DOES IT IN CHINA. THERE ARE THINGS WE SHOULD BE LEARNING AND APPLYING IN THE UNITED STATES. CAROLINE: YOU HAVE EXPOSURE, NOT JUST TO CHINA BUT WE BRING YOU ON BECAUSE YOU HAVE BEEN IN ON NAMES LIKE ALIBABA, A LONG-TERM INVESTOR UNDERSTANDING THAT ECONOMY. YOU HAVE U.S. EXPOSURE AS WELL. UBER, BUMBLE, EUROPE WITH SPOTIFY.
HOW DIFFICULT IS IT TO REMAIN COMMITTED TO CHINA WHEN THEY ARE CHANGING UP THE RULES AND YOU ARE UNABLE TO COMMIT CAPITAL IN THE WAY YOU WOULD LIKE TO? MITCHELL: MOST OF OUR BUSINESS IS NORTH AMERICA AND WESTERN EUROPE. WE HAVE A TEAM OF 18 ASSOCIATES THAT ARE 22-24 YEARS OLD THAT SPEAK TO ABOUT 9000 COMPANIES A YEAR. WE MIGHT SPEAK TO 10-20 COUNTRIES. WHAT WE HAVE DONE IN CHINA FOR IS A HANDFUL OF LARGE BUSINESSES OVER THERE. THEY ARE EFFECTIVELY PUBLIC
COMPANIES THAT HAPPEN TO BE PRIVATE. WE TEND TO LIKE TO BE CONTRARIAN. IT WAS FUNNY. A YEAR AGO -- NINE MONTHS AGO, NOBODY LIKED OR WANTED TO INVEST ANYTHING IN CHINA. YET, YOU SAW STOCKS LIKE ALIBABA GO FROM $60 TO $70 A SHARE TO 100 $30 AND $140 AND PEOPLE ARE LIKING CHINA BECAUSE THEY SAW XI JINPING AND JACK MA IN SOME CONFERENCE TOGETHER.
IF YOU BUY CHINA WHEN THE REST OF THE WORLD HATES IT, YOU CAN MAKE LOTS OF MONEY. MOST OF WHAT WE'VE INVESTED IS BACK IN THE UNITED STATES. I LOOK AT THE TARIFF SITUATION AND I CAN HAVE AN OPINION OF IT TODAY.
IT WILL PROBABLY CHANGE IN A WEEK, MONTH OR SIX MONTHS. UNCERTAINTY IS WHAT SLOWS DOWN THE ECONOMY. OUR PORTFOLIO -- THAT BEING SAID, IF YOU SELL AIRLINE SOFTWARE OR YOU SELL SOFTWARE TOO MANY FACTORING COMPANIES AND THOSE COMPANIES ARE NERVOUS ABOUT WHAT WILL HAPPEN, THEY MAY START TO PULL BACK ON SPENDING AND THE WHOLE THING UNRAVELS ON ITSELF. CAROLINE:
A NAME LIKE -- WITH A COMMUNITY OF SCIENTISTS, I'M INTERESTED IN HOW DIFFICULT THIS ENVIRONMENT IS WHEN WE THOUGHT SOME OF THE COMPANIES THAT WOULD GO PUBLIC NOW CAN'T OR DON'T WANT TO. MITCHELL: WE WERE VERY -- WE BELIEVE THAT FUNDS THAT TOOK ADVANTAGE OF LIQUIDITY AND DPI, HOW MUCH MONEY YOU GIVE BACK ON A NET BASIS TO YOUR INVESTORS OVER THE LAST FEW YEARS IS GOING TO MATTER FOR FUNDS AS THEY GO FORWARD. EVERYBODY THOUGHT 2025 WOULD BE THIS GIANT APO, THAT'S NOT DEAD -- THAT IS DEAD. THAT'S NOT HAPPENING.
I THINK THIS LIQUIDITY DROUGHT IS GOING TO CONTINUE. I THINK AS A RESULT OF LIQUIDITY DROUGHT, YOU WILL HAVE BIG INSTITUTIONAL INVESTORS THAT ARE OVER ALLOCATED TO PRIVATE EQUITY, ADVENTURE CAPITAL, GROWTH EQUITY AND THEY WILL UNLOCK THE SECONDARY MARKET. THE SECONDARY MARKET HAS BEEN BUSY. IF THIS CONTINUES, SIX MONTHS, NINE MONTHS, 12 MONTHS, YOU ARE ABOUT TO SEE A HUGE RUN OF INSTITUTIONS THAT WILL BE MASSIVELY OVER ALLOCATED TO PRIVATE EQUITY.
THEY WILL NEED TO TURN TO SECONDARY MARKETS AND SELL THINGS. THAT FOR US COULD CREATE A GREAT OPPORTUNITY. YOU WANT TO BE BUYING FROM SELLERS THAT ARE FORCED TO SELL. ED: MITCHELL GREEN, THANK YOU. REALLY APPRECIATE YOUR CONVERSATION. CAROLINE: TIME FOR TALKING TECH.
LOGITECH COULD WITHDRAW 2026 OUTLOOK DUE TO TARIFF UNCERTAINTY. TESLA STOPPED TAKING ORDERS IN CHINA FOR ITS MODEL S AND ANOTHER VEHICLE, BOTH OF WHICH ARE IMPORTED FROM THE UNITED STATES. ALIBABA'S CO-FOUNDER HAS WARNED A I NOT REPLACE HUMANS BUT SHOULD MEET WHATEVER WE NEED. HE WANTS AI TO LOVE. HE SAID IT SHOULD PROTECT LIVES AND MAKE LIVES BETTER. ED: COMING UP, ANALOG DEVICES, TEXAS INSTRUMENTS, A BIG DECLINE AS WE TAKE A DIVE INTO CITI'S TOP SEMI CONDUCTOR.
CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I AM CAROLINE HYDE IN NEW YORK. ED: I'M ED LUDLOW IN SAN FRANCISCO. SAN FRANCISCO'S MAYOR IS PLEDGING AN AND TECH REVIVAL. I SAT DOWN WITH THE MAYOR TO DISCUSS HIS GROWTH STRATEGY IN THE FACE OF TARIFFS. >> FIRST OFF WE ARE THE MOST BEAUTIFUL CITY IN THE WORLD.
THE INTELLECTUAL HORSEPOWER IS HERE. WE HAVE GREAT UNIVERSITIES. YOUNG PEOPLE WANT TO BE IN URBAN ENVIRONMENTS. THEY WANT TO BE IN SAN FRANCISCO.
THAT HAS BEEN PROVEN TRUE THROUGHOUT HISTORY. WE WILL PROVE THAT AGAIN. WE HAVE GREAT ARTS AND CULTURAL INSTITUTIONS. WE WERE NAMED THE CULINARY CAPITAL OF THE COUNTRY. WE KNOW WORKERS WANT TO BE HERE. OUR CEOS KNOW THEIR EMPLOYEES WANT TO BE IN SAN FRANCISCO.
NO OFFENSE TO MY FRIENDS IN THE PENINSULA. PEOPLE WHO LIVE IN SAN FRANCISCO AND WE WANT THEM TO WORK HERE. WE WANT THEM TO GET COMPETITIVE BUT IT STARTS WITH SAFE AND CLEAN STREETS. OUR PROPERTY CRIME RATES HAVE DROPPED 35%. VIOLENT CRIME HAS DROPPED 15%. CAR BREAK-INS IN FEBRUARY THE
LOWEST IN 22 YEARS. THIS IS A SAFE AMERICAN CITY AND WE WANT EVERYBODY COMING BACK TO WORK TO PLAY AND LIVE HERE. ED: HOW IS THE WHITE HOUSE AND THIS TARIFF POLICY GOING TO IMPACT YOUR ABILITY TO DO WHAT YOU JUST OUTLINED, BRING MORE TECHNOLOGY TO THE CITY? MAYOR LURIE: WE ARE ALL MINUTE BY MINUTE. THE UNCERTAINTY IS IMPACTING
EVERYBODY AROUND THE GLOBE. WE HAVE TO PLAN FOR THAT HERE AT CITY HALL. WE ARE WORKING WITH OUR DEPARTMENT HEADS. WE INHERITED ONE OF THE LARGEST
DEFICITS IN OUR CITY'S HISTORY. WE ARE WORKING DAY AND NIGHT TO MAKE SURE WE TIGHTEN OUR BELTS, WE DELIVER CORE SERVICES TO OUR TAXPAYERS AND RESIDENTS MAKING SURE WE FOCUS ON PUBLIC SAFETY AND FOCUS ON A BEHAVIORAL HEALTH CRISIS THAT IS CAUSING PEOPLE TO FEEL THE DISORDER ON OUR STREETS. THAT IS ALL STARTING TO IMPROVE. WE CAN ONLY CONTROL WHAT WE CAN CONTROL AND THAT IS OUR $15.9 BILLION BUDGET. WE HAVE A $1.1 BILLION BUDGET DEFICIT. WE WILL GET THAT UNDER CONTROL. WE WILL FIX OUR STRUCTURAL
BUDGET DEFICIT AND THAT WE WILL THEN BE OFF TO THE RACES. DATA BRICKS DOES IT. THEY JUST SECURES AN OFFICE SPACE. OPENAI JUST OPENED NEW HEADQUARTERS. WE ARE ON THE CUSP OF LIFTOFF IN SAN FRANCISCO AND WE WANT EVERYONE TO BE A PART OF IT. ED: THAT WAS MY CONVERSATION WITH SAN FRANCISCO MAYOR DANIEL LURIE. THE PITCH TO THE TECHNOLOGY INDUSTRY SEEMS TO BE SAN FRANCISCO IS BEAUTIFUL AND FULL OF NERDS AND THAT IS NOT REALLY A POLICY PLATFORM. BUT IF YOU THINK AT HOW THE
SILICON VALLEY HISTORY HAS WORKED THERE MANY TECH PEOPLE IN THE CITY. WHERE ALL OF THE BIG TECH COMPANIES THEY GO TO WORK AT? CAROLINE: THEY REVERSE COMMUTE OUT TO THE VALLEY. WHAT I WONDER IS WHEN WE HAVE AN ECONOMIC LAUNDRY COMING TO THE UNITED STATES WHEN ADVERTISING DOLLARS MIGHT PEOPLE BACK WHEN WE ALREADY HAVE A META THAT HAS BEEN LAYING OFF PEOPLE HOW DOES THAT AFFECT THE ECONOMY GOING FORWARD? WE WILL HAVE TO DEBATE THAT MORE IN TERMS OF WHAT IS HAPPENING IN SAN FRANCISCO. WE ALSO WANT A LITTLE MORE CONTEXT ABOUT WHAT THE GLOBAL TECH POLICIES LOOK LIKE IN THIS CURRENT CONTEXT THAT META HAS TO NAVIGATE, THAT THESE GIANTS HAVE TO NAVIGATE.
LIZA, I AM SO INTERESTED IN YOUR TAKE ON WHERE WE STAND IN THE SO-CALLED TIT-FOR-TAT. TODAY CHINA'S LEADER CAME OUT AND SAID IT IS A JOKE, WE WILL STOP RAISING TO MEET YOU BUT WE STAND AT 125% TARIFF ON U.S. GOODS. THE U.S. HAS 145% ON CHINESE GOODS. WHERE DO WE GO FROM HERE? LIZA: ABOUT A WEEK AND A HALF AGO PRESIDENT TRUMP DECLARED A TRADE WAR ON THE ENTIRE WORLD AND OVER THE LAST COUPLE OF DAYS IT SEEMS TO HAVE SLIPPED INTO AN ISOLATE CHINA STRATEGY. CLEARLY THE PRESIDENT IS TORN BETWEEN HIS DEALMAKING AND HE'S DECOUPLING INSTINCTS -- AND HIS DECOUPLING INSTINCTS.
HE IS HOPING FOR A PHONE CALL WITH XI JINPING BUT WE HAVE LEARNED U.S. TRADE NEGOTIATORS ARE ALWAYS DISAPPOINTED WITH WHAT BEIJING BRINGS TO THE TABLE. I AM SEEING THINGS PLAY OUT THIS WEEK THAT REMIND ME WHEN I WAS IN THE WHITE HOUSE IN 2020 WHEN PRESIDENT TRUMP GOT HIS PHASE ONE TRADE DEAL WITH THE CHINESE. A COUPLE MONTHS LATER HE STARTED GETTING SERIOUSLY DISAPPOINTED AND BLAMING XI JINPING FOR COVID WHICH TANK TO THE GLOBAL ECONOMY AND HE FELT RUINED HIS ELECTORAL PROSPECTS. IN SOME OF THE PRESIDENT'S COMMENTS A FEW DAYS AGO IN HIS SPEECH HE IS TALKING ABOUT XI AND HOPING FOR A PHONE CALL AND REFERRING BACK TO COVID AND SAYING I LIKE XI JINPING, WE GET ALONG GREAT, BUT COVID WAS A BRIDGE TOO FAR. THE PRESIDENT SEEMS TO BE REMEMBERING THE DISAPPOINTMENT AND ANGER FROM 2020 AND HE SEEMS TO BE SHIFTING FROM DEALMAKING TO DECOUPLING. CAROLINE:
WE GO TO YOU BECAUSE OF YOUR DEPTH OF EXPERTISE. YOU HAVE WORKED WITH THE CIA AND ON THE U.S. INTO PACIFIC COMMAND. NOT TO MENTION WHAT YOU HAVE DONE AT SCSP. I AM INTERESTED IN WHERE YOU GO
FROM WHO HAS THE UPPER HAND? WHETHER TIKTOK IS INVOLVED. TAKE US FORWARD AS TO WHAT PLAYS ON NEXT. WE ARE SEEING A U.S. PRESIDENT GETTING MORE AND MORE
TRIGGERED BY WHAT HAPPENED IN 2020. LIZA: I THINK WE COULD POTENTIALLY SEE SOME KIND OF A DEAL. CLEARLY THE PRESIDENT WOULD LIKE A DEAL INVOLVING TARIFF CONCESSIONS, MAY BE AMERICANIZING TIKTOK. HE HAS ALREADY CONCEDED THAT BEIJING WILL RETAIN THE ALGORITHM WHICH IS THE BRAIN THAT CONTROLS TIKTOK AND CONTROLS AMERICANS MEDIA DIET. I WANT TO REMIND YOUR AUDIENCE
NOT TO OVER INDEX ON THE STRATEGIC IMPORTANCE OF THE DEAL. WE HAVE ALWAYS BEEN DISAPPOINTED BY HOW CHINA IMPLEMENTS THAT DEAL. I THINK IF FOLKS ARE LOOKING FOR SOME KIND OF GRAND BARGAIN THAT MAKES -- THAT GOES BEYOND SYMBOLISM AND ADDRESSES THE FUNDAMENTAL IMBALANCE OF CHINESE ECONOMY, THIS MASSIVE TRADE SURPLUS. THEY WILL BE DISAPPOINTED BY THAT SO MARKETS WILL REACT AND GO UP AND DOWN ON NEWS OR RUMORS OF A POTENTIAL DEAL. A TRUE GRAND BARGAIN IS OFF THE
TABLE. ED: I WOULD LIKE TO HOLD YOU TO ACCOUNT ON TWO POINTS YOU HAVE MADE. ONE, ISOLATE CHINA IS AN ACCIDENTAL STRATEGY. AND THE DATA YOU JUST FLAGGED, THE DEFICIT BETWEEN UNITED STATES AND CHINA. THIS IS THE ECTR FUNCTION ON THE BLOOMBERG TERMINAL.
IT IS 2023 DATA BUT I THINK I AM RIGHT IN SHOWING PARLIAMENT HARRY DATA SHOWED THE DEFICIT GROWING IN 2024. MATERIALLY WHAT WE ARE TALKING ABOUT IS A COUNTRY THAT DOMINATES MANUFACTURING OF MOST OF THE WORLD'S CONSUMER ELECTRONICS AND OTHER THINGS. FORGET NUMBERS AND TARIFFS AND MARKET AND TRADE. YOU SEE THE WHITE HOUSE EVER RESULTING THIS POLICY AND MORE OF THAT STUFF HAPPENING IN AMERICA? LIZA: THE PRESIDENT WANTS TO AND HE AND HIS ADVISERS ARE CONSTANTLY TALKING ABOUT RE-INDUSTRIALIZATION. THE PROBLEM IS THE DEVIL IS IN THE DETAILS. IT IS UNCLEAR IF PRESIDENT TRUMP REALLY UNDERSTANDS THE DETAILS AND THE EXTREME INTRICACIES OF THE SUPPLY CHAINS AND WHAT IT TAKES TO RE-INDUSTRIALIZE.
THERE ARE STRUCTURAL CHALLENGES LIKE DO WE HAVE THE WORKFORCE FOR THIS. THE ADMINISTRATION TALKS ABOUT MANUFACTURING JOBS COMING BACK. THAT IS GREAT BUT ACTUALLY WE HAVE A SHORTAGE OF SKILLED MANUFACTURING WORKFORCE. ADVANCED MANUFACTURING IS NOW A KNOWLEDGE INDUSTRY, A HIGHLY SKILLED PROFESSION. IT IS MORE LIKE SOFTWARE CODING AND APPLYING AI TO THE FACTORY FLOOR AND IT IS NOT CLEAR TO ME THAT KIND OF ADVANCED MANUFACTURING IS FRONT AND CENTER ON THE ADMINISTRATION'S AGENDA. IT IS A TARIFFS FIRST, TAX CUTS, DEREGULATION.
THOSE MAY BE A GREAT START BUT THEY ALSO NEED TO BE LEANING INTO THE STRUCTURAL ISSUES. CAROLINE: CERTAINLY IF THEY WANT TO MAKE IPHONES IN THE UNITED STATES. LIZA TOBIN, GREAT TO HAVE YOU JOIN US. FEDERAL RESERVE BANK OF NEW YORK JOHN WILLIAMS EXPECTS A PICKUP IN INFLATION DUE TO THE U.S. TARIFFS POLICY AND REDUCED IMMIGRATION. TAKE A LISTEN TO WHAT HE HAD TO SAY MOMENTS AGO.
>> UNCERTAINTY ON THE ECONOMIC OUTLOOK REFLECTS MANY FACTORS. THE EFFECTS OF TARIFFS AND TRADE POLICY ON THE ECONOMY ARE AT THE TOP OF THE LIST. MY BUSINESS HIGHLIGHTS THIS HAS MADE IT MORE DIFFICULT TO PLAN FOR INVESTMENTS AND FOR HIRING. ♪ SPOTIFY, AND I HEART. THIS IS BLOOMBERG. ED: LET'S GET RIGHT BACK TO FINANCIAL MARKETS. IT IS FRIDAY.
FLAT ON THE NASDAQ 100 BUT UP OVER 5% OVER THE COURSE OF THE WEEK. FLAT ON THE SEMICONDUCTOR INDEX. OF MORE THAN 7% IN THE COURSE OF THE WEEK. THERE WAS A REALLY IMPORTANT HEADLINE OVERNIGHT I THINK OUR AUDIENCE NEEDS TO UNDERSTAND. IT CAME FROM CHINESE SEMICONDUCTOR INDUSTRY BODY BASICALLY CITING CUSTOMS REGULATORS -- HOW WILL THEY DEFINE THE POINT OF ORIGIN OF A SEMICONDUCTOR? THINK ABOUT GLOBAL SUPPLY CHAINS. IN THE MARKET YOU SEE NAMES LIKE NVIDIA HIGHER. NVIDIA DOES NOT MANUFACTURE ITS OWN CHIPS. INTEL AND TEXAS INSTRUMENTS
SIGNIFICANTLY LOWER. HERE IS WHAT THEY SAID. THE POINT OF ORIGIN FOR A CHIP WILL BE AT THE POINT IT IS TAPED OUT. THAT MEANS WHEN AN AMERICAN COMPANY IS DONE DESIGNING ITS CHIP IN SAN DIEGO OR HERE IN THE BAY AREA IT NEEDS TO SEND THE DESIGNS TO A CONTRACT MANUFACTURER, TSMC AND KOREAN NAMES LIKE SAMSUNG.
THAT HAPPENS LOCALLY. THEY ARE SAYING THAT IS HOW WE DECIDE WHERE YOUR CHIP COMES FROM. YOU TELL ME THE BIG STORY WE HAVE LEARNED ABOUT ALL OF THESE AMERICAN CHIPMAKERS. WHAT ARE THEY NOT? CAROLINE: THEY ARE NOT MAKERS OF CHIPS BUT SOME OF THEM ARE TRYING TO BE. SOME OF THEM ARE TRYING TO BE
CONTRACT MAKERS OF CHIPS. INTEL IS EXPANDING ITS PRESENCE. YOU JUST HAVE TO TAKE OUT CHINA FROM THE EQUATION AND ON THE FLIPSIDE DOMESTIC CHIPMAKERS IN CHINA RALLIED HARD. YOU SAW THE CSI 300 INDEX OF MORE THAN 3%. THIS HAD REAL TAILWINDS WERE CHINESE LOCAL PLAYERS AND PRESSURE ON SOME IN THE UNITED STATES. ED: THE ONE THING I WOULD SAY IS IT ALL COMES BACK TO THE END MARKET. WHAT DOES CHINA DO? IT MAKES MOST ELECTRONICS. THAT IS WHY I WAS TRACKING THIS SO CLOSELY.
IN SOME OF THE NAMES YOU JUST MENTIONED ANALYSTS ARE PAYING ATTENTION FOR OTHER REASONS. CAROLINE: LET'S GET TO ONE OF THOSE ANALYST CALLS. PRESSURE TODAY. CITI NAMED THOSE COMPANIES ITS TOP SEMICONDUCTOR PICKS. CITI MANAGING DIRECTOR AND SEMICONDUCTOR ANALYST WRITING A HIGH END COMPANIES SUCH AS ADI AND TSM HAVE OUTPERFORMED DURING DOWNTURNS. WE WOULD EXPECT THE SAME TO
OCCUR DURING YOUR SESSION WITH ADI PERFORMING BEST DURING HIGHER MARGINS. BLOOMBERG'S RYAN BREAKS DOWN SOME OF THE MOVES. SEMI MEANT TO FEEL MORE HEADWIND ACCORDING TO CITI. RYAN: I THINK PEOPLE ARE STRUGGLING TO FIND OUT WHAT THIS ENVIRONMENT WILL BE LIKE DEPENDING ON THEIR MANUFACTURING SYSTEMS, THEIR SUPPLY CHAINS.
VERY UNCERTAIN AND VERY UP IN THE AIR AT THE MOMENT. CITI ALSO SAID IT WAS TAKING OUT THE LAWMAKER -- THE LAWNMOWER, CUTTING ESTIMATES BY AS MUCH AS 20% WHEN IT COMES TO THIS SECTOR. ED: THE FIRM HAD THIS ESTIMATE THAT THE INDEX WOULD DROP 20%. THEY NOW ASSUME A RECESSION. THERE IS A LOT HAPPENING IN THE MARKET. YOU WROTE ABOUT THE POINT OF ORIGIN STORY YOURSELF THIS MORNING. GO BACK TO EXPLAIN SOME OF THE MOVES OF THE MARKET IN THE HERE AND NOW. RYAN:
COMPANIES LIKE TI, INTEL, MICROCHIP, ALL OF THESE HAVE DOMESTIC MANUFACTURING PLANTS FOR THEIR PRODUCTS AND THESE ARE THE STOCKS THAT ARE FALLING TODAY. THE OTHER ONES THAT DO MOST OF THEIR MANUFACTURING ABROAD, TAIWAN SEMI, NVIDIA, BROADCOM, ALL OF THOSE NAMES ARE PROBABLY HIGHER IN THE MORNING. IT IS A VOLATILE SITUATION. A LOT OF CROSSCURRENTS RIGHT NOW BUT WE ARE SEEING TEXAS INSTRUMENTS WEAKER TODAY. INTEL PARTICULAR WEAKER TODAY. WHEREAS COMPANIES LIKE NVIDIA ARE HIGHER. LET'S -- CAROLINE: LET'S GO TO NVIDIA BECAUSE OF DIFFERENT ANALYST AT CITI HAS BEEN DOWNGRADING NVIDIA. HYPERSCALERS WILL CURTAIL THEIR SPENDING ON AI DATA CENTERS.
MUCH OF AN OVERHANG IS THAT FOR NAMES OF WHETHER YOU ARE A FABULOUS OR FAB CHIPMAKER. RYAN: I THINK 40% OR SO OF THEIR REVENUE COMES FROM FOUR COMPANIES, MICROSOFT AND AMAZON. TO THE EXTENT THOSE COMPANIES PULL BACK, ALPHABET HAD A BIG CLOUD CONFERENCE AND DID AFFIRM ITS CAPEX PLANS. MICROSOFT AFFIRMED ITS OWN PLANS EARLIER THIS YEAR.
ALL OF THE SPENDING PLANS ARE INTACT. IF WE GET TO 12 MONTHS FROM NOW AND WE ARE NOT SEEING A HUGE ROI ON ALL OF THE EYES SPENDING, IF THE COST -- ON ALL OF THE AI SPENDING, IF THE PICTURE HAS CHANGED DUE TO WEAKER ECONOMIC GROWTH, IT WOULD NOT BE SURPRISING IF THESE COMPANIES STARTED PULLING BACK ON THEIR CAPEX AS IT PERTAINS TO THEIR AI INFRASTRUCTURE, WHICH IS A LOT OF NVIDIA PRODUCTS. WHAT THAT MEANS IN TERMS OF THEIR GROWTH AND THEIR PROFITABILITY WHILE GIVEN ITS CUSTOMER CONCENTRATION THAT WOULD BE A DRAMATIC HIT TO A COMPANY LIKE NVIDIA. ED: TERRIFIC. THANK YOU VERY MUCH. COMING UP AND SPEAKING OF THE SQUARE OFF BETWEEN CHINA AND THE U.S., A STARTUP PREPARING TO BUILD AUTONOMOUS SHIPS AIMS
TO HELP WITH THE U.S. GOAL OF RECLAIMING SHIPBUILDING SUPREMACY. WE WILL TALK TO A FOUNDER NEXT. THIS IS "BLOOMBERG TECHNOLOGY." >> A SINGLE SHIPYARD IN CHINA NOW PRODUCES MORE SHIPS EVERY YEAR THAN ALL OF THE AMERICAN SHIPYARDS COMBINED. IT WAS A BUSINESS WE USED TO DOMINATE.
CAROLINE: PRESIDENT TRUMP LOOKING TO MANUFACTURE SHIPS IN THE UNITED STATES. BLUEWATER UPON AMI PLANNING TO BUILD LARGE WEAPONS -- BLUEWATER AUTONOMY PLANNING TO BUILD LARGE -- YOU HAVE VC THAT BACK TO HER PRIOR. YOU WERE IN WAREHOUSE AUTOMATION PRIOR TO THIS. HOW MUCH IS THE TIME NOW TO BE MAKING AUTOMATED SHIPS FOR MORE PREVALENT WHEN WE HAVE U.S. CHINA TENSIONS? >> THE TIME IS NOW. THE CURRENT ADMINISTRATION IS TALKING ABOUT SHIPBUILDING AND WE ARE DESIGNING AND BUILDING AUTONOMOUS SHIPS AND WHEN YOU MAKE THEM ECONOMIST YOU CAN REMOVE THE BRIDGE, THE GALLEY, THE SHOWERS, MAKE THEM A LOT SMALLER. WHEN THEY ARE SMALLER WE DO NOT
HAVE TO BUILD THEM AT THE BIG NAVY SHIPYARDS. WE SHOULD CONTINUE TO BUILD THE BIG WARSHIPS AS QUICKLY AS POSSIBLE. BUT OUR SHIPS CAN BE BUILT AT MIDYEAR FACILITIES THAT HAVE THE CAPACITY TODAY. CAROLINE: WHY IS NOW THE RIGHT TIME FROM A TECHNOLOGY PERSPECTIVE? WHAT IS GOING INTO MAKING AUTOMATION MORE ABLE TO ENACT RIGHT NOW? >> THIS IS A HARD PROBLEM BECAUSE WE ARE DESIGNING SHIPS THEY CAN OPERATE ACROSS THE OPEN OCEAN. THE LAST THING THE NAVY NEEDS IS FOR THE SHIPS TO BE DEAD IN THE WATER IN THE MIDDLE OF THE OCEAN. WE THINK ABOUT EXTREME
TEMPERATURES AND SALTWATER. SHIPS GET HIT BY LIGHTNING. IT HAPPENS. WE DID RESEARCH AND WE TALKED TO THE CHIEF ENGINEERS ON THESE WORK BOATS THAT OPERATE AROUND THE UNITED STATES AND HE SAID MY SHIP GOT HIT BY LIGHTNING AND IT FRIED ALL OF MY ELECTRONICS. THERE IS A TON OF CHALLENGES TO DO THIS BUT WE FEEL WE HAVE THE TEAM TO DO THIS BECAUSE WE HAVE BEEN WITH SOME OF THE MOST SUCCESSFUL ROBOTIC COMPANIES IN THE UNITED STATES AND MY COFOUNDERS WERE ALSO IN THE NAVY. ED: THE BIG PICTURE IS TO MODERNIZE THE MARITIME INDUSTRY BUT THIS IS A NAVY APPLICATION, AMERICAN DYNAMISM, THE BIG EMPHASIS ON THE PRIVATE SECTOR'S RELATIONSHIP WITH THE MILITARY-INDUSTRIAL COMPLEX. WHAT IS IT YOU WANT THE
PRESIDENT TO DO TO ALLOW YOU TO MAKE THIS A SUCCESS? >> WE WANT TO MOVE FAST AND WE WILL MOVE AS FAST AS THE NAVY WANTS US TO MOVE. WE WANT THE PRESIDENT TO FOCUS ON SHIPBUILDING AND INNOVATION. THOMAS SYSTEMS IN THE AIR AND ON THIS -- AUTONOMOUS SYSTEMS IN THE AIR AND WATER, OUR FOCUS IS ON SHIPS THAT CAN OPERATE ON THE SURFACE OF THE WATER AND HAVE HIGH ENDURANCE RANGE YOU NEED FOR THE PACIFIC OCEAN. ED: ANDORIL PICKED OHIO FOR ITS SKILLED LABOR AND ITS HISTORY IN AVIATION. WHERE DO YOU THINK YOU NEED TO
BUILT THE SHIPS? >> WE WILL HAVE MORE TO ANNOUNCE LATER THIS YEAR BUT WE HAVE BEEN LOOKING FOR THE PERFECT PLACE TO BUILD THE SHIPS AND THERE ARE A LOT OF GOOD OPTIONS, WHETHER ON THE EAST COAST OR WEST COAST OR IN THE GULF. CAROLINE: YOU ARE AN EARLY LEADER IN AMAZON ROBOTICS. HOW GOOD IS U.S. AT MANUFACTURING NOW? CAN WE BRING BACK WHAT WE WANT TO BRING BACK? >> THE U.S. IS REALLY GOOD AT ADVANCED MANUFACTURING. EARLY IN MY CAREER I WAS AT
AMAZON ROBOTICS. THERE ARE NOW OVER ONE MILLION ROBOTS IN AMAZON WAREHOUSES THROUGHOUT THE WORLD. THAT IS AMAZING WHAT THAT COMPANY HAS DONE. WHEN IT COMES TO COMPLEX SYSTEMS WHERE YOU NEED TO TAKE COMMERCIAL COMPONENTS AND PUT THEM TOGETHER AND WRITE THE SOFTWARE ON TOP, WE ARE AMAZING AT THAT. ED: CEO AND COFOUNDER OF BLUEWATER AUTONOMY, YOU HAVE TO COME BACK WHEN YOU ANNOUNCE THE LOCATION. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. THIS IS WHAT MARKETS LOOK LIKE.
IT IS ODD TO GIVE A SNAPSHOT OF THE SESSION AT THE MOMENT. NASDAQ HIGHER MODESTLY. PRESSURE ON CHINESE NAMES. CAROLINE: WHAT IS EXTRAORDINARY IS WE HAD A WEEK WHERE WE ARE MORE THAN 5% HIGHER, BUT WHAT A VOLATILE FIVE DAYS. THE BOND MARKET HAS SEEN EXTRAORDINARY MOVES IN THE COURSE OF THE MONTH THE NASDAQ IS LOWER.
2025-04-14 13:35
