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Of course, it is now only fifteen days into the New York City Mayor Zoramum Donnie's tenure, and he is.
Making moves already. Alex, do you live in the city.
I do.
I'm a lifelong New Yorker.
You're a lifelong New Yorker, so you feel it more than I do. I live in the suburbs along with John Tuckers.
So did you get your free bus service?
Yeah? Not yet, still waiting for.
You, Still waiting a free child here take the bus.
That often usually the train, so I don't think it'll direct they impact me.
Okay, but still waiting, still waiting. Let's check in with Miles Miller.
He is our senior reporter covering security the National Desk, law enforcement, governments and cities. And it's here where we want to talk to him, because Miles is joining us from downtown Manhattan. And Miles talk to us a little bit about what the new mayor, Zoramumdani is doing when it comes to work. He is cracking down on some companies and how they're treating workers.
Yeah, you know, he's enlisted Lena Kahn as an advisor unpaid advisor to him, of course, known to the Bloomberg audience as the former FTC chair. In addition to that, Julie Sue who joined us on our fabulous Labor Fridays right the fridays where we get the jobs report. And then in addition to that Sam Levine, who was at the FTC running enforcement. That's his dream team. And what they're doing is going after companies that are involved in delivery, that are involved in the gig economy to make sure
that workers are protected. The story across the Bloomberg terminal just about twenty minutes ago is one that really they're suing food delivery providers for what they say is withholding pay from workers. And it really gets to the heart of what the Mammdani administration is going to be about, using little known laws to go after big companies to
fight for who they say is the little guy. The company that is being sued today is Motoclick, and the allegations are pretty simple that they violated delivery worker laws by failing to pay the required minimum rate and deducting canceled and refunded orders directly from their paychecks. And these are folks who most times are only making you know, money off of the tips that they're getting from these people who are ordering food.
What you mentioned, the company that is in question here is Motoclick. This is not a company that I think a lot of people are necessarily familiar with. We don't if you order from DoorDash or a grubhub, you don't necessarily have a direct interaction with motoclick, do you.
Right?
You know, this is what of those companies that says it works with platforms like Uber Eats, door Dash and grub hub. You know, you may value order through these companies, and then you don't know that the folks who are coming to deliver it are actually working with this. You know, in some cases last mile company, they are basically integrated into the point of sale systems at some of these restaurants.
And so yeah, you may order from Uber lyft, but you don't know that I was sorry, Uber or doordasher, grubhub, But you don't understand, you know, in that last mile where it's coming from. Well, the city is putting them unnotice that, you know that they're going to be sued for this. And then in addition to that, the city pass laws in the last year or so that protects
these workers. In addition to this lawsuit, they're also putting the delivery companies on notice that there are specific laws that protect workers as it relates to deliveries, making sure that they get proper wages, minimum wage and all of that. And if that's not followed, that they could meet the same fate that's being met by motorclick right now miles.
This of course follows the allegations that DoorDash and Uber deprived New York City delivery workers of more than five hundred and fifty million dollars in tips. That is a lot of money. Is there a sense if this lawsuit is successful that they might see those wages come back.
Yeah.
I think what the city wants to do, and specifically the the Department of Consumer and Worker Protection wants to do, is in filing any of these lawsuits or in making these claims public, is to put pressure on these companies to do the right thing before they get to the
enforcement level. We've seen a lot of these companies that have been sued in the past, whether into the Blasio administration, whether being sued by the Controller's office, come to an agreement on a settlement, and that money does trickle down back to workers. But it doesn't stop with just the
city Hall and doesn't stop with the Comptroller's office. You know, just today the Manhattan DA also you know, trying to make it clear that he wants protections for these workers because these are you know, these wage cases continue to pop up. It was just about a year and a half ago, two years ago that Grimaldi's Pizza was being accused of of wage theft and holding back pay pay for these low paid workers. And that's going to be a major focus of this administration.
So can you reconcile this this first action, it's kind of like a shot across about by the mum donnie administration with the promises it had made to its supporters, to voters, to folks in the city, like alex Hemanova, who's a lifelong New Yorker, is this is this kind of the what they promised to prioritize.
Yeah, I mean, you know, they have changed the role that Julie Sue is in. It used to be the mayor for a deputy mayor for economic development. But it's not just economic development, it's it's really with a focus on worker protection. It's really on a focus on equality and rights for people. And you know, this is a person who has spent a good amount of time in Washington, had spent time in California, who is going to be
leading this effort. You know, when you look at Lena Khan being involved in decision making here at city Hall and going and doing what she knows best right and going through you know, very complex parts of the city Charter to find where you can really stick it to companies or where they could stick it to companies, you know, it really shows that this is a top priority for him.
You know, and in addition to that, this role, the role in consumer protection was one of the first roles he filled after being being elected and right before take it or right after he took office, because he knew it was going to be something that people really relate to.
Miles, when was the last time that we saw a New York City mayor go after big companies like this? Is this unusual.
No, I mean in the Basio administration, we saw companies targeted, certainly UH. And then you know, in the Atoms administration, it was certainly a very pro business administration trying to work with business, but also sort of the bonus on businesses to.
UH.
And so it's it's a this is obviously a different tactic, and I think for the first time you're seeing UH an administration where they're not taking people really from big business and saying, Okay, here's how you can work on economic development. In the Vasio administration, Lesha Glenn was the Deputy Mayor for economic Development and had come from the
business community. No, these are people who've worked in government for some time and are trying to figure out a way to make government work for people who you know, don't have much money, or to hit at the affordability crisis. It's a it's really a first of its kind approach to doing this kind of work.
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Let's move over to the tech sector because there's some big news for the AI sector given that Taiwan Semiconductor Manufacturing and partner of Nvidia and other chip makers, came out with a monster forecast. Man Deep saying is our global tech research had apt Bloomberg Intelligence and he joins US now and TSMC is a bellweather for the AI story, and the revenue forecast it has given is growth of almost thirty percent, handily beating analystsessimates.
Well, I mean, right now, we are in an environment where the supply constraints are at the component level, at the fab level, I mean TSMC doubt how advanced nodes are almost seventy seven percent of their revenue. So that just goes to show that if they have more wayfor capacity at the advanced node level, they'll probably be you know, growing even faster. And that's why they raise their own capex. So think of the trickle down effect. Hyperscalers are raising
their capex. TSMC, being the fab layer, is raising their capex. And this is the entire supply chain that everyone realizes they need more data center capacity when it comes to running AI and all the way through the supply chain. Right now, it's trickling down now. The question is obviously of overbuild and if and when, you know, we'll hit
an equilibrium. And from what we have seen in terms of partnerships and deal making like open Ai Cerebris, I mean right now, they're trying to procure as much chip capacity as they can because I mean Opening has said their revenue growth is a function of the power and chip available computer availability they have, so right last year they grew their power and computer availability three x, their revenue grew three x. So that's the kind of part
of the cycle we are in. And the question is you know how long it's going to sustain and so so far as signs are, this is going to carry through at least through twenty twenty six.
Mandy, what does the strong outlook from TSMC mean for Intel and its foundry business. Intel is up some thirty percent this year. Is it a positive sign for them that demand is there or signed that TSMC is a dominant name here.
Actually, there was some demand spill over to an Intel and Samsung, especially on the non data center side. So I mentioned TSMC is heavily skewed towards advanced notes and more towards data centers. Well, there is demand for you know, chip capacity on the PC side, smartphone side, and that's where there is some spillover that's carrying over to an Intel on the PC side, to Samsung as well. And so right now, everyone seems to be benefiting from overall chip demand across the board.
Right and something else that's in demand is memory. And we've seen Micron, we've seen sand Disk, we've seen Western Digital really benefit from that demand for memory chips. But it also there's a downside to that because you have hardware companies as a result under pressure because they need to pay for that memory and they need to go out and source it and it's not always available unless you.
Are Jensen and Nvidia, who has really managed the supply chain. Well, I mean, I was amazed how Nvidia mentioned that they still feel comfortable holding on to that mid seventy percent ross margins. They're one of the biggest users of HBM memory.
That is a supply constrained right now, and the prices are going through the roof, but they have logged in those multi year agreements where these suppliers can really raise prices, and so from that perspective, the bigger you are, if you're an Apple, I'm sure they can source their memory. They may have to pay higher prices and it will impact their gross margins, but not to the same extent it's going to hit a smaller hardware vender. And that's what I think we'll find out this earning season.
Man Deep also looking at the story today about Oracle struggling to hire workout workers for the buildout of its headquarters in Nashville. What has this AI build out meant for hiring the talent war? Is there anyone who's winning it?
Yeah, I mean we read the story on the terminal about electricians, you know, having almost a doubling off their pay, and so anyone who is linked to that data center construction right now is in high demand. And so it doesn't surprise me that you are sort of in this environment where laborers in short supply, you know, components are in short supply, and putting all these things together is
taking longer time because everyone wants them to be ready overnight. Well, that's where you're running into these bottom lines.
Well too, Alex's point, Oracle is trying to attract workers in Nashville where it's developing this riverfront headquarters. Is that a place where the tech talent will flock to.
I mean, we've seen what has happened in Texas right in terms of companies going to Texas just because it's easier to set up data centers over there.
So oh and no income tax.
No income tax, that's right. So all these pockets I think are having their moment in terms of one attracting these big companies. And if you have power, and I haven't studied Nashville in that detail, but if you have power, then it suddenly becomes a very attractive destination.
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One of the tailwinds for the market heading into this year was the expectation of a spate of deal making, and to that point, we did learn today that Boston Scientific is looking to buy p Number for about fourteen and a half billion dollars. Obviously, with the big banks reporting earnings, bank executives are also making comments. David Solomon, the CEO of Goldman Sachs, says that we are not yet in the middle of a full on M and A cycle, and he sees a very very good year
for M and A overall. Let's bring in Jennifer Ree, she is our senior litigation analyst for Bloomberg Intelligence, to talk to us about the antitrust landscape. Is there an active antitrust monitoring happening right now because this administration has signaled that it wants to see deals being made.
Yeah.
Absolutely, and it certainly is a big change from the Biden administration, where we kind of had the opposite sentiment. I mean, we are really seeing very little activity from the Department of Justice, a little bit more from the Federal Trade Commission, but even in their case, it's been pretty restrained. And it seems that both authorities are really willing to work with the companies if they think that there's a problem with the deal, to work out some
kind of settlement. And that's what didn't exist during the Biden administration and why deal making was so stymied At that time, and I think most companies see if we can come up if we have a problem, A lot of deals don't. But if we do and we can come up with a solution, we can probably get it cleared.
Jen you mentioned muted activity from the regulators, but are there any industries that they're targeting right now more than others.
Well, it looks like it.
It's interesting that we see Boston Scientific has a deal because of the few challenges that have been brought to deals by the FTC, they've been in the healthcare space, one in the housing area construction adhesives, which is a recent case they filed, but two in the healthcare space.
And it doesn't surprise me really because these are very sensitive sector's, consumer facing sectors, and that does align with essentially a populist agenda, which they talked about in the beginning when they took on their positions, and so I think we'll probably see if we see continued activity in those areas or other very sensitive consumer areas.
The other thing that we need to keep in mind is most of these companies that we're talking about are big multinationals. They operate all around the world, so you have US regulators and they may be stepping back and letting things happen, but regulators in Europe may not be. And I bring this up because we heard reports yesterday that Paramount and Netflix have been meeting with European Commission
officials as part of their bid for Warner Brothers. What can pare contrast, for instance, the European Commission regulators with those in the US.
You know, there's been a little bit of a pullback. I think when I think of really big regulators in antitrust, I think of US, China, UK and Europe. These are the jurisdictions which would be willing to actually block.
A global deal.
And we've seen a little bit of pullback across the board, and not so much with China. It's really just a black box there. I can't speak to what they're doing. But in the UK and in Europe there has also been a bit of a pullback, especially in the UK after they kind of got really chided from Microsoft Activision
and trying to step in there. The thing is, for companies doing a deal that might have scrutiny in Europe, it's a bit scarier than in the US because they have the ability under their law to actually block a deal, whereas the US regulators don't. They have to go to court and they have to win in court in order to actually block a deal. It is far more difficult for them. It is easier in the EU. And Netflix,
by the way, is gigantic. I didn't know this until I started looking at the deal, but it's really really.
Big outside the US.
An HBO is getting bigger in many of the countries in Europe. It's recently expanded in Italy, in a seven or eight other countries.
So they will that deal. I think no matter which.
Company ends up buying, Warner Brothers is going to get a lot of scrutiny, and certainly scrutiny in EU, and that is going to be one area where they're going to have to work, I think, to get clearance.
Jen The past couple of years saw a lot of high profile antitrust cases, specifically within big tech. We had rulings against Google and Meta. What kind of precedent have they set for big tech regulation in twenty twenty six.
Well, what they're showing is that it's going to be very, very difficult for US and anti trust agencies to actually tame what they view as monopolistic conduct. I mean, they did win technically against Google with respect to monopolizing search, but the remedy was fairly weak. They didn't get what they were looking for. Look at what Google's doing now with AI with Apple, which is exactly what the plaintiffs were trying to avoid, you know, dominance in AI after dominance in search.
So the difficulty they have is even.
Where they win on liability, they have a really tough time with remedies. Most US federal judges are going to be very cautious when it comes to meddling in business and the way a sector may develop, especially in technology, because it's so changing and nobody knows where it's going. So when you have these cautious judges, you're just not going to get the drastic remedies that are probably the remedies that are needed to really do something about the
market positions of some of these companies. So we're seeing that it's going to be difficult, but we haven't seen as much of a let up on the cases that were inherited from the Biden administration. This DOJ and FTC are continuing to go after these cases in court. They're continuing to pursue what you might think of as a drastic remedy a structural remedy. The next test will be Live Nation, which is going to trial March second against the DOJ and some states.
Okay, so we'll watch for them. Then it's a bit of leftover from the previous administration. We talk about regulators, and that's usually how the antitrust enforcement shows up, or any kind of pushback from government authorities.
But there's also the role of President.
Trump as well, and he's made clear that because he has some firm opinions about certain companies and certain sectors, that he's going to be what he says personally in some of them.
That's right.
Is there a playbook for this? I mean, how do regulators work in concert with a mercurial president?
You know, there really.
Isn't a playbook. This is somewhat unprecedented. Now there are many that would argue that this kind of started during the Biden administration, but we have authorities at the Federal Trade Commission and Department of Justice that are very much trying to align what they're doing in the anti trust space with the policy priorities of this administration, I think
much more so than in the past. And they just don't look like they'd be willing to buck the White House if the White House has some feel or some something, you know, an issue with the deal. Right, So we're seeing a lot of alignment, and we're also seeing a lot of reemptive alignment. It's preemptive alignment. And we're seeing a lot of lobbying which we hadn't seen before too in the overruling of the Anti Trust Division by senior
officials who are talking to lobbyists. And so there is a lot of concern right now in the anti trust community about the rule of lobbying really prevailing over the rule of law when it comes to merger enforcement.
And this is stuff that we see after the fact, after an announcement has made, as opposed to during it.
That's right.
We see reports and of course I'm not privy to what's going on behind closed doors, but there has been a lot of news reporting and a former senior FTC official who recently left, who has spoken out about some of the activities related to the.
Hewlett Packard Juniper deal.
Now, most recently, we have a deal between two huge real estate brokerages, Compass and Anywhere, that was cleared very quickly without even a deep investigation by the Federal Trade Commission upside the Department of Justice. That surprised a lot of people. I think it even surprised the companies that have projected to close much later this year. And apparently that was also because lobbyist had stepped in.
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We need to talk about AI, not so far, not so much so far as to how it's impacting the stock market, because we've seen that and we see that today, but how companies are actually integrating it and how consumers are experiencing it. Lindsay Dutch is our Bloomberg Intelligence Consumer Hardlines senior analysts, and she's been researching this idea of
retailers embracing AI. But I guess there's a recognition, Lindsay that for impulse purchases, which are so critical for the industry, you still need a human touch, so it can't be done remotely. It can't be done virtually. It's usually done in person, and it's kind of unpredictable.
Yes, Hi Scarlett, thanks so much for having me. I just returned from the NRF conference, forty thousand people. There lots of retailer leaders there. You know, AI was all the buzz. It was pretty much the topic of every session. And as I think about it, there's a lot of really cool technology going into this, and retailers are mostly using AI to improve employee productivity, move employees up the
value chain, improve afflirational efficiency. And on the customer side, we're mostly seeing it in terms of like a customer service chatbot, maybe some personalization when you look at your email ads. But there's you know, new levels that are coming that will really you know, amp up. You know, AI's place in that retail shopping journey. But as you mentioned, I think, you know that spur of the moment, that's spontaneity, when you find something that you love and you have to buy it.
You know, that's a big.
Piece of the shopping and retail world, and that really still you need some human element in that process.
Lindsay, we talk often about the death of brick and mortar stores. People aren't going into physical stores as much as they are shopping online. Do you think that AI can reignite the excitement for going into a store and experiencing the technology.
So I actually think we're already seeing a return to brick and mortar, you know, coming out of the pandemic. You know, people realize how important it is to have an in person experience. More recently, you know, I've heard comments, you know, I follow best Buy. You know they have talked about that gen Z and younger shoppers are showing a much stronger preference to shop in the store, to talk to their geek squad, you know, you know, to get advice, to browse things in person. We also see
that from an alta beauty as well. So I do think e commerce penetation will continue to rise.
As a whole.
I think these new technologies will continue to support more shopping online, but I do think there is a personal element that will remain. And you know, we see strong brick and mortar demand on the retail real estate side, and that is expected to continue for some time.
Having said all that, how does AI enhance the ability for stores to be able to reach out to consumers so that they're there and have the right recommendations when consumers are in the mood to make impulse purchases.
Yeah, so right now, I think the best consumer facing use of AI is really increasing discovery exactly what you're saying, So being able to serve up product online when a customer is looking for it. And you know, this new tool that Google co developed with Walmart and others, Universal
Commerce Protocol, is going to do just that. So you can pop into this tool which is powered by Gemini, and you can say I'm looking for a navy boot blazer that I don't want to have dry cleaned, and it will serve up you know, the product from the brand. You can transact right there, so it's all seamless. Something like that, you know, is a great tool to bring product directly to the person and close the gap between looking for something that you want, finding it, and transacting it.
And we see a lot of technology, you know, coming to the fore that that's going to allow that to happen.
Lindsay, AI and new technology can be really complicated for consumers to navigate. What are companies doing to help guide shoppers through maximizing the experience they get with AI.
Yeah, that's a tough one.
I mean I think that you know, people in generally are using more tools like Gemini, you know, for all sorts of things chat, GPT that will you increase that comfort level. And we have seen over time, you know, I also cover home furnishings. You know, in the beginning, when people were starting to transact online, like no one wanted to buy a couch or a big product like that that that you would typically want to sit on and feel.
And you know that over time, you.
Know, retailers have figured out how to showcase their product in a digital way that makes comfortable customers more comfortable transacting on a big ticket item like that that you would normally really want to see in person. And I think the same thing would be true for these other new technologies. It will take time, you know, adoption will rise, it will rise slowly, and that's why I think it's a real balance. You have to be, you know, in that tech world, but you also have to be in person.
Well said what surprised you the most, lindsay, very quickly at NRF twenty twenty six when you went there.
What kind of blew you away?
You know, I think the retail environment right now has in twenty twenty five, is an extremely challenging environment, you know, And I think what's most impressive is, you know, the people in the industry are just so excited to take on new challenges in twenty twenty six, you know, even though we're still battling costs from tariffs, trying to implement
all this technology, a difficult consumer backdrop. So there's just a lot of excitement in the industry and everyone is just so excited to rise to that next new challenge. And I love that energy.
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