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For now, we want to go from the markets and shift over to Tesla. Tesla shares have been down there more than seven percent right now here to tell us about it more? Why is Craig for Trudell? He's Bloomberg Global Auditors Editor Craig want to start out and talk about this our investors. Are they just tired? I guess this is assuming going according to what Elon Musk has
been saying. Are they just tired of his kind of talking about this and putting himself out there and talking about politics when he should be focused on the company.
I think they see all sorts of risks here. You know, this is a matter of now, you know, just alienate, alienating Democrats, but but also now going after Republicans and and you know, really uh, sort of ticking off Donald Trump. And we've seen that with Trump going from you know, kind of biting his tongue when Musk was first attacking uh, you know, the big beautiful Bill to really going after
Musk in a more sort of pitched way. And you know, so so this is uh, you know, a risk for him to to sort of make himself in an enemy and of of both sides of the aisle in Washington, Washington potentially, but also you know, just a great big distraction after he's assured everybody, you know, on multiple occasions, look, I'm going to you know, sort of get back to business and and uh, you know, tend to to Tesla more than I have been, you know, since last year.
So I have to ask this question, is there a board here at this company that can reign Elon Musk?
Here? There is, You wouldn't necessarily know it from the actions of the board, right, you know, to the extent that we've heard from the board recently, it's been to say, you know, Elon's are our guy.
You know.
They they batted down a report in the Wall Street Journal just in the last few months about you know, potential succession planning at the company. I think the sort of read of that, a close read of that story, it wasn't necessarily the case that what the journal was saying was that they are you know, were actively looking to replace Musk. It was potentially more of a matter of of you know, sort of doing the job that
you would expect a board to do. I should sort of, you know, give them a credit in that regard that at least they're preparing for, you know, the potential of
of needing to to look for a next CEO. But you know, Musk is very much in control of this company and that was something that you know, the Delaware Chancery Court judge who throughout his pay package, you know, really emphasized in her ruling last year when she said, you know, he's very much in control of this company and its board, and you know on those grounds, uh, you know, throughout his compensation package, which has created you know, another mess and and you know, I think this you know,
political endeavors, you know, only only complicates the board's attempt to try and get him him compensated in a in a way that he's going to be happy with now quick.
Not too long ago, we heard Ilama saying, you know what, I'm going to get back to it. I'm going to focus on Tessel. This was after the last earnings and now we're seeing the shift right, he's talking about this America Party. I mean, is is this something that investors should be concerned about? He's kind of going back on his.
Word there, Yeah, I mean, I think you know some of the it's it's not the only way in which he's he's sort of undermined himself. And and you know, potentially you made an investors question the things that he's been telling them because he also, you know, said to Bloomberg back in May that our sales are turning around, right, and that was not born out in the deliveries numbers that the company reported last week. They had a thirteen
percent year over year decline in worldwide vehicle sales. That was almost bang on what they posted for the first quarter. So you know, for him to say, you know that he thinks in terms of political spendings, he's done enough that he's going to you know, do a lot less of it in the future. You know, that was what he said in May, and this is is pretty much one hundred and eighty degrees different from from what he was saying.
Then.
All right, Greig, thank you so much. I appreciate your reporting. Craig Trudel Global Auto's editor for Bloomberg News.
He is in London.
I mean, it just feels like the brand has suffered damage, the Tesla brand.
I guess the data will prove that out, and.
That's just kind of expected.
I know, I don't know, but but it seems like if you do a third party, you're kind of upsetting everybody. It's like both sides of the aisle. I don't know how that's a good marketing strategy.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple, Coarclay, and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
All right, well, the House past President Trump's latest tax and spending bill. But what does that mean for the pharmaceutical industry? Well, we're about to learn more. I introduce to you Sam Fazzelli. He's Bloomberg with Intelligence, Director of Research for Global Industry Senior Pharmaceuticals. Sam, I want to start there. I mean, what does this mean for pharma?
So the one big beautiful bill had in it a couple of things, many things, obviously, I can't remember how many pages it was supposed to be. But for the farmer industry, I'm going to focus on two things right now. Right one is a good thing. So there is an orphan drug change and impacts the IRA and actually impacts some really big drugs. Here. What's an ophan drug. When you develop a drug for a patient population that less than two hundred thousand in the US, you called an
orphan drug. You get a special exemption. It really helps you in terms of your duration of time that it can be on the market. It's a respective of your patent expiry. It was all set up to help companies develop drugs for these underserved markets. Two hundred thousand. Okay, it's not small. It's not big, but it's not that small. So it helped. One of the big drugs that had this was Cutruder, which is the biggest selling drug at
the minute, and that's for cancer from merk. So when IRA came along, it said, what we're going to do is say your drug twenty fourteen approval for Truder under orphan drug. Great, if you're an ophen drug, you don't fall into IRA the renegotiation or price and all that. But as soon as you get another indication then that
clock starts from the original date of approval. So if you had a drug orphant drug in twenty fourteen and you get some other indication in twenty twenty two, they date back to count the clock counting to twenty fourteen. That was terrible. It really means that nobody would want to do multi indication tests, et cetera. So that's been changed. Once an ophn drug is you can keep that drug date.
And so what does that mean for Ktruder from Merk one extra year before price negotiations by Medicare, and that's a twenty thirty billion dollar drug selling something like fifty percent of his revenues in the US. That's a huge win for the industry.
Sam, I'm looking at some of the bigger names, the Mark down eighteen percent, and you know some of these other names, the big farmer companies, Bristol Meyers down seventeen percent. Is the markets? What's that reflect?
That?
Just uncertainty around trade, around teriffs.
All of it. So on the one hand, we've got this positive. On the other hand, we have two big things hanging over the farmer industry in general. One is the tariffs, sectoral tariffs that are still being discussed. We don't know yet. This is to try and incentivize companies to bring their products to a manufacturing into the US if they want to sell in the US market, et cetera.
If we did hear that perhaps in the trade deal with the Switzerland they're giving a special dispensation for the Swiss farmer companies rash and no artists and their shore prices were up. But we don't know. We haven't seen this trade deal yet. And then you've got the most favored nation, which is the one that's particularly draconian, and that is to say that whatever price do you want to charge in the US, it's got to be closer to the lower end of companies with a similar GDP
or something in the West. So that really is where I think the biggest problem is we haven't heard anything, but that's still under discussion and under consideration. Might be another six to nine months before we hear anything.
Sam Another big I guess component of this administration policy has been cutting funding or maybe threatening the cut funding for research universities. And I have long experience with Duke University, which is a huge medical center and research area. Here's what's your industry saying about those potential cuts.
Yeah, the industry itself is relatively quiet, Paul, because what they don't want to do is is, I don't know whether the right phrases here, shake the target, tiger's cage or whatever, you know, rattle the whole set here. But in reality, there is a I think what I heard the last number was a twelve percent increase in applications to some of the top universities in Europe versus what
they were last year from the US. So that's folks that would have gone to or wanted to go to Harvard, they're now looking at Oxford, Cambridge, Siance, Pool, et cetera, these very brilliant universities across Europe. So there's that issue. But remember in the OBBB there's also another area where there is a cup to mediciate spending. That's a million Medicaid covered folks that lose it. That will also have
repercussions for pharma companies, healthcare in general. And of course you go to a hospital you don't have insurance, they're going to treat you. Who's going to pay for that? It's going to go on your premium. There's a tax on you, you know, let's see how this all pans out. But not good there either.
All right, Sam, I want to talk about the Medicaid cuts. I'm going to kind of put you on the spot there, but it's going to affect insurers who focus on Medicaid. They might lose customers. So what does this mean for like, let's say Elevant's Health, United Health companies that do deal with this.
Yeah, so they are clearly under pressure and there's a risk for them. And one of the issues is exactly what you just said. You know, this is completely upsetting the card here for the insurance in general. The point is, I'm not convinced that they will necessarily lose out. I mean, we have dedicated expert analysts who cover the sector, et cetera.
But usually what's going to happen is that if they're not making money elsewhere, they're going to try and raise premium somewhere else, which is what I said to start with, that there will be a way that they'll get through this. But clearly uncertainty in the new time.
There's that word again, uncertainty.
We heard her so many times the day across so many different industries. Sam Fazelli, thanks so much for your time. Always appreciate checking in with you. Sam Fazzelli. He's a director of Research for Global Industries, Senior Pharmaceuticals and Senior Wine analyst for Bloomberg Intelligence.
Based over there in London.
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All right, we're going to shift gears now. I want to take us to honorad Rona. He is Bloomberg Intelligence Technology analyst corwe That is the big headline buying Core Scientific. It's an all stock transaction, an rog. I want to bring you in and talk about this for core Weve. What is the benefit from this? What do they gain from this?
Mean, think about it that they have capacity to process ex summer of transactions or the backlock that they have with this particular deal, they are expanding their infrastructure.
I mean it's a very simple deal.
As if you know, they're just buying more factories to produce what they do. So is you know, it's it's as simple as that.
All right, So this.
I'm not a tech person, so, but I know, tell us what Core We've is, what do they do and why are they shouting out nine billion dollars to get bigger?
I guess yeah.
So in the purest of pure forms, they are just renting computing resources to anybody that wants to run an AI infrastructure.
They are a very big Invidia shop.
They basically buy GPUs from Invidia, They create a network or an infrastructure, and they give it to people to go out and experiment or do whatever they need to do on that infrastructure. It's no different than what AWS does, but very heavy focus on GPUs rather than the CPO. So that's really the big difference between a pure play provider like Core Weve versus Amazon Web Services.
Now, if you can dig into some of the background, what kind of challenges has has Core We've had in the past. I mean, didn't they have a pretty dismal IPO.
Yeah.
I think that's really the most important thing is, you know, they everybody thought when they're going to come out as the first pure play you know AI infrastructure IPO, it's going to be extremely popular, but it didn't happen. And the reason for that is because they need a large amount of upfront capital to build these data centers, and then the workload comes in over the.
Next several years.
So there's a lot of questions about whether there's going to be sustainability of this GPU demand going forward several years out. So that's why you were right. The IPO came at forty. In a few days, it was down to thirty five. But now we're seeing you know, the stock closer won sixty before this deal was announced, so I you know, we have talked about it before that. You know, why aren't they doing a secondary when it's like one hundred and sixty blucks stocks of what they
did instead? It is they use their stock to go out and buy another competitor I should say competitor, but you know, another company in that space, so that it expands their capacity, and you know, I think they're doing the right thing by using stock at this point.
Are there more core weaves out there on a round kind of more pure play AI stories, maybe the kind of the sausage of AI if you will, the guts that somebody could take public.
There are multiples of them there, but they are much smaller size in korby they I would say there would be hundreds of them at this point, because you know, you go out, you buy the GPU, you go out and start renting it out in the in you know, in a long time ago, this high powered computing was used for bitcoin mining, and then you know, when that's not in favor, these guys are renting out their infrastructure
for other reasons. So there are other plays out there, but almost all of them are much smaller than core Viv from a you know, pure play point of view.
Now we digged into corewey, what about Core Scientific, what's the attraction to them?
I mean, it's just they're expanding the number of you know, the capacity that they have to process the transactions. In a sense that Corvieve is a massive backlock right now they have people wanting to use their services, and then these guys have to go out and lease it from you know, other companies like our Scientific In this case, they said, you know, they have an agreement with them to lease their facilities. They just said, you know, we'll
buy it out and expand their size. And I think that's as simple as that.
And I think I have to point out Lisa core Weave based in Livingston, New New Jersey.
Yes, so it just goes to my folks.
A little history lesson. Before there was Silicon Valley, there was New Jersey. There was Central Jersey, the Institute for Advanced Study, Princeton University, Menlo Park, New Jersey. Before there's a Menlo Park, California, Menlo. Before there's a sand Hill road in Silicon Valley, there's a sand Hill.
Road in Jersey. So it all, there's all these Jersey guys went on New Jersey is back in New Jersey. All right, an, thank you so much. We appreciate it.
On a rock ron Eastern technologyannels for Bloomberg Intelligence. He's in at Chicago. You're trying to establish Chicago as a technology hub.
Here.
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We want to move on now to the latest TikTok news. We're going to bring a man deep saying Bloomberg Intelligence senior tech industry analysts. Okay, so Mandy, President Trump getting ready to begin talks with China. About a possible TikTok deal to sell the app. Want to ask you, where do we stand in this right now?
What is the latest?
I mean, from what we know, President Trump is pretty confident that there is a buyer. In fact, there could be private equity buyers at Consortium who may be interested in buying TikTok us. And at this point, you know, they want to make sure that it goes through in terms of getting the approval from China. But in the process they've launched a new app, TikTok Has, and that sort of suggests they want to decouple the algorithm from the core TikTok usage. So that was also a point
of contention in terms of getting the approval. So I think the two go hand in hand, that one there is a buyer available and the other the app is getting a changeover in terms of decoupling the algorithm.
All right, So am I going to have effectively two tiktoks out there? The TikTok app we all know and love, and then something that they are doubling internally is M two. So now there's gonna be two effective TikTok apps out there for all these people.
Yes, and look with apps, there's always like a date when the first app will obviously be phased out and folks won't have access to it. I mean, remember what happened during the band you know that wasn't even available. So in this case, the plan is if and when the deal gets announced and the new TikTok owner which we don't know who will be ye, will get access to the new app, and then the first one gets paced down.
All right, So my kids want to know, asking, okay, is there any chance of none of this going through, like just TikTok disappearing from the US in general, they'd be devastated, Mandy.
Look, it happened for two days, the app went dark, and at that time Instagram got a very nice pop in terms of engagement. So from that perspective, this will be all positive news for a meta snapchat or you know, even if dual lingo was mentioned as a beneficiary of app and dark. Yeah, I know, it's all very intuitive, but it did happen. In the data you could see for those two days, duel Lingo did get a pop in the engagement time.
All right.
I mean, you gotta spend your time somehow, go forbid reading a book says the father. You know, Okay, so China. If I'm China, what's my incentive to approve a sale to say, a group maybe including some like an Oracle, what's my incentive?
The incentive is it's the President of the United States who is negotiating the deal, you know. And this is part of a much bigger conversation when it comes to China tariffs and everything that they are negotiating. So TikTok deal to me, is part of that bigger negotiation now, and President Trump is obviously keen to have a deal for TikTok Us. He doesn't want the app to be banned, and as part of that, he wants some concessions on
the tariff front. So to me, this is part of a much bigger negotiation.
Now you mentioned Oracle, it's Oracle, the only name being thrown around.
They are the trusted one when it comes to Washington. They are among all the hyperscalers. I think they get the trust of the President in terms of moving.
Ahead with what's the drug? Why Oracle?
Well, Oracle clearly hosts all the back end infrastructure for TikTok, So this has been going on a while and they have moved all the back end infrastructure to Oracles platform, and they clearly have some sort of synergy when it comes to hosting that making sure nothing gets saved in Chinese data centers and none of the data gets transferred there. So I think they're in the best position to do.
That thirty seconds. Any sense of timing when this could happen.
It sounded like President Trump is confident about this happening over the course of the next ninety days, because remember he extended the band by another ninety days, so to do that, that would be my guest.
All right, Man Deep, thank you so much.
Appreciate that.
Man Deep, seeing senior tech industry anust, I can't imagine he's on TikTok, but you never know Bloomberg Intelligence learnings here in our Bloomberg Interactive Broker studio at Lisa.
Are you a TikToker?
I am not, but I will Actually I take that back, I am because I have to follow my kids to make sure to spy on them, you know, so I have to join in.
All right, all right, I don't know, and it's it's big for one hundred and seventy million US users.
I know, I know exactly. He's all over that stuff.
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