Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from San Francisco. I'm Tim Stenebeck, and this is Bloomberg Technology. Coming up on the program today, Elon tries to alleviate Tesla concerns, telling staffers to hold onto their stock after plunging fifty percent in three months, plus micron under pressure, disappointing margins, overshadowing an otherwise impressive set of quarterly results. And in video, that's on America announcing new
plans to invest billions of dollars on US manufacturing. All that and more coming up over the next hour on Bloomberg Technology.
First Up.
Shares a Tesla over the last five days down about three point five percent. Elon musk yesterday trying to reassure Tesla employees during what he referred to as quote a little bit of stormy weather. Check out what he had to say. He urged employees to hang onto their stock. He called Arc invest Kathy Wood as an example of someone's still believing in the stock. He said some people like Kathy Wood at Ark invest do you see the future? So what I'm saying is, hang on to your stock.
Let's talk a little bit more about Tesla had things over to Europe where we're joined by Bloomberg's Craig or Trudell. Craig, what did you make of what we heard from elon late yesterday? What was the tone that he was trying to communicate to his employees.
It was highly unusual, and you know, I know that we've of course, you know, over the years, you know, heard from from Musk via you know, memos that he's sent out to staff that you know, tend to leak, you know, soon after. But this was, you know, in the middle of a quarter, you know, not not a product event or anything like that, a sort of spur of the moment, all hands and to sort of stream
it publicly. It seemed to be a sort of you know, reassure the employees and in the in the course of doing so, reassure the market that, you know, yes, Tesla's in his words, are are on fire and they you know, that keeps getting shown on TV. But you know, essentially, don't worry. Everything's going to be fine, you know, the future is going to be bright.
Okay, Well, speaking of the future, he did bring up the idea once again that self driving cars, autonomous driving for Tesla on a wide scale is right around the corner. This is something he's been talking about for close to ten years. How close is he though, this time, Craig.
I think, you know, that is the key question for Tesla, and it's it's stock. You know, this is something that Musk has been talking about since twenty sixteen, and he himself has you know, referred to the idea that you know, he's he's sort of a boy who cried wolf at
this point. He's made this prediction that you know, at some point they'll have a software update where your Tesla will be able to drive itself and it'll be useful even when you're not in it, and perhaps you know, go fetch people and it essentially work the way in Uber would. That has not happened, and I think there are a lot of reasons to be skeptical that that
you know, future will arrive. With the hardware set that he's put in his vehicles, you can both you know, be impressed by the fact that his systems are quite capable for assisting drivers, but they still need the human in the loop. And until and unless that changes, I think you're going to have this this you know, a real reason to sort of second guess why this company is valued as richly as it is.
We Tesla Sharre is getting hit over the last three months. Hired today by two percent, down on the week. Still though Bloomberg's Preye Tree Jel joining us from London, could just see you, Craig, have a good weekend. Well, let's talk about another company that has had a week, and that's in Vidia. Maydeep saying of Bloomberg Intelligence joins us.
Now Mandy, as we reflect on the week that was in Video GtC, Why did this week fail to really capture the attention and the excitement of investors like a previous GtC events have.
Yeah, I mean, look, I think from a product roadmap perspective, they did everything they could have, you know, in terms of showing the next three years what it would mean for in video and even on the supply side, it seems, you know, it will remain inelastic around the accelerated computing chips. The demand side is where there are still question marks, because you know, he talked about infrincing using one hundred
times more compute than prior sort of infrincing. So reasoning and the deep sea type approach is what's driving the additional compute, but it remains to be seen whether it
can pull offset. You know, the plateauing of pre training, which everyone seems to agree on at this moment of time, and you know there is always that lurking competition from your hyperscalers developing data own a six even though he downplayed the competition, and really for him, it's about the next version, which is the black Belt and Rubin.
And look, I.
Think if you're a customer of Nvidia, you're asking yourself, if Blackvel is forty times better, do I really appreciate all the Hopper chips that I have right now within two years? And I think that will come up at some point in terms of the depreciation expenses.
So it raises the question about the next catalyst here a man deep. If this didn't excite investors, then what are they looking toward to get more information about what could move the stock higher.
I think the single biggest thing right now is how would Nvidia's gross margin look like in the second half, because there is that concern that you know, given Nvidia is packaging two GPU chips now in their black Belt series, how does that impact the gross margin? And gross margins have already been trending down with the Blackwell ramp that they were with seventy five percent and now it's closer
to seventy percent. So clearly that gross margin ramp is critical in terms of the next series that in video is going to produce, and that for me, is the key determinant of where the stock is headed next.
Mandy Seeing of Bloomberg Intelligence, Mandy always get to see you. Thanks for joining us. Well, let's break down the week in markets. Nancy Curtain is Alti Teadman, a global chief investment officer, and she joins us. Now, Nancy, we're still talking about a correction, especially when it comes to tech stocks. The NASTAC one hundred could close down for a fifth week in a row, the longest losing streak going back
to May of twenty twenty two. Is this correction a sign of more weakness to or do you think we're at the bottom.
Look.
I think near term forecasting is pretty na on impossible. But one of the things to keep in mind is we have a pretty big D day deadline ahead, which is April second, and until we know what these tarts are, the magnitude, reciprocal, etc. I think markets are going to be pretty volatile here. But look, we think this is a correction and not the beginnings of a bear market, because we don't see a recession. And I think that's an important thing to keep in mind. You were overdue
a correction. Corrections normally resolve themselves as the markets move higher. Huge levels of pessimism, which I find very encouraging, but we could have some volatility here, as you mentioned, for at least another eleven days.
What makes you so sure that we're not going to see a recession? The consumer, we know powers this economy. We've gotten some mixed consumer data, especially in the early part of last week when it comes to airlines. What makes you so sure we're not headed twitter recession.
Well, first of all, I think it's the dichotomy between the heart and the soft data. So the soft data has been weaker, consumer sentiment, inflation expectations one year have risen, and we do think that the economy is slow and certainly going to be negative, probably in the first quarter. Because we had all that buying of imports proactively by companies, which is meaning that net trade is going to be a negative. So expect the first quarter to be lower.
Expect GDP overall for twenty twenty five to be weaker than expectations. But you know, let's get back to the hard data, jobs, personal incomes. The household balance sheet, which was announced by the Fed two weeks ago, still remains pretty strong, and you know, we haven't talked about the fact it could well be that investment surprises. Look, you saw in Nvidia committing to five hundred billion over the next four years. That comes on top of Apple, that
comes on top of TSMC. Add those three companies together and you're looking at close to one point four trillion of expenditure over the next four years back into the United States, not to manage, not to mention, you know, the funding bill making its way through Congress, which might have some CAPEX goodies like you know, one hundred percent expensing of R and D and depreciation, etc. So you know,
there are some things here. Hard data is still solid, those slowing, and we think there are some things that will come in what I call the goody side of Trump that are still to come.
Let's zero in a little bit on tech specifically, the MAG seven Meta Platforms is actually higher for the year as of now, but for the first time this year, it did dip into negative territory for the year. Other than that, six of the seven MAG seven are negative on the year. Do you see a turnaround with the MAG seven.
Well, we don't buy stocks, we buy managers. But you know, our managers have been underweight. Our active managers are underweight the MAG seven. So that's been a good positioning for us this year. Met has done a much better job I think of communicating how they expect all this AI spend to result in better metrics, advertising, metrics, engagement, et cetera.
The other companies have been a little bit more vague, and that's why investors are concerned, at least for the four horsemen that are spending what three hundred and twenty billion plus, you know, on various forms of AI infrastructure, how that's going to result in returns our view, let's go to the spending beneficiary. So we like digital infrastructure. We like infrastructure generally because that's where all the spending
is going. We like power, we like energy, we like onshore in a production We think infrastructure is something that's less correlated to equity markets, very very good counter parties, but also is part of what I call this huge spending surge that's likely to continue. So MAG seven underweight. We think that's the right positioning, but we want to be with the spending beneficiaries.
What's your view on how Jenai adoption moves to other parts of the market. So far, the beneficiaries have largely been the hyperscalers, the chip manufacturers, the companies that we talk about each and every day. When does that move beyond these companies?
So well, our theme has been a broadening in market participation, and by the way, we're seeing that this year. You know, it feels horrible, but you know, ninety seven percent of
the decline is coming from the MAG seven. There are a bunch of sectors that are in positive territory, but you know, looking forward and of course European markets, the Chinese markets in positive territory as well, So you know, as we look forward, we think that broadening theme will be operative that we think Jenai is early innings, early innings, right, compute power is going to come down these large language models are going to come down the cost of that,
and of course that's Jevan's paradox that leads to greater adoption, and that's not been priced in. The profitability and productivity enhancements across large sections of the global economy from jen Ai is still to come and that's really not priced in. And so again that's not a tomorrow thing. But we think that is positive yearly from the kind of a medium term perspective, and again our clients are longer term,
you know, investors. We don't try to play the markets with a day to day trading mentality.
Nancy Curtin of Aalti Teadman, thanks so much for joining us.
Have a great weekend.
Hey, coming up Micron, it disappoints investors of the week margin Now look we're gonna have more on the chip maker right after this. Shares down by eight percent.
Right now, this is Bloomberg.
Well.
Shares of Micron are following today after the memory chip maker said margins will miss analysts estimates this quarter. Look at that shares down eight point two percent as we speak. It's ours investor sentiment despite posting a strong sales and profit For more. Pierre farragu joins us New Street Research head of Chech Infrastructure. Pierre, good to see you today. I'm wondering about this margin miss Why did analysts get it so wrong and why did Micron miss there?
What happened, Well, you have to put that into the context of the perspective of analysts, financial analysts and the perspective of management. So if we get it from the perspective of analysts, the stock had like a fantastic rome,
like if you get old stocks exposed to AI. Really Micron is the one who behaved the best in the last few weeks and even in the last like you have to date, and that kind of situation always calls for, like you know, taking profits a bit of a pose in the outperformance, and we do think Memory is going to outperform AI is the AI world, because that's really the part of the AI achieve the path as the bill of material of the chief that's is growing the fastest,
and so when you get more memory, margins should expand. And if you don't get that immediately, the stock running to the numbers expecting that. So there is a profit taking. Does that mean there is a change in trend? Something weird? Happening. No, If you look at it from the perspective of management, the situation is interesting. As a CEO of Micron, you don't want to warm up investors too much on margins
for tour reasons. The first one that you don't want to set expectations too high to avoid situations like today, And the second one is your clients are listening to the code as well, and you don't want to brag too much that margin expanding towards because for your clients it means you know you your pricing is going up.
Okay, So let's talk big picture a little bit. How would you characterize Microns really stacking up to competition when it comes to this high bandwidth memory.
Yes, so hybend with memory is going to be the largest segment of memory at the end of this year and it barely existed three years ago. And at the moment, from a technological standpoint, Micron and Highnix are in the lead position for hybend with memory. They are coming up in the market the earliest with the latest generation of these chips, and Samsung is like running a bit behind,
like struggling a bit with their production. But I think they will eventually catch up, and at the end of the day, what you have to keep in mind that this market is going to remain a treeopoly. Only the three companies have the technology as the decades of experience required to be able to manufacture these chips. And what really matters is that if you look at the H one hundred, the GPU that is largely deployed today from Nvidia,
it has ninety six yeabytes of HBM. The Robin Ultra that will roll out in twenty twenty seven is going to have one terabytes of HBM, ten times more. That's really what the opportunity is these guys are facing.
Pierre, what would you say when you look out across this year and even in the next year, the cycle looks like, the trend looks like when it comes to pieces and smartphones, is there concern there still about weakness?
Yeah, it's a great question. I am actually very very cautious, very variation on pieces and smart phones. I think consumer demand is not there, and I think AI is not going to trigger a hardware with fresh cycle. So people are not going to buy a new phone or buy a new laptop to use AI. They are going to start using AI first and then AI is going to push up, you know, the specification requirements of your device over time. So definitely not to bullish on that front.
At the same time, we are at a point in the cycle which is a low point. So when I say I'm not bullish, it means I expect the recovery from two day's level of demand to be very very sluggish, very slow, but it's still recover So the story for Micron is these businesses are to low they're going to recover very very little. But the data center business is really going through the roof.
Hey, Pierre, we only have just twenty seconds left for the answer, but a little bit of a peppert because we're just learning that ten Cent has launched upgrades of a Deep six style reasoning AI model. Twenty seconds on your reaction to what China's doing when it comes to reasoning.
Yes, AI is just joining the pack. Everybody is doing the same. Every time you create a great model, you have like a lot of innovation happening to try and make the model more efficient, and like the US and the West has been doing that for a decade, even like a couple of decades, and China is joining the group. And there is nothing really new in deepse You got what ten cent ilt you bit about doing?
All right?
Pierre Farrague of New Street Research, Pierre, good to see you. Thanks for joining us. Have a wonderful weekend. Well, we do have some breaking news. Boeing has won a contract to design and build the US's next generation fighter jet, beating out Lockheed Martin. The contract is part of the Next Generation Air Dominance Program. It aims to develop a new fighter jet that will operate with drones and replace
the F twenty two Raptor. The new fighter jet is expected enter service in the twenty thirties, and the Air Force plans to spend up to twenty billion dollars on research and development through twenty twenty nine. You see shares of Lockheed Martin down, you see shares of Boeing. Uh Well, billionaire who made his fortune and cryptocurrency is turning his attention to space. Jed Michaeleb is the sole financial backer of vast Space. It's a startup aiming to build the
world's first commercial space station. Bloomberg's Kyle Porter has the details of this story. Kyle, this is a very quickly growing startup. They're hiring people every single day. This guy has put pretty much half of his fortune behind this company. Can he pull it off?
Well, that's a really good open question. I was very skeptical before I visited in December. I came away thinking, you know, they've got a decent shot of this. They might revolutionize how you go about these type of projects.
How are they doing it? How are they revolutionizing it?
Well, most people in the space industry or any big industrial company, tend to think of you build a product, you get investors, you grow. It happens over time, you reach benchmarks, and a lot of these projects tend not to reach the finish line because something goes wrong during the process. An investor pulls out, You sell that what's left of the company. Vast have decided time is money,
but money is time. So why not spend five hundred million dollars a year, get a product to market, and then have your revenue come back.
In Kyle, As I was reading your story, and as I watched the Real Good Bloomberg Originals documentary that a Company is It, I was thinking to myself, talk about putting all your eggs in one basket. If they do not get this contract from NASA.
Is that it Well, they've sort of hinted there might be a Middle Eastern investor that might take it if they don't manage it, but they're very upfront the yeah, this is the big swing, and if it doesn't happen, it could be, you know, lights out for the company.
Who's the talent that they've brought in to help run the company.
They bought a company called Launcher, which was headed by Max Hote a couple of years ago. Now, Max also had never built a space station before, didn't have any real experience in space until he started a Launcher, and neither of his rockets I think preached all a bit.
But now he's running the show for.
Them, all right, Bloomberg, Kyle Porter, thanks for joining us. It's the big take. Check it out on the Bloomberg terminal. Also check out the documentary about it.
Very very cool.
Welcome back to Bloomberg Technology. I'm Jim Steneveek in San Francisco. I'm also watching shares at Apple today down about three tenths of one percent. The company is shaking up its executive ranks to get its AI efforts back on track after months of delays and stumbles. The changes aim to rescue Siri, which has struggled to release new features, and Apple is betting on Rockwell's technical experience to solve the problems. From all on the personnel moves, we're joined by Bloomberg's
Dana Wollman. Dana, what's going on at Apple when it comes to AI?
Why are they so far behind?
So Apple really over promised, promised a whole raft of upgrades to Apple Intelligence at its Developer conference in June of last year, and behind the scenes, the engineering team has struggled to keep up with those promises and deliver
on pace. And so the company just took control of Syria and took it away from the executive who had been overseeing this ambitious upgrade and had moved it under the person who brought us the Vision Pro, which itself has not been a commercial hit, but if nothing else, has been well regarded for its technical innovations.
So Apple, Yes, well, people, I mean I haven't actually tried the Vision Pro yet. People who talk about it just rave about it. But you know, you don't see the sales numbers for it, and you don't, by any means see it being one of Apple's blockbuster devices by any means, Dana, I think the question that I have is context here. It's really rare for Apple to make a big personnel move such as this.
It is rare for Apple to make a personnel move like this like this, as you said, and according to our own reporting, it was in the works even before some recent bombshells. Bloomberg reported that a different company executive
called the delays ugly and embarrassing. According to Bloomberg's reporting, this move had been in the works for a while, but as you said, it doesn't usually happen, and I think a lot of industry observers were waiting for some sort of shoot a drop, whether it was someone being fired, really heads rolling, or something of this nature, at least the project being reassigned to somebody else.
All right, Dana, we are going to have to leave things there. I do want to head now to the Oval Office and the White House, where we're hearing from President Trump and Defense Secretary Pete Hagsath.
It's going to be amazing. Should have been nine years ago.
They've been talking about doing it for many years, but nobody ever got it off. But we did, and there was great excitement and great acceptance of it by almost everybody, including a lot of Democrats. Actually, I do want to say that I've decided that the SBA, the Small Business Administration, headed by Kelly Loffler's a terrific person, will handle all of the student portfolio.
We have a portfolio that's very large, lots of.
Loans, tens of thousands of loans, pretty complicated deal, and that's coming out of the Department of Education immediately, and it's going to be headed up by Kelly Laffler SBA and the role set for it.
They're waiting for it that it will be serviced much better than it has in the past.
It's been a mess.
And also Bobby Kennedy, the Health and Human Services will be handling special needs and all of the nutrition programs and everything else rather complex, but that's going to be headed by and handled by Health and Human Services, So
I think that will work out very well. Those two elements will be taken out of the Department of Education, and then all we have to do is get the students to get guidance from the people that love them and cherish them, including their parents by the way, or be totally involved in their education along with the boards and the governors and the states, and it's going to be a great it's going to be a great situation. I guarantee that in a few years from now, I hope I'm going to be around.
To see it, but I think we're going to see a lot. I think that you're going to.
Have tremendous results. You're going to have results like Norway, Sweden, Denmark, a lot of the countries that do so well.
I think you're going to have a lot of those results.
If you look at Iowa and Indiana and Idaho, so many places that run so well, Florida, Texas, big ones, and you're going to have great education, much better than it is now at half the cost. And we're not even doing it as a cost item, although you will say probably half, maybe more than that, and you're not going to be at the bottom of the list. You're going to be much higher, and maybe you'll be I will guarantee some of the states will be at the top of the list.
They'll be comparable or better than these number.
One, two, three, four, five countries, the countries that are in the top five positions. So to me, it's very exciting and it's been received very well, So I just want to tell you about the student loans and special needs. But we're here for a reason today that is very and I'm thrilled to announce that at my direction, the United States Air Force is moving forward with the world's first sixth generation fighter jet, number six six generation.
Nothing in the world comes even.
Close to it, and it'll be known as the F forty seven. The General's picked a title, and it's a beautiful number, F forty seven. It's something the likes of which nobody has seen before.
In terms of all of.
The attributes of a fighter jet, there's never been anything even close to it, from speed to maneuverability to what it can have to payload.
And this has been in the works for a long period of time.
After a rigorous and thorough competition between some of America's top aerospace companies, the Air Force is going to be awarding the contract for the next generation air dominance platform to Boeing.
You know, was highly competed for.
There was a lot of competition, generals, and it's been going on for a long time, very very tough competition. But this plane is produced numbers that nobody's ever seen before. Their forty seven will be the most advanced, most capable, most lethal aircraft ever built. An experimental version of the plane has secretly been flying for almost five years, and we're confident that it massively overpowers the capabilities of any other nation. There's no other nation. We know every other plane.
I've seen every one of them, and it's not even close as the next level. You know, level five is good. This is level six. They say their forty seven is equipped with state of the arts stealth technology. It's virtually unseeable and unprecedented power. It's got the most power of any jet of its kind ever made. New verability, likewise is the There's never been anything like it. Despite the power and speed, its speed is top over two, which
is something that you don't hear very often. America's enemies will never see it coming. Hopefully we won't have to use it for that purpose, but you have to have it, and.
If it ever happens, they won't know what the hell hit them.
A new fleet of these magnificence and planes will be built in the and in the air during my administration for the next couple of years.
It's ready to go.
They've already built much of what has to be built in terms of production, including the sheds. We'll ensure that the USA continues to dominate the skies. Given an order for a lot, we can't tell you the price because it would give it would give way to some of the technology and some of the size of the planet's good sized plane. This contract also represents a historic investment in our defense industrial base, helping to keep America at
the cutting edge of aerospace and technology. Our allies are calling constantly. They want to buy them also, and will certain allies We'll be selling them, perhaps toned down versions. We like to tone them down about ten percent, which probably makes sense because someday maybe.
They're not our allies. Right.
But I would like to ask Secretary Hegseth, who's doing a fantastic job. He's really really been very inspiring in so many ways, and I must say.
That before he speaks.
We have had record people wanting to join our military in the last two and a half months, literally since this I think probably since the election November fifth, but especially since we came to office and since I announced Pete.
He's young, he's smarty, strong, he loves it of him. But we've had.
Record numbers of people wanting to join our military.
Now, if you go.
Back six months, it was the exact opposite. You had record numbers of people not wanting to join the military. Now you have record numbers of people wanting to be in our military. And that's a really that's a great honor. That shows you we're really on the right track. So Pete maybe say if you were Chorts, well.
Mister President, this is a big day.
This is a big day for our war.
Fighters, this is a big day for our country, a big day.
In the world.
The name of this program is the next Generation of Air Dominance, and mister President, because of your leadership, your clarity, we are going to America is going to have a generations in the future of air dominance because of this sixth generation fighter. We've had the F fifteen, we had the F sixteen, the F eighteen, the F twenty two,
the F thirty five. Now we have the F forty seven, which sends a very direct, clear message to our allies that we're not going anywhere and to our enemies that we will be able to project power around the globe unimpeded for.
Generations to come.
Mister President, this is a gift to my kids and your kids, to my grandkids and your grandkids. This is a historic investment in the American military, in the American industrial base, in American industry that will help revive the warrior ethos inside our military, which we're doing rebuild our military, which the previous.
Administration did not do. By the way, mister President, they paused.
This program and were prepared to potentially scrap it. We know this is cheaper, longer, rage and more stealthy. President Trump said, we're reviving it, and we're doing it.
And then we are also going to re establish de terrence. Under the previous administration.
We looked like fools.
Not anymore.
President Trump has re established American leadership. The F forty seven is part of it. And mister President, thank you for having the current to do it and leading away for all.
Of our fires. Thank you very much, Pete.
One of the things I will say, but the general generals are going to speak, and just a couple of seconds, but this plane flies with drones. It flies with many, many drones, as many as you want. And it's a technology that's new. But it doesn't fly by itself. It flies five with many drones as many as we want, and that's something that no other plane can do.
So I'd like to.
Introduce, if I my Air Force Chief of Staff, General David Olvin, and also General Dale White, to incredible people that I've known over the years, but I got to know really well.
Over the last few months. And would you say a few words please, Jenneral.
Thank you very much, mister President, Miss President, Miss Sectary, thank you so much for your unwavering committed to our military. I will say this is a big day. This is a big day for a United States Air Force as well. You know, air dominance is not a birth rate, but it's become synonymous with American airpower. But air dominance needs
to be earned every single day. And since the earliest days of area of warfare, brave American airmen have jumped into their machines, taken to the air and they've cleared the skies. And whether that be clearing the sky so we can rain down destruction on our enemies from above, or we can clear the path the ground forces below. That's been our commitment to the fight and that's really been our promise to American and with this at forty seven, as the Crown Jewel in the next generation air dominance
family of systems. We're going to be able to keep that promise well into the future. I also want to thank everyone from industry and with the government, our engineers who have put work tirelessly on this program.
To bring it where we are right now today.
This shows that American talent, American skill, and American determination are second to none, because this platform is second to none. So we believe that this provides more lethality, It provides more capability, more modernized capability in a way that is built to adapt. This along with our collaborative combat aircraft the President talked about with drones. This is allowing us to look into the future and unlock the magic that
is human machine teaming. And as we do that, we're going to write the next generation of modern aerial warfare with this.
This enables us to do this.
The manner in which we put this program together puts more control in the hands of the government, so we can update and adapt at the speed of relevance, at the speed of technology, not at the speed of beer.
Honors.
This is more air force, This is more options for the President.
We say, as our mission in the United States, Air force is to fly, fight and win airpower anytime, anywhere. If you want to go anywhere, you have to have a platform that gets you anywhere.
This provides the options from.
The very one end, which is a quick response, and then we can get right back into fight and stance without having to deploy troops that are going to take maybe months in cost more lives.
We can move back and find stance and maybe we restore that de.
Terms all the way to decisive victory as part of a joint force that is the most lethal and capable military every own history. That's what we provide now, and this provide allows us to relate.
Into the future. It's more deterrence, more capability. It's what piece to strength looks like in the future. Mis President. That's what we're very proud of that.
And all we can say is on behalf of us, and I says Air Force, let's deliver it.
Thank you very much, Thank you, Jim, you like you to say anything. I'll just don't want to chase that. This is what to do generally, had the mook.
A questions.
Thanks, Thank you very much. Great job.
We've worked together long and heart of it and this was a big secret in fact, we don't show too much of it.
Well, there we have it, President Trump, along with Secretary of Defense Pete hag Seth. Also we heard from David Alvin, chief of Staff of the Air Force, getting quite a few headlines on this story. The Army, or President Trump, i should say, has said that the F forty seven will be built during his administration. The US Air Force has proceeded with the F forty seven fighter jet. The US Air Force will award that jet contract to Boeing. In response, we did see shares of Boeing higher on
the news. Shares of Lockheed Martin are falling. He did also say that this experimental version of the F forty seven has been flying for almost five years and that it will be built during his administration. This next generation fighter jet, he did also say, will fly with drones, and it's already experiencing interest from our allies. From more, we bring in Bloomberg News as Tyler Kendall, she joins us this afternoon from Washington, DCO. This morning, I should say, Tyler, good.
To see you.
What do we know about this F forty seven and the technology that allows it to fly with drones?
Well, Tim Bloomberg News reporting that the Air Force has allocated at least twenty billion dollars around the research and development for this effort. You said it, they're Boeing beating out Lockey Martin for the contract that could be worth multi billions of dollars, and this was a two year bidding process for these companies to try to put forward that full scale proposal for this new generation of fighter
jets that will work in tandem with drones. You heard President Trump emphasizing there that that's how critically important that is is they try to move to this next generation. Now, not a lot about this program is known. It's classified or reporting indicating that it's meant to replace that Lockie Martins F twenty two Raptor stealth jets that are currently in the sky and flying. The goal is to have this operational by twenty thirty. Now, you mentioned our allies there.
That was something important that President Trump mentioned because we know a lot of this is gearing up in our competition with China. Like many of the proposals that we've seen from the Trump administration, particularly in recent weeks, try to bulk up, particularly when it comes militarily against China. I also would like to flag one other headline that
we were seeing today. Elon Musk at the Pentagon are reporting indicating that this program in particular, there might have been some budget constraints there as Elon Musk looks full forward to his DOGE cost cutting efforts. Just yesterday, Secretary of Defense Pete Heigseth announced that five hundred and eighty million dollars worth of programs will be cut at the
Department of Defense. Of course, that fails in comparison to the numbers that we're talking about for this program here, but it does bring the DoD's cost cutting measures to eight hundred million dollars. Since Pete Hegseth was sworn in as Defense Secretary, Tyler.
You've done a lot of reporting on the weapons of the future. These companies Palanteer, SpaceX, Boeing is a traditional old school defense contractor. Where does this fit in with the modernization of the armed forces?
Well, tim the defense industrial base has actually shrunk by forty percent over the last decade. That's according to the Department of Defense, which says that they want to try to get in those smaller contractors who compete with the big defense primes. They're referencing some reporting that I did a few months ago where I had the chance to sit down with the Chief of Staff of the Army,
General Randy George. He's the highest ranking military official in the Army, and he is trying to put forward this
path that would make the acquisition process easier. It would instead look to these short term contracts instead of these multi decade contracts in order to get these more nimble companies in particularly when it comes to drone makes it easier for them to do business because oftentimes he's told me that they will put in these purchase orders, but then at the end of the day, by the time those weapons get on the battlefield, they end up being obsolete.
That appears to encounter with this. Of course, this is going to be a decade long, multi billion dollar project that the defense primes had been competing for.
All Right, Bloomberg, Tyler Kendall joining us from Washington, d C. Tyler, thanks, do appreciate that well. Sticking with what's happening in Washington, DC. Earlier this week, President Trump fired too democratic members of the FTC. Questions had already been raised about how much influenced the White House might expect or exert over the agency and its actions toward big tech. Joining us now is William Covese. He's professor at the George Washington School
of Law. Bill, good to have you with us. How did you look at these firings earlier this week? I know it alarmed certain folks who watch this agency closely.
As far as the FTC goes, there was an inevitability that the Republicans were going to get control of the FTC. There is a nominee pending, Daniel Metterer, who's likely to get a vote in the Congress relatively soon, so that in a short time there would be a working majority of three Republicans that would have the votes to do
what they wanted. The larger message, though, for the regulatory process, is that the White House is determined to get more control over how these agencies operate and to bend their programs more in the direction that the President prefers. At The agency leadership has said, we do want to press a ad with the big tech cases that are running now.
We want to have an active program involving mergers. But at the same time they've said, we do want to create an environment that's going to be more favorable for deal making because we're going to tolerate settlements. We're going to establish a timeline that is more predictable and reliable. So this is part of a larger effort across the government for the White House to achieve greater control over how the regulatory process operates, including for big tech and any trust.
Well, explain the nuance there, because what I heard is two different things. One is that Okay, we're going to continue with you know, for lack of a better term, of crackdown on big tech. Are going hard on big tech. I guess some observers would would point that out. Some
people might not agree with that statement. But the other part is we want a friendly or regulatory environment, and we want to communicate a friendly regulatory environment that opens up more m and a How do those things co exist?
Yeah, here's one way that you can reconcile them. The Biden administration adopted the position on mergers that was very skeptical about settlements is a way to resolve problems settlements
that would involve divestitures or conduct related solutions. The leadership of the Federal Trade Commission and the incoming leadership of the Department of Justice Anti Trust Division have said settlements belong in the solution set that where the parties can come forward with a divestiture package that we regard as acceptable. When they offer us conduct related solutions to specific problems, we are going to be more willing to accept those.
That opens up a wider path for deal makers to come forward with solutions to problems that might otherwise have led the agencies to go directly into court. So there's a commitment to bear down on any competitive mergers, but a greater willingness to accept solutions that the previous administration tried to slam the door on.
It's interesting because we've heard in the past, even during the election that Vice President jd Vance thought Lena Kahn was actually doing a great job. It raises the question of continuation of policy between her FTC and Andrew Ferguson's. So do you expect that the FTC and I guess also the DOJ is going to continue to move forward with the cases against Google, Apple, Meta, and Amazon.
I expect it will continue. And it's been interesting to watch how Andrew Ferguson, the FTC chair, especially, has emphasized that many of these initiatives began at the end of the first Trump presidency. The case involving Google Search began at the end of the President Trump's first term. The FTC's case against Meta for monopolization began in twenty twenty.
The investigation of Apple began in twenty twenty. So one message that's come from the leadership is that we're the ones who started this, We're the ones who brought this scrutiny to bear, and we're going to carry forward with those In a way, it's an effort to claim credit for the development of the newer approach to competition law. At the same time, CHERF Ferguson makes a point of saying the Biden Harris antitrust era at the FTC is over, the con chairmanship and policy is over.
I think what they.
Mean to be saying there is that we are going to be more willing to consider solutions to mergers that stop short of absolute prohibitions. We're going to provide more clarity and certainty about the duration of the merger review process. We're not going to game the system of process to stretch out the timeline to give companies more pause and considering whether they want to go ahead.
So it is.
It's a mixture of saying we're going to continue to be tough with respect to tech in particular, but at the same time saying that we aren't going to create an environment that is so demanding as it was before. So there're going to be possibilities for for more mergers. And I think both of the leaders face something that a Republican nominee to these agencies always face. A conventional story in academics me are part of creating that right.
The eventual story is Republicans are going to open the gates. They want to say things at the beginning to say not so fast.
William Covisich GW law Professor Bill, good to see you.
Thanks for joining us. Do appreciate it.
Hey, do you want to bring in Bloomberg's Ryan Vistellica to wrap up this week in market? It's certainly a big focus being news out of Nvidia's GtC event. Ryan, it doesn't look like this was the catalyst that Nvidia investors wanted to see, and also that the greater tech industry wanted to see. What is the consequence of that?
Hey, thanks for having me on.
So you're right.
I think if you talk to a lot of analysts and investors in Nvidia, there was a lot of optimism about their product pipeline, their roadmap going forward, but it wasn't really enough to avert some of the week. As we've seen in the stock there continues to be a lot of uncertainty about policies. There continues to be a lot of uncertainty about tariffs, the outlook for the economy. All of this stuff has been weighing on tech in particular, although losses have been pretty widespread. But a couple of
stats caught my attention earlier today. This is on track d the fifth straight weekly drop for the Nastik one hundred. That's its longest since May twenty twenty two. Microsoft is on track for its eight straight weekly drop. That's its longest since February two thousand and eight. So certainly a kind of level of historic selling they're here that we're seeing today. We've seen the mag seven index fall into a correction, We've seen the Nastik one hundred fall into
a correction. There's been just a lot of broad based weakness. However, I do think we might start to see some people start buying the dip here. Valuations have really come off with their minds and we might be building a sort of face.
All right, that's the question. Hey, Ryan, have a great weekend. That's Bloomberg's Ryan Estealica. Thanks so much. That is going to do it for this edition of Bloomberg Technology. Do not forget to check out our podcast. You can find it on the terminal as well as online at Apple, Spotify, and iHeart. This is Bloomberg Technology.