Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live from coast to coast with Caroline Hide in New York and Ever though in sentrancs go.
This is Bloomberg Tech coming up data bricks raising over four billion dollars. Is its valuation skyrockets to one hundred and thirty four billion. We have the details on the relentless investor demand for AI oriented tech companies as we talk the future of US China Tech relations with Jacob Helberg and a Secretary of State for Economic Affairs and founder of the Hill and Valley's Forum. This while shopping on China's TikTok Live is catching on in the US.
We'll explore how big the experience might become for users, but first we talk about not particularly large moves in the market. Right now, we are unchanged on the NASA one hundred. It is a noisy jobs report that we tried to digest, but it does come across as a lowing data set that we see for non farm payrolls. Unemployment takes higher. The market tries to digest Bitcoin, though, just picking up about two percent where eight and sixty two.
It has been under pressure over the last few training days and in fact could be the fourth ever annual loss for bitcoin. More broadly, but as we see nervousness around the overall public market phase, what about the private market phase. Data Bricks another tell raising over four billion dollars in a new funding round. That value is the private software firm one hundred and thirty four billion dollars. But he makes Body four joins us now to discuss
what just seems to be relentless. Even though we have AI anxiety in the public markets, we are all in in the private sector fields.
What a big valuation? I mean Series L isn't it.
I mean, this is one of these companies that you know, for as long as I can remember, an IPO was six or twelve months out. But they just keep raising money from the private markets, and it's clear that private investors are happy to keep giving it to them. Right now, if you're able to tell an AI story, and for Data Bricks, that is, we're going to get all your data together and make it easy for you to run
LMS on it, then investors will be lining up. And I mean, this is a company with very clean financials, with a lot of momentum, and so you know. My guess is in six months we'll be here again talking about the series whatever letters after l.
Maybe get to z aligoci has I said, Look, I wouldn't be running a cash positive business if I didn't want to be tapping the public markets at some point. And it seems to be trying to also do secondary sales for employees. They are a competitor of Oracle and Snowfake in the public markets. Again, we're worrying about Oracle and exposure to leases for data centers. How much anxiety you hearing about around Oracle.
So Oracle disclosed a big jump in its leases in a three month period. They inked one hundred and fifty billion dollars in leases. One hundred and fifty billion, and of course that's over the next fifteen nineteen years, but you break it down, that's what around sixteen billion a year in lease payments for the coming decade and a half. That's significant. It's a lot of money that was not necessarily known about. We knew they were leasing data centers,
but probably not quite to this scale. And so it's just one more data point that's giving folks indigestion about how much is it going to cost to really get the AA data centers up and running.
Intigestion's a nice turn of phrase for it. Ready forward, We'll see how this market digests as we enter the end of the year.
Let's get more of a market perspective on that.
Let's go to Carish Life Shares, the chief market strategist Bemo Private Wealth. Carol that anxiety around oracle, around companies that have been tapping the debt markets to finance the AI well focus on infrastructure. Do you think it's the right moment to be going into these sorts of names or to be putting back.
I think it's very interesting because, as you know, there's been a lot of chat on the street, if you will, about are we in a bubble? Are we not in a bubble? But the fact that investors are being very discerning. They're putting money in private companies, they're putting money in some of those public companies, but then they're also pulling back from company is where they're not necessarily approving, if you will, of the total package, or don't like the
surprises for increased spending or increased commitments. And so that discerning nature is really constructive, and we are big believers. In fact, one of our core big three macro themes that we'll be introducing in our capital market assumptions is Industrial Revolution four point zero, and we think AI is just part of it. There's a lot bigger, broader spend, but we are definitely in a revolution that's taking this economy and putting it in a whole different place.
I mean, Carol, go deep on what discerning is discerning one hundred and thirty four billion dollar valuation for a private company that agreed has a revenue run rate of some four point eight billion dollars an eight hundred billion dollar market valuation for SpaceX and the private market, so it wants to be worth one point five trillion when IPO is in twenty twenty six. What spells out discerning to you? What are the financials you need to see?
Discerning spells out somewhat if we just take the public markets and we look at, for example, when you had five of the meg seven all report in the same week, and they all for the most part be expectations, and yet some stocks rallied and some declined because of investors listening through to the story. So there's a piece there where investors want to participate in the industry in technology in general, and they're trying to figure out where. I
think there is always that allure. It's tough to get your head around the financials, even though a number of different entities now are trying to provide US index on private companies. And I saw last week that the CBOE and others are looking to want to write options in futures on private companies. So there's different ways to participate
in it. But investors want to foot in that market because I think for anyone who lived through prior periods, you don't want to miss out on not on having everything on the sideline.
Carol, is that democratization or is that frothiness and a desire to just get in on super high valuations.
Yeah, I think we're still trying to figure that out. For me, it's a way of persing risk in different places. It's sort of like too that we've seen this evolution of the prediction markets, where in the old days you had to, you know, your traditional sixty forty portfolio. If you're nervous about markets, you had to trim equity exposure.
Now you have different ways to sort of execute on that risk nervousness, you might go buy a levered ETF, or if you own a single highly concentrated position in one name, you might go out and say, well, I'm going to buy an option or a single strategy ETF or a single stock ETF on that that's levered to the downside just to offset some of my potential. So there's different ways to play it, which we're still trying
to figure out. You know, does it get and Frothy gets when everyone runs in the same direction and we've pushed these things all parabolic and despite the fact that they've been running for what three years now, they're not parabolic yet.
Yeah, and therefore is the proof point yet again earning season? Is that why you start to see that actually valuations are in line because the PE evaluations aren't out of whack if you're really seeing the revenue that they're bringing and more broadly we see productivity board.
Now, Yeah, I think.
It's very interesting because actually when you looked at the last earning season, when you got to the end of it and you looked at forward earnings, and Video was trading with the lower forward PE ratio than Walmart was, and so part of that is the movement of those earnings we need to get for all of us. I can't wait till we get into the December report season, sooner or later we will have some sort of a handoff from all the focus and concentration around just those
seven or ten or fifteen names. We do need to see more broadening in the markets because there's been a lot of interesting stuff going on in a lot of other sectors as well, or that some that are second and third iteration of related to technology and some that are totally unrelated. But our benefiting or will benefit from increased use of robotics and technology and down the road when we have a breakthrough in quantum.
Carol, you're already excited for January twentieth when Netflix kicks off our tech earning Salem wishing away our end of the year. But it's so great to have you on to really push us forward to what your key areas are. Focus on carriage life always great in the show, Chief Market Structures and be Mo Private Wealth coming up. Well, let me joined by Jet Blue CEO because the airline prepares to open its first airport lounge.
This is a really big.
Tech Jet Blue and it's preparing to open its first airport lounge, just ahead of what's expected to be a busy holiday travel season. Blue Mags Lisa Ramowitz joins us now from John F. Kennedy Airport, a very special guest.
Thank you so much.
Yes, Caroline, I am here with Joanna Garrity, the CEO of Jet Blue, in the very first lounge. It is fashioned like an Art Deco New York City apartment from the nineteen forties, thirties, seventies, thirties. Okay, I think I got it right, Joanna. Thank you so much for being here before the launch later this week. I want to start with just how this fits into the strategy of Jet Blue right now to make the airline truly profitable for a sustainable period of time.
Yeah, thanks for the question.
Great to be here and have you in Blue House, jet Blue's first foray into lounges. This is very much part of our jet Forward strategy. We've been working very hard for the last several quarters. I'm really turning towards premium and trying to make sure that we're offering more opportunities for customers who want to pay a little more, and the lounge is part of that. Our transition to a first class product next year, domestic first class product.
We'd be part of that.
Our premier card are even more as a cabin and really excited to start seeing all of that come to life in twenty twenty six.
All of the big airlines we've talked about loyalty and how important loyalty and premium offerings is to their profitability going forward. How is it different for Jet Blue because there isn't the sort of obvious business customer that typically fuels the loyalty offering.
I mean, we're a leisure carrier.
We tend to get you know, a nice share of business customers because they love the product. You know, we're back at the top net promoter score, so really proud
of that. But at the end of the day, this is really designed around trying to make sure that customers who travel for vacation have a reason to come back again and again, providing with a little oasis of peace, and you know, really through our loyalty program, we want to reward people who choose Jet Blue because they love the product, the service and what we offer.
You have already offered Mint and other premium rollouts. How has it been going.
It's been great, Mint's been a very strong source of revenue for Jet Blue for well over the last decade, and so I'm not new to this. We have a brand that definitely associates with more of a higher end leisure customer, providing more to customers at a very reasonable fare. We want to make sure that we offer something for everybody across the full spectrum, whether you want sort of a dialed down experience, still free Wi Fi and great
leg room and great snacks and drinks TVs. But then if you want to pay a little more, you have the opportunity for a lounge our Mint Class for Transatlantic and then when we launched domestic first later this year, that's going to be a great product offering for customers want a little more.
So I was shuttled into here through very log security lines and lots of people with screaming children trying to get to different destinations for their warm holidays.
This is the busy season.
How is it looking in terms of demand given the fact that there were some hiccups in the past couple of months, But at this point people are getting back to what they originally had.
Yeah, twenty twenty five has been a very tough year. Whether it was the macro setback, or the government shut down, or the list goes on and on. We're really looking forward to the holiday season. Bookings are coming in strong
as we go into twenty twenty six. We're optimistic that the consumer is healthy and that we're going to start really ramping up the initiatives that we have been working really hard for the last year to execute too and seeing the benefit as we move through twenty twenty six, how long do.
You think it'll take before you start to actually turn profitable and sustain that.
You know, our goal next year is to break even from an operating margin perspective, and that's the first step back to profitability. We have a great team here. Everybody's pulling for us. We're doing all the right things, whether it's our focus on operational reliability, that promoter score, all the premium products that we're launching, our laser focus on costs, and really trying to make sure that we're delivering a
great product offering for customers. Because Jeblue has this wonderful brand and this sense of people want to love us and they want to see us succeed, and twenty twenty six is going to be our year with everything we put into place, because twenty twenty.
Five was not the year for a lot of airlines.
There are a lot of airlines.
There are a lot of issues, and you talk about the government shutdown, this has been a big discussion among a lot of the air airlines CEOs where they've said, we just can't make up that kind of revenue, so there will be some sort of hit. Have you disclosed to any kind of revenue loss as a result of some of the shutdown.
You know, we haven't disclosed any kind of revenue loss. You know, we've said that we remain on track for Q four and I think we're pleased with what we're seeing in terms of bookings coming in for the for the balance of the month. We definitely saw some softness obviously during the government shut down, but we're recovering coming out of that. I think most have shared that, but it was it was definitely an impact and unfortunate that the airlines were put, you know, right in the middle
of that shut down. You know, all the great air traffic controllers and the TSA workers they need to be you know, cast as essential workers. We really need to make sure that if anything, this industry is so essential
to our economy. I mean, think about all the people who were traveling for weddings and funerals or doctor's appointments that were displaced because we couldn't get on the same page in Washington, d C. So we're really hopeful that you know, we've turned a page there and that we can move forward, you know, looking at that end of January date with you know a little bit of nervousness, but I'm confident that DC will pull it together and get get us in the back end of that.
Yeah, somehow, being an airline CEO probably wasn't in your BINGO card that you'd be well focused on healthcare legislation. With your fingers crossed heading into January, I'm wondering how much you're hoping to attract a new class of customers versus capitalized and the ones that you have that might be willing and able to pay a little bit more with some of the new offerings.
It's a little bit of both. We know we have customers today that want our first class product, and so it's really you know, offering that to them so that they can buy up when that opportunity to presents it. But it's also making sure that we're competitive with the industry. Everybody's moved towards premium. You know, we're going to continue to move towards premium because it is a resilient customer segment. But we're not going to forget the folks that fly
in our coach product. I mean, they're just as important, and we want to make sure that Je Blue offers something to everyone.
It really does feel a little bit like the Sharks and the Jets when you speak to some of the airline industry CEOs where they talk about, you know, it's become a game of consolidation, and it's become a game of the big fish really dominating the fields in a lot of different ways. They say, it's going to be very hard to be a more budget focused airline.
How do you fight back?
How do you sort of create a viable business model at a time when you do see this consolid of profitability and travel in the biggest airlines.
I mean, it's definitely hard. We talk about the need for a more level playing field. When four carriers have eighty percent of the domestic seats, that's a real problem. You know, we fight very hard in DC to try to make sure that we're heard that the challenges we face, whether it's cost pressures, the lack of scale, the lack of you know, consolidated purchasing, the you know, inability to get access to gates. We just been on a gate a Heathrow, a Heathrow slot and we were denied it.
And so, you know, while maybe understand why it went to a legacy larger carrier, those are little things that add up over time, and the smaller carriers really need to be given a fair shot to win in this environment and that's not happening right now. So we're focused on what we can control. We're focused on a whole series of initiatives under our Jet Forward program. It's getting us moveing in the right direction. I'm excited about what
it's going to bring. But we do need the government to kind of make that a more level playing field so smaller carriers can more effectively compete.
In the meantime, you do have this cooperation with United fix banding in a host of different places. Is that the template going forward, maybe not consolidation due to the recent issues, but in terms of the previous merger that was denied, but going forward, having some sort of partnership with major airlines to expand the route.
So we've got fifty airline partners across the globe and now we have the Blue Sky partnership with United. That is most certainly a part of trying to provide more utility to our loyalty program and providing a broader global network for our customers when eventually in Q one they can book a Jet Blue flight on United dot Com and vice versa through our interline agreement, and so we're
excited about what it's going to bring. Does it solve the problem fully, No, it doesn't, but it's definitely a meaningful revenue initiative that gets us back movement in the right direction.
Do anticipate consolidation at any point in your future? Is that sort of on the back burner.
So that's on the back burner. We're really focused on Jet Forward. You know, I'm really excited with the progress we're making. We're seeing it. We're seeing improved operational reliability, improved customer scores. We have not let the grass grow under our feet. In twenty twenty five. We've executed a whole series of revenue initiatives. We've kept our costs under control despite pulling a point and a half capacity this year.
So twenty twenty six really is the year that we should reap the benefits of all these initiatives that we put into place in twenty twenty five.
Before I let you get back to celebrating the new lounge, I do want to just ask you about the recent incident and with a pilot, a four jet plu plane that was in the route between Krosau and JFK. There was a close call within the.
US Air Force jet.
Do you have any more information about what happened there to make sure that it doesn't happen again.
Yeah, I'm really proud of our pilot. He reported the event and we train them for situations like this. We reported the incident to the government. We're waiting to hear the results of their investigation. But just please with how our pilot handled it and how attract Control handled it. There's a whole series of safety nets in place in the era, in the national airspace system, and the pilot is the last line of defense and he absolutely did
his job, did it well. And you know, my hope is that doesn't that doesn't happen again.
So Aana Garty thank you so much for being with us. Joanna Guardy, CEO of jeff Blue. I'll send it back to you.
Great looking lounge, Bloombg's Lisa Obama, it's great interviews.
We thank you.
Coming up is the EV revolution stalling or shifting gears That discussion.
Next is the Bloomberg.
Tech It's really about moving to more profitable vehicles. You know, we're going to make in Tennessee now an affordable pickup truck, so these are going to be better investments for the company profit and all those hybrid sales, you know, those are really profitable vehicles for us.
The Ford CEO Jim Farley speaking with Bloomberg's Matt Miller yesterday as the company announced it's going to take a nineteen and a half billion dollar charge tied to an overhaul of its EV business. More Bluemogs creat Judell joins us, you cover all things automotive, and really this comes in the context of the US on Europe really envisaging what the relationship with the EV fuel is looking like.
Yeah, I think with what we've seen just in the last you know, day, day and a half, at this point, it's really a matter of sort of plenty of blame going around, right, this is a case where the consumer absolutely has not been ready to go fully electric, you know, universally.
I think manufacturers like Ford have learned that the hard way, and I think they have you know, some some mistakes to wear here in terms of, you know, bringing out electric vehicles that were just too expensive, not supporting them with enough charging infrastructure. And then you have I think policymakers too, where you have a lot of criticism of the approach that the EU has taken and the need on Brussels part to kind of back down from this.
You know, twenty thirty five policy that you know, kind of all along was seen by the industry is really a stretch, and the closer we get to it, the more, you know, real doubts of emerge about us being able to come anywhere close to that ambition.
And Craig that ambition, just to remind us, was an effective ban on combustion engines, Yeah.
It was one hundred percent reduction in emissions by twenty thirty five. I think you have to sort of throw it effective in there, and that there are you know, lots of loopholes and sort of ways in which you can sort of you know, preserve at least, as you know, some role for combustion engines with offsets and so forth.
But this was absolutely going to be a very difficult ambition for this industry, and it will remain so even with some of these changes that we're learning about today out of Brussels.
Craig.
This comes in the context US Europe on this global pullback from green policies, but it also goes without saying that China has really made building affordable evs very difficult to compete with.
Yeah, I think that's a really important aspect of all this. And and absolutely you have to, on one hand give China credit for really sort of bum rushing this technology, building up this huge lead both from a technology perspective appeal and you know, being able to offer prices that
the rest of the world can't match. I think you know what you have to ask yourself though, if if your other you know, sort of governments in other parts of the world, is are you prepared to sort of allow China to sort of export its deflation to your markets when that is going to mean you know, a
loss of jobs, a loss of industry. We've already seen enough, you know, hollowing out in so many of these places, and a rise of populism, rise of a lot of things that you know, have have sort of been ugly for the world, and hence we get this pushback, we get these tariffs, and even today with the EU, you know, sort of a means.
For quote unquote super credits that.
You know, manufacturers will earn only if they make electric vehicles in Europe, and so that's going to lead to you know, sort of some further support and sort of preference for a domestic manufacturing over imports from China.
Geopolitics just intertwining itself with capital markets and with the auto sector. Blue most Craig Cridel, thanks so much for breaking that down. Now, coming up, we're going to be talking with the CEO Bespoke Partners. AIS impact on executive recruiting and the labor market more broadly is why we digest. Of course, well, unemployment rising yet again to a four year high in the United States, and that's that one hundred tried to take on the chin the labor market
and the slowdown. We're off by three tens percent of magnificent seven. As you'll see on the downside, semis under pressure check out Walcom off.
By two tens percent. They've had thirt of a trillion.
Dollars wiped off their market cap in the last four days alone.
This is blue bg Tech combat to Bloomberg Tech.
Let's check in on these markets because we're trying to digest a relatively noisy report, as some people are saying about the jobs market. Of course, this comes for October November numbers. Sixty four thousand non farm payrolls increased in November for the unemployment rate to hire four point six percent. Federal Reserve therefore unlikely to do much on this particular current jobs report. So the market pretty sanguin are off
by four tens percent. Bitcoin managed to ramp up almost two percent eighty seven thousands where we trade, but it has under significant pressure as we end this year, and in fact, it looks to be fourth ever down year for the og in crypto. But more broadly, we think
about how US unemployment is factoring into market sentiment. As we said, the figure rising to a four year high in November, and while clear evidence of widespread AI related layofs hasn't quite emerged, more and more firms like these appointing to the technology as they announce all plan for cuts for firms hiring AI skills are actually becoming I must have, But could actually AI also help solve a potential leadership shortage?
Eric well Zikowski is with us.
You see over executive recruiting firms spoke Partners, and really you're thinking about the intersection of AI in the labor market and you're thinking about how AI can help with the job search. Eric, But first your few on whether these jobs numbers and unemployment rate increases are in any way tied to AI and automation.
Caroline, thanks for having me on the show.
Look, when I think about AI, it's definitely impacting the broader market. But I think that while payroll growth has stalled, I don't think it's collapsed. And I think this tickup in unemployment is temporary. And I think when we look at the last couple of years, we've had a tight
monetary policy, high capital rates, low deal flow. In Q three, I think we started to see deal flow pickup, and I think we're going to start to see deal flow pick up from there, and from there, I think we'll see leadership change and then job creation.
Okay, so you're very much focused on sort of SMEs held by private equity that my going through some sort of change and transition. But you've been trying to warn that maybe the leadership isn't quite there to stand into these sorts of periods of transition.
Well, what's interesting is deal flow finally picked up in Q three and we're seeing the tightest labor market ever in executives for software companies.
It's the perfect storm.
As deal flow has picked up, demand for these executives has also picked up because we need new executives for new platforms.
But they're about thirteen.
Thousand companies in the private equity sector that need to exit at some point.
There's light at the end of the tunnel.
And so in a market where there's natural churn with executives, you have more executives now who are waiting for the exit in the next twelve to eighteen months, putting a significant amount of pressure on these leadership changes.
So there's people looking for an exit. Does that mean we're going to have a glut of leaders coming onto the market because suddenly their businesses are sold And do they have the right talents and the right AI talents to advise in the future.
Whens you take more leadership positions.
I think we are going to see more folks come onto the market, but I think it's going to take a significant amount of time to get through this private equity bloat backlog, number of portfolio companies that need to exit. So I anticipate twenty twenty six and twenty twenty seven to be a very tight leader market. That said, we're paid to find the best of the best, and those
folks are out there. The key is to make sure that you're looking at the entire market, and I think that's where AI really comes in and gives us the opportunity to determine who those right executives are.
So how is AI helping?
Well, what's interesting.
When I entered the execs search industry about five years ago, I saw an industry where searches were done from the bottoms up, and the very best executive search professionals we're only seeing about twenty percent of the market because effect what they were doing is they were going to a database of who they know. So we started a project about four years ago where we indexed the entire market for software executives in North America and identified all seven
hundred thousand executives that participate in the market. Those AI tools have then allowed us to determine who is particularly the best fit for the executive roles that we're placing.
Eric.
Fascinating talking to you in this current environment. Eric Mazaikowski, He's the CEO Bespoke Partners.
Thank you.
Coming up an important conversation from geopolitical perspective. Jacob Helberg joining US under Secretary of State for Economic Affairs. He's also the founder of the hen and Valley Forum. We're going to talk all things chips, China securing the AI supply chain.
This is the Blueberg teg.
Really.
In our latest move to secure the AI supply chain, the government is backing a project by Career Zinc to build a some point four billion dollars smelter in Tennessee. So latest in flurry of Trump administration measures aimed establishing domestic supply chains.
For key minerals.
Jacob Helberg, under Secretary of State for Economic Affairs, is leading one of those.
Key initiatives, Pax Silica.
I'm very pleased to say he joins US now and you are all in on AI supply chain resiliency and maybe managing to ensure that China doesn't own it all. How does this particular Tennessee smelter speak to that initiative.
Well, Caroline, it's great to be with you, and it's great to be on your show. So during my confirmation hearing back in June, the Senate ask for a strategy, and the President's National Security Strategy gave them one, and every day the State Department is wasting no time to give them results. Our economic security strategy is based on four pillars. We're rebalancing trade and Secretary Lutnek, Secretary Bessone, and Ambassador Greer have done a stellar job at renegotiating
decades long trade deals. We're stabilizing conflict zones. We're reindustrializing America to make sure that we maintain our competitive edge, and the deal with Korea Zinc is a major milestone in that effort. And ultimately, we're also securing our supply chains. Pack Silica provides the framework that allows us to work with our allies and partners to make sure that we can secure our supply chains in order to lead in the industries of the future. And we're very proud of
the rollout of Korea Zinc. The Department of War was an instrumental pillar to the deal, and ultimately this is the kind of whole of government of approach that we're looking at advancing to advance our interests.
Talk about that approach in this case, it feels very much more like public private partnership on a particular smelter. JP Morgan's in there as well with its initiative. On other cases, you're actually taking stakes in companies that aren't even American. How do you see it being fit for purpose on each individual way.
So one of the reasons that we started the pack Silica initiative is because the global supply chain is global. We wanted to get together with the Koreans, the Japanese, the Australians, the Brits, the Singaporeans and Israel because all of these companies bring unique attributes to the table. And ultimately the deal with Korea Zinc illustrates the competitive advantages that some of our key partners and allies have in
these areas. Ultimately, what we realize is that there is a new economic security consensus that's emerging across our allied space that economic security is national security and economic policy is downstream of national security, and our allies are on the same page that this is not a line item,
it's a prerequisite for national survival. So through Packed Silica, we're cooperating on economic security practices as well as opening new channels for co investment in FABS data centers, as well as refining projects like the Korea Zinc Refining Facility in Clarksville. Ultimately, we want to pool together and leverage different investment vehicles that our respective governments have. In the US, we have the Development Finance Corporation, we have the Department
of War, the Office of Strategic Capital. There are so many resources at our disposal, and most importantly, we have the world's best corporate ecosystem and innovation ecosystem. And this is where collaboration between allies as well as between the public sector and the private sector can really make a difference when stakes are taken.
For example, we're looking at a graphic show four hundred million dollars for fifty percent of MP materials. Some might say this isn't very pro capitalism.
How do you speak to that.
It's an investment in America. Ultimately, the Department of War needs various minerals in order to make sure that we have the best arsenal to deter and to deter our adversaries and maintain our piece through strength policy. It is in the amble of our Constitution that it is a fundamental purpose of the US government to provide for the common defense, and so the Department of War needs weapons
to do that. In order to get the weapons that it needs, it needs to be able to have an ecosystem of suppliers that are reliable in times of peace as well as in times of war. And ultimately, the Department of War has demonstrated its commitment in order to use every tool in its toolbox in order to make sure that we actually have an ecosystem here in the US that can guarantee our critical supplies for minerals, especially
in a wartime. So we're very proud of this project, and it's going to have dramatic spillovers on the commercial sector as well.
Spillovers are on commercial sector. How much could we spill over in more countries joining.
We're looking at the inaugural.
Pack Silica Summit the allies that joined, but someone guests as well, TAIWANOCD, Europe in particular.
Will more join.
So we do expect a number of them to join in the first half of next year. We're talking to a number of countries right now, including India among several others. India is host to the AI Impact Forum next year.
We're very much looking forward to participating in that. Ultimately, we want to make sure that the group stays focused on solving very specific challenges of supply chain security, So we approach every single partner very much through the lens of which companies are they able to bring to bear to the table in order to solve concrete challenges. That is very much our model. We expect to pursue that model, but we do realize that the meeting that we held
was a first step. It's not a final destination. Now we're shifting towards implementation, and we will likely add more new partners early next year.
Many a watch for as to how much the you will get involved. One key company in the U is SML. We spoke with the CEO recently about his own supply chain US China. Just take a minute to listen to this, Jacob, if you will.
Most probably we need to develop a much bigger supply chain, so maybe not depending fully on China. I don't know how much we have in Europe. So that's also why it's important to keep some of those market open.
I think you're right.
The interdependencies we have between you know, US, China the US is being reminded to us.
Every day now.
We understand that China has just started allowing rare earth export licenses to certain European companies in particular, and the top train negotiator yesterday told us that things were looking up.
Is it looking up for the US as well? With rare earth metals for example.
So we're seeing a very interesting debate take place in Europe, and Europe fundamentally has a choice between the loss of identity, the loss of industry, and the loss of borders, or they can choose regulatory simplification, energy abundance, and fair and reciprocal trade. There is an effort within the EU context
aimed at regulatory simplifications, which we find very encouraging. I will say we also find it very very encouraging that there is a growing economic security consensus between the United States and Europe. And one of the examples of that is the fact that the G seven theme next year is global imbalances, and as you know, the French government is not referring to weather patterns when they're talking about imbalances.
It's referring to the fact that Europe is awakening to the economic security challenges of industrial over reliance and decades of unfair practices, and we welcome that and we want to work with them on that. The Netherlands did participate in the Pack Silica summit. We want to deepen that collaboration, and ultimately we view Europe as an important partner and we want to work with them as they are currently working through to solve their economic and supply chain challenges as well.
I mean, Jacob, many would say that Europe felt that your National Security strategy, as was put out on December the fifth, was a real wake up call. In fact, I think they saw it as a significant reorientation of US and its relationship with Europe. They felt sort of under threatened, specifically criticized. How did you take on board that reaction? I think there is even the word used civilization erasure as you thought to tackle immigration or put your views forward on culture wars in Europe.
Sure, so, the president's National Security strategy was not an insult, It was a diagnosis. It was the fact that he laid out in clear and simple terms that there is a turning point that Europe is facing. It can choose managed decline, bureaucratic paralysis, or it can choose rejuvenation, secure borders, energy abundance, and fair and reciprocal trade.
We have our.
Disagreements with Europe on how they approach the technology sector. We think that they are way too heavy handed from a bureaucratic and regulatory standpoint over cutting edge technologies. We believe ultimately that you know, when they take steps to go after our companies, they actually end up hurting themselves by deteriorating the investment climate in Europe. With that being said, we do have notable areas of convergence, including on economic security.
They are now experiencing the economic security and supply chain challenges that we are experiencing. They are having healthy, open debates about supply chain security, and the theme of the G seven highlights where their mind is at, and so we do see a healthy terrain to engage with them on supply chain security. We hope to seize that opportunity actually expanded if and where possible.
That time diagnosis, Jacob, You've been diagnosis for a long time diagnosing the relationship the security risks of US and China. You've been writing about it, you've been a public servant around it, you've done private company roles around it. What do you think the relationship with US and China should be like? Because at the moment, the diagnosis is we're still dependent on ninety percent of our rare earth metals from there.
Well, ultimately, the President's been clear that we want to have a constructive, stable and positive relationship with China, and at this we're going to do that all the while standing up for America and putting America first. And so he delivered a landmark speech back in July on winning the AI race. Our policy is we want to win the AI race because we want to put America first, and so we're never going to apologize or back down from defending American interests. We believe that winning the race
has two main vectors. We need to have the best innovation and we need to have the most diffusion. And ultimately, we are pursuing a two track approach to make sure that we expand our compute capacity here at home to have the best models in the world, all the while exporting our technology onto the world market to make sure that the world's developers are all building on the American stack.
Jacob Helberg, great to have some time with you.
Come back to your US under Secretary of State for Economic Affairs, of course, the founder of Helen Valley Forum as well. Much more coming up, Stay with us the Blue Bag Tech and it's time now for talking tech. First up.
President Donald Trump has filed.
A defamation suit against the BBC over an edit of his January sixth, twenty twenty one speech used in Panorama documentary, and according to the court filings in Florida, Trump is seeking ten billion dollars in damages, alleging that the edit falsely suggested that he issued a direct call for violence kind of the attack on the US Capitol. Plus PayPal, Well, It's applied to become a bank in the United States.
The payments firm is looking to take advantage of the Trump administration's openness to fintech companies entering the banking system. The company says, if approved, a PayPal bank would help strengthen its small business lending capabilities, and the NASDAQ is looking for regulatory approval to extend its trading hours to twenty three hours during the work week. According to the filing, the firm has asked the SEC for permission to add an additional trading session from nine pm to four am
Eastern Time. Let's talk social media and Instagram. It is just unveiled its first dedicated TV app, and let's use us watch short form video feature reels on a larger screen, something Instagram head Adam Masi hinted out earlier in this year during our Bloomberg screen Time event Bloomberg Kirk Wagner was a person interviewing him at that screen Time event. You cover all things social media. So any big surprises here.
No, not exactly.
A little faster honestly than I thought. If you remember when we chatted with Adam Masei in October, he kind of hinted that this was something they were looking toward. Here we are just two months later. They do have this app that they're debuting. The one thing I'll point out is that this is just for the Amazon Fire
TV right now. I imagine that they want to create this app for all those different smart TV platforms, so, you know, sort of limited in scope at the moment, but obviously the plan being to expand this quite aggressively, and you.
Just think about how already YouTube has dominated so much of our attention span, and we're looking at TV, We're all thinking about Warner Brothers Discovery and what that means in terms of competition, But there's a lot of competition in terms of social media as well.
For our eyeballs and for our wallets.
Kurt, what are you making of TikTok ever more encroaching on our wallet and on shopping.
Yeah, there was a great story by our colleague Alex Levine this morning about the rise of live stream shopping on TikTok. It's a kind of a format that is very popular in China. It is responsible for hundreds of billions of dollars in annual spend in China. It is not translated to the US.
US.
Despite sort of efforts from YouTube, from Meta, from other big tech companies over the years, TikTok is having a little bit more success here. The story highlights some of the small mom and pop shops that are really seeing great sales on TikTok live. Kim Kardashian just did a holiday special for her Skims company, so it feels like maybe TikTok is having a little bit of success where
other larger tech companies have not. And I have to imagine that's just because people are so just scrolling, so used to being entertained on that app that when you throw in sort of an entertaining infomercial, it doesn't feel so out of place to users.
What's interesting, because TikTok used by about half the country, there have been so much concern and anxiety by those dedicated users that TikTok was going to be kicked out of the United States.
Have they been able to.
Ramp up other parts of the business model as that anxiety seems to dial down. We're just getting extension after extension in terms of whether or not we'll be allowed to serve here.
Well, what's interesting is they didn't seem to, you know, pump the brakes on live shopping at all, despite this kind of cloud hanging over the company.
Now. I think we can all.
Probably agree at this point that a band seems very unlikely. President Trump has now extended the deadline for them to sign a deal several times. He clearly does not want to ban this app, but they were kind of pushing this forward regardless, and I think they're now benefiting from that well Snoop.
Dog seems to be doing cocktails with Kim Kardashian via TikTok so Brave Mean World is always Bloomberg's Kat Wagner. Great to have you on all things social. That does it for this edition of Bloomberg Tech. But don't forget to check out our podcast. You can find it on the terminal, as well as online on.
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