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 New York. I'm Caroline Hyde.
And I'm Mike Sheppard and Washington. This is Bloomberg Technology.
Coming up metas all in on AI with plans to boost capital expenditure to up to sixty five billion dollars in twenty twenty five, plus a choppy start to chip earnings with global semi stocks falling after Texas Instruments is the latest to underwhelm and what'll be joined by Frank McCourt on the future of TikTok in the US and his bid for the social media platform. At first, we check in on these markets, Mike, which are still treading near record highs.
The NASAC is up almost two percent with the course of the week.
But we draw down a little bit as we of course see the weight of some chip stocks causing a little anxiety. Look at his industrial automotive end markets that still prove wheak. Texas Instruments again falling on from s k Heinix, which had a little bit of an underwhelming earnings report as well. They're seeing the smartphone weakness, but AI still really managing to drive forward. Broadcom is on the higher side when it comes to the socks. Why's
broad come up because of our nex stock. Let's have a look at what's happening with Meta today, because they see from Mark Zuckerberg almost front running his own earnings report next week to say that they are committed to spending on AI, data centers, people, infrastructure, and indeed we're starting to see it up nineteen percent.
We're at a record high for Meta.
Let's get out to Kurt Wagner for more, because this is all about upping its capital expenditure to whopping sixty five billion.
Yeah, and that's about fifty percent more than what we saw in twenty twenty four, which was a big amount thirty eight to forty billion, and a lot of people a year ago, Caroline, were sort of worried is Meta overspending here? Right? And here they are jumping up even higher.
I mean, I think you hit it right there, which is that this is an AI play, right, This is data centers, these are GPUs, this is you know, trying to keep pace with Open AI and Microsoft and Google and all these other companies that are investing so heavily. It's been a huge focus for Mark Zuckerberg over the last couple of years and clearly will continue to be in twenty twenty five.
Kurt. We've seen some investors express concern about whether there is an overspend in AI, but today they seem to be giving a little bit of grace to Meta. Why is that in metas case?
Well, I think this is the most exciting technology that Meta could be investing in.
Right.
If you're a meta investor and you say, hey, what would you rather do have Mark Zuckerberg put twenty billion dollars into AI or twenty billion dollars into you know, the metaverse?
Right?
And obviously those things are related. A lot of the A technology will ultimately power the metaverse. But my point simply being is that I think this is the avenue where investors are okay with overspending.
Right.
Even Mark Zuckerberg told our own Emily Chang last summer, Hey, a lot of us are going to overspend, but that is a better outcome than waking up ten years from now and realizing you missed the boat on this whole thing.
Bloomberg's Kurt Wagner, Thank you. And it was a big week for chip stocks as President Trump announced Project Stargate to help boost AI infrastructure, but weakness in traditional memory markets is limiting that euphoria. For more, we're joined by Peter Elstrom of Bloomberg. Thank you, Peter. Peter, we are seeing that this AI wave is not lifting all boats. Can you talk a little bit about what happened with sk Heinex and Texast Instruments for example, and then more broadly.
Yeah, Ska Honicks is a Korean company that doesn't get that much attention, doesn't get the kind of attention that Nvidia does, but it's very related to them. In Vidia makes the AI accelerators and Ska Honicks makes the memory that are paired with those accelerators to be able to run these AI models. So it's a pretty good bill weather of what's going on in the AI market now. It's earnings results, by almost any measure, were quite strong.
Revenue was of seventy five percent, their operating profit was up twenty fold, but it wasn't enough for investors. The shares actually declined about three percent yesterday. There's been some softness in that market, and that sort of sent some concerns throughout the market, including here into Europe and into the US yesterday. It just goes to show how high
the expectations are in this market. You would think that sixty five billion dollars in spending on AI will get you something of a rally in stocks, but that's not what we're seeing so far.
Yeah, any Broadcom really managing to garnering any love from that because it's a supplier to Meta so too is in video that's on the downside, and maybe that's more in line with what we're seeing with Texas instruments. It underwhelms on its numbers, but it's the end markets of autos, of industrials of actually maybe where we'll see some tariffs being hit from China too.
Yeah, there are different kinds of concerns around Texas instruments. They play a bit more into the traditional markets, as you say, into the auto market in particular. We could have teriffs impact some of those in markets. It's not clear exactly how that's going to spend. And also Trump has been talking about rolling back some of the subsidies for evs, which take a lot of these ships too.
So there's some softness and some more traditional size parts of the chip market here that may be impacting Texas instruments and overall just raising concerns about whether some of these valuations have gotten ahead of themselves from AI into some of these other areas.
Peter Elstrom manering the tech with the politics.
We thank you so much on all things chip. President Trump.
They're speaking as he boards Air Force one in Nashville, North Carolina, visiting. Of course family is affected by Hurricane Helen. But he spoke much more about Federal Emergency Management Agency, wanting them to see less involvement in hurricane recovery and more state involvement when it comes to these sorts of natural disasters.
Also speaking about OPEC, the view.
On cutting oil prices, and indeed he was speaking that a little bit about some of the immigration policies, and indeed once again criticizing some of the water policies in California. He pans to visit California next and regarding those LA wildfires. But Mike, we have much more on President Trump's policies.
We do, and he has these big ambitions for the US to become an AI superpower. As we heard him talk about at Davos yesterday. This is touching off a global tech race, and we're joined by Michelle guid To, the CEO of the Kroc Institute for Tech Diplomacy at Purdue, to talk us through it. Michelle, we have seen this week the Stargate venture announced and then Meta today talking about a big investment in AI and in data centers.
Those are all private sector initiatives. Are they going to be enough to keep up with what rivals like China in particular, are doing with state driven investment?
Yeah?
Thanks, thanks for that. Mike. Well, I think what we're seeing in the first five days of the second Trump administration is America First also means innovation first, and as you pointed out, there is a lot of momentum with private sector companies now stepping up their game to invest in the future of the United States becoming what the President has said will be the world capital of artificial intelligence, the world capital of cryptocurrency. And that's really important because
China wants to hold that title. And China is also pouring a lot of its own government money, billions and billions of dollars into building out data centers, building out infrastructure. They're building eight new massive data hubs. They're approving ten nuclear power plants every year. They have a national initiative
called Eastern Data Western Compute. So to see private sector companies United States all of a sudden really cranking up their investment in this strategic capability for the United States as good news.
Michelle, You've talked in the past about the importance of democratic allies working together in this area of tech. Yesterday, also at Davo's, we heard Donald Trump talking about tariffs and differences over regulation with the European Union. How does that complicate joint efforts to say counter China.
Well, you know, with trusted allies and partners, you can also be really honest and they are honest conversations going on about what it takes to work together and to be effective economically, to be effective technologically in order to compete against China. And the innovation first approach is really interesting because the opposite of that, the alternative to that, is a regulatory first approach. We've seen what happens with that.
Just look at Europe.
The report that Mario Dragi release just a few months ago outlined how painful it's become for Europe. They have to pay eight hundred billion dollars a year just to catch up in terms of tech competitives. In fifty years, they haven't created a single company that's got greater than one hundred billion dollar market cap. All of their unicorns,
a third of their unicorns are fleeing the EU. So we have to change that because the Europeans, our friends in the Indo Pacific, Latin America, all across the world are really important partner. So we need to be on the same page in terms of how we power innovation at the same time we are powering oternational security.
Michelle, it's interesting that the previous administration, in the last days of the Biden administration, did put some pretty tough focus on Nvidia, for example. Then it's a bitity to export, particularly to China. How much might that hinders some of the very successful companies here in the United States with the ongoing geopolitical tension.
Yeah, I think we'll see some developments with the new Trump administration on where they're going with export controls. Well, remember that started under the first administration was carried forward by the Biden administration.
We'll see where that goes.
But I think you can tell that this administration is very focused on innovation and national security at the same time. So we've got a bolster us and allied innovation and leadership so that we win and our values are represented in technology. At the same time, we can also protect national security. And as President Trump said in his inaugural address, America can do the impossible. It's what we do. And
to balance those two things with our allies. I think we're headed on a trajectory toward that.
But it takes time.
These one hundred billion dollars of investment up to five hundred billion dollars can't go into the ground immediately to start getting data centers up and running. It takes years, and yet we might see an impact on goods coming from China in months.
Is that a key issue? Is that a national security risk?
Well, I think this administration has signaled that this all needs to happen as fast as possible. They've used the word unleash many times, unleashing American energy, unleashing American innovation, declaring an energy emergency in order to really catalyze and accelerate what we're doing there, We're going to need so much more energy to power these data centers that power ai. Open Ai and Goldman Sacks I think had estimate it. We're going to need fifty gegawatts of new incremental energy.
In order to do that.
We're dusting off all nuclear power plants, so you're right, that has to happen really fast. And the great part is that we've got private sector companies now on board that are going to turbo charge our effort.
Chere, Geida, It's always great to have you on the crowd Institute for Tech Topoonmacy at Perdu, we thank you.
Coming up.
Look, open ai is joining a growing number of tech companies bending on so called AI agents. We're going to talk about what Operator is capable of and some of the concerns. This is blue Meg technology. Let's turn to the latest product out of open Ai, the startup launching its AI agent.
Of course, this is all regarding Operator.
Apparently it can put you flights, plan your grocery orders, even complete purchases for users. We're joined now by bloomgg's Rachel Metz, who I'm told is wearing some lipstick that Operator already.
Bought for you.
This is correct. I used Operator yesterday to do a whole bunch of different things, just trying it out really quickly to sort of put it through its paces. One of the things I did well, actually it relates to you. You were wearing a nice neutral shade of lipstick a few days ago that I happened a spot and I asked Operator to pick out a neutral lipstick shade for me from Sephora and purchase it. And it did, And then I went to Sephora and picked it up and I'm wearing it now.
Rachel. Investors have been looking for this breakthrough functionality with AI. Are we getting any closer with this?
I think it's still a little bit tricky to tell, but it is very clear that they're putting a lot of time and resources into trying to figure out new ways that they can integrate these tools into people's lives. Operator is meant to be pretty general purpose, as you might have noticed from the way they were positioning it. You mentioned caroline, grocery orders. I think you might have
mentioned planning flights. These are all like different things that the average person can totally envision doing themselves that they might not like doing posted to some of the other agent type software that's already out there that's more inward
things like coding. I feel like we're definitely seeing this the idea of this at least being spread as more of a mass market thing, even though operator is only available to a small number of Opening Eyes users who want to pay two hundred dollars a month for it as part of a larger service.
Almost beta testing as it does tend to do. Rachel Metz, great to have you, and I like the way that you encompass that there is competition how there as well. Welcome back to Blue Meg Technology and Caroin Hide in New.
York and I'm Mike Sheppard and Washington.
Quick check on these markets, Mike, because we are at near record highs and that's that one hundred is up almost two percent on the week we just pulled back. It's chip stocks that are in focus as we underwhelm on Texas instruments following skhinex's numbers.
But Bitcoin up two point eight percent.
Remember a flurry of executive orders that I know you've been watching, and came among them yesterday was the AI and the crypto order. Maybe we get some sort of overall bitcoin reserve, but it's not.
A bitcoin reserve, it's a digital asset.
Reserve and Bitcoin took a bit of a hit yesterday, but we're back at one hundred and six thousand.
Move on, individual names you need to keep an eye on.
We've had started the earning season and Verizon is among them. We're currently seeing it up one one point two percent, as they managed to beat in terms of almost half a million being added for new phones. Tesla up a quarter of percent. They're having to put over and over the air update to basically technically recall Chinese cars, but here in the US they're doing model wise. New ericson down thirteen percent on the back of telecoms equipment not selling as expected.
Mike Carol, Let's turn to TikTok. Now this is such a big issue in Washington. We're joined by Frank McCord, executive chairman of McCourt Global and founder of Project Liberty, which had made a formal offer to acquire the social media giant less than two weeks ago, not long before the band deadline. Frank, I wanted to start with the reprieve that President Donald Trump signed hours after taking office.
How has that complicated efforts by you and other bidders, perhaps to get byt dance to come to the table to talk about a sale.
Well, I really hasn't complicated anything from our perspective, Mike, we just continue to, you know, chug along and we're prepared.
Here.
We're hanging around the hoops, so to speak, waiting for Bike Dance to make a decision, and if it takes a little bit more time, so be it. But you know, we feel we're in a really unique position to buy us TikTok. We're the only ones that actually put a bid in and submitted to the Department of Justice before the original deadline and where we were ready to roll but for a signature from BYT Dance. So we continue to be ready. We have more and more conversations. There's
more and more excitement around this. We had a fabulous couple of days in Davos where there was great, great excitement around the project. So yeah, I remain optimistic and I think we just have to give BYT Dance time to sort this out, but I believe they will. You're buying us TikTok without the Chinese technology is the way forward.
What if you heard back from Byte Dance in response to this offer, Have they been engaging much at all and would President Donald Trump be in position to perhaps help you get them to really get the discussions going.
Well. My hope is that President Trump can be you know, a deal maker here and help get this deal done by convincing by Dance to actually sell us TikTok and not shut it down. I mean, those are the two choices here, and by Dance themselves have been pretty silent. I mean, they've acknowledged receipt of our offer, but I think quite frankly, they're they're digesting everything. I think their hope originally was relief from the Supreme Court, which they
did not get, as you well know. And now I think they're in a new reality and so they're confronted with a shutdown or a sale, and we believe that a sale is the best way forward. It will keep the app lit up and as I say, without the Chinese technology, why not sell?
Who have you been talking to? Where's the excitement in Davos?
It's interesting. We had a little house called Future House that on the promenade, and the promenade was lined with different AI products being marketed and so forth. It was the theme really of Davos this year. And Caroline our house, Future House had a long line outside.
Of people who want to invest with you, though, Frank, you speaking to mister Bees, for example, because he's joined another consort him, it.
Seems well, mister Beasts has joined all consortiums, so he's interested in keeping his his options open. I've talked to Jimmy, others have talked to Jimmy. You've read the reports that he has not aligned with a single bidder, But put that aside. I think the people that were really interested in of course, they're interested in seeing what will happen
with TikTok. But as I've said over and over again, this is an opportunity to actually reimagine how the Internet works and give people ownership and control of their identity and their data and their relationships. And that's very exciting to people, and including by the way, TikTok influencers.
And that is what sets you apart the fact that you're building to a new tech stack basically, and a decentralized one at that. Frank, what does it mean to potentially work with the US government? Would you want to have the US government also buying? In fact talking to the US government. We're just going to have to listen in to President Trump. Just one moment, Frank sit with us. We were just asking you if you'd work alongside Trump.
He's thinking about potentially in the US the government owned a piece of TikTok.
Well, yeah, we absolutely want to work alongside President Trump, and I think he could be very, very helpful. I do think ultimately the US TikTok is going to be in the hands of the private sector and totally disentangled from the Chinese technology. I think that's really clear in the legislation and was made doubly clear. You know on pages five and six of the Supreme Court decision that
their Congress is looking for a complete disentanglement. And that's Caroline, which puts us in a unique position because we have the tech stack. We've been building it for the last five years to move the user base and the data onto This is.
A story that will evolve. We thank you so much for your patients. Coming on from Rome, Frank mcort, executive Chairman of the Court Global and founder of Project Liberty. We hope we will come back as the negotiations continue. Let's talk about how this is impacting TikTok users and the brands that use it. Rachel tipographs founder and CEO make Macks, an e commance marketing platform for multi channel brams.
What did they make of a sudden going black? Did brands pull away from spending on TikTok? It's been wild.
January eighteenth, ten pm, New York Time, we saw TikTok brand traffic go to zero percent. It stayed that way for fifteen hours. Traffic started to come back January nineteenth, twelve, fifteen pm, and for about two business days it held at zero point five percent of our traffic. In the last two business days it has risen. It now represents around fifteen percent of our total traffic. I've been coming on the show now for two years.
You've heard me.
Say TikTok typically is thirty five percent of our traffic. Based on this meteoric rise in the last two business days, we at mcmack believe that we're going to get back to normal rates on Monday, Rachel.
What is the fallout for businesses that are tied in some way or another to TikTok from all the uncertainty surrounding whether will continue, whether there will be a purchaser.
Yeah, so I think the delta between fifteen and thirty five percent is essentially all those fortune one thousand brands that are feeling very skittish right now with the uncertainty and who's going to be the new parent owner as well as just the overall view right now of the Supreme Court. They don't want to be held liable and typically they're spending hundreds of millions of dollars on that platform.
So there is a large set right now of the fortune one thousand brands that are just waiting to see what the outcome is.
Going to be, make sure they have to make decisions and whey to allocate right now, we're just seeing some of your data.
Who's winning?
Yeah, So these brands, they're heavily reliant obviously on their marketing budgets. It's how they drive demand generation and sales. So in the last I would say two weeks, we have watched spend move out of TikTok as well as Meta. We can circle back on that into Alphabet, which is paid search, YouTube, DV three sixty and pinterest. The reason why is that brands are looking for reach, conversion and
brand safety. Alphabet absolutely delivers on reach and conversion. They've made enormous efforts around brand safety since all of the challenges YouTube had in twenty twelve, and then Pinterest. I've been on the show, I talked about it. It's a dark horse that no one talks about. It's the safest place on the Internet and brands are moving dollars there because Pinterest can drive conversion as well. So the big
winners are Alphabet and Pinterest. The reason why we've also seen a decline in meta traffic in the month of January has everything to do with the announcement Zuckerberg made two and a half weeks ago when he announced that fact checking was going to be removed from the platform.
Brands once again fell skittish. Brands care about their long term brand equity, their brand safety, and whenever a platform becomes political, they reallocate dollars to platforms that they have more confidence in their brand safety.
Rachel, we were just talking to a prospective bidder for TikTok. What does all this churn mean for its value and perhaps ultimate purchase price.
I'm personally skeptical of what's going to happen with this divestiture if it goes into the hands of a new US parent owner. TikTok is not TikTok without the algorithm. The community is based on the app automatically pushing you like minded people. That's what makes TikTok so magical. With a new US parent owner, if they can't replicate the magic of that algorithm, I know with significant confidence people are going to move out of TikTok.
We saw it in the last two weeks.
It's so easy to build a new community in a new app. Will be red Note, will it be blue sky, will it be Pinterest? Only time will tell, and so I have trepidation on what's going to happen From a brand advertiser standpoint. They're going to go wherever eyeballs and engagement are, so brands can move their dollars very easily. I think we've all seen that in the month of January. It's like trading on Wall Street media buying. You can move a dollar from one platform to the next in a second.
Rachel Tippograph, founder and CEO of Mick Mac, we thank you more. Coming up next, this is Bloomberg. Now let's talk about open Ai, SoftBank and Oracle and their plans to open the first data center associated with the one hundred billion dollar Stargate venture. Let's bring in Bloomberg's Brody Ford for more Brody. There's been a lot of talk about this project that was heralded at the White House on Wednesday with President Donald Trump, and that included the
prospect of a lot of jobs being created. But you've got some findings that just maybe that's not quite so.
Yeah. On Tuesday, Trump said one hundred thousand American jobs open. AIS doubled down on that number, but we got our hands on some documents from the government down there showing that there is a guarantee of a whole fifty seven full time jobs. Obviously a far cry from the one hundred thousand range. Of course, when you build a data center, you're going to employ thousands of construction folks. Those jobs go away at some point, and then the people needed
to keep things running. It's this much smaller number. This is just one project of what will likely be many, but it certainly kind of throws a bit of water on the idea that data center infrastructure is a massive long term job creator for this country.
Fifty seven is so stark brody. And then we wonder what the sixty five billion dollar capex coming from Meta is going to mean in terms of jobs as well as the data centers here in the US. Just thinking about the players involved the Oracle. Now Oracle's busy also
potentially being thrown out. There is a bidder for TikTok, but it's an infrastructure provider to TikTok, And I'm just interested about what you're hearing in terms of supporting TikTok when it comes to Oracle, Visa, VI, Apple, and Alphabet.
Right, we're in this interesting moment where Trump says, hey, it's cool, keep working with TikTok. We're gonna figure something out. I go on my phone. I'm an Android user. I can't download TikTok. I already have it. Same thing with Apple. Oracle says, hey, you're paying us a lot of money
to run your servers. We're gonna keep doing it, right, And so we had some exclusive details on that today that going back even to twenty twenty one twenty twenty two, TikTok was one of the most important early customers for Oracle's cloud. I mean, this is really kind of like close to their heart as it relates to them becoming a major infrastructure provider. Like you know, we found that they had special code names for TikTok. They called it
talysis internally because it was so top secret. And so, I mean, this is a big business line and they're not going to want to turn that off unless they really have to.
Bloomberg's party forward.
Thank you, Cara, thank you.
Yeah, Mike, it's time for talking tech and first art, we're looking at shares a Twilio as you see surging today. The company reported preliminary fourth quarter revenue growth at top down assessments. The software maker also announcing its Investor Day that it authorizes a two billion dollar shareback pil plan plus data Bricks said it has raised more than fifteen billion dollars in funding from investors include Meta and Countries
to Singapore and Kata. The software maker now holds a valuation of sixty two billion dollars and says it plans to use a financing for investments, acquisitions, and international expansion. And shares of American Express, as you see, just trading off of their record highs today, at least the credit card company reporting fourth quarter expenses that were somewhat higher than expected, even as profits increased twelve percent, with higher
than expected spending during the holidays. I talked with the CEOC squery and he's still committed to tech spending. He says that the business is becoming more and more digital and automated. We continue to invest in tech in a big way. Now, coming up, how YouTubers have propelled Trump to a second presidency.
We're on that story.
Next, this is Bluemad technology.
Breaking news on Apple from our own Mark German. And this coming so we understand that a key executive, Kim of woraf company veteran, will be moving to help whip the area of AI and Siri into shape. Vorath is a vice president and she's in charge at the moment of program management. She's since moved to the AI and Machine Learning division, according to people with knowledge of the matter,
top deputy therefore to the AI chief John Gandriaria. And all of this is as we understand, the people are not publicly announcing it, but being ulstering the AI vision of Apple, which many feel has been behind some of those technology peers.
Let's talk about a peer alphabet.
Let's talk about YouTube because we want to do a deep dive now into the role played by some key YouTubers in particular some of the podcast makers that we understand and potentially helped propel the second administration of Trump. We want to get to Davey Alba, who has done an absolute beautiful deep dive for our big take on all of this.
And Davey just talked to us a little.
Bit about why you were first interested in the likes of Joe Rogan and the role they played via YouTube.
Yeah, of course, you know, we started to realize that the power centers in media and tech were really shifting, and I think you know, seeing Joe Rogan be at the inauguration and actually in the Capitol rotunda over the past weekend is really symbolic of the shifting media landscape. We wanted to understand what kind of power he had and the messages that he and a cohort of other podcast masters who are wildly popular onto what they put out.
So we started to listen to these podcasts and ended up analyzing almost thirteen hundred hours of footage.
Two thousand YouTube videos. Is what you watched over the last two years? How similar? How's the messaging been?
Briefly, the messages have been extremely similar. There are overlapping talking points and the way the podcasters painted a picture of America was that it's in a desperate place with soaring inflation, migrant streaming across the border. You know, public schools have gone too far with their gender policies, and it's just stunning to see how often these messages are repeated and the fact that this became more political as the election neared.
Dave Alba, it's a must read. We urge our viewers to go and see it. But that does it for this edition of Blue Bag Technology. Don't forget to check out our podcast, This is Bloomberg Technology.