From Mahard where Innovation of Money and Power Collie in Silicon Valley NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Now from New York and San Francisco. This is Bloomberg Technology coming up. Tech stocks lead the markets to new highs.
We discussed the drivers from the elections to earnings and the FED, and.
We talked chip demand as ARM and Qualcom give mixed signals about the smartphone market.
We speak to ARMS CEO Rene Has and.
The c suite take on the election. We speak with Andreil's at Palmer Lucky. I'm going to focus on defense tech, but first let's just get back to these publicly traded markets that are at new record highs. I shine a light on the Nastak one hundred. It finally reaches that new record yesterday, eclipsing the number it got to back in July.
We're at one point three percent.
The likely magnificent sevens drive this benchmark to yet further heights ahead of the FED.
What are you watching?
End earnings?
But November fifth an astonishing day to report numbers. Right, Lift is up twenty seven percent off session highs where it was up thirty percent strong outlook, they're kind of finding their niche and growth despite big brother Uber also doing well. Then there's the chip names qual Common, ARM. They've traded very choppy in the session. Qual Comm was up a lot, now it's up eight tens percent. Arm was down, it's now up five and a half percent.
Basically consumers in key markets like China buying higher price handsets and both benefiting from that.
But we can get into it later in the program we can.
And of course China are a key focus for the macro perspective going forward. After the results of the election came through. Let's get an overview of these markets of roombgs, Jess meant and just we see big tech leading all the benchmarks to new highs as well as small caps.
But what keeps your eye, Well.
The big thing is because you'll just touched on when it comes to Earth. So the biggest player, obviously we'll have Invidia coming up on November twentieth, but when you look more specifically at when it comes to some of its biggest customers, we've already had those earnings when it comes to Meta, Microsoft, alphabet as Wolls, Amazon, So when it comes to as far as what in totality when it comes to what they're plowing into data center binesses
as well as other fixed assets. I mean, it's around fifty nine billion with those forward companies just in the third quarter alone, So usually that you can kind of glean into what that means for in video moving forward.
But obviously on the.
Back of these election results, there's a lot of questions as far as what this could potentially mean for Biden's chip back, especially when you think about companies that derive different manufacturing from overseas like Apple as wolves when it comes to say China and Biden trying to prohibit them trying to use Western technology and trying to curb that.
Right now, Caroline, the headline of the band story today is in video is clear winner in a lackluster big tech earning season.
Is anyone watching the show? It's been great, Caroline, I've had a lot of fun.
The main point is that whatever happens in this next administration jests, it doesn't kick in for a while. Is there like a theme of the now of the next three months, final three months of the year that markets are looking to well.
Usually the playbook in an election year is typically once you have the election results.
There tends to be a year.
End rally, but we had quite a bit of a real not even just when you're thinking about what's happened tech and growth stocks, but the first three quarters of this year was the best start to a year for the S and P five hundred since nineteen ninety seven, but the Magnetum seven didn't really.
Contribute to that in the third quarter.
Obviously we've seen a bounce back from that, but even when we heard from Microsoft and Meta's results in recent weeks on the back of that, we didn't.
Really see those stocks pop.
But obviously sort of an all tied kind of lifting bulks here over the last couple of days following those election results. But moving forward, it's whether or not we see that playbook and especially the positioning play out in the final months of the year like we normally would through history.
Boo bos Jess meant and helping us make sense of tech in markets, Thank you very much. So what does Trump two point zero presidency look like for the tech sector? Dan ives have web shrites. We expect a strong AI focus out of the gates from Trump for US big tech players can't out of the FTC and Musk's big bet on Trump being a home run for Tesla.
Danaves joins us.
Now, Dan, regular viewers of this show and network will know that much of what I just read out is not a surprise this that you have this thesis.
But let's start on the AI part.
What gives you such conviction that Trump will focus on AI out of the game.
I mean, I think that that's going to be a huge focus within the government. I mean, government's been way behind when it comes to AI. That's going to be huge initiatives. I think through D O D, through the agency. Is that's gonna be borged for Microsoft, borge for Amazon, borge for good good Google.
Names like par and Teer.
I think that's other names that are going to benefit here in what is a gordon aede for AI and Palenteer.
There's the link with government. I want to ask you about Elon Musk, and if you'll allow me, let me just put it this way. Because the market tried to make sense of the Tesla move, It's believed that Trump will repeal some or all of what's legislated for on the EV consumer incentive side, manufacturing support for the companies themselves,
there's the association tailwind between Musk and Trump. Why is it that Tesla survives and stands out to your mind, but gm Ford rivian names like that won't do as well.
Sure, I think it's a great point where it's good two parts. One by removing the credits seventy five hundred, that's going to give much more even playing field. I mean task as a scale and scope, They're going to be hugely advantaged there versus the Detroit Star Wars. So that's bullege there in terms of giving them that availability. And I think option you know, to the automate, they
can still cut prices more. But the big thing, the reason that this stock, I believe it's a trillion dollars of value unlocked when it comes to the AIPS because when you look at Trump, this is going to give the highway the autobond for autonomous I think he is going to fast track autonomous FSD. That is very bullish for Tesla. And it comes down to from Musk one of the best strategic bets he ever made was ultimately this bet on Trump.
It's the technology ready.
I think the.
Technology is not maybe not necessarily ready today in its current form, but it's going to a point that this is ultimately going to be. When I look at autonomous and FSD, it's a trillion dollar incremental valuation. You could cyber cabs, you could ultimately see twenty twenty six, twenty seven initiatives, get fast tracked.
Tesla.
Musk is the big winner in this called Trump sweepstakes, along with big tech because the other view is that Khan is likely going to be out the FTC and that's bullish for deal making across big tech.
Okay, there's a lot to be butish about, but one area of concern has been well, yes, AI will be fueled, but what about the infrastructure for AI? A lot of that comes with growing chip sector here in the United States, and that's dependent on well, in many ways, the Chips Act.
Maybe that gets blown out in the water.
Yes, I think when it comes to Chips or Inflationial Reduction Act, clearly there's gonna be a lot of revisions there. I think probably the biggest loser negative would be names like Intel. You're just adding to that pain. But from a chip perspective.
You think Intel will be a loser that well, for.
I think Intel has been a loser. This is just putting really adding gasoline to the fire in terms of IRA was really going to be a huge opportunity for Intel. I think Intel now is on the wrong side that trend. I think what you're going to see with IRA and inflacial Reduction act much more focus on chips in the US, but really much more focus on the AI build out. And I think when it comes to some of the tariffs that we talked about with China, I think there will be carve outs.
That's why I don't.
Think that Nvidia is going to be so negatively impacted. I don't think a lot of these other names in terms of the tafts, I think Tesla Apple. That's also why it's so important that Musk is going to be a whisper in the White House.
I'm going to let you put your ifvback on because I know Ed wants to jump in here, but I'm interested in basically, you think Trump isn't going to live up to a lot of the things he promised on the campaign.
I think bar's going to be a lot worse than the bite. When it comes to some of the tariffs, you have some that'll be much more nastier. But when it comes to some of the exports that we see. I think it's you're gonna see carve outs here. I don't think it's gonna be as negative for tech and supply chain. That's why right now this is a Goldielox scenario for tech, but it's a champagne moment for Tesla investors.
Dan, you can hear me? Well, can hearn?
You?
Give you a second? O? Good?
All right, here's the question, be honest with me. Can Elon Musk have an.
Informal all formal.
Role in the administration and be the CEO of Tesla, SpaceX associated with Neuralink boring company, et cetera.
Yes, I think he won't clearly have a formal role from a cabinet perspective. Why not kidding, because then it complicates in terms of his ownership and I think some of the structure in terms of what we see with Tesso with space X. But I believe he'll be an unofficial whisper. I think he'll have a significant influence within the White House.
And that's why this is going to be.
Known as probably the best strategic bet that Musk ever made in terms of betting on Trump. And I think you know this is something that is just starting to play out in terms of this Trump Musk sort of alliance.
That i'ves and Webbush. I appreciate you coming on today.
Meanwhile, coming up, we speak with m CEO Rene has hosts the chip designers earnings.
That's next.
This is bely Me Technology.
Let's just dive into the markets a little bit more and check out chipmakers in particular.
I'll bring you the socks. Of course. The Semiconductor index currently.
Out one point six percent, having a lovely couple of days, were up more than almost four point seventy five, call it five percent over the last couple of training days. Most in the green qualcom just holding on to its gains. It has come down from what had been in excess of four five percent higher earlier. We're up seven tens of percent. They're giving a bullish sales forecast, expecting revenue of ten and a half to eleven point three billion
dollars in the current quarter. They beat analyst expectations and their profit came in better than expected as well. Moving on to ARM, which has come from what was in the red pre market training to a higher three and a half percent. Now this is they too really managed to beat out the gate when it comes to the both the top and bottom line. The company's revenue forecast was a bit of a concern nine hundred and twenty million to nine hundred and seventy million, which perhaps just fell.
Short of some expectations.
But they really are maintaining their annual forecasts of three point eight to four point one billion dollars in sales. So let's get into it all a little bit more.
At Yeah, I think the shares are so interesting for maybe it's a company reporting November fifth, and it took time for the market to wake up and read the numbers a little bit.
Who knows. The chip maker did give what was seen.
As a sluggish sales outlook and at first disappointed investors. What has changed, Rene Huss is the CEO of ARM and joins us. Now it's really interesting, right and the function of what ARM does on licensing royalties, because sometimes it's not about unit growth.
I look at like revenue.
For example, maybe some evidence renee that the Chinese consumer in particular is buying higher end handsets.
How does that help you benefit?
Well, good morning Eda and Caroline, and we are very happy about the quarter. We just reported the high end of the guidance, and our royalties were at a record number. And to your question, you know, one of the things that we have seen a huge benefit from with our technology going forward has been our Version nine, which commands a much higher royalty rate than we have in the past. And what that allows to do is not exactly track
the market from a unit standpoint. One of the proof points of that unit sales for smartphones we're up four percent in the last quarter. Our royalties we're up forty percent. So you can get a sense that you're seeing a very big difference that's really driven by two factors. One is Version nine, as I said, which commands a high royalty rate. And second, we're just seeing more arm technology inside these smartphones, particularly the premium segment, which also commands a high royalty rene.
A lot of investors and people that I speak to in the world of technology think you're great. You're a great CEO, and you've been embarked on this sort of journey for profit and margin. But is there a ceiling to that, Like, at some point, how do you keep driving those letters? Are you sort of very pricing dependent at this point?
I don't think so.
You know, the market that we're addressing is very, very large, and one of the things that has made it even larger has been all things AI. And if you think about what ARM does, we do compute, we do the CPU. Every digital device has one. And the fact that you're running all these AI workloads on devices that are already running different applications that they had to in the past, that drives a need for more and more compute capacity,
which ends up ending up with ARM. So as a result, we were very, very fortunate to have some tailwinds from a technology standpoint driving our growth. So as far as the ceiling, I don't think about it quite that way, but I do think where we are is a market where we just can't get enough compute capacity for all these workloads that are going to be running on every device in your home or your business.
Meanwhile, though, perhaps some of the tension around compute and AI has been whether China is going to quote unquote beat out the United States, and that suddenly comes into a closer focus, particularly with the results of the US election. Does any of that concern you, particularly around the trade and embroilment and whether that courtails the industry and going forward.
Yeah, a little hard to say, Caroline, relative to what could happen from perspective of tariffs, etc. I think the one thing that I'm happy about post the election on Tuesday is that here we are on Thursday morning and we have a result. We're not debating about what might happen or could happen or should happen. We at least have a result behind us, which is good for business, it's good for the country. Now going forward, we'll just
have to see what goes forward. In terms of the things you mentioned, the China business for US has been very resilient and very strong, both in data center and phones that we've talked about, but also in the automobile sector. So regarding your question, we'll just have to wait and see.
Talk to us a.
Little bit about the phone part, and in particular whether or not just us replacing less often but with much more expensive phones is going to be able to what makes your numbers resilient going forward? Will that continue to upset the fact that we're just buying fewer on them.
I do, and the reason for that is when you start thinking about all of these AI agents that will increasingly be running on your smartphone, that is going to drive demand for more and more capability on these premium phones. And that's great for ARM because if you think about a next generation smartphone still has to run games, it still has to run apps, it still has to connect to the internet. But now you want to run a large language model or a small language model, and you
need to interface with a cloud and do security. That all requires a lot of compute, much more than in the past, which is great for ARM because you can't do it without using our technology.
Renee Bloomberg reported that ARM was interested in buying some or all of Intel.
What's the latest for that, please? Yeah, I read that.
I'm not sure exactly where it came from, but I can't really comment on those kind of rumors.
Small recent is a licensed dispute with Qualcom, a longtime partner and customer of yours. Wouldn't it just makes sense for you guys to work it out and settle and get something done so you can both just move forward.
Yeah.
So it's an ongoing litigation, as you know, and in just the baseline things, it's.
A pretty straightforward case.
Consent is required anytime one company buys another company that has ARMED technology. Consent was not granted in this case, and just by way of history, every contract we have has this clause, and in thirty five years, I think we've done one hundred and thirty assignments and one hundred and thirty times consent has been granted. This time it wasn't. We sent a notification to QUALKM that they were in breach of the license. We're very confident in our case.
But more importantly, this is about fairness. It's about equity the ecosystem. We have lots of partners who've license our technology over the last decades. We need to be fair and equitable, and we just now have a situation, an unprecedented one where consent was not granted, and as a result, we took the action we felt we needed to take.
How is it doing business therefore with what is a key customer but increasingly becoming more of a front of me.
Well, you know, in terms of the litigations, I said, there's not much more I can add on to it. From a financial standpoint, we've made assumptions all along when we've given guidance and forecast to investors that we will not prevail in this case. So we've taken a fairly bearish position on the financial outlook, and that's really about about all I can say on it.
RENEE at the end, market level and product level. What is the next phase farm, what's the next story that you think will carry the company forward?
Thanks for asking that question. You know, compute subsystems and these are all about taking the pieces of IP, stitching them together together, providing them as a full end solution which greatly saves engineering time, time to market, time to profit for our partners. That is the direction of the company. We've seen amazing traction. We've had lots of design wins in the data center space. Media Tech just announced their first chip set recently using ARM computer subsystems for mobile.
I see that to be pervasive going forward, and it's going to allow us to not only get great benefits to the customers' markets, but those drive much higher royalties than anything we've ever done in the past, which will drive growth for us.
Just paint the picture of where ARM will be in the ecosystem five ten years from now. You're still majority held by soft Bank in terms of your outstanding shares. Massa has some big vision one hundred billion dollars to put in in terms of creating an AI behemoth.
That complements what you do.
But then there's also the element of whether you just stick to the designing part of the business.
Where do you take this business? Renee as a CEO.
We have a lot of optionality, Caroline in terms of the things that we do, and these are obviously the things we talk about all the time internally. Which direction do we go, how horizontal do we go, how vertical do we go. I'm not able, unfortunately to talk about unannounced products this morning with you, although I would love to, but I just can't. But we do focus very much.
We do focus very much on the vertical and horizontal nature of the products and also AI and the form factors and everything.
That goes forward.
So five to ten years ago from five tent years from now, I do know that ARM will be involved in computing in a very large way.
I'm CEO and A has you appreciate the time today, Thank you.
I think av's are going to be a huge accelerant. Actually you say a TAM expander addressable work an expander for LYFT, because I think.
What it's going to do is it's going to bring.
New product onto the platform that people are going to like. Some people are going to like being driven by human. Some people are going to think being driven by robot is pretty cool. Some use cases favor one of the other. So anyway, I think the hybrid future is what we're looking at over time. Now Mobili they make the sensors, they made the tech. You probably have them in your car right now, Lay and assist, smart cruise control, all that stuff that's level two, level four is full self driving.
So imagine a world.
We now go to the President States Biden addressing the public from the Rose Garden.
That's listening.
Good to see this cabinet and the staff together here.
Thank you, thank you, thank you, thank you, please, thank you, thank you, thank you.
It's good to see you all. Particularly good to see my granddaughter sitting in the front row here at Fann Hawaii. Honey. For over two hundred years, America has carried on the greatest experiment in self government and history of the world. That's not hyperbole, that's a fact. For the people. The people vote and choose their own leaders, and they do it peacefully. And we're in a democracy. The will of
the people always prevails. Yesterday I spoke with President elect Trump to congratulate him on his victory, and I assured him I direct my entire administration to work with his team to ensure a peaceful and orderly transition. That's what the American people deserve. Yesterday I also spoke Vice President Harris. She's been a partner and a public servant. She ran an inspiring campaign and everyone got to see something that I've learned early on to respect so much her character.
She has a backbone like a ramrod. She has great character, true character. She gave her whole heart and effort, and she and her entire team should be proud of the campaign they ran. You know, the struggle for the soul of America since our very founding has always been an ongoing debate and still vital today. I know for some people it's a time for victory to state the obvious. For others, it's a time of loss. Campaigns, your contest of competing visions. The country chooses one or the other.
We accept the choice the country made. I've said many times, you can't love your country only when you win. You can't love your neighbor only when you agree something I hope we can do. No matter who you voted for is see each other not as adversaries, but as fellow Americans. Bring down the temperature. I also hope we can later rest the question about the integrity of the American electoral system. It is honest, it is fair, and it is transparent,
and it can be trusted, win or lose. I also hope we can restore the respect for all our election workers who busted their next risks of the outset. We should thank them, thank them for staffing voting sites, counting the votes, protecting the very integrity of the election. Many of them are volunteers who do it simply out of love for their country and as they did as they did their duty as citizens. I will do my duty as president. I'll fulfill my oath and I wanted the Constitution.
On January twentieth, we'll have a peaceful transfer of power here in America. To all our incredible staff, supporters, cabinet members, all the people who have been hanging out with me for the last forty years. God love you. As my mother would say, thank you so much. You put so much into the past four years. I know it's a difficult time. You're hurting. I hear you, and I see you,
but don't forget. Don't forget all the we accomplished. It's beending historic president, not because I'm president, because what we've done, what you've done, a presidency for all Americans. Much of the work we've done is already being felt by the American people, with the vast majority of it will not be felt we felt over the next ten years. We have legislation we passed. It's just only now just really
kicking in. We're going to see over trillion dollars worth of infrastructure work done, changing people's lives in rural communities and communities that are in real difficulty because it takes time to get it done, and so much more. It's going to take time, but it's there. The road ahead is clear, assuming we sustain it. There's so much, so much we can get done and will get done based the way the legislation was passed, and it's truly historic.
You know, we're leaving behind the strongest economy in the world. I know people are still hurting, but things are changing rapidly. Together, we've changed America for the better. Now we have seventy four days to finish the term. Our term. Let's make every day count That's the responsibility we have to the American people. Look, folks, you all know it in your lives. Setbacks are unavoidable, but giving up is unforgivable. Setbacks are unavoidable,
but giving up is unforgivable. We all get knocked down. But the measure of our characters, my dad would say, is how quickly we get back up. Remember, a defeat does not mean we are defeated. We lost this battle. America of your dreams is calling for you to get back up. That's the story of America for over two hundred and forty years years in counting. It's a story for all of us, not just some of us. The
American Experiment endors. We're going to be okay, but we need to stay engaged, We need to keep going, and above all, we need to keep the faith. So proud to have worked with all of you. I really mean it, I sincerely mean it. God bless you all, God bless America, and may God protect our troops. Thank you, thank you, thank you.
Let's bring in Bloombak's Katie Lions, who joins us from New York City. Kaylee Plice, your summary of President Biden's comments, Well.
The most important point about this speech from Biden at the Rose Garden in the White House that follows the speech the concession speech from Vice pres A. Kamala Harris yesterday, is that they both are acknowledging the decisive victory of Donald Trump and pledging for a peaceful transition of power.
We just heard President Biden say those words that he called to congratulate Donald Trump yesterday, that he will do his duty on January twentieth to make sure there is a peaceful inauguration of Donald Trump in a power transition in the United States, similar in rhetoric to what we
heard from Kamala Harris yesterday. The suggestion while this specific fight was lost as he casts this as campaigns being a contest between competing ideas, that that did not necessarily mean that there won't be ones one in the future.
And interesting to also see President Biden here trying to characterize his legacy as well, talking about the accomplishments he sees this administration having completed, the idea that there's more work they will do in seventy four days, because in part this is the swan song of song of President Biden, who is getting a lot of blame within the Democratic Party for the loss of Kamala Harris, the suggestion that
he stayed in the race too long. He ultimately, of course, did not bow out of it in tell July, and he is getting a great share of the blame for what happened this week and the victory of Donald Trump. But again that victory is being acknowledged. They are planning to work with the Trump transition team to make sure
that this all happened smoothly. There could still be some hiccups, as Donald Trump is specifically a bit skeptical of the General Services Administration, for example, the intelligence agencies that would oversee things like background checks for those incoming into the administration. So there could still be some hiccups here. But by and large, they are committing to a peaceful transfer of power.
They are conceding that Donald Trump won this race, and this is something we did not see four years ago in twenty twenty, Katie.
They then also focus on the seventy four days still left to enact policies and indeed what has been achieved with there was a mention of infrastructure, and that plays a lot to the technology community here.
How much do you think there will.
Be any more passing of anything or any more focus on and potentially the future.
If indeed, say a Chipsack is unraveled.
Well that's going to be something that would be de within the next Congress. Obviously, there are still some months remaining here for this administration, in this Congress and House of Representatives. What they're likely to deal with in the lame dunk section session, which do tend to be more productive as the campaign has already completed at that time, really is going to surround funding, as there is a funding deadline, a government funding deadline on the twenty first
of December. So they will need to make sure that the government stays funded for some period of time into the next administration first and foremost. But when the new Congress is sad and we do not yet know the entire makeup of it, Yes, it will be a Republican Senate. Whether it stays a Republican House at this time is still unclear, and it would take a Republican House likely
to unravel any of the accomplishments of this administration. Legislation pass including the Chips Act, but the Inflation Reduction Act as well.
Whoms Kendie lines, we appreciate it so much on the back of that Biden speech. Meanwhile, and let's get back to these markets.
Yeah, and I'd like to go as crypto if that's okay, because we didn't have a show twenty four hours ago. But within the last twenty four hours, Bitcoin is US scott below seventy six thousand US dollars per token and it's kind of weird. I'm going to say it out loud, but that's all time high, right. I had to pull up the GP chart on my Bloomberg terminal and be like, oh,
this is also happening in real time. And one of the big stories, of course of the last twenty four hours is some of the crypto related equities or stocks companies that either are a marketplace for have exposure to crypto.
And I think the sentiment is simple, right, Caro, that President elect Trump, whether from a policy perspective or his own attitude, will approach crypto differently, and largely that's been seen as supportive of that industry, even though these specific names aren't doing much in either direction in the moment.
Boy did they move higher yesterday, though we appreciate it. And let's go to Noel Aichson who's with US Triple Crown digital partner, author of the crypto is macro now and someone who put out a great note yesterday that I paid a lot of attention to Noel because it was outlining what next. Yes, there's a lot of euphoria around whether indeed the sec chare will change and be more or crypto loving or a nice put in place some sort of clarity as to what the future regulation
will be rather than enforcement. What is next on the to do list? What will really substantiate these record highs?
That's exactly what we're all asking Caroline, Thanks so much for having me. What is next very much depends on the priorities of the new administration when it gets in.
I think we can assume that.
Crep's crypto is not going to be top of their list. But he did make some very important promises, and it is a very sore thorn in the side of US financial infrastructure that this has not ment dealt with. There's going to be some limits as to what they can do in the short term, and perhaps crypto spirits are getting ahead of themselves a bit, but at the very least, a change of regime at the SEC would be very good news to enable so builders to go in and
talk to the regulator without fear of an action. This would especially be good for assets whose status a spirity are lot is currently unclear, as well as those that want to provide services for those assets.
Do you have a good sense of where President electromp will start any specific area of focus?
I think the number one and the either low hanging fruit has to be a change at the SEC. I think that's pretty much on the cards that would have happened to be fair, I think any ways, but the type of change now obviously is going to be slightly different than had the neglection gone the other way. That's a fairly easy one, and again have to remember ever since Chevron was overturned, the SEC does have its hands tied as to the kind of rule making it can
engage in. But just removing the fear of action is a very big deal.
Then you articulate in the note that maybe we look at stable coin focus and indeed some sort of clarity on it going forward. We're also though thinking about what Congress looks like. There are a lot of people, a lot of races that were backed by an awful lot of money coming from the cryptoc community that wanted to see well more change From a congressional perspective, Senator Cynthia Loomis.
She goes on to talk about the strategy bitcoin reserve that many of us really wonder how powerful that will really be. What do you make of that particular part of the promise from Trump.
I'm hearing a lot of chatter about that, a little peo. Everyone's asking when, not if, but when is this going to happen. I to be honest, I'm skeptical we're going to get one of those. And I also think that Trump himself might walk back his promise on that when he realizes that it involves selling dollars to buy bitcoin. Even if he doesn't, it will be very hard to get through Congress. But to be honest, that isn't the
most important thing. It would be just enough. It would be good news for the market if the US decides to not sell its current stash. And as for the stable coins that you're asking about, that again is low hanging fruit. A stable coin bill is bipartisan. This person of ironing out the details, what kind of requirements and reserves would they insist on. That's going to be pretty easy. And I think we're going to get that pretty much right out of the bat as well, depending on how
fast Congress moves the course. And we do as as you said, Gary, and we do have the most crypto friendly Congress ever. That is really quite astonishing. What is really needed, though, is a crypto bill that will recognize that the definitions have changed, that new types of rules are needed.
That is going to be more complicated.
A Jason, We're going to be getting a back entory for Crown Digital partner.
We thank you. Coming up, we're going to be speaking with.
Parma Lucky, androil founder and President Trump heads back to the White House and questions linger around his defense tech starts. We discuss President elect Trump. This is Bloomberg Technology.
As Donald Trump prepares to head back to the White House, there are questions around his policies on AI, defense tech and spending for More and roll founder Parma Lucky is back with us here on Bloomberg Technology, and I want to keep it focused on technology, but i'd also like to invite you'd start just to give your reaction to the outcome of the election, and I guess reflect your sentiments about the next four years.
Well, I think it was obvious to most people who have been paying attention to what people are paying attention to. I know that that's contentious. A lot of people thought it was going to be close. I didn't think it was. Of course, I'm biased. I've been a Trump supporter for a long time. I supported him in twenty sixteen, I supported him in twenty twenty. I actually wrote a letter to him while I was in college in twenty eleven
telling him that he should run for president. So I've been a fan of the Master of the Art of the Deal for a long time. It's nice to see it finding Colman. And I'm also a big fan of his pick in JD Vans for vice president.
He's done an incredible job. Everyone else has got to see that.
But I've known JD for a while and he's an incredible person. But my reaction on kind of the more business side, the defense side, is it's great to have someone inbound who is deeply, i guess, deeply aligned with the idea that we need to be spending less on defense while still getting more, that we need to do a better job for k during the defense tools that
protect our country. Trump famously got involved in the nitty gritty of some of our aircraft carrier design and some of the procurement of air Force.
One. To see that level of involvement from a president.
Is pretty rare, and I think an indicator of his priorities.
You wrote a letter to the guy back in twenty eleven. Who knows whether that inspired has run Parma.
But you're close, of course with the VP elect as well. Are you talking about anyone to be the Defense secretary? Have you got anyone's here? Would you like anyone in particular?
Look, I've got opinions. I'm in touch with the.
Transition of team, of course, and I know a lot of people who are involved with the transition have known them for a long time. In many cases, I've heard a few names thrown around for a potential Secretary of Defense, but also for the many roles that are in maybe not the secretary level. They don't get quite as discussed on shows like yours, but it's still very, very important.
So you know what, I.
Don't want to throw any names out there because I would be happy with all There's not There's not a single name that I've heard that I'm unhappy with. And I have to I have to play nice and not say, oh, well, I prefer this guy or that guy.
All of the names that I've seen are people who are do an incredible job. Thank you, Palmer.
Anderil has spent years working with the Department of Defense, right, and I don't want you to reflect too much on the experience that has been, but maybe you could talk because through the changes you think are needed in that department structurally in terms of how government does business with private enterprise.
Like Anderill.
Sure, Look, I got into the defense space after I sold my first company, Oculus, to Facebook for a few billion dollars.
Was working on VR there for a few years before I got fired.
And the reason I got into national security is because I wanted to save taxpayers hundreds of billions of dollars a year by making tens of billions of dollars a year.
And I think that that can be.
Done by encouraging the creation of defense product companies that use their own money to decide what to build, how to build it when it's done, and then have skin in the game. And they fail, they lose money. When they succeed, they make money. I think the set of incentives that you see in a lot of defense contracting today. Defense procurement today cost plus contracting, where you're paid for your fixed time and materials and a fixed percentage of
profit on top. It rewards exactly the wrong things. You make more money by making things more expensive. You make more plus by having more cost and that manifests in the form of programs that go too long, programs that are too expensive, components that are more expensive than need be, because it's really the only way to make more money on it. In fact, in some cases, they make more money with things that break frequently than not.
And so I think what we really need.
Is companies that are aligned with the way that we do business and the rest of our economy.
You build a good product, you sell it, you make money.
So in terms of contracting, if we see a shakeup, will you benefit the smaller? The startups benefit a little bit more than they have been Who the winners?
Who are the losers? Do you think?
Well?
I think the winners are going to be particularly to two things. I think it's going to be a lot of these new startups that are up in the wake of Androl's success. I often say that other defense startups have raised a lot more money off my success than I have, which I'm fine with. And I've raised billions, but I've seen their pitch decks. They're saying, hey, Androl did it. The DoD is moving with this. People understand
that this is a viable business model. I think another beneficiary is going to be companies that have been around for a long time that are very very competent, that know how to get things done, that know how to write a budget, that know how to build a team, that know how to build a product. The companies that suffer are going to be the ones that try to shunt responsibility for their failures over and over and over again onto the taxpayer. I think they're the ones who
are going to struggle. And I don't want to make this sound like this is a this is just a Trump thing. This is a non partisan idea. I mean, Androl's been around for about eight years now. We did well under Trump in his first administration, and we did even better under Biden and his administration. I think we're going to do even better now. It's the defense space is one of the few that is I think actually successfully remained pretty non partisan, and that's aligned with Androl too.
You know, I'm a Republican obviously, I'm the founder of ANDROL, but our CEO Brianship as a Democrat, He's fundraised for Jamala, He's done fundraisers for other Democrat politicians. The idea that the United States military should have the strongest military in the world, and that we should defend our allies around the world, not just with our military, but especially giving them the tools that they need to defend themselves.
It's a pretty non partisan idea.
Palmer has the election of Donald Trump caused Anderill to adjust or change planning for China and allies like taiwan.
Ah.
I don't think so, mostly because I was certain he was going to win.
I think it was already big di in Okay.
And one thing I'm fascinated by, and just bear with me on this one elon Musk Okay. There's an association between the two. The great unknown is whether Musk will hold a formal or informal role in some government department. But I guess what's your assumption and planning, how much attention he can keep Trump focused on defense space and what you kind of think it will actually lead to.
Do you see what I mean?
I think that Elon has outperformed every reasonable expectation of him. I was one of the people, I have to admit that didn't believe that he could successfully work on Twitter and SpaceX and Tesla and Solar City and Neurolink and politics and everything else and Diablo for Top twenty ranked all at the same time.
But he's done it. And so on the one.
Hand, it's easy to say, oh, man, I think it's going to be really hard for him to do all of that and also keep this administration maybe focused on things like space making, humanity and multiplanetary species and extra solar species eventually. But you know what, everyone who's ever bet against Elon has come away crying. So I think I'm probably just gonna have to say, yeah, I bet he's going to do it somehow, somehow, he's going.
To do it.
Andrew Founder Palmer Lucky. We appreciate it. Thank you for coming on a sketter Today's Tech Daily. Elon Musk's big bet on Donald Trump has paid off if you're looking
at the count market capitalization of Tesla absolutely rocketing. But what does it mean for the value of other areas of his control X for example, the platform formerly known as Twitter those Max Trafkan discusses what has been a massive payoff if you think of one hundred and thirty million in and how much as wealth has ballooned by that.
But what about the other areas of growth.
Well, I think X we need to stop thinking about as a business that exists outside of Elon Musk's you know, general empire. You know, X's value has fallen a lot over the past two years, but I think at this point it's fair to say that it's influence, it's political worth. What it gives Elon Musk's other areas is probably worth more than the forty four billion dollars he paid for it, or at least the money that he's lost in running it over the past two years. SpaceX stands to gain
tremendously from this election. You know, Trump on the stump was talking about Mars programs, talking about ordering rockets up from Elon, and if that happens, if there is a big Mars program that is unveiled, that's going to be worth billions, if not tens of billions of dollars to Elon Musk neuralink, his you know, brain implant thing that's federally regulated, the boring company federally regulated, AI potentially.
Regulated, federally regulated is like the key point, right.
You know, in.
History, high profile people from the private sites of Going's government is not new like Gary Cohne Minuchin. Whatever the question is, will Musk see it through Max? Will he still be with Trump in some role a year from now, two or three years from now.
Well, I think, and I think the comparison with folks like Gary Cohn is instructive. You know, there are lots of business people who during the last Trump presidency kind of navigated themselves towards Trump and ultimately I think had a not great experience. You know, this is a guy who takes up a lot of space in the room. He is, you know, famously strong headed, and you look at Elon Musk's personality and Donald Trump's personality, might say,
how can these two men be in a room together? Now, the point I would put, what I would point out is that Elon Musk is way richer than any of those guys you mentioned, and way more powerful and has a real personal brand celebrity. He is as famous as some of the most famous people in the world. So he has leverage over Trump that maybe some of these other business people did not have Elon Musk. Now I
think very much needs Donald Trump. But I would argue that Donald Trump and the Republican Party now needs Elon Musk too.
There are other positions of power within the US government.
The White House is not all of it. Will that be checks and balances?
I mean, I think you have to look at the past Trump presidency and also, just like the character of Elon Musk and Donald Trump, these are not guys who like following the who necessarily are paying super close attention to the rules, and so I think that you know, yeah, we're going to see a lot of conversation about potential
ethics violations. Should a guy who owns a major defense contractor, who controls a major defense contractor be giving the US government advice on defense personnel, that's probably going to run a foul of ethics rules. Now, do I expect that to slow down Elon Musk?
No, I mean, to be fair, Pa Ma Lucky was just in the show, and he's a major defense contractor, and he was giving loads of advice to the future administration.
So okay, But there's a difference between giving advice and being part of the White House.
Right, that's I know there.
Is and it's the only question formal role or informal role. And I promise you I'll try and find out Blooma's match chaffikin. Thank you very much, Carol.
That does it for this edition of Blue Big Technology. Boy do we get through a lot, whether it's earnings that are still on a fed that's to come, but also about the election.
Check out the pod you know where to find it. Team in New York and accept.
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