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. This is Bloomberg Technology coming up. Stocks powering higher as.
Global risk on rally through a potential US China truce, plus, President Trump says he spoke to Apple CEO Tim Cook this morning about building plants in the United States and all lies on c ATL as China's battery Giant gets ready for a Hong Kong listing without US investors. First we check in on these markets. Could we be on for a ballmarket?
A ballmarker then ows Dot one hundred.
We are more than twenty percent of our loads that we hit in earlier April. All of that surrounding the anxiety that was of course Trump trade tariffs and the impact on Magnificent seven.
We're currently up three percent on.
The day as we pull back on those extraordinary one hundred and forty five percent tariffs and now we see a thirty percent tariff instead going on Chinese goods coming into the United States, move on and having the look at the individual movers though, because in this ninety day reprieve, it really does drive big tech up the most. We
see a seven percent move for Amazon. Of course, retail therefore maybe comes back from China into the US, not the full one hundred and forty five percent cost impact. And notably, maybe those Chinese retailers continued to advertise with Amazon.
We see Apple up more.
Than five percent, but does this still potentially impact their move and shifts towards India and the like, because twenty percent tariff is still a lot on the likes of your smartphone. Remember, they not impacted by the ten percent reciprocal Tesla up more than six percent, as they manage to get once again get access to rare earth that.
We're worried would be a limitation.
But all of this is President Trump really spoke earlier this morning and said he's likely to speak with Chinese leeder later this week.
Just take a listen.
The talks in Geneva were very friendly. The relationship is very good. We're not looking to her China. China is being hurt very badly and they were closing up factories, they were having a lot of unrest. Then they were very happy to be able to do something with us, and the relationship is very, very good. I'll speak to President she may be at the end of the week.
We bring in the analysis. My Shepherd is standing by. All of this a huge relief to market.
So look, we're still down on the year when it comes to the NAS at one hundred, but the fact that we're back in a technical ballmarket is extraordinary.
Mike. Should they be this risk.
One, Well, that's a great question about whether risk on is appropriate given that we're only awaiting a ninety day break as negotiators from the US in China to hash through some of the fine print of what was discussed over the weekend between the leading negotiators from both countries.
Now they have a lot to get through.
The fine print includes where they end up on tariffs, but also some of the non monetary tariff barriers that President Donald Trump said that China had agreed to lift as a way of opening the Chinese market more to American goods. And likewise, the Chinese have their own asks of the administration, and it's not clear, at least from what we're hearing from President Donald Trump what those might be too. So there is a lot of road ahead of us on this, and then also we have to
await what could be coming in terms of sector wide tariffs. Now, you mentioned in the open there that Apple is exempt for now from that ten percent reciprocal tariff. But Apple and other tech companies are awaiting what could be happening with semiconductors. Remember, the administration is conducting this investigation into the semiconductor market to determine whether tariffs are called for on imported chips into the United States and what level
that tariff should be at. So there is still a fair amount of uncertainty lingering out there for tech and for its investors.
And certainly in video wrapped up in this semiconductor anxiety as well, Mike, So push us forward as to what really is the devil in the detail? We have a lot to now be discussed over the next ninety days. Who leads that charge and in what capacity?
Well, that's another great question.
Does Scott Besson continue to play this leading role?
Clearly he was one of.
The drivers of the discussions together with US Trade Representative Jamison Greer in Geneva with Chinese officials led by Hula Pong. Now do they delegate this now to a lower level and where do they start and how fast can they move? You remember, back in twenty eighteen, twenty nineteen, twenty twenty, the US came close to the deals and then pulled back. Donald Trump in twenty eighteen scrapped a plan for an
agreement with the China because he wasn't happy with it. Ultimately, they ended up with the deal that was signed in January twenty t twenty, the so called Phase one Agreement, But that never really fully bore fruit, not in the view of President Donald Trump and not even in the view of his president predecessor Joe Biden. They each saw China not living up to all of the elements of that deal, including purchases of US agricultural products, for example.
But there are a lot of areas where the fine print, even after it signed, may end up falling apart for both sides.
Now we're still thinking that there's an adversarial relationship, and this is highlighted by a key share sale going on in Hong Kong this week. We understand the atl It is like the Chinese battery maker.
You can't mine if you're a US investor.
Right, Mike, Well, that's right, and they are discouraged from doing so, and some House lawmakers sent a warning shot in a letter to US banks last month saying, steer clear of this one because we are looking at CATL on national security grounds. They have concerns that there may be some security implication from the use of these batteries here in the US in US products, and they also
see an element of competition. The US wants to make sure that China doesn't get too far even further ahead when it comes to electric vehicles, and the batteries, of course, are where it all starts.
Now.
When you look at this share sale, though, Caro, it is a sign of optimism. The fact that they are pricing this up to four billion dollars in US terms. That signals that there is some optimism that maybe trade tensions won't be quite as bad as the world won't be so much of an overhang, even in the China IPO market.
We waive a bated breath on how it goes, and indeed, the banks that are still leading at Michael SHEBBND we thank you very much. Indeed, let's get more on how all these trade changes, how they're impacting the tech sector. We welcome Jason Oxman President and c of the Information Technology Industry Council, And we're so pleased to have your voice because within your trade industry, there are the likes of Nvidia, there are the likes of Apple.
How are these companies going to be reacting today?
Very positive reaction I think you'll see today and in the days ahead, and great to be with you with this breaking news. I think the most important element, and Mike alluded to this in your conversation, is the statement that came out jointly from the US and Chinese negotiators in Geneva. Now, in the trade world, the joint statements are really something that we want to look and parse at and see what it really means. But the fact that this statement was issued jointly by the negotiators and
didn't put out separate statements. They put out one together. And the very opening language of that joint statement that was put out this morning is about the importance of the economic relationship, of the trade relationship between the US and China, about the importance of a sustainable, long term, mutually beneficial economic and trade relationship between the US and China. So today's announcement of the tariff pause is obviously enormously important.
But I think what it suggests for the negotiation and the months ahead is that the parties are very focused and very dedicated and believe that a mutually beneficial agreement can be struck, and so looking even in the medium and long term, I'm feeling very optimistic in the tech industry is feeling very optimistic about where we're headed now.
Interestingly, Scott Besson, Treasury Sector, he's been negotiating this in Switzerland and over the weekend joined our colleagues on Blomberg Surveilance.
A little bit earlier just have a listened to twenty.
Said China was the only country who escalated their terroriffts in response to I reciprocal tarot level. So that resulted in an unfortunate escalation. So we now have a mechanism to deal with that. Neither side wants a generalized decoupling. The US is going to do a strategic decoupling.
I want your take on what strategic decoupling now means. Jason, for your key members of your trade association in video, who wants to sell into China, applely wants to bring phones from China.
Yeah, I think it's a really important statement. From the Treasury Secretary. It means that we're returning to a place where we look at national security issues separate and apart from economic issues, where we were in a bad place, as the Treasury Secretary said, with the reciprocal tariffs and
the escalating on both sides, was heading toward decoupling. Where we're returning to, and I think we'll see this in the negotiations going forward, is a place where we look at national security issues like the highest security need to make sure, for example, that the Chinese Communist Party military doesn't get access to the latest generation of AI technology.
But at the same time, China, which is an enormously valuable market one and a half billion people, top three economy in the world, can get access to other US technology. The semiconductor space is a great example of that. We're going to make semiconductors here in the United States going forward. President Trump is very focused on that. You've seen the tech industry announce hundreds of billions of dollars in investments
here in the US. But if you can't sell any semiconductors to China, that investment in the US doesn't make as much sense as if you can. So if we focus very narrowly on the total decoupling of the economies, but just on that national security issue to make sure that, for example, the military doesn't get the next generation of technology. Then we can make sure that the economic investment that's necessary to trade with China continues to happen. And that's what we're seeing today.
I mean, it's interesting that we had President Trump saying he's already spoken to Tim Cook about that five hundred billion that's being committed.
We understand a lot of that was already committed into the United States, but that in some way is.
About semiconductive production here in the US. Jason how CEOs like Jensen, liked Tim Cook got the clarity they need to invest and to invest locally right now.
Yeah, and you saw it in the White House just the day after the President was inaugurated, a five hundred billion dollar announcement in AI manufacturing here in the US from Open Ai, Oracle.
And soft Bank.
Since that time, you've seen over a trillion and a half dollars of addition announcement in investment.
So you're absolutely right.
The tech industry is very focused on bringing manufacturing back to the US. This period of uncertainty created by the escalating reciprocal tariffs could have been harmful to that investment, no question about it. But what we're seeing today is getting back to where we need to be, where the
tech industry is very focused on that investment. Semiconductors, AI, manufacturing, data centers, servers, all of that happening in the US to the tune of over trillion and a half dollars, close to two trillion dollars it's been announced in recent weeks and months, and I think we'll see that investment only accelerate going forward now that we're getting back to a place where we know that trade with China is going to happen. It's a huge market we need to
sell internationally. You know, ninety five percent of the people that live on the planet don't live in the United States. So if you're manufacturing in the new US, you need to access the world. So moving to trade agreements that these technology company investments can use in order to sell to the rest of the world, that's going to drive more manufacturing investment in the US.
So just on that point, it feels as though you're currently voicing the issue that Jonson Wang has that he wants to be able to access the Chinese market, not with the most of to caate to chips, but least some.
Do you think that you'll manage that?
I do. And here's the second reason. In addition to accessing global markets, it's really important for US companies. We want the US to lead in the world in AI and manufacturing. So if manufacturing in the US means that companies that manufacturer in the US can access the rest of the world, that's only going to encourage more manufacturing investment.
But the second thing that's going to do is make sure that we don't provide a perverse incentive for Chinese manufacturers to step up their game and access global markets. We want the rest of the world to buy from the US as well, not just China. So if US technology is not available to the rest of the world, if the US is not a reliable trading partner for manufacturing that happens in the US, we're going to see
other countries take advantage of that opportunity. We want Nvidia and all the other great US companies, great technology companies that are manufacturing in the US to lead the world and making sure that these trade agreements that we're moving to very quickly make that access possible. That's going to encourage them to invest in and manufacture in the US, and it will make sure that USAI leadership continues a clear Trump administration priority.
Jason Oxman, great to have you on today, President and CEO of the Information Technology Industry Council, who represents companies such as in videos.
We're just speaking.
About Nasalftbank's AI ambitions in the US seem to have hit a speed bump. The company had planned one hundred billion dollar investment in AI infrastructure and three months ago it was all part of the Project Stargate, but Japan's chant is yet to actually develop a project financing template or even begin detailed discussions with banks and investors for more bloomerge Seth Ingman joins US now and Seth this is about putting AI infrastructure here in the United States.
Now.
Is it about the deep seat cheaper model issue? Or is it about trade tensions and tariff anxiety?
I really think it's about all of the above. The picture for the AA market has changed pretty dramatically just in the three months since the steal was announced, and probably not for the better. The same week that they announced U South a White has Deep Seek launch, and suddenly since then there's been a glut of these cheap Chinese AI models that potentially raise questions about the profit and revenue picture for open Ai, one of the big
backers of this project. At the same time, we've seen a bit of a data center pullback, potentially raising concerns about oversupply in the US and other markets. And as you mentioned, with tariffs, which as general broader economic uncertainty, none of that seems favorable for a one hundred or five hundred billion dollar AI infrastructure.
But yeah, because it was meant to be scaling up, and just remind us how integral soft Bank is to the financing part of the equation, because Oracle and open Ai there too, but less on the money side.
Yeah, I think ultimately soft Bank is a very big piece of both one hundred billion and five hundred million dollar pledge. They do have other substantial backers, but one of them is open Ai, which is also leaning very heavily on financing from soft Bank through a VC round and through this steal. So if soft Bank has any second thoughts or reservations here that does impact it greatly.
I will just say, as a caveat soft Bank publicly and hopefully I publicly remain fully committed to moving forward with this adventure.
Sethieman, great to have you articulating it. Thank you.
Staying on AI, President Trump's plan to rescind that by neuropolicy to curb AI chip experts when it aims to simplify to ensure AI dominance for the United States.
But on core, Crawford, ALGA portfolio.
Manager says, there's a lot of moving parts right now, and it's critical to think long term about AI and diffusion rules of course here with US now, and we've just come off discussing how maybe the equation of what is profitable in AI infrastructure here in the US is changing. How much did the abandonment of AI diffusion rule help or hinder those sorts of maths.
Well, the diffusion rules being mitigated by the Trump administration was an important step forward because quite honestly, didn't make any sense to limit the technology to go to a wide swath of countries that really, in many cases were our friends. And so the question is what comes next and what are the rules that they will put in place to hold the strategic kind of lead that they perceive.
What's interesting is, as you say, countries that were deemed allies Israel, India suddenly on a tier two level not as able to access as many sophisticated chips as they'd wanted to. That was the proposed AI diffusion rule. But now we come to this awkwardness where it's going to be sort of a case by case basis, country by country basis Malaysia where Oracle wants to be putting a huge data center, for example, that's when we're going to need.
Clarity on that.
And how do you start to see companies and countries navigated.
Yeah, I think it's going to be.
They're going to use it almost as a bartering tool in these trade negotiations, and it.
Is a strong bartering tool.
I think, however, the administration has to be very careful that we have to look after our own strategic initiatives and own strategy for national security.
But we cannot overreach.
And in part because there is a very viable competitor with Huawei, we want to pretend that in Nvidia is a monopoly.
It is not.
Huawei has shown an incredible prowess over the last two months. Even they've introduced these fantastic chips in fantastic racks that in fact do.
Compete with Nvidia.
So if we push too far on this, there is an alternative for the Malaysias to move to a different vendor.
So when that argument comes from Jensen Huang that I actually want to not only access Malaysia and Indonesia and well MISSUS Southeast Asia, but I also.
Want to send into China.
Still should he be able to You know, I do think that we're looking at this in the wrong way.
To be completely frank, you know, let's think about deep Seek.
Deep Seek's innovation actually is helping our models, and Facebook is adopting some of the innovation that came out of deep Seeks. So one thing we can't forget is that innovation begets innovation, and you cannot stop that kind of life cycle of innovation. And if we slow innovation in China, we're slowing innovation here as well. So you know, what I think this should focus on is in fact IP theft.
So focus on making sure that our IP across the board, not only for for GPUs, but any kind of equipment, whether it's robotics or medical equipment that's not being stolen by the Chinese, right, instead of kind of fighting over the widgets. So I think we like to think of this as, you know, are you friend or foe or are you And perhaps there's some place in the middle where we can't treat China as this enemy of the
people when they're really not. They too are innovating at a pace that is probably faster than we are.
When a CATL is looking to list in Hong Kong and US residing investors on able to access that, how does that make you feel as a portfolio manager who wants to be able to thrive in innovation worldwide?
Yeah, frustrating. But you know what is also frustrating.
A CATL wanted to build a factory here, you know, a few years ago and was stopped by the Biden administration. They actually wanted to move manufacturing back to the US and weren't able to. So that too is frustrating as an American to have, you know that the initiatives of bringing manufacturing back of these technologies to the US is being hindered, which hopefully will will stop with this administration. I think c ATL, you know, US not being able to access it.
You know this too, This too.
Will be overcome and I think these are these are hurdles along the way that will have to work through with with the Chinese and the Trump administration.
UNCO, you were very clear that you did not want the AI diffusion rule and you felt that it was just harming most people in this environment. What then, as a portfolio manager you do in this current lack of clarity, the fact that it's going to be a case by case do you still think in Nvidia will compete, We'll be able to compete, well, we'll be able to access markets, and you from the optimistic side of things, do you start to add on in this point.
I think it only makes sense to allow for our technology giant and Vidia, who you know, quite honestly is the pride of our nation at this point right they are driving forward the AI revolution, and so I do think that over time, over I think by September will have very clear boundary conditions around where we can and what we can or cannot ship and.
IP will be protected, do you think and I hope IP will be protected, And I think that's the most important thing here.
IP should be protected on a go forward basis across all industries with a commitment from Chinese government to make sure that that is in fact the case, because we can't have this industrial espionage occurring all over throughout many industries. So I feel very optimistic for the rest of the world and for China that we will sort through this because you know, we are a globalized world and we
can't pull back from that. We can bring manufacturing back here, which I wholeheartedly believe in, but in a.
Controlled way onco Crawfin of algia. It's great to have her on.
Meanwhile, coming up global stories from this unnearly doubling the amount of employees expected to let go.
That's next. That's Blue Bed Technology time. Now for Talking Tech First up.
Shares of Shaomi falling almost six percent in Hong Kong trading after a local.
Report over the weekend cited as much as.
Three hundred people wanted to cancel orders for the company's s U seven ultra electric vehicles over false advertising related to the cars carbon fiberhood and.
Duel air duct.
Shami issued an apology for the unclear communication. Plus is cutting eleven thousand more jobs than previously panned.
Now. That's according to a report by NHK.
The company previously announced restructuring plans in November and nouncing a cup of nine thousand positions at the time as after week sales in the US and China stropping ninety four percent drop in net income, and New Zealand's Prime Minister says a proposal to ban children under the age of sixteen from accessing social media will become part of the government's work program to protect the youth from bullying halmful content.
If approved, the restrictions could.
Become law before the country's twenty twenty sixth election.
Now coming up.
President Trump spoke with Apple CEO Tim Cook earlier today.
We're on that. Next this is Bluemberg Technology.
We'llcome back to Bloomberg Technology and Caroline Hide in New York. Let's get a check on these markets because we are in full on rally mode. The reason will trade tension style back and notch as we see new tariffs put in at a much lower rate between China and US.
You're going to be paying thirty percent.
Tariffs on your Chinese god coming into the US and just ten percent on US goods going into China, well lower than had been expected. It's a ninety day reprieve. Four point seven percent higher on the magnificent seven.
Move on to the individual movers.
Of course, we see companies have been the eye of the storm, managed to push higher. Semi Conductors at six percent now it's the best stay since oh, April the ninth, when they rallied hard on the fact that some semiconductor has got reprieve from the original reciprocals.
For we are at six percent.
Amazon of course up more than seven percent, as Chinese goods can now flow at a lower price point than they were worrying about. An Apple up more than five percent, one hundred and fifty one billion dollars in market cap added to this company. And all of this as we of course here from President Trump a little bit earlier as part of remarks on trade, he did indeed say he spoke with Apple CEO Tim Cook.
Here's what the President said.
I spoke to Tim Cook this morning, and he's going to I think even up his numbers five hundred billion dollars. He's going to be building a lot of plants in the United States for Apple, and we look forward to that.
I really do look forward to that.
Let's talk about Apple and the remaining challenges that remain Bloomberg Stain and Woman is with us. And look, if they're going to be recommitting to spending in the US, they're probably still going to be facing what at the moment, twenty percent taris on an iPhone ship from China. They're still going to be looking to move into India. The headwinds aren't stopping, but the market is still at least a bit more relieved.
Absolutely, this would signal some relief. But to your point, this doesn't exactly eliminate tariffs. And as we've reported before, even if Apple wanted to shift production water places like India, the ramp up on that is going to be gradual doesn't happen overnight, and it won't necessarily happen in time for the big iPhone launch this fall.
And time and time again, Mark Gumman's been out there saying, look, maybe they have to protect margins. Maybe you look at us like price increase. You've been thinking about how they tend to enact that, whether it's an actual more costly iPhone or whether it's more about the data and the services. But what are you hearing in terms of how they innovate in this context as well?
So it does feel very safe to assume that Apple is at least considering price hikes. Every other consumer electronics company, including Microsoft recently with the Xbox, has had to weigh, if not imposed tariffs, and I think you're going to see more in that space in the consumer electronics industry
Apple four. It's part if these price hikes do come to bear, they're going to be coming at a time when Apple is expected to announce a radically Radically might be a strong word, but a noticeably redesigned iPhone more than just spec bumps, more than just software upgrades, but thinner, just something that might actually persuade people to upgrade. And it would be interesting to see how much Apple frames any sort of potential hike around quote, technology improvements, design improvements.
I don't expect them to mention tariffs in any sort of big presentation that it makes.
But the real redesigns coming in twenty twenty seven. That's when we get curvature, that's when we get foldable.
Right.
Twenty twenty seven, Mark Kerrman has reported, is the year that you can see maybe more ambitious, bold Apple designs. And we're talking, as you say, more than just a slim down iPhone, but things like a foldable phone and entry into home robotics would be really interesting. It is
something that Bloomberg has reported on. But there is a really interesting and possibly unfortunate gap between the present and when Apple's finally going to be able to catch up and in terms of its just ability to manufacture and market these devices.
And of course bring jenditor Ai to bear as well.
Clan a woman on all the latest out of Apple right now, and let's shift against another magnificent seven stock, Tesla. It is of course rising today along with the rest of the market, but the stock has faced so much volatility of late whips or by global trade tensions, weak sales. Eel Musk himself and take billionaire. Of course, his face backlash from his doge efforts, and Bloomberg opinion columnist Otha mcunda is sounding the alarm on Musk. He's writing that
the call is coming from inside the house. It's Musk's approach to leadership that is sowing the seeds for Tesla's next crisis, one that could affect the entire industry.
He needs to realize that being bold.
Doesn't just mean playing fast and loose on safety. Bothamconna joins us, now, can you bring us the examples got them? Where you think Elo Musk has been playing.
Fast and loose with safety, Caroly, it's about my critique is about the culture that he's establishing at Tesla.
Right, So, what we know about safety cultures in every company that has ever decided to make safety it's number one priority, is they deemphasize hierarchy and they make it safety descent. But safety, physical safety for your customers and your employees comes from psychological safety from your employees being willing to say, hey, we're making a mistake. We need
to stop this. And if there's anything that you can see about the way Musk or runs everything, not just Tesla, it's he's incredibly intolerant of descent, of people beneath him saying hey, I don't think this is right. We've seen a multitude of lawsuits against Tesla from employees saying that they've been retaliated against for raising safety concerns. When you have that kind of a culture, being a safe company becomes all most impossible.
And you sort of take echoes from the past with Boeing for example, and the issues that company is faced in a similar time of going for growth over potentially safety calls and a clear rechain of command.
That's right.
Boeing used to be the safest of all airline companies because they had this culture, one that was dominated by engineers, where when people thought there was a safety concern, everything else would go by the wayside until it was fixed, and where you had complete freedom as an employee at Boeing to go to anyone at Boeing and say no, like, we have a problem. And this is really really important.
When Boeing abandoned that culture in order to pursue short term shareholder returns, we found out that they got the shirt. There were short term returns for a little while, although not recently of course, but much worse than that, the safety reputation of Boeing that had been cultivated for almost a century was thrown away because their airplanes started crashing, which they had never done in the same way.
And there's not mutually exclusive outcomes here. Just because you're.
Putting safety first doesn't mean you need to hold back innovation. And you highlight well a couple of key executives in the past, particularly in the mining field, that really went for security and actually benefited them.
So yeah, So the most famous example of this in the United States is Paul O'Neill at Alcoa, who said, we are going to make this the safest company in the world. And when he first announced this, when he became CEO, one of his investors went and sort of said, they've appointed a hippie to run the company and he's going to destroy it. And in fact, the while he was CEO, the value of the company went up by factor of nine because what O'Neil realized is there is
no such thing as a well run unsafe factory. Similarly, Cynthia Carroll at Anglo American when she transformed safety in Anglo American and said, there is no such thing as a well run unsafe mine. So no, these are absolutely not intentions. Psychological safety helps you on safety issues at the company as a whole. They also helped you on innovation. It is the single determined factor more important than any other in determining the success of a team is how
psychologically safe the people on it feel. When you take it away, you take away everything.
It's interesting.
Other though you reference a lot about the push into the robotaxi space in particular, then this is the moment that Elon must needs to be focused on safety above all else.
But actually he's.
Been outrun by local competition. Weimo already on the streets performing. You've got China in particular showing growth when it comes to robotaxis and autonomous vehicles. So he's not really sort of running ahead of himself in terms of pushing for innovation ahead of safety or do you feel that there has been moments where that's occurred.
So, I mean, there certainly had been moments. So Tesla's so set before robotaxis. Tesla's are incredibly safe cars if you are in a crash, but the ideally safe car is one that never gets in a crash in the first place, and Tesla's do not do nearly as well. In fact, autopilot, for example, does not seem to make you safer when you're driving the car. It may actually make you a little less safe because it decreases driver attention.
Already starting to see concerns about that with Tesla. But going forward, I mean, Tesla is not the leader in automated driving.
WEIMO is. We all know this.
They are vastly ahead technologically, but Tesla's promises of what they're saying they will offer. If they want to offer anything like that successfully, they have to be at least as safe as weimo, and they probably need to be better, and that will be very, very difficult to do if they don't have a culture where people, every single person at Tesla feel safe to say, Elon Musk, we are not a safe.
Company, Gotham.
Do you have the confidence that the culture will allow for that, because that's the corporate governance is saying. We are thinking by Elon and Elon only. We're not even assessing whether anyone could ever indeed replace him if needed.
I don't at all. I would never underestimate Elon must to work, you know, miracles or what seem like miracles, But there are there are is a track record of CEOs who would transformed the culture of their companies in ways like this. O'Neil is one example, Alan Malalley would be another. And the thing you'd say about them is they really don't operate anything like Elon Musk. They emphasize
that the team is more important than themselves. They emphasize that hierarchy is the death of success in an organization. This is not the way Musk has operated anywhere he has been certainly in the last ten years you could have, you know, you could make a real question about whether early Elon operator like that, But the one we see today just does not.
Gotham mccunna, thank you so much for joining us from Bloomberg Opinion.
We appreciate it.
Now some breaking news from a geopolitical spective. In the last few minutes, we are reporting the headline that Hamas indeed has released Israeli American hostage Dan Alexander.
It was a.
Hastily announced move, of course, ahead of US President Donald Trump's visit to the Middle East. Now hours earlier, we did know, of course that Israel is planning on sending its negotiating team to Kata on Tuesday as part of the latest efforts to secure the release of the remaining hostages who are in Gaza. Now coming up, investor Carter Room joins us to discuss how this easing of trade tensions that we're seeing between US and China could impact global supply chains and e commerce.
This is really meant technology now a bit to.
Say the least, of a reprieve in the trade war between China and the United States has people talking, in particular flex sports CEO Ryan Peterson, commenting on X This Morning saying, get ready for a shipping boom.
Let's talk more about.
The tariff reprieve that night to day pause with Carterine, co founder and partner at venture firm M thirteen, which counts sourcing its services start up Pietra as one of its portfolio companies. That company, it seems, helps brand shift supply chains away from China and make business decisions based on the tariff environment. Carter boy, Pietro must have had an interesting few months.
Absolutely.
Pietro's building kind of the AI brain for e commerce companies, and part of that has supply chain. You know, they have over thirty thousand you know, non China suppliers on their platform, about six thousand of those in the US, and they have definitely been busy. They've seen about a five x increase in people wanting to reshore.
And restore at an extremely higher cost. Like, how are they helping startups want to be D two C companies navigate the fact that making a product in the US is likely to be a lot more expensive than if they had sourced from China.
Yeah, I think, you know, it used to take a few months to reshore. Now using AI, you can literally upload a photo your product you're previously making in China, and within about two days you can find kind of the most the best factories, the vetted factories in the US. You could compare costs, but this is where the power of AI can just take something that literally took months and not do it in days.
So you can do it in days.
But have we seen slight elastic nature in the desire for companies to reshore? They will swallow either margin hit or they will pass on that increased cost to their user base.
You know, I think right now there's just a lot of uncertainty, and with today's news, it obviously gives people a reprieve. But I think the one thing that every kind of brand or company realizes you have to have multiple.
Options in your supply chain.
So I think to be decided on, you know, the cost structure and whether they pass it along. But I think everyone right now is just panicked and trying to figure out how to make sure they have alternative sources. And there's a lot of great sources and factories in the US and also other places outside of China.
So let's talk about the underlying technology of how by just taking a photo you're suddenly able to ensure that you can source make manufacture closer to home.
How does it work?
Yeah, I mean I think you know, they have about over thirty thousand vedded factories. Then you can use a gentic AI reach out to those factories while you're sleeping. You can have them, you know, negotiate, you can have them do sample.
But there are a ton of.
Great factories all over the world, and you can see what other brands are you know, produced at those made it those factories and things like that.
Let's just talk about the rest of your portfolio at the moment after, because you've clearly got Pietrace seeing the upside. How the rest managed to well ultimately try and steer in this moment of uncertainty. Yes, we see tariffa print for ninety days, but maybe it's just ninety days.
Yeah, I mean, thankfully at thirteen, we don't invest in hardware companies. We don't invest in a ton of companies that have been impacted.
Directly by the tariffs.
Obviously a lot of companies are affected indirectly, you know, right now, obviously so many companies are just obsessing about AI. How to supercharge their current business models or create new business models. So we've been fortunate that, you know, we haven't been impacted like a lot of others.
And is the resilience there to commit to investing in janator AI too reorientating the business when men you're just trying to make ends meet, when trying to understand the latest headline impact cart or are you willing to invest in some of the latest startups in this environment?
Yeah, I think as a venture capitalist you take a very long term time horizon. We're looking, you know, aid or ten years out. Obviously it's an exciting time. AI is just disrupting so much. I think right now, you know, everyone's talking about the technology, but you know, we obsess about what are the implications of that technology, what's not possible, what's the next billion dollar company that will be run by three people? So I think it's an exciting time.
There's a lot of change and that will not let up, but there's a lot of opportunity.
Casarine, partner and co founder of M thirteen. Great to have you on all things Pietra and more broadly across your portfolio. Some mariky news on AI valuations for you as will Street Journal is currently reporting Perplexities into to raise about half a billion dollars five hundred million and about a.
Fourteen billion dollar valuation. Now. Interestingly, back in March.
Bloomberg was reporting that Perplexity was in early talks for refunding at an eighteen billion dollar valuation. So maybe pulling back a little bit, but will keep you abreast of the latest fundraising going on in Generative AI. Let's shift over to the world of media companies right now, because they are showcasing their new TV lineups to advertisers this week, but only twenty eight percent of marketers plan to actually
increase their ad purchases during the upfront period. Mburgs Asia, Counts joins US and I'm assuming it's because of well, complete anxiety around the economy right now.
Exactly right, the wave of economic uncertainty across the board is really making folks hesitant to go into the efference and commit ad dollars for the next twelve, fourteen to fifteen months, right not knowing what can happen tomorrow, what
can happen in the next month. So it's Brawley expected that there's going to be a little bit of a pullback and those commitments this time going into the upfronts this week, just because people don't know what's going to happen to their business and they don't know what's going to happen in the broader market.
Now, we did hear some enthusiasm Paramount Global, for example, the interim leaders there had said, look, we're hearing really good things and conversations. Who are the main companies trying to wo right now? I'm assuming it's the likes of what Paramounts. Overall media, We've got Fox, Who've got NBC as well, and who are they trying to take money from?
Yeah, absolutely, Disney's another one. You'll also have some of the streamers, so Amazon, Prime Video. I think a lot of the conversation is going to be around sports.
So over the past.
Years, there's obviously been a broad sort of decline in viewership on cable, but sports has remained really strong. And if you want to get ads next to those premium and sports that are on the NBA, the NFL, the NHL, you have to commit during upfront So I think that's where we're going to see some strength and the companies that have strong sports programming are going to do really well on upfronts, and I think they're going to see some of those commitments and she counts perfect.
Way that we now continue the conversation about the sports side of things, We thank you. Let's take a look at the new features at NBC. Peacock in particular, it's going to be offering in return for its coverage on the NBA games for the first time in decades. You know, there's Claris pal Mary joins as we're just hearing from Asia how it's basically all about live sports, and well it's a good time for Peacock therefore.
Yeah, so they just announced today.
It's you know, they had this big deal to broadcast NBA games. They stole them from Turner's eleven year deal. And so when the season starts later this year, if you go to Peacock, you'll see right away, even if you weren't planning on it, if there's a live game, there'll be a little windows.
Showing you the game you click on through.
There's going to be all sorts of interactive features. For example, celebrity cams. You could watch the reaction of some of the celebrities.
In the audience.
You can use an augmented reality feature that's going to show you not just player names as they move around the court, but their statistics if they're trying to make a shot, what the percentages is.
They're going to.
Have a feature called Scorecard that's sort of like a daily fantasy contest, not for real money, but you earn points and they're going to have a leader board for the viewers.
So you can imagine a lot of excitement there.
This takes investment, though, and unlike some other rivals, Disney Plus, I'm thinking about Warner Brothers offering Peacock's not profitable, right, Chris.
That's correct, it's you know what you know, Paramount Plus and Peacock are those sort of outliers that most of the other guys have termed profits. But this is the direction the industry is going, so they have to invest. If you just think about this event, the upfronts began in the sixties when there was three broadcast channels, and now really all the big news this week that we're expecting are going to be around streaming.
You have the Peacock announcements.
Fox this morning said that talked about their new streaming thing called Fox One.
It's going to be their channels.
Tomorrow, we're expecting a big presentation from ESPN talking about their standalone streaming products.
So it's really all about streaming these days.
And have they got the feedback that this is what fans want, but this is the way fans are going to engage, then they're not just going to be well going to TikTok to get the latest news on sports and see the ads that are being associated with the sports content over there.
Instead, well we'll see I mean part of the ESPN presentation, we expect there's gonna be a lot of interactive features as well, betting and all that.
I mean.
Seeing the screen as Peacock has presented, it just seems a little bit too much. There's already a lot going on during sporting events and all the data you see, so but there'll be the option not to watch that, I think, and streaming is I mean, it was a big deal and Amazon got Thursday Night Football. The viewer numbers weren't quite as big as they had been on Fox, but they've.
Been coming back.
People are gradually getting used to finding their favorite teams on streaming sports rights.
That's where it's at.
Not to mention the sports documentaries to Chris pal Mary, We thanks so much.
Is a great read.
Go and check out what Peacock's doing about the NBA. But meanwhile, that does it for this edition of Bloomberg Technology. You know want to forget to check out on podcast. You can find out on the terminal as well as online on Apples, Spotify and iHeart.
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