From the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from New York.
I'm Caroline Hyde, and this is Bloomberg Technology coming up a volatile Nasdaq as after posting its worst quarter in nearly three years, plus grants from the US Chips Act in limbo as a Commerce secretary pushes semi companies to expand their US projects and amid trade anxiety and week at Tesla Sales, we sit down with the CEO of Evy Giant Rivian. The first we check in on these markets that.
Actually had trying to push.
Back into the green after what was a pretty horrific quarter. The first quarter for the Nasdaq one was the worst since the second quarter of twenty twenty two. You are seeing the setos in the terms of woman twenty percent for many of those magnificent seven names, Nvidiot down almost twenty cent, twenty percent. You see broad Com having its
worst quarter in its history. Let's break down the moves and what a signals for this quarter now Isabelle Lee is with us for more and it was the most loved names for twenty three twenty four that got punished the.
Hardest exactly, and altogether they shed some two trillion dollars in market cap. Lots of superlatives out there, we won't really lose track. Microsoft, Amazon, Meta down twenty percent from their peak, broad Coom down thirty three percent since December. And it's just interesting how these tech bihemos are now dragging the markets lower. And for more than two years
they've been the darlings of AI. They're the ones that powered the markets to really it's bull run, and now questions about AI are coming out of time when there's just really a lot of macroeconomic uncertainty all around and thorough and deep sea. I read this and it really struck me with Ali Baba's co founders saying they're rushing to build new facilities to get ahead of AI services. In contrast, you have an analyst report about Microsoft saying
they're walking away from new projects. Microsoft, we've committed almost eighty billion for data centers, they've earmarked that, and altogether these big spenders earmarks three hundred billion.
So what's next.
It's really an interesting time, and you'll basically pointing to a very massy narrative for AI right now, Josi clearly trying to dash the hopes of AI.
Saying there's a bubble here in the United States. But at the same time, as.
You say, Ali Baba is busy investing more than fifty billion itself in AI infrastructure, in the future of artificial intelligence. And then we have TDCN, which continues on this narrative of Microsoft. Are people feeling that at these valuations with more than a bear market ultimately and a lot of these names down more than twenty percent, as you say, is now the time to stop buying in Do we feel that that factors in that price is in moving out of the bubble?
It depends on who you ask.
But I interviewed fund a mutual fund manager, and he says that tech is still expensive, it's still volatile. Well, I mean, yes, it's come down. It's followed to twenty four times as demated profits from twenty seven last month, but the historical average is still around twenty so it's still expensive.
But they still on it.
He said, he has a little because he calls it caught risk management. So you really see that they still have a foothold on the market. But it's really interesting because the IPO market, you expect it to be hot, but it wasn't. You look at core Weep, it was a dudt. Although newsbacks maybe that's the exception that was exciting. It's surge around eight hundred percent yesterday.
I meant retail name and find different business.
MAT's fair in Corey's, but it's notable that corey is actually up more than ten percent today. Okay, so maybe we're getting a little bit of buying around the edges
on what had been a pretty beaten up name. It's it's now just above its IPO listing price, but it does just seem so murky for public marketing investors when they're looking at private markets and they're looking at a forty billion dollar round for Open AI Sam Altman saying that there's basically insatiable demand and his GPUs of melting because everyone's using his product. Is that still the tariff overhang that perhaps lends to the downside for these names.
Absolutely.
Before the narrative was just like tech valuations AI, but now it's like Liberation Day tomorrow. I was just on talking in six floor upstairs with Anna Malaria of Allspring, and she said, we will get some information tomorrow, but not the clarity that everyone is hoping for. It's liberation Day, but I mean, what does that mean? So she was saying that we're still on the defensive, We're still on the weight and see because what will happen.
I mean, everyone's.
Hoping that we will have a magical list tomorrow per country, per tariff, but we won't see that.
So she's still very concerned.
If you look at Bitcoin, which is really the risk proxy, it's down around ten percent this year, but from its peak it's down twenty percent. And I know that bitcoin is a lot of fans but also skeptics, but one can't deny that it's a broad gauge of risk sentiment. And for now the gloom is palpable. It is well said Isabelle Lee. We thank you for that breakdown.
Let's just get into the weeds on chips specifically, now, COMMA Secretary Howard Littnan may withhold chipsack grants to push companies to expand their US projects. That's according to sources, his goal is to generate tens of billions of dollars in additional semiconductor investment commitments for not actually increasing federal grants.
Blombergs Peter Elstrom joins us on this.
Now, we'd all known that President Trump was not a fan of the Biden Harris Administration's Chips Act, even though it was bipartisan nature. But it looks as though they're looking in a different way to orchestrate it.
Yeah, that's exactly right.
So just to back up a step, the Chips Act, of course was passed with bipartisan support. The whole idea is getting these chips companies to invest more in the United States. It's fifty two billion dollars in grants and then tax credits, which are very very important here too. So the Biden administration scrambled in their last days to try to finalize the agreements with a bunch of the most important chip companies in the world, including TSMC and
Samsung and Intel and Micron. They finalized the terms of these accords, but they didn't disperse all the money. The whole idea was that these companies would hit benchmarks and then the money would go out. So what Ludnik has decided to do is he's decided to use those disbursements as leverage with these companies to try to get them to commit even more money to the United States, so the chips awards are not going to go up in
terms of value. But before he actually writes those checks, he wants companies to come forward and pledge more money.
The example for this is TSMC.
TSMC originally was going to invest about sixty five billion dollars in chip capacity in the United States. It came forward and they said they're going to put in another one hundred billion dollars. The Trump administration loves to be able to have those kinds of announcements, especially TSMC's the most important chip maker in the world right now, so for them to say we'll put another one hundred billion dollars in the market is very important.
The administration would say that was the effect of tariffs. TSMC has said they just like the American market and want.
To invest there.
But what's also interesting is the nuance on the tax credit Peter, because in many ways that's more important than the grants.
Right for many of these companies, including TSMC and probably Samsung and Intel.
Also, the tax credit is very very important.
It could be a lot more money, and so there are discussions about maybe increasing that tax credit.
It has been twenty five percent.
It could be even more in the future, and that's important for companies that actually have the money right now. If you can put in one hundred billion dollars, it s easy to do the math on that. That's twenty five billion dollars in tax credits for you. That can save you a lot of money down the line.
And you're right. TSMC sees a lot of opportunities in the United.
States market to be able to make investments, build some of those cutting age chips here and then sell them to domestic customers. You also have companies like Samsung and Intel that could do things like this are embarking on these kinds of projects. But lud Nick is exerting a lot of leverage right now in these companies to try to get bigger numbers, more eye popping numbers into the headline, so that they can take credit for bringing some of this production back to the United States.
At a time when with a lot of uncertainty, particularly with tariffs hanging over the semiconductor industry, it must be a difficult time to commit to more spending from these CEOs.
Right You're just talking about the tariff uncertainty out there. Well, I guess we'll find out some things tomorrow, but there are a lot of this we just don't know at this point. And you're right, Lutnik and the Trump administration have pointed to tariffs is part of the reason that some of these companies are investing more in the United States in the tech sector, the chip sector in particular.
It's unclear. We don't really know what the tariffs are going to look like.
There's been talk about putting tariffs on the chips themselves, maybe the products, the end products that chips go into. It's not clear exactly how that's going to play out. So I think they need more information. And of course, the time frames are totally different. They're changing these policies almost by the week, as we've seen, and when you invest in a chip company, you have to plan for decades at a time, so the time frames really don't
match up here. They're gonna have to resolve some of those conflicts going down the line.
Peter Alstrom, brilliant to have you, Thank you very much, indeed, thank you. Let's stick on chips and chip makers Global Foundries, and it's exploring a potential merger with the Taiwanese chip maker United micro Electronics as a way to create a
more resilient manufacturer of all the generation semiconductors. It's all according to sources that a deal would face multiple hurdles, including financing, potential opposition from Taiwan's government, and regulatory approval from China and another chip name that of course is affected by potential Chipsack grants, but also the new change of CEO is intel of by two point four percent, and that's after lip Bhutan took to the stage yesterday.
We heard him for the first real time articulating the future of this business under his leadership and is saying they liked his reality check, they like his focus on talent key and client secondary, but maybe lacking a little bit of detail on what next product innovation will be coming. We're off by two point three percent, but coming up Tesla. It's slumping again in Europe when it comes to sales.
The shares are interestingly on the higher side for the latest numbers in terms of sales from France, Dismal.
We'll discuss that next.
This is BLUEMBG Technology.
Let's just check in on the shares of Tesla now.
They're actually rebounding this day up more than five percent after what, of course was a pretty horrific quarter previous doub thirty five percent.
In Q one, we're up five percent.
Even though sales in France fell thirty seven percent, they actually fell further.
In countries like Denmark.
And that's as we expect Tesla's global auto deliveries for the first quarter to come out tomorrow. Bloomgs David Welts joins US for more Tesla's woes when it comes to real fundamentals, when it comes to sales looking ugly worldwide, right now, that's right.
They've got a few different pressure points here. Clearly in Europe, given what's going on politically and eon musks involving with the Trump administration, some buyers are shying away, to say
the least, But there are some other factors here. There's a lot more competition in the EV space now in Europe, in the US especially and in China, bids coming out strong and taking a lot of moreeare and we do have a model YE change over here and they make that vehicle on every Teslo plant, which means you're going to be losing a certain amount of production. It's hard to quantify how much that's biting into sales. I think that's very real. So it's not get too carried away
with buyers don't like you on Musk's politics. There are some who don't. I think that's real. But there are some just regular business factors here with Tesla and their product change over that are affecting it. And also he's got a lot of competition and bid with record sales. They just keep growing and growing, doubling sales since last year. They're a real force in Tesla has a real business
in China. So add those together and sales are done and we'll see what happens tomorrow when the numbers come out.
I think that's really important to know the competition, the element there's interesting. Wells Fargo putting out a note today saying Testa just needs some magic at this particular point, because they do say, yes, you've got this turnover in terms of production, but are people really going to be rushing out for a new iteration of the model. Why
they worry about cannibalization of any cheaper product. Also, the fundamentals of the US in terms of that five hundred dollars buyer credit there's likely to come away right that's right.
Look, you could see a little bit of a bounce for Tesla, particularly in the US because.
Tesla is at least.
Affected by tariffs among the car companies, but they still would get hit with some and some buyers may say, hey, Tesla has parts that are imported, so I don't want to have to pay more for a Tesla in three or four months because of tariffs, and then some people may We've seen this so far with numbers that are out.
Buyers are going out there thinking that if Donald Trump is going to make go down his tariff threats, he will probably make go down in his threats to get rid of the seventy five hundred dollars EV tax credits.
So we've seen it jump.
We saw in the fourth quarter, we're seeing it again so far with the companies who've reported in the first quarter. Ford and Honda both had big jumps in their EV sales so far, and st at Hundai. So people are going out Americans, I should say, going out and buying evs before before the credits go away, and Tessel will probably take advantage of that and get a bounce from it as well.
We'll see how those deliveries shake out when they published later in the week.
David Welch, thanks for the latest on all things Tesla. Let's dig in further. Jimhang.
Lee's with us, founder and CEO of jl WARN Capital. You're an independent equity research firm focusing on Chinese companies but also listed multinationals in China. You bring such expertise when it comes to Tesla It's history in China and the fact that it's kind of losing its edge over there, how much we're seeing it lose out to competition right now.
Jianhang, it's very interesting. Tesla has a luscio lot of history in China. GF three, which was the largest the factory in Shahai now accounts for about fifty five percent of the global shipment, was only started to make cars back in that twenty twenty that's five years ago. So since twenty twenty, the EV adoption China accelerated initially at sixty percent year over year, then gradually comes down to ninety percent, set seventy percent and fifty percent year of
year last year. So in the process, Tesla has been losing market to share to to in a market that it has created and helped the to accelerate. So twenty twenty, Tesla's market share in China with double digits about eleven twelve percent, and today it's only four percent. So it's really interesting. Even though China remains to be the only major market that grows itself for the brand, it's trading the overall growth of the China brad EV market.
Yeah, give us the competition. Is it all about BYD.
There's also show Me, which is flipped from a phone manufacturer to a car manufacturer. Now there's current headlines about show Me and a fatal accident that occurred, many worrying about FSD and ultimately av issues with that particular model.
Is that something to be keeping an eye on.
Yeah, I think it's in the case of the deep seek uh. If anything, that story tells you how fast the Chinese can commoditize a software. Same is the case with the hardware. So it's not just BID, it's everybody. It created the market, has helped to create the market that introduced a lot of competition. So over the course of five years, show Me is the latest competition. But meanwhile there's the three large independent EV makers that are
listed in the US. Not saying like everyone is as profitable as the TESTLA, but incrementally on the incremental scale, Test has been losing market share because it's just not able to keep up with the product and new launch
that the market uniques. China market uniques uniquely demands. So and show me a report this morning is very uttuching a sense that how EV is no longer just a vehicle, right, I mean it has elevated to a technologlogically like a new uh new height, So FSB uh you know, as driving it really invites a lot new issues, such as who is responsible in case there's a bug in the software that causes accidents that develops that becomes a you know,
tragedy or like a death. So is it the software maker, the driver, or the battery maker or any components uh maker of the car? So I mean those really those issues need to be addressed before a commercial adoption of the FSB can be seen anywhere in the.
World, Junghang.
What we haven't discussed is politics, many would say, if you look at Apple, for example, there was an erosion of market share. Some people felt that it was because Chinese purchases wanted to buy domestic made products.
Is that happening in the e V.
Space at all, or is it more that the competition is face and the price point is better.
I don't think Tesla has the same issue Apple has just yet. I think the brand is strong. China's issue is really product issue, competition issue. I mean, it's very different from what we see in the Western markets, where you know, Testla's they almost polarizing political politics, you know,
cannibalizes the buyer's demographics. In China though you know the price yes, yes, you know in the upper middle UH sector and the brand is strong, it's just very slow in launching new products, and there's a product fatigue, and then the competition is really offering a lot more attractive, exciting newness that the consumers in China demand.
Junghang is so good to get your expertise on China and the demand there, Junghangli from One Capital, We appreciate it. Time now for talking tech and first up SpaceX Well Let's launched the first ever human spaceflight over the Earth polar regions. The RAM two mission took off a Fulcon nine rocket Monday evening, carrying four passengers. The trip is expected to take three to five days and will be used to conduct research on the impact of spaceflight on
human health. Plus, the ECB president Christine Lagarde says that the use of AI could up in Europe's social model. Speaking and an ECB conference, Laguard recognize the productivity gains.
That could be achieved with AI, but warns.
That the technology also has the potential to increase labor market inequality across the region. Meanwhile, soft Bank is seeking a loan of as much as sixteen and a half billion dollars to help fund its AI investments in the United States.
It's all according to sources.
The Bridge loan would help to find finance that five hundred billion dollar AI infrastructure project, as well as the forty billion dollar funding round of which is committing thirty billion to which it leads on Open AI. Talks with banks are in early stages and details may change over the coming weeks, but we're going to stick with soft Bank's funding of.
Open AI now.
The company behind Chatchubt, of course, says it has finalized that funding round of a record forty billion dollars. It was led by soft Bank, and it's putting the company now at a three hundred million dollar valuation for morblommegs, Seth Thiegeman joins us.
So it's interestingly structured.
But SoftBank basically is giving thirty billion, and then there's other investors co To and the like that are chipping in the other ten bill.
Yeah, I mean, this is an incredibly complex deal. Soft Bank is basically creating a syndicate in investors to help them finance this. But the round is not happening all at once. There's ten billion now, thirty billion later, but also maybe not thirty billion later. It depends on whether this company, open Ai, can restructure as a for profit or not. So as far as these rounds go, unprecegentive in size, we're also kind of unpressicundating complexity and.
Also a new relationship being formed between Microsoft and open Ai, because before they were the biggest backer.
Really for sure, I mean, I think we've all felt that there's been a slow motion split happening for the last year and change between these two companies. Microsoft is still part of the syndicate investors here, that relationship still stands, but if this deal goes through, by the end of its stoft Bank will presumably be the largest financial backer
of open Ai. Displacing Microsoft, and at the same time stoft Bank is key and integral to helping open Ai diversify away from Microsoft on the data center side.
The revenue numbers, though that we're starting to get a glintse into they're good. We're seeing spectacular growth of open Ai, and meanwhile Sam Altman continues to worry about whether we can deliver the products are so successful as gpuser melting. How are they going in terms of an internal growth model?
Yeah, I mean again, you're seeing revenue triple or more than triple from the last year, potentially from the projections that we've seen to twelve point seven billion I think for this year is the estimate. At the same time, worst profitability here we have seen that cash flow positive not projected to come until the end of this decade. And that's why they need to raise tens of billions of dollars to prop up this.
Business that compute in ancient keep seth Fiegerman fun of the pun.
We thank him.
Welcome back to Blue Meg Technology and Karen Hide in New York. And we have a slight bounce back after the worst quarter for the NASA that one hundred since almost three years we're up six tens percent. In fact, technology is on the higher side when you looked in over in China, up almost percentage point on the Golden Dragon. We're also looking at stock six hundred in Europe which now is closing up more than one point one percent on that Tech index. But this is all.
Amid the worries about tariffs. About Liberation Day.
Let's just go there, because the EU says it's ready to fight back against President Trump's global tariffs, stating that they have quote strong plan to retaliate if necessary. Let's get more from Katie Lines over in Washington and person of ononderline trying to ready a response here.
Yeah, we've already seen the EU promise a response to the twenty five percent steel and aluminum tariffs that have already been announced and put into place by the Trump administration that will affect about twenty six billion euros and goods from Harley Davidson's to things like bourbon and whiskey.
But what the EU is promising here is potentially greater retaliation after tomorrow, which is assumed to be the implementation of twenty five percent tariffs on auto imports, which obviously affects European auto manufacturers, as well as whatever reciprocal tariffs
for EU nations the President ultimately decides on. As for what that retaliation could look like, the big question here is going to be whether or not the European Union decides that anti coercion instruments are going to be justified here, which is essentially a set of tools that are designed to be in response to countries using trade or other
economic policies to try to coerce the European Union. That could have specific implications for big tech companies in particular, keeping in mind that one of the anti coorgianist instruments could affect intellectual property as well as digital services trade things that technology companies obviously are involved in. The irony is Caroline. If ultimately that is how things end up in terms of European retaliation. It is one of the things that President Trump is most upset about in terms
of what he sees as unfair practices by Europe. It's not just about tariffs, but so called non tariff barriers, which he sees is not just the value add attacks, but also some of their regulatory policies around technology.
I want to go there in a minute Kyley a little bit deeper. But for now we're seeing some European response. Mercedes, of course, big automaker in Germany, saying it's weighing pulling its US entry level cars because of Trump tariffs. Of Course, the cheaper Mercedes, they're going to be hit the most in terms of ultimate profitability when shipped to the United States and tariffs upon them. So Mercedes is weighing pulling its US entry level cars over.
The Trump tariffs.
But then go to the digital services side of the equation, as you said, they is that was what really annoys big US tech in particular Mark Zuckerberg seems to be his eyes on the digital service tax and how would that be rectified or how would that go deeper if the EU responds in this way.
Well it's not just Mark Zuckerberg, Caroline. President Trump doesn't like this either. He is repeatedly in his remarks to reporters talking about the justification for imposing tariffs entrating partners like the European Union as them being unfair to US technology companies. He has said this on multiple occasions. As for what that looks like, it could obviously manifest in a number of different ways. Including overall just the tightening
of regulation around big technology companies. Is the European Union obviously is a big importer of services, which gives them a little bit of leeway as to how exactly those services businesses are able to conduct themselves. As I mentioned, intellectual property rights also one way in which anti coercion
instruments could come in to the picture. All of that said, there could potentially be some serious retaliation for that retaliation from President Trump, as we have already seen in respon spants to the threat of retaliating against those tariffs on Harley Davidson's and alcohol products. He suggested a two hundred percent tariff on things like European wine and champagne. So this could go back and forth in a lot of different realms.
Caroline retaliation on retaliation, Kaylee.
Lines, thanks so much.
Now, amid of course this US EU trade tension and the brace for tariffs, we need to bring you an expert voice, Tom Wheeler. He's the former SEC chairman, current visiting fellow at Brookies' institution.
You are putting so much thought.
Into the impact of this for tat let's call it, but what ultimately do you think the US can achieve here for its US big tech companies with the threat of tariffs anything.
Well, I think Kailey did a terrific job of explaining what the issues are here at Caroline. But at the root there is a sea change in what tariffs are all about that could be forthcoming. We don't know what's going to happen exactly tomorrow, but if this discussion of responding to regulation comes through. Traditionally tariffs were imposed to protect production. But on February twenty first, the President issued instructions to his tariff enforcers instructing them to deal with
the how can they protect big tech profits? So the move from protecting production to protecting profits, as I said, is a.
Sea change, and if we.
See that tomorrow, undoubtedly the EU is going to respond. And this won't be the first step. There will be next steps. And we're entering a world that we really have not experienced before.
Can you go into how you've thought about this might even work? Because there's one thing about tariffing a product, tariffing data flows.
How does one do that exactly?
There's a huge difference between cars and champagne and zeros and ones. Shame, but yes, and so it's you know, how to tariff a bottle of champagne that's coming in. How do I respond to zeros and ones and particularly I think there's two parts to that. One. How do you respond when those digital services are going out of the country into Europe where they're being regulated rather than being brought in from Europe like a bottle of champagne.
And sure you can go after European companies like bookings, dot Com and and and those, But that's that's the tip of the iceberg.
That's that's small potatoes.
How do you deal with You then have to get how do you deal with data flows? You then have to get down to the question of okay, let's just think about this. Where are the data flows in and out of the EU. Well, they're financial transactions even more than digital services activities. So do you put some kind of a tariff on those flows? Do you put kind some kind of a tariff on when information is accessed in American databases? I mean, there's a there's a whole
new world that we're entering here. You know, the United States dominates the cloud services market.
When you access a cloud service.
Provided by an American company, is there a tariff on that. I mean, this move from hard goods to soft goods is revolutionary. And as I said before, what happens tomorrow is just the first step, not the last step.
So take us through a few more steps and whether ultimately the desire to retaliate to protect profits could actually backfire, could end up making us more biifurcated with Europe.
So the fascinating question here, Caroline is will Donald Trump make European tech great again? Because of the fact that he is creating reasons to sever relationships with American tech companies. You know, the underlying theme of the relationship between the US and Europe has been around security, and the European countries have all recognized they have to step up to their own security.
But what is security today?
You know, sure, you can switch from making cars to making tanks, but that doesn't reflect, for instance, what's been going on in Ukraine, where it is not expensive heavy weapons systems like tanks that are decisive, but inexpensive software based systems like drones. And so we've seen a change in the battlefield.
Where it used to be that software supported hardware kinetic hardware systems, Now you have software instructing that hardware what to do.
And you've got to believe.
That the Europeans, as they go to increase their defense capabilities, aren't going to ignore the fact that it's not just hardware anymore, it's software and can we rely on United States software service providers. For instance, right when Donald Trump shut down Starlink's access to the Ukraine Army as a part of leverage with Zelenski foodfoot what kind of message did that send?
Tom?
We must leave it there from the Brookings, we thank you. We welcome our global radio and TV audiences. Now, evmaker Rivian recently announcing it will be spinning out a new company called Also, with the aim to develop evs for short trips one hundred and five million dollar funding from Rivian and VC firm Eclipse for more. I'm very pleased to say we're welcoming Eclipse partner Jetting Bell and Rivian CEO r J.
Scarrange.
Great to have you both here, and RJ I start with you the spin out of Also Now, why is it better now to let it thrive in a solo manner?
Yeah, well, well thanks for having us on.
Yeah, you know, we think about overall transportation space and what needs to happen. Of course, there's electrification of the vehicles and the infrastructure that we know of today, and that's what Rivian's been focused on. Of course, first the United States, and you know with our R two program, soonent Europe. But there's a lot of trips and a lot of miles that are much shorter distance and actually work better with something that's a much smaller form factor.
And so we kicked off a skunkworks team a few years ago to look at how we could take our core technology stack can apply it in a very low cost, much smaller form factor. And as had played out, we realized that the idea was really had a lot of had a lot of legs.
It was a.
Powerful idea, and we decided that this idea was big enough to deserve being its own business, and so we took.
The decision to spin it out.
Eclipse led the financing of that with one hundred and five million dollar investment, as you said, and we're really excited about what's the commet We haven't shown any of the products yet, but they're absolutely incredible.
Let's therefore ask Jsane, how is this relationship going to evolve? What's the sort of closeness you're going to be doing because RJ is going to be on the board.
Yes.
I think it's exciting because I spent many years at Rivian working closely with RJ, and now in this new role at Eclipse, you know, really excited to invest in this opportunity and really disrupt the micromobility space.
Yeah.
I'm really excited to partner again with RJ and the Rivian team as well as the Also team to you know, bring this vision to life.
Jten, I ask you the consumer issues here though we're a little bit worried, to say the least about the economy here in the US. Do you think that the consumer is going to be there to back this more than one hundred million dollars that you're putting behind this offering that starts to get into our hands in twenty twenty six.
Yeah.
Absolutely.
I think if you look at the transportation ecosystem around the world, it's under so much of stress when it comes to infrastructure limitations, when it comes to congestion, comes to pollution, and micromobility is a very important piece of that puzzle. And more cars, more buses, more trains is not going to be the answer you need something smaller, something more flexible to complement those other modalities, and we
believe that micromobility is a perfect solution to that. It's a large market already, it's growing very rapidly around the world. But if you look at the solutions, you know they're very weak technically, very poor user experience, They lack reliability, and this is where the opportunity is. And I think the consumer is waiting for something more compelling to hit the market.
Ah.
Jay, it's a global opportunity on micro ambility, and you just talked about how it's a global opportunity for you Right now with Rivian and the R two roll out, this is a difficult time to be a global business. How are you preparing yourself to access the European market when we're worrying about tariffs and you've always set aside hundreds of millions of dollars in potential policy in Beloce.
Yeah, I mean it's as you know, it's a very complex environment. You know, as Rivian, we're spending a lot of time interpreting and understanding what the teriff implications are for us of course here in the United States. But I think importantly recognizing that, you know, in particular Europe may respond, and so how the ultimately the teriff structure sets out and lays out is going to have a big impact on some of the decisions to make over the next year.
We're staying very, very close to it, but it's, as you've called out.
It's a very dynamic situation and I think some of the uncertainty is what makes it the most challenging to navigate.
Oh, Ja, are you in close discussions with the administration itself. Have you been getting a glean and what they're thinking of for the future.
Well, I think, you know, one of the things to that's important just if we take a big step back from all the noise of what's happening, you know, what's going to happen tomorrow with sort of the tariffs that have been talked about and will be rolled out. I think big step back is there's a clear directive to drive technology and manufacturing into the United States.
And for Rivian, we're a US company.
We have just under seventeen thousand employees here here in the US. We have a plant in Chicago, or just south of Chicago and Normal, Illinois, and we're building another plant in Georgia. So we're growing rapidly here in the United State's one hundred percent of our vehicles that they are produced here and all of our technologies here. So in terms of the administration's objectives, we're very aligned with.
What's being asked and.
What's what I think the overall policy framework is trying to drive towards. But you know, in terms of how that translates to our expansion in Europe and elsewhere, you know, we do have to recognize that it's a very dynamic environment. Our production footprint may be different than will be originally planning. But I think all of us, you know, across all the different auto manufacturers are waiting to see how things look once.
It does sells.
And that uncertainty, Jaten, I'm sure is affecting you as a team of operators investors.
How are your other founders coping with this moment?
Yeah, I think uncertainty is the key word here. I feel that what is in our control is to focus on two things. Making sure that founders building in the physical industries have the maximum control on the stack, you know, on what they design, what they engineer. If you have control over it, then you're able to make decisions to
optimize around different environments. And the second thing is to build that resilience and flexibility in the supply chain so that it is able to navigate again short term, medium term, and long term changes in the policy environment. So I think the key word there for our founders is control the controllables. There are things that are going to change,
things are going to change back. I think what is most important is to build a resilient strategy and a supply chain network within the company that can navigate all these different environments.
A Jay a quick thirty second one for you. Do you think you've benefited from people moving away from Tesla for political reasons?
Well, you know, one of the things that I think is often missed is we think about electrifications. Today, only about eight percent new vehicle sales are electric here in the United States, and so when we think about competition and growing our market share, the biggest opportunity is bringing people into our new technology vehicles and introducing people into what it feels like to be in a connected, smart,
of course electric vehicle. And so we really believe there needs to be a lot of choice in order for us to go from eight percent to fifty percent to eventually one hundred percent. We need lots of successful companies. I mean, Tesla be successful, we continue to be very successful. We need Rivian to be successful. We need the existing legacy manufacturers to be successful. And so with our our two program, it's a much lower price vehicle. It's really cool,
it's an incredible product. But what that'll do is we'll give customers another choice. And so we think the presence of another choice is going to be important from a brand and product.
Attributes point of view.
Thank you both so much for your clarity of thought today when there is not much clarity in the economy.
To Tenboo of Eclipse, r J Scarrang of Rivian. Great to have you both on the show. Thank you.
Eil Musk is looking to not another political win by using the same tactic during the Trump campaign, spending millions of his own dollars.
To influence an outcome.
This time it's for the Wisconsin Supreme Court race that could ta balance in favor of the Conservatives on the court. For more of Bloombergs, Mike Shepherd joins us. Now, I mean this is a playbook that seems to be repeated even with the big checks, Well very much.
So he's putting seventeen million dollars of his money through two groups toward this race. And you would think, why do we care about Wisconsin's Supreme Court, But remember it's a swing state and Musk has taken a deep interest in this not only because of abortion rights and labor laws that the court could decide, but also questions about congressional redistrict gang and that could help tip the balance back toward Republicans, with whom Musk has aligned along with Donald Trump.
Eighty two million dollars being spent.
This is more millions than we've ever seen on such a race, right.
Well, that's right. And Musk has also helped supercharge spending in a lot of other areas, and we saw it during the presidential race and in congressional races. And he is promising to stay on the stage politically going through the midterm elections in twenty twenty six. So this is creating for many in Congress and many down the ballot too, this notion that they will have to reckon with Musk
as a factor. And it's also been an issue for some Republicans here and wondering do I challenge Donald Trump on something, because if they do, they run the risk of perhaps facing a primary challenge funded by Musk and backed by Donald Trump.
And it's tomorrow the results Mike.
Well, we may be hearing as soon as tonight, but it will depend Caro on how close this contest is. And we're also watching other contests elsewhere in Florida where Musk has also put some money. These are two special congressional races. They're not expected to be perhaps quite as tight, but all of them also are going to be a little bit of a referendum on what the public views of Elon Musk and his new political role.
Mike Sheppard or the Inside Track, We thank you now. That does it for there's a position of Bloomberg Technology. Do not forget to check out our podcast.
You can find it on the terminal as well as online on Apples, Spotify and iHeart from New York from HERSEF there's a blombg Technology