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Coming up, the Trump administration is eyeing CHIPSAC funds for a steak in Intel.
Plus applied materials plunges due to growing trade concerns between the US and China.
And an in depth interview with Open AI chairman and Sierra CEO Brett Taylor that's later in the hour.
We go straight to.
The top story, Bloomberg reporting the White House is considering tapping US CHIPSAC funds in an effort to take a steak in American chip maker Intel. That's according to sources. For more, Bloomberg's Joe Doe joins us Joe, what's the new information?
Reporting today?
Right?
A follow on from yesterday's scoop from Bloomberg that it looks like the funding that the White House is looking at using would come from chips Act money. Of course, everybody might remember that from the law pass during the Biden administration. We've understood that some of that money has laid dormant and could be potentially used for this potential equity stake that the administration was looking at and Intel.
Fascinating because we understood there was almost eight billion dollars coming Intel's way pre agreed, maybe even eleven billion dollars and loans. We don't know the intricacies of how much money and what equity state that would be equivalent to. But Joe remind us why the US government is doing this, We're even eyeing it.
The way to look at so much of this Intel is one. Of course, this hasn't happened, but we do have one that has happened, which was the MP Materials, rare earth company that very few people have heard of, but just got a four hundred million dollar preferred EQ stake investment from the Defense Department. It is all built around this idea of national security. What does the Trump administration, the White House view as central to national security efforts,
in particular related to its race against China. You have a rare earth company, potentially a chips company. Earlier this week, had we had the announcement that in Nvidia and AMD would be giving fifteen percent of their revenues generated out of China to the federal government, this is all built around this kind of new idea that Trump.
Is trying to make work. Joe some basics.
Intel has not commented directly on our reporting. They've issued this statement. We're going to put it on the screen now and generally right this is the point that what the administration is trying to do is achieve onshoring of manufacturing of chips in this country. Intel kind of wants to do the same thing. There is more reporting that you did that a lot of this literally relates to the meeting this week between Bhutan and the President.
What have sources teld us We understand that this is the idea. This idea did come up in that meeting. I think the point that we draw from this, and I was just saying this earlier, is we have an administration a president I'm not an administration, a president directly who's willing to just have a bilateral talk or negotiation with any CEO he can bring into the White House that he finds, you know, central to some of the most important themes.
In his second term.
So obviously, as the Intel chief come in and as you've pointed out ed, you know, we don't have a full confirm here that this is happening. These things remain fluid. We've seen this in so many different issues with the White House. A lot of it is just hey, what about this? What about that? But in particular related to this, the Intel chief does show up to the White House and has this conversation with the President, and this apparently is where this idea whispurred.
Bloomberg's Jodo fascinating reporting. Scoops keep coming. We thank you. Look, let's dive into the Intel side of the equation. Why they do it? Jordan Klein, Zooho Securities Managing director joins us now who put I don't knowe this morning discussing the implications of a possible government stake and Jordan, you're questioning it, asking how does the US government help Intel fixes leading edge node when it's not a money issue?
They have no customers and.
There is a good reason for that. Jordan, extrapolate on that.
Yeah, I mean, Intel, in my opinion, has two main issues. One is on the technology side, where their leading edge foundry business has struggled to execute at these more advanced nodes and they've lost you know, a lot of potential business and share to TSM, who's executed flawlessly. And the second big issue is, you know, and this is kind of the chicken in the egg, is that they don't have any external non Intel customers to move you know, volume and bi business into these fabs on this new
leading edge. So you kind of need the former, meaning you need to be a leader improved to customers you can execute at these advanced nodes for these you know, AI and leading edge chips.
And then secondly then you need to win the business.
And until they get both of those, I think they're going to continue to struggle.
And the Bhutan really said that articulated it in the earnings saying we are not going to have this, build it and they will come. Mentality, they've got to say.
That they're coming before we build it.
In the fourteen a leading cutting edge nodes for example Jordan, is government control or at a smaller equity stake going to secure that demand.
Well, on the surface, it's not because the customers are going to ultimately decide is Intel a company I can depend and count on for my most advanced you know products that I have to get to the market. Why would I leave TSM who's proven to me year after
year that they can execute on the plan. I think the goal here is that Trump puts some money in or gets the government to invest, and then uses that to get Intel to accelerate the process of building out these new fabs in Ohio, and then he can go to these customers like Broadcom, Qualcom, Apple and Nvidia and say, oh, now they have the capability and you need to move more of your orders and production to a domestic, leading edge company like Intel.
Jordan, I really want the desk analysts take and experience. We broke the story yesterday about the stake, We broke the story this morning about using chips Act funds. What was the byside saying to you about how they interpreted that news.
Yeah, that's kind of the key question, and I think it's it's I haven't heard a ton of questions as to Okay, what next does this mean I go out and buy Intel. Ultimately, if you look at semiconductors that have led much of the market this year, I think Intel has been the laggered due to their weak fundamentals and a lot of people who need shorts to offset longs, like in video, Broadcon TSM.
Have used Intel as that short.
Now today the news about a stake and what this could mean I think gets people nervous. You know, maybe Intel's going to go on a run. I should cover my short But outside of that, I do not hear you know, big mutual funds, the traditional guys who would come in take a big steak and think this company is going to turn it around, you know, acting on
this and these headlines. One because it's premature, but two, I think they're coming to the same conclusion that I just talked about, is that how does government money or an equity stake, you know, really bring them the customers or fixed their internal technology problems?
And that's unknown.
Jensen Wogen Nvidia have demonstrated the proximity to the President has allowed them to move fast as I'm thinking King Prince be actually about exports to the Gulf, a good relationship between the President and lit Bhutan.
Is there an unlock for Intel in that, Well, you know.
I don't know what the I think ultimately, here's what I would Here's the way I see it is that I don't think Trump likes the fact that the you know, largest, you know, oldest and most established kind of US foundry logic company and Intel is on its heels struggling, losing share to these foreign players in Asia like TSM.
I think it's a bad look.
Obviously, he wants the US, you know, to be great again and that you know, we so much depends on semiconductors. So I think the fact that they're firing people, reducing costs, struggling is just a bad look under his watch. And all this Chipsacked money was allocated and they got the most of it.
So I think basically he's saying.
I want some return for this, and you know, I want to try to help this, you know, semiconductor business domestically improve, and that's got to start with you somehow.
So I think he's just putting pressure.
On them, and I don't know what other alternative Intel has, they can't really push back, and ultimately they'll probably take what money the government wants to invest and try to strengthen the relationship going forward.
Jordan, what's so interesting is then we heard on Air Force one, and we're going to discuss it more in the show later.
A potential threat of.
Two hundred to three hundred percent tariffs on semiconductors coming into the US.
But there are huge.
Carve outs that we understand being written here that if you're investing a lot in America, you don't face that. So that seems that TSMC and Samsung that are building in America aren't affected. Is he going to allow these big Asian chip giants to continue to build in America and get these sorts of carve outs.
I don't know what other alternative they really have.
I mean, the US is in the government, and the administration's kind of in a tough spot here. They need to project, like, you know, a strategy of trying to get you know, more domestic US semiconductor capacity. But if you get too tough and put too high of a tariff, that that really puts the US consumer and our strategic technology, whether it's defense or AI, at a major disadvantage. And the reason that is is because the US doesn't have an alternative. It's not like, you know, we can just
shift to all this domestic capacity. It's going to take a lot of time and money to basically get that. And right now that's basically TSM and a lot of
Samsung and some of Intel. So I think that's why they get the carve outs is to buy time and then ultimately that time runs out, and then Trump's going to say, well, if we have the capacity here and Intel is, you know, on a better footing and track, then we want you to push that those orders in that money towards Intel and away from Ta Simon Samsung, and that's where he could start to then use the tariffs to basically push that business towards Intel.
Really thoughtful and a great note. Jordan Klein of Mizuho, Thanks for bringing you expertise.
Shares of Applied Materials tumbling.
Worst day since March twenty twenty after the company presented a disappointing sales forecast for the fiscal fourth quarter said it's seeing less demand from China more. Let's bring in Bloomberg's Brodie Ford. What's so interesting is Land Research came out a week or so ago and look pretty buoyant about future growth and revenue. Very different for this chip equipment company.
You are pointing out the debate that is waging and all the sales side reports in my inbox right now, right, I mean on the call last night, the narrative from the company was that China demand is worst and some of our largest customer mergers that are holding off due to kind of just general economic uncertainty, tariffs and all that.
But there's also a head here.
As you said, some of the peers have done relatively well. So is applied losing share here? Or is this truly just a macroeconomic it's hitting everybody the same way kind of issue.
They try to explain away those two categories of customer. Right in China, loads of chip makers have gone through a refresh of their equipment, but the larger customers they're talking about is largely TSMC and Samsung.
And this is a tariff's issue. What is it?
Right?
I think tariffs is the big word we heard, but I think also, I mean, we have an administration right now that's negotiating trade deals. I mean, we saw the Intel news this morning. There's just a lot of economic uncertainty right now, right, I mean, some of the data coming out people are questioning. And so the narrative we heard on the call, and I heard in a conversation with the CEO is that companies are holding off purchases.
They're not sure exactly what the economic picture of it is like in six months, and so why do you want to make a multi billion dollar commitment right now? How much to hit the brakes for a little while.
And Brodie, we put this in the deeper context as you just hinted at with Intel. This is at a time where we want more manufacturing the United States, according to the administration, and Apply Materials.
Is part of that.
They've got what eighty percent of the revenue.
Coming from abroad.
But is that going to shift more to America?
That is the song they're singing, right, I mean they say that we are involved with you know, Apple's initiatives and Samsungs. The actual dollars committed at this point to me don't look incredible, right. I mean, a lot of companies are talking about multi billions invested in the US, and Apply to talking about hundreds of millions, and so I don't think the expectation is that revenue shift to the US in a meaningful way right now. But it's
an interesting part of the narrative. I mean, how much can the administration push the industry to, you know, reshore more of this demanding capacity?
Then, thanks Brady Ford, thank you very much. Meanwhile, President Trump is en route to Alaska for a high stakes meeting with Russian President Vladimir Putin.
During the flight on air Force one.
He addressed the state of tariffs on chip makers, saying it could rise to as much as three hundred percent.
Listen to this.
They're all coming in because they want to beat the tariffs because if they open here, they don't have to pay tariffs. If they don't open here, they have to make in some cases two hundred percent, three hundred percent. I haven't even said some of the tariffs yet till sent Semiconductors will be setting sometime next week week.
Care for for more on the tariff implications on chips and the broader technology sector. Martin Norton Empower Chief Investment Strategists. Actually, of all the reporting out there, this is the President speaking on the record saying up to three hundred percent tariffs on chips coming into America. I haven't even said the tariffs yet. This is the point policy keeps changing. As a strategist, how do you interpret it?
Well, I mean, I think there's a few things that we have to look at.
First.
We have to look at the breadth of the tariffs that we've seen and the way the market has reacted as tariffs have become part of the daily conversation. At first, you know, April second, this was something that the market felt was a disaster.
But as we've.
Rolled forward, we've seen little effect on corporate earnings, we've seen.
Little effect on economic data.
And I think there's this kind of benign neglect of tariffs as a concern for the market, which I think embolden's President Trump to continue to push forward bigger and bigger numbers when we're looking at triple digits. Of course, when we're talking about tariffs, that's a pretty astonishing thing. I really like how your last guest with Jordan really kind of talked about the very long term emphasis here. Building manufacturing here in the US is a long term thing.
Forcing companies or encouraging companies to buy US as a long term thing, and I think these tariffs are part of that game.
So if the endgame is bring Chit manufacturing back to America, you agree with Jordan that it will work or you disagree.
Well, I think there has to be a long term commitment on the part of the administration and the folks in Washington to keep those tariffs in place. I think that's in question whether that's something that we're going to see over the period of several years, because that's what it would take several years to bring manufacturing back to the United States or to the United States in the first place.
So I think there's still.
An open question as to how effective it will be and how long term that commitment will be, and how.
Long until you see it rewarding companies like an Applied Materials, which right here right now is having its worst days. It's March twenty twenty and rated all of its games for the year Marta. How do you decide who are the winners longer term in this environment?
I think the winners is one of the bigger questions that we're looking at, especially when you start to look at it in the context of artificial intelligence. When we're taking a look at corporate earnings long term, of course we're concerned about the that deglobalization will have on those corporate earnings. And yet when we look at the estimates that artificial intelligence can add to corporate earnings to profit margins,
it more than offsets it. The question is who those winners are, And what we've seen in past periods of innovation is that the early winners are not necessarily the long term the enduring winners. And there's also questions as to how different industries respond. You know, first folks thought with software is the next leg of this story, but that doesn't necessarily need to be the case. If some of these big tech companies can capture some of the developments there, it's not necessarily going.
To be the small cap companies that win.
So when I'm looking at this and I'm thinking about how do you play this, I think it's more of a broad based question than it is trying to find and pick those narrow winners.
So you take tech thinking to other industry groups, that's right, Yes, absolutely so.
For example, if you're taking a look at where can you apply AI? Where can you apply some of these narratives. The areas that we've heard talked about regularly is healthcare
and applying artificial intelligence to research and development. That's a long term play, and of course there's tons of headwinds against healthcare, pharma and the like, and when we think about those headwinds, those are opening up pretty attractive valuations while there's also this positive long term narrative that's there. So I do think that we can look at some of these other areas, particularly those that are a bit cheaper.
There's not many of them. There's a few as areas of long term beneficiaries of AI.
Marta.
It's funny for me, but it's been a week where economic data has impacted technology markets, right, PPI and I grew up in the Bloomberg school of why do we care about the FED? Because higher rates discount the present value of future cash flows. And I just wondered if you'd react to that statement, please well listen.
I mean, I do think when we think.
About economic data and we think about technology, there are these secular growth themes that can really push back against any headwind that economic data poses for technology, And of course there are other areas of the market that are more sensitive.
When I think about the economic.
Data that we're seeing come through, all that comes out is this idea of mixed signals, and people can kind of project whatever view they want on the market and find or on the economy and find evidence to support that view. I think at this point what matters more are the secular themes rather than some of these economic data points that are trickling in.
Briefly matter It's also been a week of record hizing crypto IPOs.
How many questions you get on that?
Well, it does come up more and more.
I think one of the things that people are looking at when they see the record highs in crypto, or when they're looking at IPOs, or in fact the kind of resurgence of the mean theme is what does this mean in terms of the speculative froth in the market. I don't think we're at all time peaks there, but there is this measure of complacency that's been baked in, this kind of sense that nothing can go wrong, and
of course that's reflected in valuations. So I do think when we're looking at those kind of signals, it's important to remember that things are a bit priced for perfection and we could see some volatility in the nearest term.
Martin Norton, we so appreciate having you on today of Empower.
Have great weekend.
It's time now for talking tech and first up, Masuyoshi's son has added eleven billion to his fortune in just the first two weeks of August. That is, his AI bets over at SoftBank sent shares to record highs.
Look Sum's net worth naws dance more.
Than thirty three billion dollars, making him the second richest man in Japan, according to the Bloomberg Billionaires Index plus Bill Ackman's Pershing Square Capital. Well, it's revealed that it a mastered in nearly one point three billion dollar steak in Amazon. The firm initially disclosed it had built a stake during an analyst school in May. That's after the stock tumbled more than thirty percent over AI and tariff concerns.
Look regulatory filing on Thursday show that Pershing had accumulated more than five point eight.
Million Amazon shares.
And Jackie Bezos, mother of Jeff Bezos, has died at the age of seventy eight. According to the Bezos Family Foundation website, she passed away at a home in Miami after a long battle with louis body dementia. Jackie Bezos was an advocate for early childhood education.
Alongside her husband.
She was in fact the first to invest in Amazon in nineteen ninety five.
ED.
Welcome back to Bloomberg Tech. I want to go back to Intel.
The reporting is that the US government's thinking about using chipsec funds to take a stake in Intel. Caroline, believe it or not. On the course of the week, this stocks up almost twenty five percent. If it continues to chop around and climb just a percentage point higher. It will have its best five day gain, its best weekly gain on record ever, just seven days after the President said that its CEO should resign after ties with China. Later in the program, we're going to do so much
more on Intel. But when you go into the data in the Bloomberg terminal, you can always surprise your because in Agrica over the course of the week, what an astonishing stat that is.
It is quite the stat six straight days against for Intel. What a winning performance twenty five percent that you can see it in.
All its glory.
Let's get into the world of generative AI now, though, because we are joined by Brett Taylor ed whose extensive Silicon Valley resume, who's Google metas Salesforce open Ai. His startups Erra AI helps companies build agentic customer service tools. You work with the likes of ram with clear among others. Brett, and boy, is it competitive out there at the moment. How are you seeing your customer facing GENDERAI products being taken.
Up right now?
Yeah, I've never quite been in a market like this, and as you said, I've been in the Silicon Valley for a long time. I've started three companies, one in sort of the early days of the internet, you know, one call it about you know, a decade ago, and we have never seen this kind of customer interest. I've never seen this kind of of revenue growth and customer momentum. But as you said, a lot of competition too, you know.
I think if you look at what is the impact of AI and society, there's probably two areas being impacted most right now, software engineering and customer service. We're in that latter category. We have the privilege to be the leader survey it. As you said, traditional companies like ADT, Home Security and direct TV, and the fastest growing companies in Silicon Valley like Ramp. And it is such a privilege and so much fun to be in the middle of this right now.
I'm not sure the competitors, particularly the older god of SaaS some that you helped work with, like Salesforce, love the enthusiasm way that you're shaking things up in terms of pricing though, I mean outcome based pricing models.
How are you seeing that really.
Change the cadence of which others.
Can sell and how they're selling.
It's such a great question if you look at the history of software. These technical shifts have also given rise to changes in business models, so kind of famously, you know, when Mark and Parker started Salesforce, the world went from buying a petrol license to software, to software as a service and subscribing to it. Now, our view is at Sierra, these agents aren't just helping you be more productive, but actually solving problems for you. And the best business model
is to actually pay for a job well done. So at Sierra, we only charge our customers when it solves the problem autonomously for that customer.
We call it outcomes based pricing.
And we think it's going to really disrupt the software industry because if you think about it as a business, what a great alignment of values with your partners. You only pay us when we actually save you money and solve the customer's problem delightfully. And I think it really aligns the software industry with all of our partners, and I think it's a really positive trend for the industry as a whole.
Right, you founded Sierra with Clay in twenty twenty three, Right, and I think back to when you came on the show in February twenty twenty four, it had grown so quickly the company update us on what Sierra looks like today.
Well, we have customers across a wide range of industries, from some of the largest health insurance companies to banks to some of the fastest growing companies in Silicon Valley, like Ramp, which is we're also a proud customer of They power all of our corporate credit cards. What's remarkable is just the size of customers that have aligned with us. So over twenty percent of our customers have over ten billion in revenue, over half have over a billion in revenue.
These aren't just early adopters, right, These are some of the most traditional financial services firms, healthcare firms that are really saying, Hey, I don't want my customers to.
Have to wait on hold or press two for service.
Can we have a multi lingual, delightful AI agent just pick up the phone and solve problems automatically. And what's remarkable is just how well it works. You know, you brought up RAMP at the beginning of the call. Their AI agent is actually solving ninety percent of customer cases completely autonomously. And you know that's obviously great for Ramp as a business, but for me as a customer of Ramp. It means I don't have to wait on hold ninety
percent of the time. It's completely transforming the industry and it is so fun to be able to help brands really in every industry transform their customer experience.
Brett, I'd still like to learn more about Sierra. So you talked about you haven't seen growth like this in your career. Would you share with us an arr figure, what Sierra's financials look like, number of team members, how aggressively you're hiring.
I won't share a rr numbers, sorry, but maybe when we do, I'll come back on this show and you can hear it first. But I'll tell you we have hundreds of employees. We've opened offices in New York, Atlanta, London. We're planning our expansion into Asia. We're the leader in this space. We'll do hundreds of millions of phone calls on our platform this year, hundreds of millions of digital chats. We're the highest volume company in this space, and really
that scale benefits all of our customers. It means we support more languages, it means that we've dealt with some of the most complex regulatory landscapes from hip A compliance to the compliance regimes that apply to the financial industry. We're really trying to be the best and safest bet for every company in the world who wants to transform their customer experience who they are.
And to do that, you're scaling, and I'm sure there's a little bit of a fierce fight out there for talent and that costs money before get into the talent wars a little bit, Brett, what about having to raise more money because you did back in twenty twenty four.
Do you need any more? We've got a good runway.
We have a good runway. But it's a great question, just because I do think that we really want to grow as quickly as possible. There's this great I attribute to Albert Einstein. As quickly as possible, but no more quickly. And you know right now our businesses work in I've never seen product market that quite like this. And we're always asking ourselves the question as a management team, how
fast can we grow? Because if you look around the world, the application of technology is not limited to one industry, is not limited to one country. How can we best serve not just multinationals based here, but in Europe and Asia as well? And so if raising more money will enable us to achieve that end, we're absolutely open to it. Thankfully, we have a really healthy business model and it's not something we need to do, but absolutely something we're allays open to considering because.
In many ways, Look, you raised one hundred and seventy five million last year led by Green Oaks Capital.
I'm thinking like two hundred million.
Dollars is now what Meta is willing to pay to get one person. In terms of talent, Brett, Yeah, we all chose the wrong profector here. You didn't, but Brett, I mean, I'm no coder, but Brett, tell us a little bit about trying to get that sort off the talent do you need it?
And how face is it?
Well, first, you know, I do think there's a slight difference between the really small handful of researchers building these foundation models at the research labs and you know, Sierra, we're an apply to I company, So you can think of us not necessarily as the folks doing the R and D to build these frontier models like Open Eye GPT five, but really taking all of those models and fine tuning them and applying them to a solution in the marketplace, so you can really think of the market.
I think of it really in three areas. The companies building these frontier models, open the eyes models are obviously the leading and frontier models in the space. You have companies building tools, So what are the tools you need if you're applying AI in your business. These are companies that can do data labeling and data transformation and data storage.
And then you have companies like Ours and Cursor and Harvey that are taking all of that great technology and making a push button solution so you can just solve a problem without a lot of implementation time. We just went live with an international retailer in fifteen markets in six weeks and are solving eighty five percent of their customer service cases automatically. That's what really an apply DA company does is makes it easy to consume, easy to deploy.
So thankfully we're not competing in the market for some of those I think widely publicized researchers. But as you said, it's a competitive market, a competitive market for talent, as it always is in the Valley.
You know, Brett, Over the years, I got told a lot of stories about you in meetings, like in the Salesforce context. And you know, basically people say you're pretty frighteningly effective when you talk to customers, but you're also you know, you're a busy guy. You have a very unusual jewel roll right as chairman of open Ai and chairman of its board. That's an unusual gig. How do you split the time?
You know, I love to work, is the short answer. So I work from the moment I get up to the moment I go to sleep, and I love every minute of it. And you know, some weeks I'll spend more time at some two weeks last. It's really what the organization demands. And you know, it is a lot of work, but it is such a privilege just because well,
I'm very excited about what Siro is doing. To be able to spend time with I think the greatest research lab in the world developing, I think the most important consumer product in the world in chat GPT is such a privilege and it makes me a better leader. I understand AI with more depth than ones. And then similarly, hopefully my experience having scaled a lot of companies in the past is helping Open Eye, is it? I think it's scaling and faster than really any company in history,
and so it's so fun. I wouldn't have it any other way. Sleep is for the week, right.
The big question our audience has for you in the open AYE context is how much you're working on this relationship with Microsoft and how much you personally have focused on the restructuring or the move to a new or different corporate structure.
Well, Microsoft is open Ey's most important partner and has been for years, so it's a very important relationship. The board's role is really specific. Open Eyes a not for profit. Our fiduciary duties on the board are really related exclusively to our mission, which is to ensure that our official general intelligent intelligence benefits humanity. And so we're always thinking how do we set up the organization over the long
term to ensure that we can achieve that goal. And you know, one of the things that we've talked a lot about is, you know, since the company was founded as a small research lab, the level of capital expenditure required for the infrastructure for AI, I think exceeds anyone's expectations that they had a year ago, let alone ten years ago, and so really thinking about how do we ensure that we remain a mission driven not for profit, but also set up our organization so we can raise
the capital we need to achieve that mission. So that's what I think the media is appropriately called the restructuring. It is something that we're working on. Nothing to announce it this time, but I think it's one of the most important things we work on as a board, because your job as a board is to set the company up for the future, and that's really how we think about it.
Do you think you'll get it done by the end of this year, Brett?
I can't really comment on timelines, and you know, we're really just trying to work with all the stakeholders who have an interest in it and most importantly focused on the mission. But no update on the time frame.
Redeye a CEO of Sierra and chairman of the board for Open AI. Thank you very much for your time. This is Bloomberg Tech and you're looking at a live shot of the principal room. Check out the Bloomberg Tech podcast. You can find it on the terminal so its online on Apple, Spotify and on iHeart. This is Bloomberg. Okay, all eyes are meta real quick. In the session, it's made attempts to hit all time highs and at one point go beyond two trillion dollars of market cap for
the first time. Where will we close We don't know, but it's exciting and it's one to watch. And we're also thinking a lot about Meta's AI app, which is facing mounting pressure with users complaining of an underpersonalized and inconsistent experience. The tech giant emitting this is quote just the first and many steps, as the company will continue to make updates over time. Joining us now is Bloomberg's Natalie Lung. This is the post launch digest, tell us.
What we need to know.
Yeah, we have tested it for a few weeks and asking it basic inquiries, asking it for personalized recommendations, and overall we found the experience rather inconsistent and it felt a little bit half baked. For example, I asked it to give me recommendations and what to do over the weekend here in New York City. For some reason, it knew min zip code. I might have provided it to an advertiser one time, but it wasn't able to personalize
it to that area. And the unique thing about it, apart from Rivals, is that it has a discover feed where you can see how others are prompting and interacting with the chatbot, and they're like endless images.
There, you can see.
Endless images that perhaps aren't that relevant to you, and sometimes the more edgy types of chatbots you might not want to interface with, Natalie, what's so weird as well? Is I interact with METAAI actually more within the WhatsApp offering and maybe within the Instagram offering? Why is that not taking my data that I'm feeding it and bringing it over to Meta right now?
All of those experiences are not connected, as you rightly pointed out. It is on WhatsApp, it is on Messenger, it is on Instagram, but they're not connected, which makes it a little bit foreshot of some of the personalization ambitions that Zuckerberg has.
Almost Natalie Lang a real deep dive. Go read the analysis.
Getting back to our top story, the White House is set to consider using chips At funding to take a stake in Intel, scording to sources from more Bloombergs. Ryan Gould is here who helped break this story. It's been very busy twenty four hours. Do we have any idea how much equity they could take for this?
Not yet, Caroline.
We're still trying to find out exactly how much the government is talking. I mean, just on the base of it. If you think about the problems that are facing Intel right now, you're probably looking to solve something as big as Ohio to onshore manufacturing in the US. You're talking tens of billions of dollars that the company needs. Now, I'm not going to suggest that they got it is
going to go out and put that money in. We don't know, and the government has not obviously commented on this reporting yet, but I would say that you know that the challenges facing Intel are vast, and I think most investors and alis know that. I think, just at the top of this, though, it's worth taking a step back and thinking about what a difference a week makes.
If you think about Donald Trump calling for the resignation of Liputen, the CEO, last Thursday, last Friday, I mean a week later, we're now on the cusp of maybe a potentially game changing deal, at least in the short term for one of America's most beleagued companies.
Bloombos Ryan Gould part of the reporting team, or an astonishing week for Intel.
Thank you.
Let's get more on Intel and Washington's chip goals and how this all fits in Ben hur in Creative Strategy CEO, Ben, for loads of people, this isn't actually an issue of money for Intel, It's an issue of technology and it's an issue of no customers. How did you react to Bloomberg's reporting in the last twenty four hours.
Yeah, I mean, I think we've been looking at this from some sort of a leading in this direction for some time. I mean, obviously, when you know, Trump came up and said what he said about lip butan we felt that this was in light of wanting to do or at least have a broader conversation that had not had happened prior. If he's noted like Intel was not involved in a lot of the you know, sort of public displays of America first, even though everybody knows they're
America first. And obviously his comments right on earnings about you know, they may not go forward to fourteen A without help, I think was very telling. And I think all of that led to this moment, which is, you know, from a national security standpoint, and really anybody in insecurity and knowing what's going on in chips in the US should believe we want a US company to make leading edge chips here in the United States, and that's Intel. So we want to see some resolution, right as one
hundred percent clear. Like you said, they need customers and we need to figure out how to get some form of capital so they can keep going.
Over the course of five days, Intel's up twenty seven percent. If it closes at those levels, it will be the biggest weekly gain on record on a closing basis, which, yeah, is Boo Tan the man for this Ben Yeah.
I mean I think his approach is fairly pragmatic. Right, It's not just about build and invests. Build the right technology, but do so in a capital way that makes sense. I think that's really what the board wants, that's what investors wants.
You know.
And I think really the strategy is, again, how much money do they actually need. I do think the tens of billions of dollars is right in terms of to get to fourteen A on top of what Intel will bring in customers. But the bottom line is right, they can't do this on their own, that's what they're saying. Whether it's customers or whether it's the government. You know, there needs to be an infusion of capital that's not just Intel, to make sure that foundry is secured for the long haul.
Ben there is this chicken nag situation because le Bhutan is saying, I'm not going to build it and wait for them to come. They've got to tell me that the demand is there. Does in some way taking equity by the US government incentivize others to get behind the government and say will buy them. We'll them if indeed you do innovate and get that fourteen A out there.
I mean, I think it's got to be more than just the government stake. I mean, I think what everybody's been speculating is would that come along with some form of a of a tariff or something that you know, strongly incentivized companies like you know, Nvidia, Apple, A, md Qualcom, et cetera to not you know, use TSMC, but then use some capacity of Intel, not one hundred percent, but some of it.
So I think it would necessitate that.
You know, again, I think we want Intel to win on the merit of technology, which we think is very good on paper, but they just need to get some customer wins. And I think once that happens, the confidence, you know, continues but again they're at a they're at a need for capital, and so how that arises is sort of the root of this situation.
Ben, that's interesting that you say the tariff tactic because we've heard on air Force one from President Trump today.
Then maybe it goes fast two hundred.
Three hundred percent tariffs on semiconductors. But then there's all these carv oalves, particularly for companies investing in the US, like TSMC likes, I'm sung Intel's biggest competitives.
Yeah, And I think the difference though, is that Intel is more at the leading edge, So TSMC is not going to bring in. The Taiwanese government has been very clear they're not going to allow them to bring the leading edge. So call it two naanimeter, one nanometer and beyond. Samsung's equally struggling to hit that number even though they're trying.
Intel's really the best bet. And more importantly, Intel is an American company, And so that's why I say, like, if this is some investment of peep private equity plus government, it makes sense that they want to protect that investment, so they will do what they need in terms of terrorists or some other form of regulations that just encourage customers to use Intel. But again, I still think it's better if Intel just wins on technological merit, which we think they have.
But we need a bridge, we need a gap, and.
That's kind of where everybodys struggling to figure out where that comes from.
Ben Intel will not comment on Bloomberg's reporting. The White House hasn't said anything to confirm the reporting. But the chart says, you assigned to this deal happening.
Oh, it's a tough it's a good question.
I mean, I think it really comes down to do would they believe that they could structure this in the way in a way that's fair, whether that's divesting of shares right or paying that back like some of the ways where you've seen them when they have to do, you know, investments in companies, so.
It's not just a constant holding.
I think when anytime the government gets involved, it's very very tricky. But again, right, they need customers. I'd like, I know, this is an non answer, I'd say fifty to fifty.
It's okay, but you know, a phone a friend. Fifty to fifty phone a friend.
Benar creative strategies fantastic to get your opinion.
Thank you very much.
Indeed, that does it for this edition of Bloomboat Tech. An extraordinary week around semiconductor Z.
Yeah, like the rest of the session, keep an eye on Intel if it closes that level best week on record. Recap everything we discussed in the podcast. You know where to find it on the Bloomberg terminal as well as online on Apple fight In. iHeart from New York City and London. I'm taking a little.
Break for a while, but we'll be back. This is Koomberg Tech.