Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live from coast to coast with Caroline Hide in New York and Eva Loow in Sentrancisco.
This is Bloomberg Tech coming up. AT and T plans to buy twenty three billion dollars worth of spectrum licenses from EchoStar, having to coverage in virtually every US market, plus a digital services tax fight we escalate as President Trump threatens more tarifs and restrictions on advanced tech and chips in retaliation. This as we await a cabinet meeting with President Trump this hour, we'll discuss what to expect.
The first we check in on these markets, which there is a macro story at play here that affects the bond market. Stocks actually pretty resilient in light of anxiety around French political drama, US fed drama, and that we will go into, I'm sure or when we come to the cabinet meeting. But right now we're up a ten percent on the Nasdaq Big Text still managing to push higher ahead of some key earnings this week, of course, but also as we delve into an individual stock story
that affects AT and T and Echo Star. Let's get into it, because att Off by one point four percent, had trained to hire earlier in the session. As it spends big to extend its spectrum, its access to licenses, buying them from EchoStar, which remember the chairman of this company had actually met with the Trump administration. It's not almost eighty percent as they do what was willed of them to sell off spectrum. Let's get the details. Casey Kelsey Griffiths is with us to dig into the details.
What the market likes is that they're paying far more well at and T is paying far more than originally Echo Star did for these licenses. That's right.
So we're looking at the stocks reacting pretty spectacularly to this deal that was announced this morning, and as you mentioned, Caroline, we are seeing kind of the latest step to res a regulatory probe over EchoStar potentially not putting its licenses to the highest and best use. We know that EchoStar met with the FCC chair Brendan Carr and also President Trump about a month ago, and both companies are saying that this is an important step forward toward resolving that probe.
That probe which well, those Ecosta had said had distracted them from actually making the investments into using of the licenses. There was a threat of bankruptcy at one point they weren't paying on their bonds. But tell us the AT and T side of this, why spend big on these licenses exactly?
So AT and T is really kind of making the most of this moment. These mid and high band spectrum licenses don't come available very often because this is a limited and very valuable resource, and AT and T is really jumping on the chance to increase its portfolio and
really beef up its spectrum holdings with this. So even though it's a lot of debt to take on right now, this is a really valuable investment in their future and something that customers are also going to feel the difference from pretty immediately.
They're going to feel the difference. Just remind the consumer, Remind the audience why it is so expensive but so crucial to reinvest in spectrum. To access.
Spectrum is what carries all of our wireless communications. It's what enables it, and it's sort of like a highway that gets jammed during rush hour.
If you're not able to open.
Up more lanes, then you're going to experience gridlock, and so AT and T is effectively opening more lanes on that highway to keep that wireless traffic moving.
I love that analogy. As always, we thank you so much for digging deep, Kelsey Griffiths on all things telecoms. Let's get an investigate now. Ted Mortenston's with US is managing director over at BED. They have a cool five and twenty five billion dollars in assets under management. What's so interesting is AT and T here basically reinvesting money they save through the recent budget. Ted, are we going to see more companies commit to infrastructure in this way?
I think so. I mean, the big Beautiful Bill gives a lot of flexibility and depreciation writing off of assets, and I think AT and T had, you know, a very very big tex advantage, and they're going to put three billion dollars in just into optical. I think what this spectrum buy is, you know, low band spectrum is incredibly limited, and it gives AT and T a long
term look at increasing capacity. And I'm sure on the roadmap is home internet and expanding that capacity and taking share via that as well as long term the roadmap on AI at the edge is also probably relevant.
Very much so. John Stankey's come on this show to talk about exactly that the need for data is we'll become addicted to each other chat what we're using Ted. What's interesting is we're just seeing the echo star Stock reaction. In many ways, this is once again the administration playing a very key role in as they see them, key assets. Bringing in the chair of Ecostar to the administration because President Trump was worried about a potential bankruptcy of what
he saw as a key piece of infrastructure. How much are you having to navigate this an ever more active administration in big tech?
This is I think it's unpreceded. You bring a great point up, Carolyn, this is unprecedented actually having an administration that actually understands the technology issues, whether it be digital tax out of Europe basically with additional tariffs, meeting with Navidia on getting through the China H twenty issue. The topics that this administration is tackling is really in the unprecedented, unprecedented area on getting actually involved tech. And then you throw an Intel also, yeah, I.
Mean to that point, does the administration generally align with fiduciary responsibility of leadership to give money back to shareholders in many ways. Do you think that they're generally positive for these businesses?
I'll pass on that question. I can only tell you what they're doing from the technology standpoint is they're rolling the rock uphill very very quickly and getting through all
the bureaucracy. It gives the US a tremendous advantage from the technology standpoint if you look at going head to head with China and AI, but also from an infrastructure standpoint, we're years ahead of Europe right now, and having a non bureaucratic administration that understands the issues around technology is a real benefit for the US people.
Does create perhaps sometimes just general uncertainty for businesses in the way in which they run. I'm just thinking of perhaps the threat that we've just had today. We're going to discuss it more after this conversation Ted, but how to tackle digitals his taxes on alphabet and META. He's threatening more restrictions on chips made by in video and AMD. Just how do you see tariff headwinds for companies or can I see through them? Because the tailwinds of generative AI just so huge.
I think there's a few issues this is playing chess on four levels. To be honest with you, I mean the tariff's long term, we'll see some inflationary impact to it. But I think what the administration's doing is they're looking at this one of the most prolific builds that I've
seen in thirty years of doing technology. They understand that these stakes on generative AI, whether it be AGI or actually agentic based systems, it's crucial that the US actually is in the leadership role and is developing AI in a way that if you look at the spend this year, it's over four hundred billion of fifty three percent. We've
never seen an architectural build like this. It gives the US economy and quite frankly, our defense postures, you know, a real advantage from a global perspective.
And so where is that mispriced in the market right now? Ted? Where are their opportunities?
I think there's tremendous opportunities on just looking at who has all the next generation technology. I mean, if you look what Navidia is doing with not only Blackwell, but the follow on the Ruben silicon advantage, Jensen's doing something that no one has ever done in technology from a systems approach. He's rewriting the architectural is shoes on high performance compute, whether it be from networking memory to the
core GPUs, but also these Kuda directories on software. He's got a three to four year lead on anybody in
the world done doing this. So just from a Navidia standpoint and the picks and shovels that will go into Reuben, I would have your viewers do a fair amount of work on the optical space because Jensen is pivoting the whole architecture from basic a copper infrastructure to optical and they're developing one point six terabid solutions that were on the drawing board that are getting accelerated.
And in your notes, as always, you talk about the optical option CNA being one of them some of the other stocks that give you exposure, Ted Mortenston, so great to catch up. Then managing directory. Thank you. Now coming up, President Trump fights back against Europe's digital taxes. We're just talking about it with Ted Trump saying more tariffs than export restrictions could be on the way for those countries
who impose him. More on that. Next, this is Blomberg Tech President Trump and he's vowed to impose new tariff and export restrictions on advanced tech and semiconductors in retaliation against other nations digital services taxes. Now, the latest move raise is uncertainty of a tariff rates for US trading partners. Once again, Lumerg's Tyler Kendall joins us now from the White House. This is a recurring theme, the iya from President Trump around these basically European taxes.
Right exactly, Caroline in factor will a call back. In February, President Trump had actually signed a memorandum then opened the door for the second Trump administration to look into how to retaliate against digital services taxes so called DSDs, including renewing a Section three oh one investigation into alleged trade unfair trade practices related to digital services taxes. So this has long been something that the Trump administration has taken
aim at. Take for example, in the first iteration of the One Big, Beautiful Bill, there was that so called revenge tax section eight ninety nine that was geared towards trying to retaliate against those countries that do have these taxes in place. We saw them basically derail the Canadian negotiations over trade earlier this year when Canada was set to collect retroactively revenue from the tax. Ultimately they had to stop that collection period in order to keep talking
with this White House in Prafts. Most notably, and I know you were just talking about this in your last segment, we saw a delay in that joint statement between the US and the European Union just last week when it came to their trade framework, and our understanding and reporting was it was because of this hold up ultimately on trying to get some sort of concession out of the
EU when it came to digital trade and services regulations. Now, of course, our understanding has been that the European Union is pushing back on that and that they say that that's not going to be part of any trade deal. In fact, we got a statement earlier today from the European Commission spolkeswoman who ultimately said that it's their sovereign right of the EU and its member states to regulate our economic activities on our territory that are consistent with
our own democratic value. So doesn't seem to be backing down there, though, Caroline, our reporting had indicated that perhaps there were not these concessions quite yet. In a bid to maintain some leverage as these trade negotiations continue.
Yeah, certainly when it comes to TA free treatment for wine and spirits, a bit of a tit for TACH continues here, Tyler. But what broadly is interesting that President Trump is using so one part of the technology ecosystem against another with holding perhaps access to chips if you stop hurting other big tech names such as Alphabet and Meta. How much lobbying have those sorts of companies done against these taxes.
Well, we know that there has been a huge lobbying effort here in Washington, with private sector CEOs often visiting the White House trying to make some sort of meaningful movement when it comes to the policy decisions by this administration. And we've seen that perhaps most at the forefront when it comes to those tariffs or pending tariffs on semiconductors and chips.
And as you well know.
And I report on every day on this program, we are trying to start to glean those details on what those tariffs are actually going to look like. And it has to do a lot with the administration pushing that it wants to see more US direct investment from these companies and shifting their supply chains here to make these products and these goods. So it's something that we're watching
very closely here. But of course it comes sort of at this tension point as the White House tries to protect this domestic industry, but also by putting on these export controls could ultimately end up harming the competition.
Moving forward, Tyler Kendall, we appreciate it from the White House. Let's get the European perspective on this, Bloomberg's Peter Elstrom now standing by in London. Europe is very committed to these taxes, whether or not it is some sort of bargaining chip mentality or waiting what the OBCD eventually does in terms of leveling the playing field on taxes on such big juggnats. But remind us twenty nineteen France first.
Put it in right, Yeah, that's exactly right.
Now.
Trump was not specific about which countries he was criticizing here for having these digital service taxes, as you alluded to earlier. The spokeswoman for the EU said that it's our sovereign right to impose these taxes, and then she went on to say that we're not targeting any particular company or country where these companies are coming from. But in the end, this is essentially a lot of European
companies taxing a lot of American companies. You have taxes on things like search engines ie Google, on digital advertising like Facebook and Meta, and also on streaming services like Netflix in particular. So you did see this start with France in twenty nineteen where they imposed the tax. Now you've got other countries like Austria is taxing advertising. You've got Pull in this taxing digital streaming services. And here in the u K they're going after search engine revenue
and advertising too. So it is a bit of a patchwork of taxes at this point, but they are getting posed. And now this this broadside from Trump is saying we're going to retaliate if in fact these countries proceed with these kind of digital taxes.
But as we can see you from this graphic, at the moment, it's a nice little learner for countries such as France to get about three quarters of a billion per year by getting these sorts of taxes on revenues. Peter more broadly, could we see a not backing away with Canada and but certainly a view from companies that are actually based out making money in Europe like this.
Is there anything that Meta in Alphabet have tried to do to restrict the amount of ultimate revenue that is going in that direction to Europe.
I mean, certainly these companies, as Tyler was alluding to earlier, they've been lobbying a lot within Washington. They've also been a lobby lobbying a lot here in Europe to be able to get some sort of advantages, whether those are tax advantages, relief from some of these tax in particular, they've been pushing very hard to be able to do that, and they have not been afraid to go to the Trump White House to be able to get their backing to push back on some of these issues. Sometimes it's
been about free speech online. Sometimes it's been about taxes. Sometimes it's been about their treatment. It's probably because the US does have the biggest technology companies, they are very active in Europe and they want to be able to affect the playing field as much as they can to their own advantage.
I have to see also how an OECD agreement could change all of this. Bloomberg's Peter Elstrom, it's so good to get the European perspective. We appreciate it. Now coming up, Elon Musk says Apple is unfairly favoring open Ai on iPhones in a new lawsuit. We'll context from that. Next. This is Bloomberg Tech in a new lawsuit. Elon Musk alleges that Apple and open Ai are thwarting competition, saying the tech giant is unfairly favoring open AA across its iPhones.
Joining us now to discuss is David Baltow? Do you trust lawyer? A former policy director of the Bureau of Competition of the FTC. We come to you for your expertise in competition. Is there a leg to stand on here legally speaking that with a partnership and allowing open Ai basically to be intertwined with Siri, that it's stopping fair competition for the other genai chatbots.
Well, I'm afraid this is a case that's not really going to launch. The Apple has a broad range of power to select who it's going to partner with, and I don't think there's a really compelling story here that competition is harmed through the arrangement that Apple has made, which seems to be clearly consistent with mainstream anti trestlaw.
Okay, so if he doesn't have perhaps the legal leg to stand on, maybe more of a public relations argument in many ways, Is there anything you can do about the ratings within the app store, do you think and the way in which that is deemed to be by or not.
You know, I think Apple's been tested on this in a number of areas, and of course there's been litigation in this area, and I think Apple's quite careful to make sure it's not violating the law, just you know, fundamental principles of competition law. Apple has the ability to decide who it's going to partner with and what those arrangements are. Unless it's you know, unnecessarily exclusionary, it really
prevents rivals from being able to effectively compete. And here Apple has said in a straightforward fashion, this arrangement is not exclusive. This is a question of just Elon Musk coming to the table with Apple and coming up with a better deal to convince them to you know, include his AI product.
Yeah, because the idea was always when the announcement was first made by Apple, the other third parties will be invited to the table. Of course, there's an ongoing anti trust investigation that overwhelms perhaps Alphabet at the moment and the way in which payments go between Apple and Alphabet, but certainly Jim and I AI getting closer to Apple. We know that maybe a perplexity others eventually will make some sort of agreement and that could iron out any anti trust issues.
Yes, and you know I definitely think so. But you know this is Elon Musk again trying to use the muscle of the antitrust laws to Coher's arrival into entering two arrangement. That's just not going to work. A court's going to see right through there.
Okay, you say this once again. I mean we do know that, you know, Musk has I think leveled at least one or two cases the direction of open AI and open AI have now been calling it harassment on that respect, but he's never really targeted Apple before. How much is it a distraction? How expensive is it for companies to do this?
You know Apple's you know, Apple has heavy, you know, very strong armor, and they're used to this area. You know, there's a cost with being a firm that develops very successful products and has an important market position, and that cost is you're often subject to these types of anti trust suits. Apple is a very well consoled company. I'm sure that they've figured out ways of entering into this arrangement with open Ai that do not put them in hot water.
And what's also interesting in the context of all of this is that Gemini Ai is the competitor owned by Alphabet, which of course has the Android ecosystem and relationships with Samsung that of course integrates. Therefore gemini Ai is there is that part of the argument also here that plenty of people are downloading apps, plenty of people have standalone use cases, these chatbots, and it's not just using open Ai purely through the Apple ecosystem.
You know, I think that's true, and I but there are you know, there are plenty of alternatives, and this is just a question of being able to enter into
a business arrangement. You know, Musk may not like the terms that Apple is offering offering him, but ultimately, the anti trust laws, the purpose of the anti trust laws, Justice Brennan said sixty years ago is to protect competition and consumers and not competitors, and that you know, basically, Musk is asking a court to stand anti trust law on its head and put it in the position of protecting his interests and not the interests of consumers.
Now, we appreciate all of your expertise on throughout all of this. Of course, we want to just break some other news when it comes to the legal system. Right now, we understand that a lawyer for Lisa Cook fed the Federal Reserves Lisa Cook, has saying that they will file a lawsuit challenging the firing. The firing currently being demanded by, of course, President Trump. We knew that Donald Trump and made moves to OUs for Reserve Governor Lisa Cook following
allegations that she had indeed falsified mortgage documents. It's dramactic escalation and what has been an ongoing battle the President has been having with the Federal Reserve. It's unnerved some investors. We've seen that in the bond market earlier today, with yields pushing higher, particularly at the thirty year, the dollar
has been coming lower. And now we do get a statement, it would seem from the lawyer of Lisa Cook of the Federal Reserve saying that they will file a lawsuit challenging this firing, and is ultimately something that is likely to be discussed at the cabinet meeting that we will take life view in a little bit as when it gets kicked off. But for now we do want to say, oh, thanks to David Bowto. He's the antitrust lawyer who is just discussing that fight between Eenil musk opening I and Apple.
But coming up in the tech space for you now, investors are waiting in video earnings for a gauge in the chip sector as President Trump vows potential new tariffs. That's next. This is Bloomberg Tech. Welcome back to Bloomberg Tech. We take a look at these markets, so it actually stocks remaining relatively resilient in the face of what is a concerning picture of the Federal Reserve's irking some market
participants in the bond market. Now, I look at a ten tenth of a percent higher on the Nasdaq one hundred, big tech on deck in terms of their earnings. Later this week we'll dig into that. In a moment, I wanted to shine light on the thirty year on right now,
yields are up some three basis points. Who are asking pressure on the bond market at the longer end and on the US dollar which is lower today as that fight between Lisa Cook of the Federal Reserve seems to be amping up versus President Trump and his call for her resignation or her firing. We understand from a lawyer for Lisa Cook, then indeed they're going to fight that and
challenge that with a lawsuit of their own. We'll turn now attention to that a little bit later, but for now we want to get back to what's really dictating trade here in the tech markets. I'm looking at what's happening in a Semis index. We're up seven tens of percent. Look, we're having a nice day for AMD at one point is that more than two percent a deal with IBM.
They're partnering on the future of technology, the use of GPUs when it comes to quantum computer and we saw a nice rally in AMD on the back of that, and Video up sevent ten percent as many Weight with baited breath for their earnings after the belt tomorrow in King as a man we can do that with of course he owns the semiconductor coverage for US at Bloomberg and in many weight for in Video as some sort of macro bell Weather here for me and for many. It's going to be whether we get any clarity.
On China, right, Yeah, Now this is the big confusion. I mean, the underlying market for this company's products is looking fantastic according to all of the indicators that we're seeing. But this one market, this which is the biggest market for semiconductors but not that important for InVideo, is this massive swirl of uncertainty. What is the US government going to do next, What is the Chinese government going to do next? What products will be allowed to be shipped there?
And the unfortunate problem is we don't know too many answers here, and that is what's kind of muddying the waters massively, because even though it's relatively and important for nvideo, there's still multiple billions of dollars at stake.
In talking of swirling and uncertainty. Yet another element to that was injected with President Trump once again saying that maybe he'll increase tariffs on certain semiconductor chips to those that impose digital services taxes. He means basically Europe in there's no stock reaction to that. So does it feel as though that sort of elopment of things is priced in? Is that? Do we think that that could become a reality. We're still waiting on certain semiconductor tariffs to come in.
Yeah. I mean you talk to investors as well, and I think the reaction you'll get is the same one that I get, which is, how can we worry about what we don't know, what seems to change from one day to the next, what doesn't have a very constant element to it, whether these things come and go. It's obviously a lot of negotiations being done in public. There are concerns, of course, because this country exports a massive amount of technology in some respects and imports a lot
and others. But really it's the impact on end goods in terms of semiconductors that's been the big concerns so far, rather than the pure sort of impact on raw imports of chips, which aren't that huge.
And with nervousness going back to perhaps access of H twenties to China comes in always the exuberance of what's next. Just take us up to speed with where are we in terms of getting actually sort of dumbed down, to use a technical term, Blackwell chips into China. In the long term, that seems to be where we're all talking about now.
Yeah, I mean this was something that was hinted about buying video and then President Trump went out and said, oh, hey, yeah, if they bring me one of these, maybe I'll look at it and maybe we can make a bit more of a revenue cut on that one too, And that would be a move forward for Invidia. That would give them a path forward to having, you know, keeping their Chinese customers at least a little bit happy, not as happy as they would be if they could buy everything.
Of course, So that's again we're going to be you know, hearing I would imagine from the video management tomorrow, they'll certainly be asked about this, and people want to know is like, can you find a way to stay relevant in China? And if that happens, then I think there would be a sigh of relief and maybe some of the tension would go away. But right now there's just a myriad of questions that we don't know the answers to, unfortunately.
But still an expectation for at least sort of fifty percent growth on earning pusher and indeed revenue. We anticipay that after the well tomorrow, Ian King, so great to speak with you. Thank you. Let's get the investor take chip sector. Bethkin, nig Io Fund, lead tech analyst with US. Now the China overhang, Beth, how much does it matter to the investor base right now?
Yeah?
What I would say is all the information around China is important to consider.
It is going to be a.
Couple of billion dollar impact one way or another. And there are so many sudden shifts going into this print around whether China was going to take that supply or not. But I would say ultimately any dip should be bought. And this is where a broader view is extremely important. Right now, the market has never seen a product like in Vidia's previous GPUs Hopper. Ever, nobody in the tech industry has seen that before in terms of the amount of revenue it drove. Now imagine they have two generations
of GPUs Blackwell and Blackwell Ultra. They are simultaneously preparing to ramp. So this is going to be a back half loaded year for in Nvidia, and that piece. I would not let the China noise interrupt that piece.
Okay, talk to us about therefore, the scale of the demand issue that they face. Everyone says, this is not a demand issue. They've got plenty of it. It's always a supply issue how much cannibalization goes on, and to ultimately what happens with the older GPUs. How much have you seen in your numbers and your data crunching real appetite and sales of the latest Blackwell architecture.
Yeah, to keep it simple, we still see alpha here. A year ago I had put into print in an analysis we would see a fifty billion data center segment by the close of this year, analysts had thirty three billion. Now this quarter, with only half the year through, we're at forty one or forty two billion for the data center tomorrow evening, meaning the likelihood we closed this year at fifty billion data center is very high. Now keep
in mind this is still happening for next year. Analysts are far too low, not only with their Nvidia estimates but their cap X estimates. So we get to look at both things, right. We get to look at how Nvidia is preparing to ramp these GPUs, and we also have a beautiful number around the demand in cap X, perfectly packaged for us, and it's blowing away analyst estimates. As of two three weeks ago, when Big Tech reported.
So how big could in Vidia become.
I have a two hundred billion data center segment, you know, over the next couple quarters, I I think we see a three hundred billion data center segment, which would translate to a six trillion market cap off Blackwell and Blackwell Ultra. I like to go by GPU generation. That's how I form this thesis. For seven years, so Blackwell, Blackwell Ultra, we should see six trillion from Nvidia and again on a run rate two hundred billion to three hundred billion
data center revenue. So I'm talking potentially another one hundred percent between now and the close of fiscal year twenty twenty seven.
But we're not even talking about Rubin, which of course Jensen one's been over in Taiwan talking to CSNC about already. So scale that again, where do we go from the six trillion?
And that is where that's a great point, and the one reason I haven't brought up Reuben is I would want to see more of the ai data center energy problem resolved, and that is where diversification within the energy area. You know, these companies that can provide time to power is a great way to position. Once we go into Ruben, which will really push the upper limits of what the grid is capable of today.
Okay, so therefore you're thinking about the power providers. You're thinking though, even in these edge cases, there are other chip companies out there wely trying to show their prowess when it comes to energy efficiency. Do you dare to go there or is it more actually the underlying infrastructure.
I think it's a combination of looking at alternative forms of energy. And what I would say is that right now we are all really focused on COOSK capacity from TSM and the supply and the hardware side. Where the constraint will become is the power side, and that piece needs to be resolved somewhere between black while Alter and Reuben.
And so that is a bet on a g Venova or like a company that's going into nuclear or is it somewhere else.
Beth Blue Energy is one that we've held successfully. They saw that time to power nuclear can take many years to build out. And again we're really looking pretty soon here as in like these GPUs are just going to sit on a shelf if you can't power them. Nobody wants that. Nobody's spending their capex for that reason. So Blackwell black Well Altra is really nudging the power supply
deals we're seeing. But now Ruben's going to require it, and I think it's somewhere between you the next one to two years where a great AI portfolio is diversified with exposure to energy.
Beth buying on weakness, Beth Kendy gets so good to catch up with you with a deep fundamental analysis of biofund We thank you coming out. Why two Texas senators have made it their mission to bring one of NASA's retired space shuttles so Houston. That's next. That's a brute bag tech. SpaceX delayed a critical test of its massive Starship rocket again just a few minutes before lift off yesterday,
citing unfavorable weather conditions. Now Starship was slated to take off on its tenth major mission in the company's South Texas launch facility called Starbase. SpaceX says it is targeting another flight test where no tonight, studying at seven to thirty pm Eastern time. Well elsewhere in Texas. Two Senators Ted Cruz John Cornyn are on a crusade to bring one of NASA's retired space shuttles to Houston. But that
could be a logistical nightmare. Bloomberg Space reporter Lauren Grush has been writing about this, Lauren the basics, where are they getting it from and for what reason?
Well, there's still some open questions about exactly which shuttle that they want, but it's pretty clear that they ultimately want Space Shuttle Discovery, which is currently at the Smithsonian in.
Washington, DC or in the Washington DC area.
And for them, they say, they're writing an egregious wrong that happened back at the end of the shuttle program when those shuttles were allocated to different cities and museums. You know, at the time, the people making those decisions said that they prioritized visitors and how many people would
actually see the shuttles when they were over. But to them, they felt like Houston, which oversaw the Space Shuttle program out of NASA's Johnson Space Center, should have received a shuttle because of that tied to.
The shuttle program. Now in the shuttle that's gone to space, I mean, e'sifically. What's extraordinary is you've done your digging and sort of gone through the One Big Beautiful Bill as it was known, and the Act had a provision for Space vehicle transfer up to eighty five million dollars. I mean, talk to us about the logistical issues here and why they would spend so.
Much, right I had someone told me that, you know, nothing is impossible with enough time and money, but this might just be impossible with the amount of money and time that they are trying to allocate for this. Yes, there's eighty five million allocated in the one Big Beautiful
Bill and only five million for the transfer. But the Smithsonian, which seems to be the target of this transfer, has estimated about fifty to fifty five million for the transfer, and then upwards of three hundred million dollars to prepare the transfer, to come up with a new exhibit and to display the vehicle at its new location in Houston. And then there's also just the concern of what's going to happen to the shuttles during transit. You know, they're
very delicate. They're covered in these very delicate tiles that were used to keep the vehicle from overheating when it came back to Earth from space, and so the concern is just moving that those tiles would probably be irrevocably damaged and that would you know, be destroying national asset.
Essentially about national assets right now, of course, we now think about the money being spent on sending actual shuttles into actual space at the here and now, Lauren, what do you make of the SpaceX delay?
Yeah, you know, having covered space launches for however long I have, you know, there's just one thing that companies can't control, and that.
Is the weather.
And so as much as you might like to fly, they had the wrong kind of clouds over the launch site last night and.
So that forced a delay.
But hopefully the weather will cooperate tonight and we'll maybe see a lift off of that tenth flight that we've all been kind of anticipating for a while now.
And Grash keep us on ten to hooks me. Thank you for it. Now coming up, take a look at the shares of these software companies, some of the worst performers here to date. But we were talking all about AI disruption fears that are fueling this decline and also what some earnings were about to get after the bell tomorrow could say about software demand. That's a blue big
tech time now for talking tech. First up, Acililar Luxotica is said to be exploring a potential deal to increase its stake in Japanese optical equipment MA manufacturer and Nikon Now. According to people familiar with the matter, the maker of the ray baann Meta sunglasses while they're considering boosting the state in Nikon by twenty percent of from its current
holdings of nine percent plus. Saudi Arabia's Humane It broke down on the first data centers in the kingdom, and the AI company has plans to have them up and running in nearly twenty twenty six using semiconductors important from the United States. Human plans to add one point nine gigawatts worth of data centres by twenty thirty and diplomats in Southeast Asia were targeted in a cyber espionage campaign
earlier this year. According to Google Now, the attacks used social engineering and malware disguised as software updates, and are attributed to a China linked group. Spokesperson for Chinese Ministry of Foreign Affairs said they were not aware of the situation.
While from software updates to software disruption, AI disruptions creating a sense of fear among investors in the software sector, Companies like Salesforce, Adobe Service now among the worst performers in the s and P five founders so far this year, someone's been writing about that. Bloomberg's Ryan Vlastelica, you're joining us on this software softness, But Ryan, this really is the agitation that we're seeing in Europe too, that generator of AI is going to eat their lunch.
Yeah.
Absolutely, thank you for having me on. This is a growing fear among investors as all these AI models become so prolific, they seem to offer all kinds of capabilities. The idea that you are going to continue using these sort of more niche software platforms, it seems a little bit ifpier right now, Why would you pay for a
second company? If if you're just using open ai or Gemini or some of these other services which can do all your coding, which can analyze your data, which can generate photos, which can do sort of back office in front office features like all these kinds of things. Really makes a much bigger question what is the growth going to look like for other software companies that aren't as big in the AI space? What is there demand going
to look like? It has really been weighing on the stocks, weighing on.
The stocks already, and I think about though they've done a lot of talking to try and rectify that. Just think about how much Salesforce has been leaning into the AGENTICKI offering. What needs to turn this about, because we've already thought about underlying fundamentals. Is it that earnings need to show growth and that people are going to stick with these offerings and products.
Yeah, So Salesforce reports next week, and that's going to be a very interesting report for what they say about what their growth looks like going forward, their demand trends, if they are seeing a lot of adoption of its Agent Force product and services right now. This is the kind of company, like you said, it's been very aggressive in AI. They've done a lot of acquisitions, They've really been sort of fore grounding their AI services, but it
hasn't really been enough to support the stock. I think there is just sort of this overarching concern how much competition are these companies going to face from AI? What does it mean for their stocks? What does it mean for their demand? Their valuations? Right now, people are taking very much sort of a shoot first, ask questions later sort of policy on this.
Ryan less selca brilliant writing, I mean thank you for joining us on it. Let's stick with the impacts of AI demands on certain software companies and in the infrastructure around it. Looking video comes out out of the bell tomorrow, but remember Snowflake, Mungo dB, they're on deck this week as well. Man Leipsingh head of Tech Research and Blue
Make Intelligence some places to say is with us. So the overarching bell weather is of course in video, and we're expecting the fifty percent ramp and earnings for share and more broadly in sales there. But people too optimistic going into the print.
I mean, the framework that we have is we know about the demand side. CAPEX expectations have gone up for twenty twenty six from Hyperscalers, so that's positive. TSMC isn't ramping up supply of coos to like, not to the extent where they can solve all the supply constraints. So all the setup that we have is good. The key vector for me is scaling laws versus reinforcement learning. Right now, what we are seeing is everyone has fivoted to reasoning models.
In fact, Meta said they want to lease you know, compute capacity from Hyperscalers and focus more on reinforcement learning with the new superintelligence lab. I mean that was Alexander Zwang's focus at SCALEII is reinforcement learning data tagging for training, and so they seem to be moving away from scaling laws at least that's how we are interpreting it. So from that perspective, it does have an impact on someone
like Nvidia. If everyone has slowly started to shift away from training to more reinforcement learning, I think that will have a bearing.
But Jensen's spend a lot of time trying to say that inference is still their sweet spot and that's not going to be an issue for them in terms of a month.
So let's put it this way. In Vidia has one hundred percent share when it comes to training, but when it comes to inferencing, they are in the nineties. Oh so you know mean and look, Google GPUs is ramping up. We know they're offering more capacity on GCP so that's a LEVI some of their supply constraints, But at the end of the day, training is where you need need
the highest performance chips. Nvidia still makes those, but if the other players are able to take even one two percent share, that will have an impact on Nvidia's growth rates because they continue to raise the bar. I mean, you need to see the estimates keep getting higher. And look, there is the geopolitical aspect around selling to China all that, but in the end it comes down to wolf will
be Blackwell demand and what will be Ruben's demand. And right now all these models are trained on Harper, so we want to know how big of a cluster there will be with black Row.
And then we think about the ROAI that everyone's been nervous about in the last few weeks. We think a Palenteers beat up a little bit, but push us forward to what the ROAI is on for these software names that are coming out. The Snowflake has been leaning very much into AI, but is it managed to keep its customers happening?
I just can make sense of the you know, the difference in valuation for Snowflake versus Pier when both of them have a similar growth profile. Yes, Palenteer probably has seen more with AI pilots, but Snowflake is a growth company. They've got a big customer base. So from that perspective, why can't they lean in on AI models and do something similar to Snowflake. To Palenteer, I don't understand same thing with Mango deb and it sounds like the stack
is changing with AI agents. In fact, one anecdote I heard was eighty percent of new databases are being created by AI agents. So you're not creating databases for manual human transactions, it's the AI agent's creating new databases.
Now.
That does impact someone like Mango dB in a big way because if they need to be part of that stack. And so I think in the end it comes down to how you integrate lart of that and with models.
See how those arnings come out This week as well, boom meg Intelligence is Mandeep saying always got great takes. That does it for this edition of boombg Tech. Don't forget to check out our podcast find on the terminal as well as online on app, on Spotify and iHeart this is Bloomberg.