TSMC's US Plant and the White House's Military AI Plan

From Mahard where Innovation, Money and Power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

Live from New York and San Francisco. This is Bloomberg Technology coming up. TSMC's US plant yields surpassed that of similar factories in Taiwan.

What that means for the US chip ambitions.

And the Biden administration's planning a concrete strategy on the US military's use of AI in warfare.

And Alphabet's autonomous driving unit. Weimo raises five point six billion dollars in its largest ever funding round. But first we check back on the public markets and new record high for the NASTAK. The Broader Technology indexes up one point three percent on the day. Consumer sentiment looks strong on the day, inject some risk on across the board, but most notably, we're still seeing the key magnificent seven players managing to drive up to a new record high end.

What are you watching on the micro.

Well, I want to get to that breaking news from this morning about WEIMO raising five point six billion dollars its largest ever round. It was a Series C and remember WAIMO is the autonomous driving unit of Alphabet, the parent of Google. Alphabet's leading the round, And actually I'm not drawing a direct causal link, but the stock did

Har more details, Yeah, let's.

Get to it because, as you mentioned, just the nuance there of the yields in the first plant in Arizona that are surpassing similar.

Factories back home.

It's a significant breakthrough many feel for a US expansion project initially played by delays by worker strife in King joins US for some of the backstory on this because it was hard to get to this position that they're currently in.

Yeah, there was several reports there was labor issues. Can they really do this outside of their home base? Is this big bet that the US government is making on a foreign company to bring them to the US where they really haven't done very much in the past. Is that all going to work out? And what TSMC and our sour Thing is indicating is, well, yes, it is working out.

I think it's worth explaining to the Bluemote Technology audience what yield is and why it's important. I've had to go at it and we'll bring the definition up on the screen. But it's basically the volume or number of usable chips in a batch, and that's super important when you think about profit and efficiency.

Yeah, I mean the key phrase here is production yields. That means basically, if you don't have production yields, you shouldn't be in production. You are losing money on what you're doing. How many of these things do you have to throw away? Proper production backs because you have to throw away a lot in the early stages. What they're saying here is, hey, we've got through those early stages, perhaps quicker than had been expected, and we're in a.

Good position, in a good position, What then, is the ramifications for the US focus on bringing production to the United States. Are we going to see yet more TSMC production? Are we going to see yet more money coming from the federal government.

I mean, there's no doubt that, given the landscape, that that is what the US government would want from TSMC. We've got Intel, as we know, having problems. We've got Samsung as we know, having some issues with its foundary business. So if we want this production in this country, TSMC has to be the leading vehicle for that.

I wouldn't read too much into it. I would say that the timing and manner by which we came to this information is interesting.

Could you help me explain why.

The US needs a win?

Right?

The Biden administration needs a win.

Right.

There's a lot of negative newsflow around what's going on with this initiative. At the same time, if you're TSMC, you've been criticized for what you've done here, for not going as big as possible, for coming in with an older production technique. So perhaps you want to remind the world that actually, no, we are in the lead.

We can do this. We know what we're doing.

On shoring is one part.

The other part is the export control which we can talk about a little bit more bloombergsy and King thank you very much. I want to bring an Annya Manuel for more on this exact point. Executive director of the Aspen Strategy Group and former diplomat. Let's just start with the basics of this whole situation. TSMC the sort of crown jaw of Taiwan technology industry having success early in the US and the support of the US to do it in the context of China. That's a difficult one.

That's right.

This is really very good news, and it means that the Biden policy of both having some tough export controls on certain very small critical technologies, but also these subsidies. I think TSMC got six billion in subsidies, five billion loans. Other companies are getting similar That project of pushing our semiconductor industry forward is actually working.

We come to you because of your rich experience when it comes to foreign policy, the work that you do with the Aspens Strategy Group, the work that you've done with the US government thus far. What do you grade this focus of the United States on shoring of chip supply from an A to a D.

Are they surpassing.

Expectations it's a good question I would give it about So the important thing is to keep our eye on the long term ball. There are certain key technologies where the US and our friends and allies should stay in the lead. We should be more advanced than the Chinese, who are becoming more and more competitors in that space. We do that in two ways, by slowing them down

They're great entrepreneurs themselves.

We have some very tough export controls on the most advanced chips and also on the tools that makes the chips.

Making those controls even tougher.

Nilatterly on the US side won't slow China down. It just means our companies won't have the revenue that they need to fund the research and development to keep ourselves in the lead.

Let's just set the context of this week as well, because there will some cups, shall we say, to the US focus on containing semiconductor expertise, limiting it from going into Chinese hands. In particular, we hear that TSMC has had to admit that somehow it's chips are working its way into Huawei's products, even though Huawei has been cut off in theory since twenty twenty. News today that al Chip Technology said it has no director and direct business

That's a perfect question, and this example shows exactly how difficult it is. You know, there are lots of well meaning people in the US government in European governments trying to get this right and trying to make the controls narrowly focused and effective, very very hard to do.

I think they're doing quite a good job.

I worry, however, that, for example, you see some folks in the might go into a Trump administration very tough on China, China hawks, saying well, we're just going to control more, We're going to put more companies on the entity list. And as you're seeing with this TSMC example, even when people are well meaning, it's just very very.

Difficult to do things with controls alone. You've got to run.

Faster, which is more powerful.

Then we've covered the export controls part of this story deeply on this program, but they almost work in parallel.

You sort of can't have one way out the other.

If your end goal is to make your own nation more competitive than any given field or domain.

That's absolutely right.

I'm firmly on the side of running faster is better. We have an amazing innovation engine. I live out here in California. You all report on it all the time. We're doing great, so we need to make sure that engine keeps running and keeps running fast. One of the things that's underappreciated. Everyone always talks about the CHIPSAC the

And D funding.

This is really important. This creates all of the technologies of the future, you know, okay, Serie, GPS, and so those are the things we should be doubling down on.

ANYA.

At the same time, China is taking its own action. How closely do you follow and assess their response to the TSMC situation.

China is great. They're doing a lot of innovating. Their companies are excellent. If you look at, for example, what they're doing on artificial intelligence, they're large language models.

The biggest models.

In AI are depending who you ask, three six, nine months behind because of our chip's controls. But on certain other parts of artificial intelligence, computer visions, surveillance, drones, they're really first rate.

So the Chinese are going to keep running fast.

And I would just say one thing this, this policy needs to be nuanced. It's not like we are competing with China on absolutely every technology.

There's certain areas where we.

Should still collaborate on healthcare, tech, on other things. It's just those things that touch national security that are really sensitive that can be dual use, where we need to be.

More careful push us forward.

Then, no matter what the administration ofter November fifth, sixth, will there forever be this idea of tension and ultimately opposing nations between China and US when it comes to AI. Do you see any grounds for a more dubbsh approach?

Yeah?

I do think we are entering a phase where the Chinese government, led by Si Jinping specifically, has said they want to advance in certain technologies AI semiconductors, five G, six G, certain others. They've set this out in the plan, and they want to have a very dominant military, and those two things are quite worrying. Understandably so to the US, Europe are friends and allies, and so I do think no matter who wins our election, this part of the technology race, and I don't call it a war, I

Together and lots of other areas.

When I see companies in the consumer sector and agriculture and other places still doing a lot of work with China, it doesn't mean that there has to be a completely coupling nuance.

We love it.

Anna Manuel, thank you, executive director of the Aspen Strategy Group.

Coming up, how the UK Prime.

Minister is looking to win over skeptics with they plan to lead on.

Your guest at artificial intelligence.

That's next, there's a bring back technology.

After some early confusion around the UK Labor Party's commitment to AI, Prime Minister Kiss starm is now positioning himself as a champion for AI. His party's inaugural investment summit last week. He even appeared alongside former Google CEO Eric Schmidt and called AI an opportunity rather than something to be scared of. Let's bring in Bloomberg's Matt Bergen, who's out in London for us, and let's ask the simple question, what is the UK's AI plan.

Well, we don't know it yet.

Wear our story today we talked to Secretary Cumpeter Kyle, who's the Secretary for Science and Technology runs the department here. He said, they're coming out with two false strategy and one is this opportunities plan where they're going to be using AI both for they talk about for improvements in the public sector and for the private sector, and we've seen a little bit of that in the public sector

Piece of Carl though the UK Science of Technology Secretory rather upended everyone though earlier by having to it seems nix a couple of very important investment areas in to ultimately compute and I'm interested as to how he's tried to navigate that a little bit more and educate us why he did it.

Yeah, that's correct. I was kind of shocking to a lot of investors here. And so that was a project in Scotland, one of the countries very few kind of these supercomputing projects. His explanation from that, and the Labor Party's explanation is that the prior government promised this money

Mob you cover bench capital in the UK and Europe. What is the VC community to say right now? What is the amount of money going into AI and AI innovation compared to the US and globally.

Yeah, I mean it's it's small, and there's a concern that the UK will is is losing its footing to France, which has invested quite a bit and the government has been like working the prop up the industry. There's a concern that the efforts not just of say pension funds moving into VC, but but government research project. I think the other side of that is, you know that they're defenders of the government that are saying they're much more realistic.

We had Rishi.

Sunak, the Prime Minister, talking about the UK being a scigned superpower, having Elon Musk on stage. Some of those things that maybe weren't realistic for the UK to be.

Caroline and I have some experience in reporting on the UK government and in the context of things like AI, they often add in many buzzwords and political words like efficiency, some of which we've mentioned in this conversation. But are they actually acting with the private sector, not just the vcs, but you cover the startups too, right, They need kind of some relationship there to move forward.

Yeah, I think you know, the term we heard a lot was it's a wait and see. I think right now they're they're certainly having conversations with the startup industry. They are the choice few sort of AI startups that are promising that are involved in conversations. But I don't think we've seen a lot of evidence of them either being drawn in as government contracts or partners. But that's something that at least in LIB service they're talking about a lot.

We want to thank you, Mart Bergen.

It's time for talking tech and first start. Four astronauts have made touchdown back on Earth. SpaceX's Crew eight capsule landed earlier this morning after undocking from the International Space Station on Wednesday. The crew arrived at the ISS on March fifth, but could not return due to delays and issues with Boeing Starliner two Boeing Starliner test pilots are still stuck in space for the return set for February plus.

Elon Musk is said to have.

Had secret conversations with Russian President Vladimir Putin. That's according to The Street Journal, who say the two have been chatting regularly since twenty twenty two on a wide ranging number of topics, including business and geopolitical issues. And Tesla is drawing up an eclectic menu as it prepares to open a fifties diner been charging station in the heart of La where.

Ev drivers will be able to grab a bite.

Or catch a movie or topping off their battery assign the industry's moving away from the utesarian utilitarian.

Gas station model. It's something I thought i'd never read.

Character I say it, that's quite cool.

Meanwhile, let's talk about the Biden administration saying that the US must accelerate its adoption of AI for military and intelligence use. In a new national security memorandum, the White House outlined efforts to maintain an edge of arrivals and increase safety. Courtney rosen imanly by government joins US now, and you've really been focusing in on why the US government is suddenly ramping up this narrative.

What's behind it? Corney.

Well, the primary partomle of this is that US adversaries are already deploying AI in their militaries and their intelligence uses. And that's what President Biden's National security advisor said yesterday.

He said that.

These things are advancing without American values, and so the US has to keep up in order to keep up with the adversaries.

Courney.

I want to get into kind of the specifics of what a strategy might look like, but I think to be fair to our audience on Bloomberg Technology around the world, we're all kind of conscious that we have a US presidential election in less than two weeks. Therefore, the existing administration has a time limit on what it can or can't do while in office. Just kind of take that and explain that bit to us.

Please.

This memo that President Biden's team published yesterday lays out a whole bunch of to do lists for military officials, intelligence officials. The President's not going to be in power long enough to see a lot of that through, so we need to be thinking about what the next president would do on these issues now. The Republican platform says that President Trump would repeal a lot of the Biden administration's consumer policies on AI. It doesn't really have a

Accorney, on this program, we talked to companies all the time, like Palenteer and Anderill, private sector, publicly traded companies or startups that tell us they're working more and more with the government. What about from the government's side, is this strategy they plan based on working with the private sector.

Yes.

Jake Sullivan, who's President Biden's National security advisor, yesterday made a speech about this Artificial intelligence and national security strategy, and he devoted a lot time to talking about how AI innovation is largely happening in the private sector and not in government. There was a lot of talk about how the US government's going to have to work with tech companies to make that happen in a way that maybe they hadn't in different eras of technology.

Now.

I was sitting in a room here in Washington a couple months ago during NATO when Oracle Saffricats said something very similar that the tech is existing in the companies, the government is behind, and the two have to get along to make this work.

What's interesting is the ethics around it and any limitations coming from the United Nations. There is this tension around autonomous weapons and AI, and ultimately they're used in the battlefield. How is that something that perhaps Jake Sullivan is speaking to or trying to navigate.

They put together what they call or what I would call a risk based approach. Right, the riskiest uses of AI in military and intelligence settings, for example, use it to make decisions about weapons targeting, like what you were talking about, that should require the most safeguards and the most thinking about ethics. Tasks that are smaller don't necessarily need those kind of guardrails, according to the Biden administration.

And is it going to be the companies that we've just referenced the ones that are already leading away. Are they looking to spark even smaller companies to be integrated within government.

Right now? The strategy. President Biden directed his procurement teams at the Department of Defense to work on expanding the database. I'll call them a vendors for this technology, and so they're definitely trying to yes, of course work with the big guys like what you've talked about, but also to engage with the startup community and to make sure that they have access to this opportunity to help the US government and help the military right just as much as the bigger players would.

Be their government reports at Courtney Rosen. Great to have you, Thank you very much.

Welcome back to Bluemot Technology. I'm Caroline Hyde.

In New York and I med Loveo in San Francisco.

Quick check on these markets.

We're just tentatively near that record high that we saw on an injury day basis. If we managed to hold on to some of these gains, maybe we will crack that new record for the NASDAC. We're currently up eight ten percent over the course of the week. Look another volatile one. We're still trying to digest what meet the Federal Reserve is really going to do in terms of rates, what that means for some of the main big winners

But notably your drawing attention.

To one key analyst report, we want to get into what Key Bank is saying and why they think some of Apple's well. Analysts views on Apple are just too optimistic investors embedding too much on Apple's growth.

But there's a lot going on for Apple right now.

Yeah, particularly with a lens on China, and also next week, Apple plans a series of events which are expected to include the rollout of new Mac models with the new M four chip. Those chips are designed to support AI capabilities, including Apple's own platform, Apple Intelligence here with more Bloomberg's tech editor Dana Wolman, and always interesting how they communicate this interesting that Apple has earnings Thursday and then a

Yes, absolutely, it looks like Apple is looking to create a Meganews cycle for itself next week around its Mac lineup ahead of the key holiday shopping season, and it does seem that the M four chip is coming to a series of Mac products that would include the iMac, the MacBook Pro, and the Macmini, the Macmini being often a forgotten child in Apple's lineup, but Mark has reported that the Macmini specifically is due for a pretty drastic design refresh coming up, one that would see the device

Let's set this into the context of what's needed from Apple later in the next week, because at the moment, there is anticipation that Apple is going to be fueled by artificial intelligence into weaving itself into all of its products and it's going to manage to outperform. The stock has already done pretty well, and Key Bank Capital markets on it, and it's just saying we're baking in too much right now.

Yes, with their point is that, and this really I don't think is disparagement of Apple. Really, their point is just that the underlying expectation is not realistic. That it's assuming that Apple will grow across all of its product lines at once, across all regions, and statistically that is not impossible.

Exactly.

It has happened before, and we're talking about an event that happens once every few years, if not once a decade roughly.

I want to go back to what Cara alluded to earlier, which is one cell side firm, KEYBMP, has basically cut Apple to sell. But what they're talking about is something really interesting happening in China. In China, you have iPhone sixteen cells. The data is confusing, frankly about whether it's doing well or not. But Apple intelligence isn't available in China. And yet the evidence tells us the consumer might be buying the handset because they believe in the future at will.

I would agree with you the sales data so far has been inconsistent at best. Initially, it seemed that Apple really had to cut prices or retailers had to cut prices in China to boost sales this spring. And yet, as you said, the early numbers for the iPhone sixteen in China have been encouraging. And that's despite the fact that sales of other otherwise luxury goods in China have been soft around in the same period. So those are

It's just too soon to know.

But I do think there will be a lot of scrutiny on China sales specifically next week when the company's earnings come out.

We're expecting a five percent increase in revenue, up some five percent to ninety four billion dollars for Apple. On Halloween is when the numbers come out. Thirty first and a woman, We thank you so much. Now here with more Thomas Martin, senior portfolio manager at Globalt Investments. Let's just talk a little bit about Apple and as it sits in the context of the Magnificent seven, just as we look towards next week and we start to get this bumper crop of earnings.

If you being optimistic, well we are feeling optimistic.

I mean, these are companies that are growing their earnings and their revenues, and they have had a little bit of a you know, I guess not slow down, but they haven't been as strong as they were in the first half of the year, and the fundamentals underlying them in terms of driving their revenues and their earnings, are still pretty strong. So we're hopeful that we can get some good reports out of them.

So that is very interesting, Thomas, I will if you allow me to do a bit of scene setting. I think we agree that the mag seven were the big driver of the S and P five hundred in the first half of this year, but that's kind of changed since July, right when that index, if you call it an index, peaked, and if you take the basket of the mag seven or the five that will report next, I think the earnings grope expectations about nineteen percent sub twenty percent, way beyond the S and P five hundred.

For like six quarters.

So how optimistic are you give us a sort of relative frame of reference.

Well, I think that's a good point, and I think that applies also to the market in general, is that we did have a big run up to a new high and we're back.

Above that high again.

I mean, we're off at a little bit now from the all time high, but here we are. And the seasonality of the market has really been brought forward in every case, and so we were supposed to maybe have some weakness here in September and October.

October's almost over, and we really haven't seen that.

And we're supposed to have a rally into the end of the year from that weekend point, and we may not get that. It may have been kind of pulled through. And so the one reason to not be as optimistic is regardless of what the results are, is that the market says, you know, we just we need to take a little breather here for these companies that are up so strongly, I mean, twenty seven percent on the Russell one thousand growth and the.

MGK you know, the large cap mega growth Thomas.

Which corners of the very large world of technology do you like the most?

Well, we still do like the semiconductor companies that are part of the AI movement. And so even though in Nvidia is back up to its old high the outlook for what they have and the demand for their product uh and just the underlying driver of the need for this large language models, et cetera, and the AI is still in the earn early innings of it. So those are companies that, even though you know, along with the other companies in the index, are at highs, still have

What's interesting within Video is we have to wait all the way to the twenty first November for their numbers, but we're going to get a lot of signals coming from the so called hyperscalers, whereas Alphabet, Amazon the spending.

Coming from Meta.

How much is still going to be ultimately plowed in to in Video's chips. Do you think that this quarter will still show that level of commitment and investment that we've been used to in the previous quarters.

Well, it will be critical and everybody's going to be watching those CAPEX numbers very carefully. I do think that it will still be there. It's too early for them to back off. And the reason that they would back off on their capital spending is if there is a slowdown in their revenues and their business and their costs other costs go up, they would need to cut back in order to keep the EPs growth going. But I don't think that were at that point yet, or maybe even in the next couple of quarters.

That could be a risk though for later on. In twenty twenty.

Five, Thomas Martin, Senior portfolio manager at Global Investments, Happy Friday, thank you for.

Joining us on the show. A piece of news.

Cryptocurrency exchange Kraken is set to name a new co CEO. Argent Seti, who's the co founder of the venture firm Tribe Capital, is set to lead Kraken alongside current CEO Dave Ripley. Kracken's been expanding into new product areas and considering a final funding round before a potential IPO offering all of back Carrow, according to a Bloomberg source.

One to watch Meanwhile, let's stick with crypto for a moment, because the companies are making a massive investment in the upcoming election. Of course, all in an effort to ensure politicians take the industry more seriously. Bloomgs Tim Stenowick has more on the growing impact it's having on races across the country.

Cryptos involved in the US election cycle like never before. Campaign donations have poured in supporting politicians more friendly toward the industry and opposing skeptics. Crypto backers have directed more money to support their industry than any other interest group. Leading the way is the super Pac Fairshake, which backs Republicans and Democrats as long as they back crypto and

No question about it.

We are going to see a pro crypto Congressromerge regardless of the particular outcome in individual races, and of course the outcome in the presidential race.

In the presidential race, former President Donald Trump said back in twenty twenty one that bitcoin quote seemed like a scam. Now he's become crypto's most high profile proponent.

This afternoon, I'm laying out my plan to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world.

Today, I take the oath of office. Joe Biden.

Kamala Harris's anti crypto crusade will be over.

In fun day.

One, I will fire Gary Gensler and appoint a new SEC chair.

On the Democratic side, Vice President Kamala Harris strikes a potentially softer stance on SEC chair Gary Gensler. Her campaign's crypto plan, though, is considered more vague. In a policy statement, which is part of the Opportunity Agenda for Black Men, it reads quote, make sure owners of and investors in digital assets benefit from a regulatory framework so that black men and others who participate in this market are protected.

These elections are going to swing back and forth for a while, and so Crypto shouldn't be partisans.

It doesn't really matter too much who's president Crypto broadly and bitcoint specifically. It is an unstoppable force, and an unstoppable force meeting an immovable object, you know there's going to be firework.

No matter how you slice it. Crypto certainly has a bigger voice in the election cycle than ever before.

Okay, coming up.

Activate Consulting is out with its twenty twenty five tech and media outlet report. The company's CEO, Michael Wolfe, is joining us next stay with us will be right back. This has been back technology.

Time.

Now for our VC roundup.

First up, Waimo has raised five six billion dollars for investors for its largest ever funding round. The investment round was led by Alphabet, but it included other big names, as you can see at recent Horowitz Fidelity tro Price for example. Plus China's Rewrite has raised over four hundred

That's called called it in two sources.

The deal is being led by investment firm DCVC and would value the maker of the humanoid robots that you see at about a billion dollars. Company declined to comment on the deal or its valuation.

Ed so much going on in that world.

Another one we're looking at over the next four years, the tech, Internet and media sectors are expected to add more than one point one trillion dollar of global growth. That's according to Activate Consultings twenty twenty five Technology and Media Outlook. Do I say that the company's Michael Wolf is with us now and you know, reading the rapport, it's not just the density of it or the global nature of it, but actually the near term jump that

What are the sort of top line conclusions You've drawn a couple of things.

First of all, we're talking about roughly four hundred billion dollars in incremental revenue to consumer the consumer technology media businesses, and another seven hundred billion additional revenue dollars for B to B. What you see is B to B is going to grow much faster, three percentage points faster than the consumer side of the business. And as we look at this, we're very optimistic because there's still going to be a lot more money coming into these businesses.

Can you spell out a little bit, Michael, of the underlying data you use to get to these numbers.

How have you factored in this level of.

Both Well, we spend an entire year doing a tremendous amount of both consumer and B to B research. We take apart all of the plans for the major companies, we look and see the underlying things that are driving growth, and as a result, our forecasts reflect really a mosaic of everything that we see going on and where we believe that's going to translate into revenue growth.

The reason that Caroline's question is so good and so important is that within the reports you attribute some quite a lot of what's going to happen to generative AI and on this program, whether it's an investor or a company executive, or us as journalists, I still think we're finding it really hard to see the money coming out the other side of all of the investment into the infrastructure behind AI. Take us there, Michael, generative AI leading to sales growth.

We're we're not looking at it that way. We're not looking at there's there are specific forecasts for the use of generative AI, but most of what we focused on the consumer time consumer side is increases in consumer time with technology and media, and in the case of enterprise, it is it is not money that those companies are

We can grow, We get that.

Do you think though, that there is hype around how much return on AI there will be? What's interesting I was speaking with the IBM CEO earlier this week and his key point was, at the moment, it's still really cost Yes, Eventually we're going to get there, and CEOs want to be bringing in general to AI to their companies, but it's not easy enough for enterprise right now, and it's really too expensive.

Is that something that you're feeling and hearing.

Yeah, and I think we're really this is an amazing hype cycle and there's going to be a lot of specific applications. It's unlikely that any of those applications, though, are really going to provide huge amounts of additional revenue to these companies. In many cases, it's going to be increased functionality, it's going to be better tools. But we're not stepping back and saying, let's predict what's happening in the market based on GENERAI.

We keep looking at this from.

The perspective of what's going to happen in terms of specific sales of what's existing out there, rather than bedding what could be coming.

We're shot on time.

But one other Nasson area you're looking at is a I was fortunate to spend some time with Oryan Meta's concept.

Tell us about your forecast there? I find it fascinating.

Well, we're forecasting fifty four million headset shipments by twenty twenty eight and it sounds doesn't it's really underwhelming. It's ravi. It's equivalent to four percent of smartphone sales. We believe that they're going to be a great deal more because we aren't counting on much more sophisticated headsets. The other thing is it is a place where the AI is already here, and so the AI is ahead of the device versus the other way around.

It really is a fascinating read. We thank you for bringing it. What is a year long set of number crunching and data forecasting and activate consulting.

We appreciate it. CEO Michael Wolfe.

Let's go back to today's big story in the world of chips, SMC's chip yields in the United States. What it means for American chip manufacturing at LADS. Let's bring in Bloomberg Intelligence senior analyst man Need Singh the read on the fact that TSMC is getting some superior yields even to where.

They produce back at home.

What does this mean for the general demand cycle that they're seeing.

I mean, look, in terms of the overall capacity, twenty thousand wayfirst is not that big of a deal. But when you look at the fact that they are doing it at five nanometer, which is about you know, thirty five percent of TSMC's overall revenue. And TSMC the fact that they have the pricing power is because of the leading notes. So this is one of the most popular leading notes and you know, higher yields than TSMC's own fabs.

Real quick. Mandy, Oh, actually, I think we've got to leave it. But I'm glad you came on and gave us the b I take. I think the market might price it in a little bit. We can argue about that next week. All right, have a good weekend, Carrot.

Short, sweet to the point. But that does it for this edition.

Bloomberg Technology an important one when you're thinking of chip manufacturing here in the US.

It's been a huge week in the world of technology. The Bloomberg Technology podcast is your friend. Recap there Wherever you are in the world, have a fantastic weekend. Big shout out to the team in New York City and all the crew here in San Francisco. Reminded on Monday, another big week starts. This is Bloomberg Technology