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Bloomberg reports the US Commerce Department has drafted regulations restricting AI chip shipments anywhere in the world without American approval.
Plus Oracle plans to cut thousands of jobs as it handles a cash crunch from a massive AI data center expansion effort.
And the Pentagon has officially notified lawmakers that it has determined Anthropic and its products pose a risk to the US supply chain.
Some extraordinary news on the private sector and indeed on the public markets right now. And we're seeing ourselves, what by about three quarters percent on the NASAK one hundred, coming off of our lows.
But we're down on the week, the S and P five hundred having.
Its worst week. It's October of last year, and in March. Part it's because there was lots happening to oil prices, and we're in a sixth day of conflict with the Middle East with Iran, and we're seeing ail up six percent at one point. We're now, of course, eclipsing ninety one dollars on the BNT on the global contract. All of this adding to inflation pressure when we're seeing weakness in the labor market, non farm payrolls are surprise loss
in jobs, no additions. We're also seeing, therefore, money coming out of some of those risk assets. Bitcoin off by three point six percent today, ED, what are.
You looking at?
Yeah, chip stocks are under pressure.
The Philadelphia Semiconductor indexes down in this session, down on the week, and headed to two straight weeks of declines for the first time since November. Bloomberg News is reporting that the Commerce Department has drafted new rules that would restrict US shipments of AI chips worldwide, giving Washington broad authority over whether other countries can build facilities to train and run our official intelligence models.
That's all according to sources.
Bloomberg Tech and Industrial Policy Report of Maggie Eastland joins us with the let's get into the content of those draft rules and what Bloomberg's reported.
What do we need to know?
Of course, so as we've reported, there is a license requirement for AI chips sent almost anywhere in the world. Now, whether or not these licenses will be handed out. Depends a lot on how many chips, as compared to a Blackwell and video black Well, how many of those chips each does each end user want to purchase, And now on the higher end, for end users wanting to purchase up to two hundred thousand, that may actually require and the US may ask nations to invest in AI within
US borders. So this opens up an opportunity for chip licenses to become a factor in global trade talks.
Something that I'm sure many a country of Bristol at, Maggie. What's interesting is that the Commas Department has responded and they say the draft rule isn't meant to function as an Nvidia export band. Can you just give us the nuance of how the government has responded.
You're reporting right.
So this response shows and tries to emphasize that this is not the same as the Biden administration and.
Their diffusion rule.
It's one thing is it is not based on countries. However, there is a big role here that the government is playing as a gatekeeper, and whether or not this is more restrictive is ultimately going to depend on how the US decides to dole out these licenses, and it does have the leeway to be more or less.
Strict with that.
Maggie.
An important point here is it doesn't necessarily change US policy with regards to China right now. You outline that, But there seems to be like this tiered response if it's a small batch of chips for a small data center project lighter review. But at the other end of the extreme in our reporting, it seems to indicate that you have a nation state country to country negotiation. If the US is going to allow the export of cutting edge AI accelerators.
Exactly as you say, for any shipments over two hundred thousand Blackwell equivalents, there will have to be a nation to nation negotiation, and it is sort of a tiered response. If it's under a thousand chips, that's going to be a lot easier to get approval. But again, as you work up the chain and want more and more ships, the US is going to be asking for more in return.
Maggie Eastlan on what the US we understand is currently considering. We so appreciate it. Now, let's stick with Global Tech News. Ted Mordenson is with US. He's bed managing director. He oversees technology research. Boy, is there are a lot to be trying to digest as someone who analyzes tech. Right now, just focus in on what potentially the US could be thinking about here and overseeing of basically how in video and AMD export to the rest of the world.
Your reaction, I think it's a broader focus. It also, let's face facts.
I mean, the Trump administration is providing a broad blanket not only on energy policy, Look what we've done in Venezuela, look what we're doing in our own right.
Now, but also on rare earth.
This all feeds together in one big ecosystem, and I think they just want control of what's happening on our next generation silicon at that three and two nanimeter node. This is one of the reasons why we've built eight fabs at TSM and Arizona. We have to control that technology, specifically at that two nanimeter node, because that's where all
the AI chip development is going. So I think they're just trying to get their arms around the whole situation that the US is in more of a power solution verse being ripped off globally a.
Power solution first.
I mean, at the moment, we're seeing a negative reaction to the stocks in the back of that story. In fact, very few stocks are in the green today and maybe Marvel and broad Com out perform because of numbers we see defense tech outperformed.
TED.
What do you do in this current geopolitical moment of tension?
So I'm on with some very big clients, you know, constantly, whether it be during the day or even at night lately during earnings, and I think what people are doing is we're kind of post last Saturday, and there's not a lot of cycle experience. I mean, I'm old, so I've seen pretty much all this. It doesn't really surprise
me that much. But we're now in this I would call it a capital preservation phase, where when you don't have a you know, a clear picture of what could happen, whether it be on the commodity side the raid environment,
you tend to go to a capital preservation mode. And what I mean by that is there's a lot of d risking going on in tech portfolios, and there's been some very violent moves between software and also semiconductors, and I think there's also some pms that are quite frankly just moving to other sectors that are a little bit more defensive.
So you know, Caroline outlined right at the top of the show, the sort of the trajectory of the Nasdaq one hundred, right, I think, on track for its worst week since October. Then I said, chips are following a similar pattern, back to back weekly declines for the first time since November. It seems a strange question, But what is the main catalyst in this market right now? What is it that your clients are saying is driving their psychology when you're on the phone with them.
They need clarity. You know, everybody's looking at the tenure.
I mean it revers down to the four to twelve range earlier in the day, now it's back last time I checked out of the four seventeen range. They're worried about a potential spike in rakes. There's inflation everywhere in tech. Every single conference call I'm on and I listened to over seventy during earning season, everybody is passing on price. So I think the institutional investor is looking at locking in gains on some really leadership stocks, building some more
cash levels just to be more nimble. Buying from the fearful selling to the needy is a discussion I have almost every single conversation. And then the other things that
portfolio managers are doing is they're upgrading their portfolio. And this is a great opportunity when the markets are down to really look at these A companies with unbelievable management teams, product cycles that move into AGENTIIC and free cash LOWI is king and if you do a screen on those names, there's a bunch of tech companies that are way off their highs and that's where that's where we're doing most of the work.
It's actually the S and P five hundred I think that's having the rough week relatives in AWE. That one hundred one name that is having a very good week is Palenteer.
You up almost thirteen.
Percent, and that's like logical, right, Like Caroline was making the point, I think it was Monday, maybe Tuesday that with everything that's happening with the war in Iran and indeed the back and forth between the Department of Defense, the Pentagon and AI Providers, that you'd expect that name to be higher, you know, you'd expect it to be in the spotlight right now.
It truly is one of these next generation companies that has been put in pretty much every single agency. They started with the army, but they've gone to the Space Force, the Navy, pretty much every single industry. And if you just connect the dots on our success in Iran is based upon Pallanteer being embedded in the IDEF, the Israeli Defense Force as well as.
Pretty much I.
Would assume all of our agencies in relationship to our Department of War.
This gives the warfighter.
And you know, I flew for you know a lot of years and I feel so antiquated on what my new naval aviators have at their disposal. They can see around corners, they can see the battlefield in real time, and that's that's really because of a lot of the Paneteer software and their ability to really take on an immense amount of data and make sense of it.
I love hearing about that history and that understanding you have ted. Can you therefore opine a little bit on how difficult it might be for them to unentwine themselves.
That's even a word with anthropic, because Panta has had a partnership with them. If we are seeing them forced out, is that going to be an issue for the business.
I think it's I think it's a really political I think at some point of the Defense Department, and you know, the government will need and tropic and they'll still find a way of somewhere in the middle. Same thing with open eye, open AI. If you go back in the way back machine. I mean, this has happened at Amazon, it's happened at Google, it's happened at Microsoft.
We'll get there somehow.
What I think your viewers need to understand is the US government, specifically the Defense Department, needs the best technology, and I think what we're using is kind of a strong arm tactic to get them back at the table and to get to some middle.
Grown Ted Wordenson of Bed with a very close view of what's happening between technology and the world, the state of the world.
Right now, I really appreciate it.
Now coming up in the program, Oracle plans to act thousands of roles as soon as this month. We're going to discuss what is behind that move and the Bloomberg reporting.
This is Bloomberg Tech.
Oracle is planning to cut thousands of jobs as it looks to manage a cash crunch driven by AI spending. According to sources, Let's get the details of Bloomberg's Brady Ford, who broke the story. Lots of detail in the report, the size, the scope, the when, what do we need to know?
It costs a lot of money to build data centers.
Right, Oracle is betting its company on the fact that it will be an AI infrastructure provider, and over the next couple of years that means negative cash flow. It's feeling a crunch, and so it's responding, right, it's planning what appears to be one of the largest layoffs on record for the company. Thousands of workers impacted as soon as this month. And yeah, I mean it is certainly a rough market out there for jobs in the tech industry, and this is just one more data point.
For that, Brady.
It needs money for AI and the infrastructure of it. It needs less people because of AI. And you say that the job cuts are going to be coming to those where I assume the latest greatest AI agent is going to be able to perform for them.
Exactly.
Yeah.
I think every management team right now, everybody who has.
A P and L is being asked, Hey, when you're doing your headcom planning, let's think about what roles we need less of. We all know these AI and tools aren't quite there in terms of replacing people, but in terms of time saving, in terms of hey, maybe if you had a team of ten people, can we do it with eight people.
From what we are hearing.
From sources, that is certainly a factor in this layoff.
Though at the end of the day, it's cost cutting. I think that's the big story rather than it.
Being a you know, AI is so amazing that we can replace people.
Yeah, then you want some whether it's AI washing or not, continues. It's proty forward. Thank you so much for joining us on that story. Look, another tech leader has been acknowledging the impact of AI on jobs Page a Duty CEO Jennifer tahadah I spoke with her at Bloomberg's New Voices event earlier this week, where she said AI's impact from productivity is changing the way her company fills vacant positions.
Yeah, we've tried.
I moved the word backfill from our vocabulary because that sort of infers that you need something exactly like what you have before, and the market is moving so fast that by the time one person exit the role, you actually need to think completely differently about what the opportunity is to add capacity to your team in a new way.
So are you seeing few of people working at Patrigg and how does that perhaps.
Change the conversation you're having with employees.
Well, I think employees understand that we're looking for each of them to demonstrate not only productivity and efficiency, but higher velocity in the innovation. And I stand up at town hall almost every month and say, I'm not asking you to work more, I'm not asking you to work harder. I'm asking to work differently. I'm asking you to embrace and leverage AI and service of competitive advantage, but mostly in service of our customers. Right, And I think that's exciting for most employees.
That was page Judy CEO Jennifer Tahada. Now, US employers did unexpectedly slash ninety two thousand jobs last month, raising the unemployment rate to four point four percent. Those cuts are being blamed on strikes at major healthcare providers and servers.
Whether not AI.
How much longer could it be until AI does impact to the labor market market? Gimball, executive director of the Yale Budget Lab, has been doing research on AI labor market impact and joins us WE every week month and quarter wait for the definitive data set that says AI is doing something here.
Have you seen it yet? Will we see it soon?
I really haven't seen it yet. I think everyone is so focused on what the technology can do, because the technology is so amazing that they're jumping straight to and therefore we're going to really quickly see these labor market impacts. I think it's really important to keep in mind there are a lot of things that affect deployment of technology.
It policies, economic pressures, demographic changes, liability concerns, and so the question isn't just what can the technology do, but how quickly is society going to and companies going to rearrange itself around it.
The news is that, you know, the unexpected cut to jobs in February. That's the news. That's what's driving markets today. Within the data set, did you see anything? Did you go deep and say, Okay, what can I put from this into my own model?
Yeah?
And when you look at this data, I mean, strikes did play a role, so we should see those jobs coming back.
But even if you.
Take the strikes out, about fifty percent of the job loss was in goods producing sectors approached to private service providing sectors. So things like manufacturing, manufacturing, construction, mining, and logging, those are not sectors that we expect to be affected by AI in the same way. And for context, right, they were about fifty percent of the cuts, but they're only sixteen percent of employment, and so that doesn't suggest
that this is AI. It suggests that, you know, you maybe have impacts of tariffs plus just some general cyclical weakening.
Martha, Yeah, we saw in information about eleven thousand jobs gone.
Out of those ninety two thousand.
Can you tell us what data points we should look at then, if it is going to be about productivity gains, if it is going to be more about different areas that is starting to see the impact of an AI agent for example.
Yeah, one of the things that I've been looking at is how quickly the just composition of jobs in our economy is changing. Because we gain and lose jobs all the time, that's a pretty standard part of an economy. And so just because we lose jobs in one month doesn't mean that we should immediately assume that it's AI related job loss. But if we're losing jobs predominantly in one sector or a couple of sectors that are unusual that look like AI. That's a signal that maybe this
is starting to happen. And that's why you know, at Budget Lab we've been tracking this measure of occupational distribution every month and it still isn't really flashing anything. I think it's really important to separate out the vibes on AI in the labor market from what's happening in the data. And you know, I think you're just seeing broad agreement
that it's not in the data yet. You just saw a report from Anthropic come out yesterday saying, yeah, we're really not seeing macroeconomic impacts here yet.
Vibe is one thing, but Jack Dawcy saying he's cutting half of his staff is a data point. And yes, we can say whether there's some AI washing within it, but still there are executives saying we are not backfilling, we are using AI.
We are cutting half of our.
Staff because we think AI is at a cusp where we can do more with it.
Martha, when does that start to leach in?
Do you think tracking CEO statements is not the ideal way to look at this for a couple of reasons.
Right.
One is there's huge selection and who even makes a statement about layoffs. Your hardware store down the street is not issuing a statement every time they lay someone off. There's selection effects in whose statements get covered, right. The statement from Jack Dorsey was you know, very eye catching, and so I got picked up. And also, frankly, you know, CEOs have incentives to talk about things in a certain way.
Shareholders want to hear that they're making AI investments and driving productivity, and they may not even have a perfect sense of what hiring would look like in the absence of AI. And so I do think it's a moment where you know, yes, we should listen to people about what's going on. We should listen to CEOs. But it's really important to go back to the data and make sure we're taking a really data driven approach here rather than you know, following the latest.
Company announcement.
And that is why your data approach is so important. Some of the research you do is just great, go and read it. Labor market a exposure, what do we know? For example, Martha Gimmell, executive director and co founder at the Yale Budget Lab, we appreciate you now coming up soft Bank in search of forty million dollars to fuel.
Its AI ambitions. More on that next, this is bloombag Tech. It's time now for talking tech and first up.
Robin Hood raised six hundred and fifty eight million dollars for its closed end fund designed to give US retail investors access to private companies.
Robinhood, CEO of Latana, joined Open Interest. Just take a listen.
Robin Adventure is a closed end fund listed on the Nicey that invests in private companies. The idea is we raise the capital in an IPO and then we invest that capital in private companies. And so far we've got a portfolio frontier names in their industries. You mentioned Data Bricks or a Mercore, Revolute Ramp. Those are just some of the companies that are are part of this portfolio.
Plus uber Well it is posted job listings that suggest the right share company is stepping our efforts to test a subscription offering for drivers and couriers around the world. Now the move underscores a sharper focus on subscriptions as emerging competitors load drivers with flat fee models and soft bank Well it's seeking up to forty billion dollars from banks to help finances investment in Open AI. Now that's according to sources, the roughly twelve month bridge loan will
be unwritten by fall enders including JP Morgan Chase. So SoftBank has been unloading assets in fact, including its taken VideA to bankroll.
It's growing better on open AI, but ED is an interesting time to be.
Wanting more banks to be syndicating dead at the moment exposed.
To AI because credit pressure is building on soft Bank in particularly a twelvemonth bridge loan. And remind yourself that forty billion dollars is their largest ever US denominated borrowing caroc, isn't it.
Also within that conversation, we're just honing from Vlad Tenorth and Robin Hood on one side, people still wanting access to private markets. But then we have today the news around Blackrock and it's private market credit fund and having to say, look, you can't keep taking.
Money from at the moment. It's really extraordinary moves.
Yeah, and we've been on top of it all week. That credit story is not going away.
Okay.
Coming up, we're going to discuss the data center threats in the Middle East with sand Winter Levy of the Carnegie Endowment for International Peace. That's next it's halftime. This is Bloomberg Tech. Welcome back to Bloomberg Tech. This is what markets look like on Friday to end the week. There's a lot going on in the context of Bloomberg's reporting on the tech sector and the war in Iran. And as that one hundred is off session lows but down eight tens of percent, and bonds have kind of
been wavering. You see the US tenure yield at four point four one four percent. Interestingly, like a lot of pressure on the Nasdaq one hundred in the moment is coming from some of the megacap names. I was talking with the team Caro on the equities desk, like what's going on. There is some kind of stabilization in memory pricing, for example. We know that there's a recalculation in recent days of capital expenditures that impact some of the hyperscalers.
But you look at Apple, Meta, Tesla, Amazon, those are on a points basis the biggest drags right now, and not that much in the news flow beyond. It's just, I guess a volatile week politically speaking, and as we went through a ted there's a lot that the market needs clarity on.
Yeah, let's talk about one of those stories. Politically speaking, Anthropic it's fouled to legally contest a Pentagon decision that declared the company a US supply chain threat, a designation typically reserved for foreign anversaries. Capping off a very turbulent week in the AI race, Blue most Shrinkafari joins us now for more on the unfolding AI saga that you have been at the forefront of reporting with for at
least a week now. It was last week when we first saw the explosive conversation around being deemed a supply chain risk, and now it's come in writing.
That's right, and you know.
Dario m and A, the CEO of Aanthropic, also put out a memo yesterday saying that he believes that the order is narrow in scope to the effect that it won't actually impact hopefully business with customers who are not at the government or working directly with the Pentagon. I think it's going to take a while to figure out exactly how customers react to this.
A few places that we've looked over recent days interesting there's the Censor Tower data on uninstalls and downloads, and there's the app stores and like it's part of the Q and AI newsletter. Right, we're going to look at this idea that there have been changes in chat, GPT open aies tool in terms of downloads and DOUN stores, and then Claude Anthropics what are you seeing.
Yeah, So it's really interesting because Anthropics claud business has historically been more enterprise, especially in the past year, and now we're seeing this shift the sort of consumer bump for the Claud app, and a lot of that is because some users agree with the company stands on pushing for restrictions on surveillance and autonomous weaponry in their negotiations with the Department of War.
So now those.
Gains are up to a million downloads a day. Yesterday the company was saying that. Being said, Chatchapt by far has a large majority of the market share here. It's going to take a lot of sustain growth at that level for Anthropic to even come close to Chatchapt on the consumer side. But consumer support, any kind of support, is much needed for Anthropic right now.
So that is an interesting bump.
In terms of just where they stand and consume penetration. It is much smaller than Opening Eye. More broadly, how much of a concern is it to Anthropic that the enterprise part of the business could be impacted if they are asked on install As you said, there is clarification that really a wouldn't extend too many parts of the other companies that use clawed only with Pentagon contracts.
That's right.
This is the million billion, multi billion dollar question, right. Anthropic has grown very rapidly in the past year. It's now at a reported nineteen billion in run rate revenue. However,
a majority of that does come from enterprise contracts. So if they are our enterprise business, so if they are losing marquee customers over this, who may also have dealing themselves with the Pentagon and are worried about the implications of the supplier risk designation, that could be devastating to Anthropics. So that is a big question is how why does the supplier risk designation really? Will Anthropics end up legally
challenging it? And is this issue resolved? I think that's going to be the question to watch for customers.
Bloombo Sharen Gafari, Thank you very much. And as tensions rise between Washington and leading AI firms, the global stakes are growing as well. Data centers, the backbone of artificial intelligence have now merged as potential targets in the escalating conflict in the Middle East. Let's bring in Sam winter Levy,
Carnegie Endowment for International Peace Fellow. Twenty four hours ago, we went to our correspondent in the emir region and went through the specific sites that have been targeted, the reason why, and just for the audience, Amazon owns and operates some of those facilities. You've had time to do your own research and study of the data. How does this fit in this idea that data centers are a target in the context of a war in Iran and a conflict between the United States and Iran.
Sure, yeah, so, thanks so much having me. Datata centers are becoming increasingly central to a very broad range of economic life, national security activities, and they are fundamentally soft targets. So for the Onians looking for targets, so they could they could cause disruption, could try to broaden the conflict,
could bring the conflict home to the United States. Targeting a data center that is operated by a US company that's a symbol or of US Gulf cooperation, it becomes quite an appealing target given how easy they are to hit with a drone with a barage and missile strikes. Given how fragile and vulnerable these facilities.
Are vulnerable, how do you protect a data center.
In this In this case, sure so it's hard.
So fundamentally, these data centers are filled with GPUs, they're very fragile. It's quite easy to take out a chiller, which are these things that keep the data centers cool, keep the servers cool, or to take out a generator or the transformers that provide electricity to the data center. There are things you can do. You can use more reinforced concrete, you can try to harden the facilities. You can use air defense systems, anti own devices, jamming systems,
an anti anti missile systems. But all of this drives up the costs of building a data center, and none of this will guarantee security against a kind of swarm of cheap drones. And it's very very expensive to protect against these sorts of cheap strikes. So there are things
you can do to protect them. I think historically these companies and the governments be much more focused on protecting data centers from cyber attacks, protecting them from trespasses, but much less focused on strikes from drones or from missiles, which you know is an inevitable risk, I think to building expensive infrastructure in a region where drones and missile strikes are unfortunately a real risk to worry about.
And you saw this risk.
You wrote about it in July in an opinion column, really saying that the Golf is not a place to be building out these data centers, Sam, but also the Golf is the place longer term with more abundant energy, and the Golf is the place that also needs AI for its own citizens. So what do they do?
Yeah, So the Golf has huge ambitions in the AI race, and they're very appealing partners for the United States for many reasons, energy capital or the things you mentioned. So I think it's inevitable that the data centers are going to be built out in the region. I think this underscores the risks of building the biggest computing clusters there the most critical infrastructure. I think that the United States should have been very carefully about where it wants to
cite that sort of infrastructure. But some degree of data center construction is inevitable in the growth. But I think governments need to think. Governments and the companies that operate. The data centers need to think much more carefully about their resilience plans, their redundancy plans, how to protect them from these sorts of physical risks, because as you know, as you said, this was a foreseeable risk.
These targets are soft.
The more they become symbols of technological might, the more they become central to economic life, the more appealing they become as targets for nonstate actors or for hostile states that want to cause disruption.
Okay, there is a lot that goes into a decision as to where to put a data center, not only about the power that's accessible or the water, but the people and the labor and the costs. SAM Therefore, though with your Carnegie in talment intational international.
Piece hat on where should these be built?
From a US perspective, so, I think these data centers are going to be built all over the world.
I think we should be building them all over the world.
I think for the biggest, most important, most critical computing clusters, the United States should be thinking carefully about siding them in close US allies, NAO states, within the United States itself, areas where they can be kind of protective from attacks or whether it can be more easily protected from attacks.
That's not to say that we shouldn't.
Be building data facilities in the Gulf too, but probably not our most critical computing clusters. And I would I would also say that these strone strikes are also underscore. The data centers all over the world could be a threat. So even a data center in Europe could well be targeted by Russian sabotage for example. You know, these these are fragile sites wherever they're saved.
You know, the argument the Gulf is not the place to build the world's AI infrastructure. The reality is that is exactly where they're building the world's AI infrastructure, and it's where the capital is coming from, and it's where in VIDEO and AMD have deals to send their chips, and you have capital flowing from the Gulf into the United States to fund infrastructure products projects.
In the United States.
I mean, I welcome any response to that reality that you have.
Yeah, so I think, you know, as I said, I think that is the reality to some extent, the customer is toward extent we go forward with these types of projects. You know, it remains to be seen what this will look like after this conflict. Because it'sertainly going to drive up insurance premiums. It may make it harder to attract engineering talent to build out these dead des centers. I think this will't make video AE or cider Adia rethink their plans to any great extent, but I think it
will complicate those plans. I think, you know, it should make the US government much more cautious about where it's like its most critical data centers. But again, as I said, data centers are going to be built everywhere. I think this attack should be a wake up called that all of these data centers need to think much more seriously about physical attacks and not just cyber attacks.
Digitalis are natural disasters.
I wake up.
Cool.
You've been trying to give for at least six months now, sam Win to Levy, we appreciate your time of Carnegie and Dowmon for international peace. Coming up, How are supply chain risks impacting the world's largest automotive supply. I'm a justly going to hear from the BOSH CEO now, Stephan Herton, that's next to the Bloomberg Tech.
The conflict in the Middle East is in its seventh day and with President Trump insisting on unconditional surrender from Iran. Concerns about the impact on global supply chains arising. I spoke with BOSH CEO Stephan Horton about what that's meant for the automotive industry.
So far, we've seen that evs have heard the first wave, and that was not as big as we all expected, especially in the US. We saw a less demand than we actually were hoping for. So now a second wave comes in with but also pluck in hybrid vehicles or range extended vehicles. That's a very interesting technology which you also see in China. So very much all work is now focused on this combination of electric vehicle technology and engine technology, and this engine technology is a modern engine
technology with a differentiated engine. So BOSH is doing this work because we have kept our capability in engine work, I sees and we can combine these two and do the plug and hybrid vehicles very important. So I expect actually demand for these kind of vehicles to be rising quickly because they are more fuel efficient and same time they have range, which you want to have and you can still pull a boat or have a heavy vehicle, which is practically of use for many people.
But the situation with the war in Iran has any impact or bearing on that.
Well, I think people will be sensitive always now a bit more on what gas prices are, how much they have to spend for the vehicle, what's the vehicle used, and probably this pluck in hybrid vas or hybrid vehicles in total with a certain electrical range, which is really useful, So you can drive electrically for a certain range and then you'll have to we will switch over to gasoline. This is something which is for the market the optimal
solution as of now it looks like it. And obviously people becoming more sensitive about gasoline prices means they will tend more or not go from a pure ic because more to a combined so hybrid vehicle or even a full electric vehicle, that's for sure.
We started this conversation with semiconductors. You talked about the situation with the start of the year, but also some parallels with the COVID era and the chip shock, the chip crisis.
Is this war in Iran different?
Do you see there being a similar level of impact on semiconductor supply or bottleneck and where are you most focused within the realm of silicon silicon.
I'm more watching the AI build up because the I build up, for example, demands high amount of ramps, right, So, and I also observe that because the same time we are looking at the ship supply for all applications we do, but at the same time we're also applying AI in a massive volume, So that's a very important thing to monitor. These chips are used in AI data centers to build the we need to implement solutions like accident prevention in cars,
and that's the business cases which also AI need. So yes, it is a balance, and yes, there will be probably a shortage in certain components because the ramp up of AI infrastructure is massive. On the other hand, these infrastructure is used also on product we make, so it's used in Hossald appliances, empower tools in cars, and that's an important story to go forward.
Is there some panic right now in trying to secure memory in particular?
No, I wouldn't say there is panic.
It's something we know.
We have seen more severe chip crisis some years ago, right, But it's something obviously you need to look at because you also want the functionality, right, you want the I functionality, You want the better automational vehicles. You want the better assisted driving because that's safer, it's better than just human driving.
So also in the automation you see probably both. You see the full automation like in the EV, the full y V, right, but you see also the hybrid, which is the massive assisted automation making a driver just the better driver. And that's based on AI.
Bosh THEO there Se van hearton coming up.
A massive boom in AI data centers is driving demand for housing and amenities in remote parts of the country. We'll talk about the state that's on demand, simulating golf.
This is Blueberg tech.
Construction of data centers has led to increase competition for workers in areas with limited housing and amenities q the rise of so called AI man camps take a listen.
To power the boom and data center building companies are heading far outside of Silicon Valley and cities in general.
We're starting to see some pushback from cities where residents are kind of concerned about what living near a data center might mean for their property values and for their way of life. We're seeing projects push out further into rural stretches of places like Texas and Louisiana because you can get much cheaper land out there, and you can also find municipalities that are more willing to work with you when you need to negotiate things like power arrangements
or zoning changes. While the AI companies are dooking it out to figure out whose model will win, there are these other companies that see opportunity just in the build out itself. There is a huge demand to build data centers as quickly as they can, so housing becomes a big bottleneck. Most of these places that these projects are getting built now just do not have the infrastructure and that they need for this. Hotels fill right up, our
V parks are completely full with workers. All of a sudden, there's a line at the grocery store or at the gas pump. We have a lot of these sort of single lane county roads and they're not built for rows and rows of heavy duty trucks driving on them all day, and so you get roads kind of deteriorating. People are paying thousands of dollars a month just to rent r
V spaces near construction sites. We're seeing a wide range of companies get into this, all the way from Wiley locals that pitch together a little bit of land and sell the RV spots all the way up to major publicly traded corporations helping house workers. They've helped with oil and gas in the shale boom. If you look at it from above, it looks like an XL spreadsheet cut out of the middle of farmland. You get this paved surface where you have rows and rows of gray roofs
and temporary housing. They'll have their own toilet or they'll have their own sink. They always have Wi Fi so that you can make video calls to family back home, and then there'll be a shared communal kind of dining setup. They place so much empass on the food, not only because these guys are working so hard all day that they need the calories, but also because it's an easy way to attract workers when there's such competition for them.
We'll also see a lot of amenity space. These are workers that are spending fifteen sixteen hours a day doing manual labor. You know, I figured when they got home they'd want to go to sleep, but apparently there are often gyms so they can get workouts in.
And you can see the.
Rest of the full story from Blomberg Originals on our website, on YouTube or the terminal, and we want to get more on this story now, the driving force and the
impact of these data center camps. Bloomberg's Joe Reporter Bloomberg's reporter, Show Love and we were just seeing you there in the original's piece and Joe talk to us about some of the companies that are actually going to be thriving in this moment, the ones that are actually doing the building of because people, there's a great quote in your story, people don't want to be spasically sleeping in their trailer.
That's right, Thank you for having me.
Well, we're seeing companies ranging all the way from smaller local companies that have been working on you know, oil fields all the way up to publicly traded corporation where they're using the same assets that they were for immigration facilities or for major drilling projects during the sale boom, and they're using these assets now to build out these man camps. And so these are companies like Target Hospitality or Civio, and what they're able to do is reallocate
their resources. You know, until recently, oil was not priced
very very lucatively, so drilling had kind of declined. So this presented a new opportunity with all of these projects, especially as they're pushing out further into rural Texas, rural Louisiana, places that just you know, you show up in a place like Dickens County, which I wrote about in the story, you know, you'll find a couple of restaurants, you might find a motel, but it's just not nearly enough for a fifteen hundred man workforce that's being brought in to build these Darta centers.
At a more macro level, the date is quite compelling.
What the story is here, right, jobs growth and the data center build out? Well, zoom out a bit, you know what what is direction is this heading in at scale?
Right, We've seen a state like Texas for example. I mean, if you talk to the leaders, if you talk to the hyperscalers, they're very bullish on the opportunity for building data centers in Texas. There's abundant land here, there's abundant energy, and Texas leaders see this as an opportunity to overtake Virginia even in the data center space. So you know, Bloomberg Intelligence estimates that there's seven hundred billion dollars worth of projects that are just in the planning stage right now.
And I don't need to tell you artificial intelligence it's growing at a pace that really is hard to keep, you know, keep tabs on. So these companies that I've spoken with, you know, they see a very, very high ceiling for where this buildout can go.
I mean, the number of Bloomberg Intelligent is saying seven hundred billion dollars worth of projects in the planning stage, one hundred and sixty billion already underway. But Joe, the word camps kind of says it all in that these aren't permanent housing.
Briefly, it's not long term jobs.
That's right.
And when you speak with local officials, even in a place like Dickens County that has not seen a project nearly of this scale, they're aware that these jobs are not going to stick around forever and that while you might have some people that stick around to work on the data center once it's built, most of them are going to have to get out of town. So you know, it's temporary.
Bloomberg, Jo Lovenger, great reporting in video, imprint.
Great to have you on the program.
Charroc, Yeah, that does it for an extraordinary week on Bloomberg chech Head.
Yeah, a lot to recap. Do it on the podcast. You know where to find it. It's all on the screen there but Spotify, iHeart and Apple.
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