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Lie from New York. I'm Caroline Hyde and.
I'm Mike Sheppard in San Francisco. This is Bloomberg.
Technology coming up the US probes where the deep seek bypassed US restrictions to buy advanced in video chips through third parties. In Singapore, Plus, Apple gives a reassuring revenue forecast for the current quarter. The results show declining iPhone and Chinese sales over the holidays, and we sit down with the CEO of HPE of thedoj swing to stop its fourteen billion dollar acquisition of Juniper Networks, but first check in on these markets, which have underperformed from a
tech perspective in the last month the most. It's twenty sixteen. A brilliant line coming from Bank of America's Michael Hartnett, who potentially thinks we are now seeing the dawn of the Lagnificent seven. He coined the phrase magnificent seven. Mike, and we're starting to question the overall peak of AI spending. This is of course crucial in the context of this week.
We started the week on deep seak revelations. Do you need as much compute when you've got an R one model that's brought to bear the implications that that has for the GPU sellers such as in video, And today we get that first official meeting between in Vidio, CEO just One and indeed President Donald Trump. That we understand that the meeting has been in the week's works for
several weeks now. They plan to discuss AI policy, but that policy just got so much more interesting following the revelations of.
Our one Caro. There is so much riding on this meeting for Jensen Wang, and you're right. We heard him say at CES that he was looking forward to a meeting with Donald Trump. But so much has happened since then, and all the other major tech leaders have had their
chance in their sit downs with Donald Trump. And the question now is whether it might be a case of too little, too late for Jensen Wang as he sits down with Trump with all the pressure growing on whether the US should impose even more restrictions on AI chip sales to China, Cara.
And of course for many, the question still remains as to whether or not it was done with very high powered in video chips or not. It all comes as US officials and Fat Mike approbing whether Deep Seat bought advanced video chips through third parties perhaps in Singapore. We here's what a representative Roga Krishna Mudy had to say on the Show of Balance and Power yesterday.
What I'm concerned about is, for instance, with deep Sea, that they weren't able to stockpile a number of the highest ends before the export controls actually went into effect, namely the H one hundred chips, and then they bought a lot of these H eight hundred chips. And so what we want to do is both strengthen the export controls and make sure that they're not porous.
A leading lawmaker there on the policy implications of China and US, and we bring in Blumeg's Jordan Robertson because there is much speculation as to whether or not Deep Seak achieved this with chips that it was allowed to purchase, or chips that perhaps it circumvented some key policies here in the United States.
Yeah, thanks for having me. We reported today that US officials are investigating whether deep Seek achieved its breakthrough in AI chatbots, you know, through the acquisition of Nvidia advanced in video chips that it's not supposed to have. Now, I should point out that the timeline here, you know, it's messy, you know, because deep Seek has acknowledged using chips in its in its network. You know, that is not a secret. That is not something the company has
tried to hide. The question is which chips has it used, and when did it buy those chips and where did it buy those chips from? And our reporting, our reporting is that American officials are looking at, you know, whether those acquisitions of chips included chips that were not supposed to be sold to China and that transited you know, from the US to China via Singapore.
Jordan, let's get blunt here, are the export controls even working? Have they been able to stay ahead of what appears to be China's ability to leapfrog ahead or around them.
Yeah, that's the big question in a lot of the China revelations we've seen over the last you know, especially twelve months, whether it's you know, the chips used in Huawei phones or in this case, you know, the chips used to you know, facilitate Deep Seeks breakthroughs. You know, I think there's certainly a story to be told about creativity and ingenu in you know, rethinking how you do these AI large language models. You know, that certainly is part of it. But at its core, you do need hardware,
you do need software. You still do need the most advanced technology available, whether that's a SML hardware to make chips or in this case, you know, in videos GPUs to run these these models. And again deep Seek has not hidden the fact that it uses in Vidio chips. The question is which chips and when did it get them?
Maybe a classic example here of just fast follow the idea that if you curtail, you bring about innovation. Jordan, that innovation has got a lot of people in the US excited the app being downloaded for deep Seek, But you're reporting that actually we're having to prevent it being used by government by companies.
Yeah.
Yeah, the Pentagon, I mean, we've had a number of stories come out in the past few days. One of them was that the Pentagon was kind of caught flat footed on this. You know a number of Department of Defense, you know, employees in official downloaded, you know, connected their work computers to the Chinese deep deep seek servers and
downloaded the code the large language models. It was not blocked, and they were downloading this code for several days before the Defense Information Systems Agency, which is essentially like the IT and Cybersecurity Department for the Pentagon, began blocking those links. And what we've also reported is that now there's an effort underway throughout the military to identify where deep Seek's code has wound up on military networks and to remove it.
So this was an example of, you know, the fast changing nature of technology and the fact that it's really hard to keep up with what the latest potential threats are.
Bloomberg's Jordan robertson Thank You Coming up. Apple's holiday results showed declines for China and the iPhone, but the company's forecast helped to reassure investors. Will break down Apples earnings after the break.
If you look at our Greater China revenue for the quarter, we were down eleven percent year over year, and over half of the decline that we experienced was driven by a change in channel inventory.
Apple CEO Tim Cobb there trying to perhaps comment on the sales decline in China, which was a key miss in the numbers. Apple's biggest market well is the US, but in large part China is dominant too. It struggled to fend off competition from local brands. Let's get to Mark German, who was trying to understand really what this inventory change really meant it. How did it spawn an eleven percent decline in China sales.
Yeah, so whenever Apple has a shortfall these days, of course there were days where they didn't have these shortfalls, they have some color or I guess, an excuse as to why that happened. And for China this time around, we're talking a seven billion dollar decline from a few years ago. On the holiday quarter. They're saying that they
simply didn't have enough inventory. They're saying that they underprojected how many units they needed in the channel for the quarter, and by the end of the quarter, by the end of December, they simply ran out, which meant they weren't able to fulfill those orders, which led to a decrease in revenue. And he says about half of the eleven percent shortfall was due to that find It makes sense, right, but clearly that you are anticipating a shortfall to begin
with if they under provided inventory. And I think the response right this morning you see the saw prices up considerably despite the significant miss in China, right and the three percent decline of iPhone revenue. I think one is the guidance, right, they're going to grow again in the March quarter, which is a far cry from where they were just a year and a half ago where there was a series of quarters in a row where they
were declining. So that's positive. But I also think investors believe that because they missed those sales in China due to inventory in Q one, those sales will return in Q two. If you're an Apple customer and you want the new iPhone or ipowder watch or what have you, and the Apple store doesn't have it and it's unavailable, you're not really going to give up in most cases, right,
You're going to go back when it's in sock. And so I think investors and analysts believe that is going to happen, and we are going to see that China revenue actually come in and factor in into the March quarter.
Mark. How much have a grace period are investors they're willing to give Apple given some of the struggles that we've seen with Apple Intelligence and also areas like wearables too.
Yeah, no, both good points. So on Apple Intelligence, I think investors are giving Apple a little bit of leeway. They've shown their ability to come into new categories slowly and improve the product over time. Obviously AI is a different beast. Obviously they have rivals both here and abroad. They are absolutely crushing them right now. But I think investors are going to give them a little bit of leeway.
I would give them two more quarters, right analysts, I believe we'll give them two more quarters before they start having real concerns about this technology and its ability to drive sales and from a fundamental perspective, how it works feature wise. In terms of wearables. The new CFO, Kevin Burakt, made an interesting point on the earnings call that.
There was a little bit of a tough compare.
So typically over the last few years or so, you've see an Apple roll out two or three new Apple Watch models. This past fall, in September, they only released an Apple Watch Series ten. There was no new Apple Watch Ultra that's coming later in the year. This year. There'll be a new Apple Watch se later in the year this year, so you will see a little bit of that momentum return to the wearables category. But clearly the Apple vision pro not driving anything material to grow.
That category, right.
I mean, if you look at the big picture, Apple's first major new product category in years thirty five hundred dollars in revenue or peace at minimum, and it's not driving anything to that segment. That just tells you how few of these devices they're still selling.
Bloomberg's Mark German, thanks for joining us. Let's get more with Gene Monster of deep Water Asset Management. Deep Seek really shook up the markets earlier this week and cause so many reflections upon investment in AI and development of AI in this country. What sort of pressure does that put on Apple specifically with its Apple Intelligence product.
It's probably put a relief on Apple because if deep Seek does advance some of these third party models and basically creates an environment where the primary models like GPT or Gemini will have to lower their price to compete with more of these open source that benefits Apple from two perspectives. First is that as you use Apple Intelligence and it goes and taps into open ai, for example, there is a cost that comes to Apple for that those tokens. That's how it's measured. The usage is measured,
and they sell tokens. As the price of those comes down driven by deep seek. That's a positive for Apple. And separately is Apple's app developers who are building these AI tools need to be aware of the costs that these apps have in terms of pulling in the token costs and lowering the token costs will should promote more AI development within the apps. And so that's why you
saw Apple move up on the deep seek news. And I think that more broadly, I mean this has been I've been around tech for a while, and what I've seen this week related to deep seek is I think captured in the concept that the market is now the nastak is now flat from where it closed on Friday, and I think that essentially the commentary from Apple about how they can better fit from this. To answer your question, Mike, specifically, they focus in a.
Long way on and AI security. They talk up their chips, they talk up private service. Is that going to be integral to a consumer when we're thinking about using Chinese apps When it comes to artificient intelligence.
So for US consumers and Western consumers, they're probably not going to want to use a model I think. I suspect most people will not want to use a model that's based in China. And part of it is because I think this data integrity question, that's something that matters more for people who are over thirty five years old, when through our research we've seen that younger demographics tend not to care. I think the whole TikTok example is
a pretty clear example. People just want the content, and I think some of the potential downfalls to using some platforms it's just not top of radar. But to answer your question, is that Apple will brand around security of course with AI and benefit I think with deep seek or some other third party open source AI within China. Is that that needs to Apple really needs to fill that AI hole in terms of Apple intelligence. Who is their partner in China.
Let's just talk about Apple intelligence that we just heard from Mark German. I know you speak with him. He's been saying, look, you the analyst community and the investor community will give Apple a two quarter grace period to get this intelligence side right. Is that the sort of length of time we need.
I think actually investors are going to give probably a little bit more room and probably give a pass largely on fiscal twenty twenty five. And if you look at the street numbers right now after these adjustments last night, iPhone growth is going to be around three percent. It
steps up to eight percent in fiscal twenty six. And so I think that as long as that carrot is out there, and Apple did a good job of reminding investors that carrot's there because in markets that Apple Intelligence available, they said sales did better than in the other markets. As long as that carrot's out there, I think you're going to see this kind of this trend towards investors
focused on what this breakout potentially could look like. And I would just say this, and Mark's done an incredible job of reporting on the features, on Apple Intelligence, the timing all these and from my perspective, I think that they still fall short of well short of what needs to happen for these products to really get people excited and tell their friends to buy it. I think they're going to get there. I'm an Apple shareholder, are Fermones,
and I think they're going to get there. But I think that the product needs not only more distribution over the next few quarters, but the feature set really needs to get pumped up.
Gene In China, we saw Apple report inventory issues there, but soon they're going to have some geopolitical ones, perhaps thanks to tariffs that Donald Trump is threatening against the world's second largest economy. How do you see Apple navigating that later this year if that happens.
Well, just quickly on the tariff side of it was the second to last question on the call last night, and Cook just said, we're monitoring the situation, so basically sidestepped the question. I think most investors believe that there's just no risk to the tariffs given what happened seven eight years ago. They're able to navigate around that. So this probably is more of a risk to Apple stock, just given I think that most investors are complacent on
what this potentially could mean. I think it's going to be fine. I think they're going to be able to navigate that. But I think there's something bigger going on in China. Potentially something bigger going on when you see Huawei their phone sales up fifteen percent of the December quarter, and Samsung and Apple, if you just for the channel
inventory down three four or five six percent. It begs a question, is it about lack of AI features or is there some sort of shift that Chinese consumers, some sort of bias movity towards more homegrown products. And this goes beyond Apple and Samsung, but maybe think about like how Tesla could be impacted, and the Chinese government does an amazing job of being able to kind of steer how public sentiment is around some of these products. And that's kind of in the back of my mind about
what me something else may be going on. This isn't just China economies week and a quarter in that negative in a way exactly.
I mean, with thirty seconds to go, give marks out of ten for this earning season. This week with Tesla their Meta two, I.
Think the fundamentals were six out of ten. It was it was okay, nothing, But I think what was most important as far as the a topic deep seek, the commentary about how they feel AI is going to proceed, and the spending around that.
It was a ten out of ten.
Gene Monster, a deep water asset management, more earnings, more chips. Let's look at Samsung chip maker, of course, on the downside by three tenths of percent. It's Pivotal Chip division's reported a smaller than expected profit. The company is fighting off arch rival s k Heinez so itself has been on the downside after a four day holiday in sat Over in South Korea, and some warriors post deep seek and what it means that chips. More broadly, mic Caro.
Intel posted better than expected fourth quarter results as the company saw a sales beat, partly from Asia customer orders ahead of possible tariffs from the US, But the company says first quarter sales are expected to fall short of expectations on weaker demand and tougher competition. We're joined now by Wedbush analyst Matt Bryson, who's been writing that the results were quote nothing unexpected. He maintains a neutral rating on the stock with a twenty dollars price target, and
he's with us now, Matt. We did hear a somewhat more realistic tone from the interim CEO about the prospects for maybe turning the company around in the short term. How did that land with you?
I think it's the right way to think about things in the sense that Intel Underpat Elsinger was consistently you know, being optimistic about where where things were going to end up, and at the end of the day that that ended up disappointing investors. So you start off with a more realistic bar and the hope is you're you're able to execute from there.
Realistic looks pretty painful and the shares do drop on the back of all of this. No quick fixes, but what can be done the interim when you get no news on a new CEO?
Yeah, so I think the big question is what does Intel do from here? So under underpat Intel's plan was we're going to make Intel grate again. So we're going to restore our our fabs to competit ofness. That's going to bolster the entire operation. So now the real question is when you bring in a new CEO, is that still the plan of record or rather, do you do what a m D did, try to split the business up, look more like a Broadcom or Marvel, be a chip
design house, spin the fab out. I think until we get an answer to that, it's going to be hard to kind of figure out what future looks like for Intel.
Matt, what is your timeline? Nonetheless for Intel to be able to close the gap with rivals in critical areas like server chips for all those data centers that we're starting to see built across the country.
Yeah, so there's two things to think about there. One is where are they with their fabs. They've they've told us that AT and A is going to ship second half of this year, So I think it's really important as to what those new chips look like. If the ships are competitive, that's a huge victory for Intel. Their struggles really started almost a decade ago when they missed their their their FAB upgrades. So getting that right, I
think would be would be a huge positive. But the next piece is what we're seeing is a whole lot more consumption of AI chips. So whether it's Nvidia or Broadcom or Marvel building for for some of the large data centers or a m D, their growth has come from the AI side. Intel there, they still really don't have a product. Gouty disappointed. They just told us that their next product, Fealton Shores, is going to be more
of a test product. So I think getting things right there it is important, But we don't have a whole lot of insight into what exactly that that roadmap is going to look like and how successful it's going to be.
Matt.
In thirty seconds, they're planning to spend twenty billion dollars on new plants. Will the administration be supporting this long term?
That is?
That is a great great question is SEMs like this administration goes from one place to another place. You never quite know where it's going to go. So hopefully for Intel sake they will. But I'm not going to guess what the Trump administration is going to do.
Matt Bryson, a wed Verse, Thanks so much for your time today. Welcome back to Blue Meg Technology. I'm Caroline Hide in New.
York and I'm Mike Shepard in San Francisco.
As we wrap up the week, let's look at these markets, because what a week has been. The Monday anxiety. What does deep seek our one model mean for the need for GPU, the need for AR infrastructure. The selloff was hard on the Monday, but we've actually managed to grind our a higher on the NASZAC over the last five days. On the Naszak one hundred, we are now up the tenth of a percent. Sure underperforms on an SMP level from a tech perspective versus the rest of the index,
but in the NASVAC we core it higher. But that release of deep seeks are one has perhaps for some venture capitalists do rethink their strategy around investing in AI startups, particularly on the hardware side of thing. But let's get
the VC take. Joining us now is Joshualf, co founder of lux Capital, which is an investor in Hugging Face and Angual industries in data bricks the name but a few Josh, and you actually have been more plowing into the application layer of generative AI rather than the models. But what do you make of this?
Well, I think there's two key takeaways from this past week and basically the entire trend of what's happening in AI. The first is on the capital side, and then the second is on the human capital side. On the capital side, I think that the people that have been investing in
the large foundation models are a little bit shaken. The idea of putting tens of billions of dollars into something, even if it was partially replicated by China, and then having a five or six million dollar overlay on top of that, I think has people shaken to their core, and rightly so. But the other piece of this is thinking about the open source models. Those are things like you mentioned, hugging face together compute, thinking about novel model
architectures like Sikana out of Japan. This is where we've been investing over the past two or three years. And then also thinking about the next wave, which is going to be really in AI for the three dimensional physical world, biology and robotics, and there I think you're going to see a lot of great new companies physical intelligence evolutionary scale. Those are people that are not going to have the same kind of competition on the large language model scale.
Josh, is there a third piece to this though, maybe geopolitics and the rivalry between the US and China. How does deep Seek fit into that You're invested in Andrail and Palanteer. Where do you see this as part of pantheon of issues between the US and China?
Mike, I think you nailed it. This is increasingly, you know, whether you think we are in Cold War two point zero or not. The TikTok piece over the past few year and now with President Trump coming in and maybe thwarting what I think is a grave national security threat is number one. Number two is deep Seek. With people saying my gosh, this is not just made in China with us things that are manufactured there like our iPhones, but actually created and invented there or even if it
is copied. I think the bigger thing is this human capital. We are at war for talent. We need a brain drain coming here. And let me give you three stats that shocked me to my core and viewers are listening. Fifty percent of undergraduates in AI around the world are coming from China. They are producing fifty percent of the undergraduate researchers in AI. Number two, thirty eight percent of American researchers are from China. Thirty seven percent are Native Americans.
So think about that, we're outnumbered in our own country. Now. We want to get those people here and keep them here, but if they're going back to Chinese companies, it's.
A really bad thing.
And Number three, the US used to be about twenty three to twenty five percent of international students that we're coming here to our country. Today it's only about fifteen percent. So it underscores the need that we are in competition not just for the hardware and the physical capital, not just for the financial capital, but for the human capital. And we need to do something. I think this is a real big wake up call.
You should know you're on trustee of the SANA fans to think a look about Josh. I want to go back, though, to something you've been posting a lot on the national security front. I think of what you put on X and you're talking about Chinese state backed companies and not companies. They're arms of the government. They're designed to erode US competitiveness. And you talk about TikTok, Dji and I in the Sky, deep Sea Huawei. I'm interested, though, does it matter if
China continues to fast follow. They need the compute power, the inference to actually get all of this innovation into people's hands. If you rate what just happened this week, is this really a concern or is this like us even more determination to remain ahead of the game and have to continue to invest in the overall AI infrastructure.
Well, as you said, very well right now, if it is a wake of call and people are now saying we need to compete, we need to be more aggressive. We cannot be complacent or lazy, than it's a win for America. We do not want the rest of the world relying on Chinese models which will approach inn as in totive truth but never fully get there. Try searching for Wigers or Jannaman Square Taiwan. You're not going to
get truth. You're going to get CCP censorship. We don't want the world or the world's companies developing on those models. To the point about hardware infrastructure, you also now in that we are seeing a shift from training where you need one hundred thousand clusters of h one hundred chips and video chips to inference. And there's going to be a big fight on inference on two fronts. And I'll give you a sort of preview what I think is
going to be the next big wave here. If you can do inference on device, I suspect about thirty to fifty percent of your inference, your prompts, your queries will be on your chats, your cash, emails, your photos, your health data. You don't need to go to the cloud for that. And so the memory players and other chip makers are going to become dominant, and I think that the attention and the capital allocation is going to shift
towards them. Maybe you're doing fifty to seventy percent of your inference in the cloud, and you're going to perplexity your chat GPT with search or Google Gemini as you today would for Google for basic search. But that ecosystem is going to change. The other big thing we're going to see the death of ap high. AI going to
bring in the death of APIs. And what I mean by that is all of the backwards backchannel software negotiation that happens between all of our applications today are going to be usurped by AI basically just acting like a user and navigating on your phone. And there's going to be big fights between Meta and Apple and some of the app layer people in that. So those are two big things to watch.
The agent fight. You of course a part of the Hill and Valley Forum group. It's a private, bipartisan community of lawmakers and business people about the national security focus of US versus China. And I just want to take your thought on whether the administration current one gets this, because we've got Jenson One meeting Trump today.
You know, I think that they do.
I think there's a lot of brilliant people that have gone into this administration. When you think about Jacob Hilbert, you think about Scott Besson, these are both friends and people that I think are extraordinary service and highly competent. They feel very strongly about this issue. Now has done a good job of flattering Trump because they know that
flattery works to influence. I hope that the people around him recognized, particularly on the TikTok issue, how nefarious and dangerous, insidious TikTok is for the American public and the things that we believe for the rest of the technological competitiveness. I think it is great to see things like Hill and Valley where you have cutting edge technologists, venture capitalists
like us, and policymakers that are all working together. People used to warn about the military industrial complex, and rightly so back in the day we went from fifty primes to five. Now you're seeing Anderill and Sale, Drone and Hadrian and Varda, these neo primes, these new emergent companies getting the space and the speed pass to compete. I think that is absolutely critical against the civil military fusion doctrine.
Where As I said in my tweetstorm there that every company is not an independent Chinese company, it is part of the government. They have to report everything that they do and all the information to the Chinese Communist Party into Shujipin.
Josh, you stress the importance of research as fundamental to developing AI in this country. Do you have any concerns that the new administration may be taking a chillier or more hostile approach to science. You're a scientist, to yourself, what is your view? I do.
I feel very deeply that we should be funding basic science. If we knew the answer to questions, we would just go and pursue them. But you need fundamental research, you need funding. Can those things operate better? Yes, But the answer is not on the administrative side trying to cut things. The answer is giving more grants and more money, not less,
to younger people, to younger researchers. And I know that sounds crazy, but most of the great breakthroughs happen from that crazy cocktail, that potent combination of ambition and naivete and people that question why wouldn't.
We try that?
Why not try? Versus the old guard that often is set in their ways and sclerotic and solidified, and they are basically always saying why try that? So instead give more money to young people. But we should absolutely, as we're seeing from China and their competitive rise, We should absolutely be giving more federal funding to basic science and undirected research to create the spontaneous breakthroughs that can change the world. We want the GLP ones invented here. We
want the GPUs invented here. TSMC itself should have been invented here instead of in Taiwan. So we want all these break great breakthroughs, whether they're in chemistry, physics, material science. We dominated in software for the past two decades and for the past generation. We really want to dominate in the physical sciences, robots, space rocketry. Thank gosh for SpaceX,
even though I'm really critical of Elon. An amazing company and an amazing American company, So we need more of that no less.
Josh Wolf, co founder and managing partner at Lux Capital, thank you for joining us. Coming up, we speak with Hewlett Packard Enterprise CEO Antonio nari As the US sus to block the company's acquisition of Juniper Networks. This is Bloomberg technol.
Let's take a quick look at shares of HPE and Juniper Networks. The DOJ yesterday announcing it's suing to stop the fourteen billion dollar acquisition of Juniper Networks arguing the merger would harm competition in the market for enterprise wireless equipment. We're rallying off the back of some falls yesterday joining us now Antonio nairy hpe CEO, and you have fought back saying the DOJ is ignoring key competitors here. Why are they doing that?
Welcome on it, Caroline, thank you for having me. We believe the thesis from the euj's flawed because they consider their market very narrowly in the wireless line, only three competitors, when the reality there are eight.
You know.
Even industry analysts came out yesterday, you know, stating that that's the case. So as we go in through the process, we understood that that's going to be a challenge, but ultimately we believe there is no case here. This is
pro competitive. We will bring it too complementary technologies together, which also will enable us to compete outside the United States in the context of the previous competition we have with Josh against the Chinese vendors, in the context of national security, particularly in cloud and the service provider space. So that's why we're going to fight this vigorously, and we believe we're going to prevail. Through the process.
Do your lawyers think you will prevail? It's interesting, of course other regulators sign this off, so it must have been a surprise.
Yeah, it was a surprise because fourteen of these sixteen jurisdictions around the globe approved the deal pretty much by September last year, which was very very quick. You know, since the announcement was January nine, twenty twenty fourth, and that included in the UK, in the European Union. They
never asked for a second request. Customer testimony was always in favor of the transaction, and that's why, you know, since September we were pretty much substantially complete with the DOJ process, but obviously through the elections and the like, we took us to today and then you know, when I meet with it DOJ on Tuesday, nothing new came out of that conversation, and therefore, you know, we are surprised and disappointed, but ultimately we believe this is pro
competitive and we believe this is the interested on the national security in alignment with the current administration agenda. And that's why from a puran the trust perspective, we believe we have a case here for us.
And tell you, did you try in the course of those conversations with the Justice Department ahead of the losses being filed, to negotiate something or perhaps offer concessions. What might those have been and what did DOJ ask you for?
No, it was not necessary. In the DOJ never asked for any concessions whatsoever. They ask us through the process several extensions, but we never discuss remediation or any concessions as a part of the approval.
Are you a little surprised them by the current administration actually following through with this case? You pointed to its posture when it comes to competitiveness in the US and trying to foster investment. How does this square with what the President, for instance, would be talking about when it comes to business.
Well, Mike, we don't have yet the permanent leaders, neither of the DOJ nor at the Antitrust Division, so we're looking forward to have them on board. We hope that they will take a second look at the case and realize that this transaction is core tech, no big tech. Remember that both Juniper Networks and HP powers a lot of the United States infrastructure in the Department of Defense,
Department of Energy, and many other administrations. Across the government, and so we're hopeful that when the new administration is in charge, they're going to look at this and take a second look and realize this is aligned perfectly with the agenda that the President has America first, building the United States. Let's remind yourself a lot of the equipment that HP produces today for the United State governments building the United States and also outside the United States to
compete with China. The reason why the market looks the way it looks in the United States, which is eight vendors and this is data from the industry analysts, which we provided obviously tremendous amount of documentation, is because worldwet is not allowed to play in the United States, but when you go outside the United States, they're actually nine members.
It does feel like China continues to be the bogey man that a lot of companies are going to turn on to try and get things through. And ultimately, I put to you that James McHenry, who's the acting Attorneys General at the moment in the US, probably want to pursue this and as he got some sort of sign off from the new administration, a more pro business administration. So do you think really this is going to land any differently with Pamboni.
We don't know, Karen, I will not speak related to that. Excuse me for my voice. I will not speak related in that. You know, we have dealt with the Department of Energy Anti Trust Division. We were very collaborative, constructive throughout the process, and we hope that the new administration one is in charge, they're going to look at this and they will bring us back at the table. Otherwise, you know, we will pursue the actions through the court.
They were the ones decided to file the lawsuit to block the transaction, and we believe we have the right to defend ourselves there and we believe that we can prevail through the just the anti trust aspect of the and then in addition to that, we hope that also the national security aspect of this article see.
That as well.
HPE CEO Antonio Neri, thank you. Here's the story. We've got to get to the future of H one B visas in America's tech industry under the new administration. This is Trump's birthright citizenship order, sparks fear in H one B parents. Let's bring in HIBBA and from the ericson immigration group HIBBA. The rhetoric from the White House and elsewhere in the administration about immigration has to be very troubling for a lot of your clients to digest what are you hearing from them.
So what we're hearing is basically concerns resulting from some of the impacts of the Birthright Citizenship Executive Order, namely that, for example, if an individual who's here on an H one B visa has a baby in the United States, according to this executive order, that baby is no longer considered a US citizen. So if that child is not a US citizen at birth, and if that child is not a citizen of the parents' home country at birth, then what this executive order does is essentially create a
category of stateless children. And that is very, very concerning for a lot of the visa holders in the United States, inclusive of the age one B visa. And so a lot of the questions that we're getting stem from those concerns, because a lot of these restrictionist policies are creating an environment that is seemingly hostile towards immigrants.
So if the tech.
Industry is about talent attraction and employee incentives, this really isn't going.
To help hiper I'm going to make this personal. I came here with already one child, and I gave birth to one in the United States and automatically got us citizenship. I was on a temporary visa at the time. I wasn't worried about coming here to have an American baby, and it wasn't hard for me to get her case citizenship afterwards. So who is it that is really concerned here, because I imagine it's not developed nation to develop nation.
Who of your clients when he thinks that it's integral to have a child that is with birthright citizenship.
So the thing is that there are a lot of countries around the world where if the parents have a child born abroad, that child is not going to automatically get citizenship from the home country until the parents take some sort of affirmative steps to apply.
For that city. Night had to do that too, which wasn't add well.
So essentially, you have to look at it in the totality of the circumstances. We can't look at it in
a vacuum. If the United States is going to have policies that are seemingly hostile towards immigrants, or making it harder for immigrants to establish their families and their lives in the United States than irrespective of whether the citizenship of the home country is easy for the parent to obtain for their child, that visa holder in the United States is going to think twice about whether or not they want to settle in the United States long term.
So then if you take a look at the companies that actually employ those individuals, those companies are going to find it more difficult to retain the top talent that they rely on in order for them to be competitive on a global stage. So what I'm hopeful for is that whatever policy comes out of this administration continues to be very welcoming and creates that culture welcome irrespective of whether the individuals have to deal with certain citizenship issues
for their child or not. But we have to understand that birthright citizenship is enshrined in our constitution. So one of the key issues here is the fact that there's a presidential action that is seeking to overturn something in the Constitution outside the proper process, and that's also been concerning to a lot of individuals as well.
Hibba Trump has yet to alter the H one B program itself. Let's home in there for a moment. Are you anticipating any changes from the administration or Congress to it.
I don't know if we're necessarily going to see something that directly impacts the he B program. However, there are a lot of executive orders that have come out since the inauguration that indirectly impact legal immigration in the United States.
For example, this Birthright Citizenship Executive Order. So, for example, if this executive order ends up being successful, and if children that are born in the United States are not automatically US citizens, then what that implies is that there's an additional number of individuals that are going to get included in the overall green card Q. Now, the backlogs for obtaining a green card in the United States are they're already very, very lengthy and long for a lot
of individuals, So this is only going to increase their wait times. So again, if you look at the totality of the circumstances, this is getting a little bit of like a discouraging environment for individuals that are seeking to live in the United States.
Well said, I can tell you it took a long time to get a green card Heave and the really great to have you on the show from ericson Immigration Group. Now that does it for this edition of Bloomberg Technology, Mike, do not forget to check out our podcast provided on the terminal, as well as online on Apple, Spotify, and iHeart This is Bloomberg.