Bloomberg TechBloomberg's Caroline Hyde and Jackie Davalos discuss China's retaliatory tariffs, including a probe into Alphabet. And, a look at Palantir as the stock surges to a new record on "untamed growth" for AI. Plus, Spotify posts its first ever annual profit.
From the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed.
Lovelow live from New York Home Caroline Hyde.
And I'm Jackiet Devowls from San Francisco. This is Bloomberg Technology coming up.
China retaliates with its own tariffs on the United States, including a probean to Google plus Pallanteer sauce to a new recorder's earning show. Untamed growth for its AI software and Spotify shares also surged to a record offer its first annual profit. And we start there with a markets check amid all the record highs in earnings. Let's get to it with the NAZAC currently making up for yesterday's sell off. Jackie, we're currently up more than a percentage point at the moment, and in terms of points contributed, it's all about Palenteer. Move on and have a look at what the fundamentals and certain businesses are doing to this index. Valenteer up twenty six percent, a new record high. This as we see untamed organic growth. When it comes to AI. They win on commercial, they win on government. We'll get to it later in the show. Spotify also add a new record up almost ten percent as they add to their growing monthly active users, and also the first profit ever in terms of an annual profit. They're going to continue that out for that up to two and a half percent. Look, they're coming with their earnings after the bell all lies on thirteen percent increase in revenue.
Will get to the earnings in a bit.
But this is also an anti trust investigation story from China.
This is we see China.
Retaliate to the tariff potential coming from the United States. We anticipate a call between Shujimping and Trunk coming soon. But let's delve into the tech implications. Bloembags Mike Shepherd is with us in Washington, and look from a search perspective, Google's not there in China, but Android.
Is, Android is, and Caro. You have to think of this also in terms of symbolism as well. Shuchimping is trying to send a signal to Washington that hey, I can retaliate too and try to make it hurt by targeting individual companies. So by going after Google with this anti trust probe, Look, the search is not really a factor in China, where it really hasn't been operating since twenty ten, but the company does have some advertising, sales and engineering work done there. It does have three offices in three different Chinese cities, so it's not a zero factor, but it is a signal that other US entities, perhaps Apple and perhaps Intel. We saw the Financial Times reporting that officials in Beijing were weighing whether to conduct a fuller probe of Intel as well. And also, as you and I have talked about before, there is the Nvidia anti trust probe being conducted by officials in Beijing, and this is over that long ago acquisition by Nvidia of Melanoch. So they are trying to send a signal with this Google anti trust probe as much as anything else.
Mike, as you mentioned, there's also an Nvidio probe, So this isn't the first time that Chi Jimpang is using a probe like this to retaliate in the past, have you seen it be an effective negotiating tool.
Well, we're going to.
Find out now whether it works in real time with Donald Trump, because under the Biden administration it was one equation, but under Donald Trump it's a very different one and he may not be looking at this as such a dangerous signal. Even after having met with Jensen Wang last week, it may not be as big a concern. Really, what we're looking for is the broader negotiation that is going to happen in April. This is really just sort of the opening round in the conversation between China and the US on trade. The President has ordered US President has ordered a review of the Phase one trade agreement that he forged at the end of his first term, and we're going to hear more about that in April. So this is just sort of the warm up act to a bigger conversation. And remember Donald Trump has talked about imposing tariffs of up to sixty percent additional tariffs of up to sixty percent on Chinese goods, and that would really hurt Beijing, which is focusing on its exports to the rest of the world as a way of reviving in domestic economy.
Bloomberg's Mike Shephard, thank you, and as Alpha that faces a Chinese probe, the company is set to report results today after the closing bell. For what we can expect, Bloomberg's Ryan les Stelica joins us Now. Ryan when it comes to Google, there's cloud, search and artificial intelligence as of late, what's tep of mind for investors going into this report?
Good afternoon.
I would say that probably the cloud business is probably what people are most curious about right now. We did get Microsoft results last week. There were sort of a mixed bag. They were growing a little bit slower than expected, but that's partially due to some supply constraints. So, you know, cloud has become increasingly important to alphabet and I think people are curious to see what growth looks like there. We also got Meta results last week which painted a pretty good picture of the market for online advertising, So it seems kind of safe to assume that a Google search will be at least pretty strong as well.
Any response to deep seat mentioned, do you think.
Ron, I'm sure they'll address it. It's a sort of an interesting position with respected deep seek. If you know, they do find a way to make their own AI model more efficient, more cost effective, that's probably going to be great for the stock. It's probably going to be, you know, something that's cheered on Wall Street. But it seems like so far, while it did see a little bit of volatility last week when the you know, the big sell off happened and impacted everyone in tech. It's really come back strongly since then.
It's trading at a record right now.
It's been able to brush off a lot of issues that you think would take down a stock like this, not only the regulatory and antirut trust stuff out of China, but also here in the United States.
I like that you note that shares are at a record high round less selica. We thank you. You got MD after the bell as well. There's a lot to get to from more market perspective. Let's bring in Fiona Scottish, a senior analysta City Index Financial Markets.
Let's just stick with earnings.
For a moment, because've got record high as a bound on the back of certain earnings today, and we look towards Alphabet and AMD. What are you looking to in terms of generative AI sort being a winning formula for these companies or not.
I'm continue to way I think we have.
A technical issue there. We're just going to bring her volumes up a little bit more for you. So we spend just a moment just anticipating what Fiona is going to be delving into in terms of generative AI. The focus on Alphabet whether or not AMD can steal any of the market share from in video in terms of its offering to data centers and servers, and Jackie, I think we can also be anticipating what all of the trade tariffs and geopolitical anxiety is currently having on the markets. Let's go back to Fiona, now, I think we fix your technical issues, just talk about earnings and fundamentals first.
Yes, that's right.
You know, I think AI is still going to be very much and it is still very much are focus as far as earnings are concerned. You know, we know that the investors are still looking to see whether these huge investments that we've seen are going to be bringing returns, are going to be bringing in new revenue streams and stronger revenue streams, and that I think is what's sort of helping to keep these stocks at these record levels. There is still a lot of optimism surrounding what the AI, what AI can do for these stocks, and you know the prospect of potentially those costs coming down in the future. Again, I think that's a positive as far as users of AI can be concerned.
Fiona, I'm curious if there's a divergence between some of the software names and hardware names, especially as we're seeing geopolitical tensions play out in the forum of tariffs, that could take a bigger hit to chip makers for example.
Yes, you know, it's a really good point, and we have been noticing that, and I think that's something that's going to be very much forefront as we get through these earnings as well. Is you know, what is the outlook as far as some of those chip stocks are concerned. What is the prospect of exports and tariffs being placed on them, export limitations which could make the outlook for those chip socks a little bit more complicated them. Whereas the sort of more software firms, I think they have the potential to have a little bit more freedom as far as their outlook is concerned, and potentially could benefit from the outlook even as we see trade tariff's discussions in the market.
One of the things I'm curious about is in this new administration, many think that it's going to be pretty friendly when it comes to the Federal Trade Commission. What do you think that bodes for technology?
Yeah, you know, if we do have a sense that they're sort of reduced regulation, we know that that could be really beneficial for technology, and I think it's a really interesting idea, especially when we're considering, you know, what regulation there might have been with regards to big tech, what regulation they could be with regards to this idea of AI as well. I think still very much an open subject of where regulation may have been, but the fact that we could be looking at a future at least for the next few years of decreased regulation is definitely a positive for many stocks in the tech area, but also could be outside of the tech area as well.
What are the.
Names fear and that you've been fielding the most cause on.
Oh, that's a good one, you know. I think obviously Navidia and Vidia has been hugely in focus because of those levels of volatility that we've had. We've also seen Tesla has always been very popular among our clients as well, But heading towards this week, Amazon and Alphabet are the names that have been up there with our clients. You know, we do see this big focus on the Magnificent seven and their ability to be able to sort of continue impressing the market with their numbers.
And how do you think the investor base has come out in terms of yes, please spend all costs.
This is a rush, this is a war.
Or on the other side, hold on do we need this sort of level of data center investment right now?
Where are they falling?
Is to that sort of ultimate dichotomy we see faced in the market.
Yeah, I think you know that when we did see that sort of release last week from deep Seek, that did just sort of raise questions of disruption and raise those questions over the amount of spending which had been lingering anyway. But I think at the moment so far, and what we've seen from earning seasons so far, from the calls that we've listened to, it does seem to be that sense that AKA for now, this still seems like an idea that spending in AI, investing in AI is still the way to go. There's still plenty of opportunity out there. I still think we're very much at the cusp of understanding what this AI revolution could mean for these stock So I think at the moment we're just still on that side. I think what the concern would be is actually, when we get a little bit further down the line and we're not seeing a return on those investments, that's when we're going to start potentially to see this unraveling, but up to now that hasn't been the case.
Fear Now I'm curious, but now that you mentioned kind of perhaps companies getting a bit more leeway, especially as you have President tramp really amping up this idea of the EI race national competitiveness. How long do you think investors will give companies to see whether those investments are actually panning out.
Yeah, that's a really good question. Yeah, because I think this the whole sort of what we've seen over the last couple of weeks, the last week particular with this deep Seek unveiling is sort of that question of innovation, is that question of you know what's next? How far can this go? And so you know, investors are curious, they are optimistic, but they're not going to have an everlasting patients. Obviously we've seen from Matter, I mean, they were a good example to use from last week's earnings, where we've seen sort of really encouraging outlook and numbers, and then obviously we've seen Microsoft wasn't so well received. So there is sort of this sense that the investors do want to see some optimism into the future. But I do think that as we head towards the middle and the end of twenty twenty five, and I think that's when we're going to really need to start to see these numbers coming through into stronger revenue streams still and profit margins.
The honest and kard a senior analyst of City Index Financial Markets, thank you.
Coming up.
Shares of Spotify and Puenteer surge to new records on strong earnings.
More on that. Next, this is Bloomberg.
Shares of Spotify jumping to a new record as the music streaming company posted another quolta better than expect to subswabic growth. And so first I have an annual profit from all openubg's actually common joins us now and more than a billion delivered in terms of euros that managed to control called stag grow.
Yes, last year was really a story of unfortunately lots of layoffs at Spotify. They really cut back on their podcast spending. And then this year, so I guess actually twenty twenty four, that was twenty twenty three, twenty twenty four was the year of new products, really doubling down on these video creators. They say now they're going to be focusing more on the music business. So they've they've definitely turned a corner.
Ashley. I'm a huge fan of audio books.
And historically this has kind of been a drag on margins for Spotify. What did the companies say about its growth prospects in this particular segment.
So really, podcasts were what investors were really worried about when it came to their margins. So they introduced audiobooks back in twenty twenty three, and so far, I mean, the company is basically positioning it as they have this profit. Now they had their full year of profit, they're able to reinvest in new verticals like audiobooks, like these video creators. They did say on their earnings call today that there's going to be a little bit of variability when it comes to their gross margin moving forward. But again I think they're sort of couching it as well. We showed you guys we could do really well. We do need to start innovating again and really putting out new products.
Bloomberg's Ashley Carmen, thank you. Another earning story, Palenteer stock surging to a record after it posted a full year revenue forecast that exceeded analyst estimates, driven by a quote untamed AI Demand CEO Alex Karp said this on yesterday's earnings call.
We are at the way beginning of our trajectory. We are at the way beginning of revolution, and we plan to be a cornerstone if not the cornerstone company and driving this revolution in the US over the next three to five years.
For more impalentail Gil I'm managing partner at DA Davidson joins us now. He has a neutral rating on the stock with a price target of one hundred and five dollars gil. Alex Karp called this a revolution. He made clear that the company is poised to benefit as global conflict rises, especially with China. But they also touted its commercial business on its call and in its letter. What do you make of that segment and are you confident in its growth prospects?
Yeah, the commercial segment is doing phenomenally well because Palenteer is addressing the need in the market. There's a deep need in the market for implementing AI solutions that can add insight and decision making support. And Palenteer has a combination of an existing set of products that they've developed over the years, as well as a very strong professional services group. That can help companies implement AI solutions quickly. They're uniquely positioned to do that, and they're really riding the AI wave right now.
So does that vindicate a price to earnings ratio of four a price versus future earnings that is currently training at almost two hundred times. This is a phenomenal valuation.
Yes, it is. It's orders of magnitude higher than comparable companies. But the reality is that right now, there is no comparable company. Polunteer is the only company at this size that is not only going to grow more than thirty percent, it's doing so as it accelerates growth. I mean, the rest of the software complex it has seen decelerating growth, and very few companies at this size can even approach thirty percent.
Let's just talk about that growth though, because if you go back to twenty twenty two and we heard from William Blair, analyst talking about this, he made a commitment to bringing in about four and a half billion in terms of revenue, So actually he's undershot that. Are you worried about the undershooting of a three year target.
Here right now? Because again, on the commercial side, they have a tremendous amount of momentum with enterprise customers that want AI solutions quickly going to Poundteer to do that. And then on the government side, they're having great success with Department of Defense, which is likely to continue under this administration given the focus on digital, given the focus the proximity of people Impounteer to this administration. And then they also have really big wins in the UK National Health Services that drove a lot of the growth this quarter as well. So they're hitting on all cylinders right now. They have a ramp to continue to grow at these rates even if they didn't reach some of those ambitious goals they've set in the past.
Potentially one of those ramps could be Elon Musk's Department of Government Efficiency, which came up on last night's call. I'm curious if that is factoring into how you're thinking about the stock.
It does, because the government is running a lot of outdated software that was developed sometimes in the eighties or nineties, with code that can only be maintained by people that are retiring. There's a huge need to update all the software code in the government and again especially in units of the Department of Defense. And this is what Palndteer has been focused on for more than twenty years. So with a little bit more of a sense of urgency from the government, pound Tier is very well positioned to get a lot more of that business, again extending the ramp in the government sector, where where previously maybe they were still fighting for turf. Now they have a much straight line, much more straight line towards getting that progress.
But international growth, gil that's going to be hit if we do see geopolitical tensions and they are seeming to lose that sort of growth trajectory in an international sales perspective.
That's right outside of the US and the UK, they're having challenges in Europe, and part of it is the political identity. This company is a mission driven company. They state very clearly that they're there to defend Western civilization and especially the United States and putting America first, which again fits very well with this administration in the US, but in Europe that rubs some people the wrong way. They don't necessarily see that mission as a reason to buy software, and that's where polunteers not doing as well. Now. There are some political landscape shifts in Europe and we'll see how those play out.
And getting real time messages from hedge Fund Telemetry, for example, really questioning the market capitalization here, Gil, you talked about why it's vindicated, it's unique offering, but just tell us about your price point, because it's actually where the price is currently for the stock. Would you upgrade it?
We prefer other companies that have similar growth trajectories and similar ramps. Specifically, in this case, Snowflake and Data Dog will also ride the AI wave in their own way, and they're trading at a fraction of the multiple. So if palteers trading at seventy times revenue and one hundred and seventy times cash flow, Snowflake and Data Dog are trading more like fifteen times revenue and fifty times cash flow, which are much more palatable valuations, and that's why those are our by ratings in this sector.
Iilllaria, It's great to catch up with you. Thank you, Da Davison. It's time now for talking tech. First up salesforce cutting jobs at its latest fiscal year gets underway, according to a source who says in fat more than a thousand roles will be affected. This comes even as the company is simultaneously hiring workers to sell new AI products. Plus Grab check out the shares jumping on the back of the news that it is weighing a takeover of rival Goat at evaluation more than seven billion dollars. The firms are the two biggest white hailing providers in Southeast Asia and have held on and off talks for years, and shares of German Chipmaker and Finian also surging, this time the most in nine months, after the company's forecast revenue beat analyst expectations. A bright spot in an industry that's been grappling with long standing slump, a situation which would not be held though by tariffs, says the company CFO.
A major escalation of the tariffs is not included in our guidance because we still are not giving up in advocating for free trade. We do not see that as positive for the industry, so an escalation of tariffs and counter tariffs would be negative.
Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York and.
I'm Jackie Devalas in San Francisco.
Quick check on these markets, Jackie, because for making up for yesterday's sell off, we're up more than one point three percent on the NASDAK Big points contribution coming from the likes of Nvidia, from Alphabet that has numbers after the bell, but also from Pallenteer that had its numbers off the bell yesterday.
Boy, we are riding high. We are new record high.
Let's moving on to Palenteer that currently jumps twenty six percent. The valuation is absolutely extraordinarily on this software stop as we're hearing from key Da Davison analysts saying, look, look, ultimately, this is a unique story in software, and they continue to outperform. We've got government contracts, we've got commercial contracts. It's all about the US in this age of geopolitical risk. But Jackie, we're looking at plenty more.
Elon Musk's government takeover has been swift and chaotic. Bloomberg's Kirt Wagner rates in today's Tech news letter that just in two short weeks, Musk has become a bit of a human wrecking ball in Washington.
He joins us now for more, Kurt, you rate that this isn't a movie that we haven't seen before. Could you walk us through?
Perhaps the difference is between how Elon Musk is running Doze right now versus his previous takeover of Twitter.
Yeah, Well, the number of similarities is going to be a lot longer, I think than the number of differences. I think anybody familiar with that Twitter takeover is seeing a very familiar playbook play out right here. Right, it's you know, showing up cutting off access for people offering buyouts with literally the same language in the email that he's given people kind of bullying his way into these systems, right, and anybody who tries to get in his way is you know, suddenly showing up on leave.
And in Twitter's case, it was it was being fired.
And so I think the biggest difference here, and what I wanted to really hammer home in the in this morning's Tech newsletter, is that, you know, with Twitter, he was doing this with a privately held company that he bought with private money.
Right, this is the US government.
This is the ramifications of what he's doing to cut the government is going to affect all of us as citizens here.
And it doesn't necessarily strike me.
As well that the the tactics are the same.
The you know, stakes are much higher here, I think.
They are, but some people like it.
Kurt look Palenteer, the CTO, was on the call saying that Palenti's real competition is a lack of accountability, and in fact, they think Dog is going to bring meritocracy, It's going to bring transparency to government. So even though it is this sort of wrecking ball, could it have positive impacts for companies here?
Yeah?
So, I think in much the same way you know he succeeded in cutting costs at Twitter, I have no doubt that he will cut costs at the US government and find things that quite frankly, all of us would be scratching our head saying, wait, we were paying for what we were spending X number of millions on?
What?
Right?
I have no doubt that those things exist and that they will hopefully be uncovered. But I also think that there are probably a lot more thoughtful ways to go about doing this. I think the thing we know from Elon, over covering him for years and watching him with all his companies as he tends to you know, not worry about the collateral damage, right, he just simply says, the goal is to cut costs, we will do whatever it takes to get there, and you know everything else that happens as a side effect, well, those side effects, I think at a at a national scale could just be really significant, and so for me, I would prefer to see someone who's you know, maybe moving a little slower, you know, to try and make sure that we don't have any of these downstream effects that we've seen at some of his companies when he moves this quickly.
Cole Wagner, thanks so much, and do check out, of course, the Tech in Depth newsletter from Bloomberg's journalists around the world. You can subscribe on bloombg dot com slash newsletters. But let's keep this conversation going when it comes to do Jennifer Perlker's with our senior fellow at the Nishkin and Center and former President Mark Balmer's deputy chief technology officer. And interestingly, you just recently co authored a report providing perhaps a roadmap for improving government performance structural cultural challenges. But do in any way see the positives of this doze drive, Jennifer.
I think I hoped to see positives.
I've been a big advocate for real significant renovation of government for a long time, and as Kurt said, I've been hoping that would move faster. I think unfortunately what we're seeing is moving far too fast. And not with the right intent. So if you want to renovate government, that's sort of like pulling it back down to the studs. What we're seeing now is really pulling up the core foundations of our government, the principles on which it was established, and that is not going to increase state capacity.
Which is what our report is about.
State capacity is just the ability of government to achieve its policy goals. We have incredibly important challenges that we need to face as a government. We need a stronger state, not a destroyed state.
Jennifer, you've talked about how government and perhaps some political parties more than others, have focused too much on process, not outcomes. How in a perfect world could you see perhaps those playing a role in advancing technology really helping government perform better.
We certainly do need more focus on outcomes over process.
We don't need no process.
And what's happening right now is not just looking deeply at what processes could be simplified, but actually not respecting the law. And what I had hoped Doge would do is go in and say, Okay, these things can be cleaned up. Oh and by the way, some of these laws are holding us back. Let's go to Congress and have them fixed so that we can operate in a more streamlined and outcomes oriented way. Instead, they're just sort of rolling roughshot over the law, which is again through the principle of our government, and very dangerous.
I mean, if you were to give lawmakers perhaps some advice on how to clean some of this up, how to regain some of the trusting credibility that perhaps DOGE can bring, what advice would you bring them?
Well, we have four major pillars that we think need to happen, and they should have been regardless of DOGE. I think we're in a very chaotic moment, but there will be moments when we can look back at this agenda. We essentially say four things. If you want a government that can do what it says it's going to do, you need to be able to hire the right people and fire the wrong one. You need to reduce the procedural bloat. You need to invest in digital and data infrastructure in smart ways, not just cutting people off but actually building what does work. And lastly, we need to close the loop, the feedback loop between policymakers and the outcomes that actually come from our laws and policies. Right now, we're just sort of putting things out there and hoping that we get what we want without doing what the private sector does, which is really say, is this working as we're going? Can we check in? Can lawmakers and others sort of work with the executive branch in new ways to say, let's tweak this as it goes along so that we get the outcomes that are laws and policies intend. I still think all of these things can be done, but it's very hard to do it in the current environment chaos and fear.
Chaos fere but also speed, and that's all from what the private sector brings. And as you say, a lot of your offerings and prioritization here feel like very private sector orientation of of prioritizing talent, of streamlining processes. Realistically, if they didn't, as you quote Ron Roshod, if they went along with.
Congress, how much longer would that take.
Are the incentives of politicians aligned with ultimately remaking with efficiency?
I think the incentives of politicians come from the people, and that the people need to ask their politicians to be more focused on the how of government and not just the what whatever you want government to do, it has to actually be able to do it. And I think if the people say, look, this matters how we are structured to achieve our policy goals, they will ultimately be responsive to that. Right now, again, it's very hard because there's so much chaos going on, but I do think we'll get to a place where that conversation can happen. Yes, it would be a little bit slower, and yes I have called for things to move faster, but the core foundations of our government are good and we should be protecting them right now as well.
Is Elon is cool.
Department of Government efficiency the right albitter of this if they do it in the right way.
Elon, I think, has shown that he's not going to do it in a way that's consistent with the core values of our government. Unfortunately, we still need it done, but we need it done probably first at the state and local level, so that we can show how to do it right and then bring it back to the federal government and do it the way that it needs to be done for the American people.
Jennifer polkas senior Fellow at the Nis Canon Center.
We thank you now.
Coming up, Edith Young from Race Capital joins us next on the state of crypto under the Trump administration.
This is Bloomberg. Senator Bill.
Senator Bill Haggerty will introduce legislation today to create a framework for stable coins. This is the latest push of my Republicans to create a crypto friendly guideline for the industry. That's a priority for President Trump. Let's bring in Edith Young for today's VC Spotlight, General partner at Race Capital in early stage Silicon Valley VC fund investing in all things infrastructure. Edith, why don't you walk us through what this new administration means for the crypto landscape and how you're thinking about potential opportunities going forward.
Yeah.
So, one of my predictions for twenty twenty five is for President Trump to create the Bitcoin Reserve.
And this is only his third.
Week in office, and I don't have all the tea leaves yet, but I just spent some time digging into how the US government holds our other reserved assept today. Let's take Goal as an example, is actually managed by the Treasure Department, and US actually hold over eighty eighty one hundred tons of Goal reserve today and is managed by the Treasury Department.
And what's really interesting is that.
Particular is being oversight by the Inspector General of Treasure Department, and this role is currently vacant.
No one is in this world today.
And what's also really interesting is that that role is supposed to the custody security audit and set all the policy around goal. So for us, as you us to think about should we have.
A bitcoin reserve?
The key thing I think for the administration and of course the exacts are cryptosard to think about is why do we want a reserve? And historically it's really for to hetch against the inflation at the same time, and of course we already US already have over two hundred thousand of bitcoin in custody today. But the key thing is really is the government do need to diversify but bitcoin is fluctually quite a bit. Is this something that we really want to do? Ns this afternoon we'll find out more.
You, of course a well known for your backing of Solana, and so perhaps I dare say slight talking of books, to say there should be digital asset reserve rather than perhaps just a bitcoin reserve, plain and simple. But I'm interested as to what the stable coin adoption or indeed clarity can bring to actual US using crypto more easily with real tangible benefits that isn't just about asset purchases.
Yeah.
Absolutely, I'm actually very bullish on stable coin in general. I think in twenty twenty four over two hundred billion of stable market cap, which is over fifty percent increas year over year. And particularly what I'm really interested in is the whole concept of open PAYFI infrastructure, and I think is really really aligned with President Trump the administration with the executive Order, which is all about strengthening American leadership in digital finance. So think about it. The more the US dominated a stable coin being adopted means we need to kind of think about really is the traditional PAYFI means credit card remittances across border payment and all these old infrastructure is slow, is expensive, and Visa was actually dablished in nineteen fifty fifty.
Eight, sixty six years ago. It's a long time and these rail is very old.
So having like stable coin, particularly US dominated, I think it will drive more use case for US dollar and it will really really align with and think through the whole infrastructure is only not only about transaction layer, which is Solana, the finance layer, which is humor, finance, and more so it's also compliance KYC security. So there are a lot of opportunities for venture to invest and pay attention to.
You mentioned President Trump's executive order. His rhetoric has also brought some volatility to the sector.
I mean, just this.
Weekend we saw a huge liquidation this risk off trade in crypto.
Curious if you find.
That US dependency on how the headlines here at home are really driving those movements. Is crypto a little too s US dependent at the moment.
Well, I think crypto in some set is the other way around. The United States need crypto innovation. Before President Trump, the Biden administration really have been using lawsuits to manage the whole policy. This is really not the way to go. I think the Trump presidencies, in particular with the new cryptosar, really set the stage just now. The America wants to be the leaders the forefront of this, and I think in general is set a really positive tone. Although everything's been again, as I said mentioned earlier, it's only been third week, and I really don't know what's going to happen, but I think the whole world is watching and really looking out for the US leadership. In crypto, stable coin and bitcoin.
Should have it involved a meme coin from the president, and indeed the first lady.
I think you know, President Trump is have a lot of fun with the Trump and the Millennium Mean coin before his inaugurations. And I watched many many of the crypto exchange leadership, including Brian's Armstrong, and what they say about the meme coin, and all of them basically say a lot of things that happened early in their Internet all looked like fund and don't really know what it is. And I think the key thing for as an investor, particularly as a consumer investor, for to pay attention to it's really about we need to be careful about speculations. The key thing is really about protecting the normal retail investor. So it's really the key thing is the power for all the different exchanges to determine which token should be listed to make sure that the US consumer re'll investor is being protected in.
If you from Race Capital, thanks for joining us today. Let's flip gears into another story.
We're watching Elon Musk stepping up his efforts to block open ai from restructuring as a for profit company, claiming it would abandon its public spirited mission. Now, Musk's lawyers are expected to urge a federal judge to halt open AI's conversion plans and a court hearing today.
All of this is.
As open a CEOs. Moutman is currently doing another world tour with the Global Ai race heating up. Let's get to that tour with Rachel Metz and he's been in Japan, South Korea. Ultimately, what are we hearing in terms of real innovation and partnership that open ai is bringing.
Yeah, so this is Sam Martman's second world tour over the last couple of years. This one he is certainly more well known his technology and his company is more established, and he is making stopped in a bunch of different countries, including South Korea where he had a deal with a really large company focused on social media there. And he's been meeting with soft Bank in Japan, and there's a bunch of other staff stops as well, some are focused on meeting with people developers. Also that there's a university in Germany that he's going to hit up. So he's got like a lot of different kinds of people to meet with that are all connected to the company. Or that he would like to be connected to the company.
We Rachel, I'm curious what risks this world tour brings up, because obviously the Deep Seek developments of last week really amplified this talk about an AI race. Than today we see some retaliation from China on alphabet in.
Response to Trump's tariff.
So your scene tech companies really get caught in the middle. Is by doing this is Sam Altman kind of putting himself out there just a little too much.
That's a really good question. There's a lot of diplomacy that needs to come along at this point with heading a really powerful AI company, right like, this technology has really taken the world by storm over the last couple of years, So there's a lot of talking that has to happen, meetings that have to happen. You have to get a lot of stakeholders invested in what you're doing, either literally invested or figuratively at least, you know, interested in using the product and buying in So, I mean it seems like a reasonably shrewd strategy to meet with the people that you need to sort of get at least familiarize them with your face and your company, as especially as something like deep seek is happening where people are saying, wait a minute, do we really need to spend this much money to make this AI happen. It's a really interesting time for him to be doing this, that's for sure.
Bloomberg's Rachel Mattz thank you. Tesla sales have fallen in key markets. The electric vehicle maker registered fewer cars. In California throughout twenty twenty four. Sales of Model three fell by thirty six percent. Meanwhile, in France, the EU's second biggest market for battery vehicle vehicles, Tesla saw registrations plummet by sixty three percent.
CARO Meanwhile, EV competition, well, it's been struggling here in the United States as well. Jackie Ford particularly vulnerable with no new EV models coming for two years. Keith Norton has been writing about this in Bloomberg's Big Take, And you call it Ford's EV crisis. Why is it a crisis? Why postponing new models is it making it a crisis?
Keith?
Yeah, So they are going to face this kind of EV desert for the next two years where they won't have any new electric vehicle models they made. What CEO Jim Frowley called a big pivot. Back in August, they canceled plans for a big electric suv. They said it would have been too pricey, and now they're going to instead focus on lower price dvs below thirty thousand dollars, as well as something called an extended range electric vehicle, which as a small gas engine that recharges the battery. So that's their new two pronged strategy, which is fine, but that means they have no new evs to sell and their model lineup continues to age for the next two years.
Keith, what does this new administration bode for Ford and perhaps other electric vehicle makers, especially with Elon Musk so close to President Trump.
Yeah, and you know Elon Musk's cyber truck is now out selling Ford's Flune fifty lightning electric pickup truck, which is not a good turn of events for Ford. Ford also makes one of its other big electric models, the Mustang Mocke, down in Mexico, So if that twenty five percent tariff threat comes back, that would add a lot of cost to the Mustang Mocke. So there is a lot hanging in the balance with the decisions that President Trump makes.
Not you know, the least of which that he wants.
To get rid of that seventy five hundred dollars tax credit given to eed buyers.
Most Keith Norton is a brilliant big take read it. Thanks so much for joining. Now that does it for this edition of Bloomberg Technology. Do not forget to check out our podcast you can find out on the terminal as well as online on Apples, Spotify, and iHeart. And do not forget to tune in for Earnings after the Bell as well. We've got a whole host alphabet AMD plentive to be digesting when it comes to earnings from New York and San Francisco.
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