From the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde.

From the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde.

And Ed Ludlow.

And Ed Ludlow.

Live from New York On Caroline Hyde and.

Live from New York On Caroline Hyde and.

I'm Mike Shepard in San Francisco. This is Bloomberg Technology coming up.

I'm Mike Shepard in San Francisco. This is Bloomberg Technology coming up.

Deep Seek Day two, we dive into the ripple effects in tech markets and the impact on US chip cubs lust. We discuss deep Seek's AI model and the future of open source with hugging faces. Chief AI scientist and President Trump says Microsoft is in talks to acquire the US unit of TikTok. Details later this ow but first we check in on the markets and we claw our way back. Mike, not nearly off setting yesterday's significant sell off. We're up just the edge point on the overall NASDAC. Look, Apple once again doing heavy lifting to the point side.

Deep Seek Day two, we dive into the ripple effects in tech markets and the impact on US chip cubs lust. We discuss deep Seek's AI model and the future of open source with hugging faces. Chief AI scientist and President Trump says Microsoft is in talks to acquire the US unit of TikTok. Details later this ow but first we check in on the markets and we claw our way back. Mike, not nearly off setting yesterday's significant sell off. We're up just the edge point on the overall NASDAC. Look, Apple once again doing heavy lifting to the point side.

Meta at a new record high, but not enough because.

Meta at a new record high, but not enough because.

In video bounces back but two percent after a seventeen percent set off yesterday, but thirty billion being added from the market cap that was wiped out by six.

In video bounces back but two percent after a seventeen percent set off yesterday, but thirty billion being added from the market cap that was wiped out by six.

Hundred billion dollars yesterday.

Hundred billion dollars yesterday.

This is all surrounding China coming with clearly a very powerful, very efficient, very cheap, open source model NIC.

This is all surrounding China coming with clearly a very powerful, very efficient, very cheap, open source model NIC.

And yesterday in video called deep Seek's new model quote an excellent AI advancement that complies with US technology export controls, and that deep Seek's work illustrates how new models can be created. Let's bring in Bloomberg, Zee and King now to tell us more about this ian. This was a rough day yesterday for in Vidia. It bore the brunt of the deep Seak shock across the markets. Yet their statement really was curious. Tell us what your interpretation was.

And yesterday in video called deep Seek's new model quote an excellent AI advancement that complies with US technology export controls, and that deep Seek's work illustrates how new models can be created. Let's bring in Bloomberg, Zee and King now to tell us more about this ian. This was a rough day yesterday for in Vidia. It bore the brunt of the deep Seak shock across the markets. Yet their statement really was curious. Tell us what your interpretation was.

Yeah, I mean, there are a couple of things going on here. I mean they could have obviously said nothing. They could have just ignored it. They could have said, maybe it's kind of dodgy technology that we don't really believe in, but they actually endorsed it and said, no, this is good. And the sort of underpinning message we saw here was that maybe they're telling the US.

Yeah, I mean, there are a couple of things going on here. I mean they could have obviously said nothing. They could have just ignored it. They could have said, maybe it's kind of dodgy technology that we don't really believe in, but they actually endorsed it and said, no, this is good. And the sort of underpinning message we saw here was that maybe they're telling the US.

Government, your export controls haven't worked. We should be allowed to ship whatever chips we.

Government, your export controls haven't worked. We should be allowed to ship whatever chips we.

Want to China because guess what, they'll do good stuff with whatever they can get hold of.

Want to China because guess what, they'll do good stuff with whatever they can get hold of.

Let's just go to that narrative on chip exports potentially not working.

Let's just go to that narrative on chip exports potentially not working.

We heard from President Trump.

We heard from President Trump.

Just yesterday about what the impact could be.

Just yesterday about what the impact could be.

Just take a listening.

Just take a listening.

In a very near future, we're going to be placing tariffs and farm production of computer chips, semiconductors, and pharmaceuticals to return production of these essential goods to the United States of America. They left US and they went to Taiwan, which is about ninety eight percent of the chip business by the way, and we want them to come back.

In a very near future, we're going to be placing tariffs and farm production of computer chips, semiconductors, and pharmaceuticals to return production of these essential goods to the United States of America. They left US and they went to Taiwan, which is about ninety eight percent of the chip business by the way, and we want them to come back.

Of course, a lot of in video chips are manufactured in Taiwan, and so there's going to be an impact there. What do you think the regulatory and pat will be let alone where the inferencing is really going to be the future for GPU demand?

Of course, a lot of in video chips are manufactured in Taiwan, and so there's going to be an impact there. What do you think the regulatory and pat will be let alone where the inferencing is really going to be the future for GPU demand?

Yeah, I mean this is the big question here. And the expectation I think before the inauguration was that this administration would, if anything, double down on this kind of crackdown of chips and the flow to China. And here we're getting a different aspect of it. So I think we'll have to see how much attention the new administration is placed is pacing on this issue. But the expectation is that they're not going to let.

Yeah, I mean this is the big question here. And the expectation I think before the inauguration was that this administration would, if anything, double down on this kind of crackdown of chips and the flow to China. And here we're getting a different aspect of it. So I think we'll have to see how much attention the new administration is placed is pacing on this issue. But the expectation is that they're not going to let.

Up em back to Nvidia.

Up em back to Nvidia.

How much is this complicating their efforts to get their customers to keep buying all those premium chips like Blackwell and the next generations that you've been writing about so much.

How much is this complicating their efforts to get their customers to keep buying all those premium chips like Blackwell and the next generations that you've been writing about so much.

Yeah, well, it creates a massive question.

Yeah, well, it creates a massive question.

It's like, well, if a Chinese startup can fine tune their models to this extent using sort of two three year old technology on the cheap, why can't you write so if you're Microsoft, if you're a WUS and you're running all of these systems, and why wouldn't you do it cheaper if you can? So obviously has implications for what in video is trying to sell. So we'll see how they answer those questions.

It's like, well, if a Chinese startup can fine tune their models to this extent using sort of two three year old technology on the cheap, why can't you write so if you're Microsoft, if you're a WUS and you're running all of these systems, and why wouldn't you do it cheaper if you can? So obviously has implications for what in video is trying to sell. So we'll see how they answer those questions.

Thank you so far the statement is all we get in king, We thank you. Now let's just talk about how the tech markets, of course roiled by china seemingly cheap, powerful AI model. Here's what some Bloomberg Television guests had to say about deep Seek.

Thank you so far the statement is all we get in king, We thank you. Now let's just talk about how the tech markets, of course roiled by china seemingly cheap, powerful AI model. Here's what some Bloomberg Television guests had to say about deep Seek.

I don't think it's about China versus US, right, It's really about closed source versus open source and more more, American developers should leverage the open source and what deep Seak had done and built on top of it.

I don't think it's about China versus US, right, It's really about closed source versus open source and more more, American developers should leverage the open source and what deep Seak had done and built on top of it.

And make it greater. Really amazing what they have done.

And make it greater. Really amazing what they have done.

The fraction of training cost, fraction of interference costs to produce a model like that in deep Seek, but it will unravel basically the path of spending.

The fraction of training cost, fraction of interference costs to produce a model like that in deep Seek, but it will unravel basically the path of spending.

Of course, I think a healthy dose of skepticism is very very good, it's needed. But even if you multiply their spend and their cost by ten times two D time, this is still a order and maltitude in terms of theotocopy action.

Of course, I think a healthy dose of skepticism is very very good, it's needed. But even if you multiply their spend and their cost by ten times two D time, this is still a order and maltitude in terms of theotocopy action.

They're not really a company that's out there trying to compete directly with the big US players. So in that sense, I think it was an overreaction to the release of this model.

They're not really a company that's out there trying to compete directly with the big US players. So in that sense, I think it was an overreaction to the release of this model.

Let's get more reaction.

Let's get more reaction.

Mardin Alton, now chief investment strategist at Empower. The question for many is will capital expenditure remain for in video chips, for AI hardware writ large.

Mardin Alton, now chief investment strategist at Empower. The question for many is will capital expenditure remain for in video chips, for AI hardware writ large.

Is that what you were tackling yesterday.

Is that what you were tackling yesterday.

Well, I think that is one of the critical questions, right, because this was a very surgical sell off, a very surgical development in the sense that it's attacking really not the case for using AI, but really the supply chain around AI and all roads on supply chain lean back to Nvidia, and so this question of whether companies really need to spend this much. I think that is the question that markets are grappling with. But it's hard to imagine that we're going to see, and of course we'll see in earnings this week, but it's hard to imagine that we're going to see companies massively change their spending patterns simply because of this news. I think there's still this arms race going on, So of course that's something that we're going to have to watch especially closely. But we may need more than just this news to unravel that.

Well, I think that is one of the critical questions, right, because this was a very surgical sell off, a very surgical development in the sense that it's attacking really not the case for using AI, but really the supply chain around AI and all roads on supply chain lean back to Nvidia, and so this question of whether companies really need to spend this much. I think that is the question that markets are grappling with. But it's hard to imagine that we're going to see, and of course we'll see in earnings this week, but it's hard to imagine that we're going to see companies massively change their spending patterns simply because of this news. I think there's still this arms race going on, So of course that's something that we're going to have to watch especially closely. But we may need more than just this news to unravel that.

But the unraveling could start when you have earnings expectations as they are and valuations at forty one times future earnings for a namelike in video. How much you worried that this could have a similarity to what we saw in the dot com era.

But the unraveling could start when you have earnings expectations as they are and valuations at forty one times future earnings for a namelike in video. How much you worried that this could have a similarity to what we saw in the dot com era.

I mean, that's really something that we're watching really closely. When you're looking at earnings expectations for the broad market overall, you're seeing an acceleration of earnings and of course maybe not the same for MAGS seven, but certainly a continuation of the powerful earnings that we've seen there. And then you couple that with valuations that are extreme. When we do our analysis of valuations and we break the time series for our price to expected earnings down into death siles. We're looking at the tech sector that's in the ninetieth percentile of valuations. Now associating that with forward one year returns, you can still see valuations grind higher and companies perform. But ultimately that's where you also start to see some of these more meaningful selloffs. And as pedantic as it sounds, I think a lot of these developments over the past few days relate more to evaluation argument than anything that relates to kind of technology in the sense that this is big news and technology, but the bigger news is that there's no room in the narrative to account for anything but world domination when it comes to MAGS seven. And this is allowing us to think about the range of outcomes Martin.

I mean, that's really something that we're watching really closely. When you're looking at earnings expectations for the broad market overall, you're seeing an acceleration of earnings and of course maybe not the same for MAGS seven, but certainly a continuation of the powerful earnings that we've seen there. And then you couple that with valuations that are extreme. When we do our analysis of valuations and we break the time series for our price to expected earnings down into death siles. We're looking at the tech sector that's in the ninetieth percentile of valuations. Now associating that with forward one year returns, you can still see valuations grind higher and companies perform. But ultimately that's where you also start to see some of these more meaningful selloffs. And as pedantic as it sounds, I think a lot of these developments over the past few days relate more to evaluation argument than anything that relates to kind of technology in the sense that this is big news and technology, but the bigger news is that there's no room in the narrative to account for anything but world domination when it comes to MAGS seven. And this is allowing us to think about the range of outcomes Martin.

To play the movie forward a few years. Where do you see this taking us? Is this a parallel to the dot com era, which you know, eventually, after some troubles right around two thousand, really set us up for a long period of growth.

To play the movie forward a few years. Where do you see this taking us? Is this a parallel to the dot com era, which you know, eventually, after some troubles right around two thousand, really set us up for a long period of growth.

What about AI? Are we in that moment?

What about AI? Are we in that moment?

Well, that's that's the corollary that I reference. I know a lot of us are pointing back to the dot Com era and looking at evaluation argument. I think that's important, But I think the other important element is that this is an innovation supercycle. It feels like just the way the dot Com era was, and what we saw in that period was a massive expansion or growth for the broad market, not just for the tech area. So if we're looking at the trend growth from the nineteen nineties and comparing that to the realized trend growth of the subsequent years, we saw massive expansion, whether that's margins or enterprise value. That Internet world had a huge impact on the broad economy, and I think that's what we can expect to see with AI. And in many ways, this news around deepseek is part of that in the sense that it says we can economize, we can do this a lot better, and we can get deployment a lot more quickly than maybe we had otherwise thought.

Well, that's that's the corollary that I reference. I know a lot of us are pointing back to the dot Com era and looking at evaluation argument. I think that's important, But I think the other important element is that this is an innovation supercycle. It feels like just the way the dot Com era was, and what we saw in that period was a massive expansion or growth for the broad market, not just for the tech area. So if we're looking at the trend growth from the nineteen nineties and comparing that to the realized trend growth of the subsequent years, we saw massive expansion, whether that's margins or enterprise value. That Internet world had a huge impact on the broad economy, and I think that's what we can expect to see with AI. And in many ways, this news around deepseek is part of that in the sense that it says we can economize, we can do this a lot better, and we can get deployment a lot more quickly than maybe we had otherwise thought.

And on that idea of getting cheaper AI out to companies and businesses across the economy maybe a little bit faster. What sort of impact do you see and where do you see growth potential from that?

And on that idea of getting cheaper AI out to companies and businesses across the economy maybe a little bit faster. What sort of impact do you see and where do you see growth potential from that?

Well, I do think there's this broad market where you have to understand spaces that we can't perfectly anticipate. I think we're seeing a lot hearing, a lot more conversations around retailers and the deployment of kind of acres more quickly with fewer steps along the way. I think that's one application we're also based square stocks hold up quite a bit better. I think that software can easily deploy or maybe more easily deploy AI within their world. I think that's a possibility. So I think that applications are somewhat in less the imagination. It has to be pretty broad here, and so there's some argument for kind of an equal weight exposure to try to capture that range of experiences, but with long term horizon. I don't think this is necessarily something that we're going to see in Q two Q three of twenty twenty five.

Well, I do think there's this broad market where you have to understand spaces that we can't perfectly anticipate. I think we're seeing a lot hearing, a lot more conversations around retailers and the deployment of kind of acres more quickly with fewer steps along the way. I think that's one application we're also based square stocks hold up quite a bit better. I think that software can easily deploy or maybe more easily deploy AI within their world. I think that's a possibility. So I think that applications are somewhat in less the imagination. It has to be pretty broad here, and so there's some argument for kind of an equal weight exposure to try to capture that range of experiences, but with long term horizon. I don't think this is necessarily something that we're going to see in Q two Q three of twenty twenty five.

We're taking a few tech hits to your line, but we're going to stick with it matter because I have this crucial point for the here and now with retail we buying back into in video institutionals not right now? What about a so called black swad event or ripple effect. We talk of course to nasin Talib yesterday.

We're taking a few tech hits to your line, but we're going to stick with it matter because I have this crucial point for the here and now with retail we buying back into in video institutionals not right now? What about a so called black swad event or ripple effect. We talk of course to nasin Talib yesterday.

Just have a listen to what he said, right.

Just have a listen to what he said, right.

The beginning of an adjustment of people for reality because now they realize now it's no longer flawless. You have a small little trip on the glass.

The beginning of an adjustment of people for reality because now they realize now it's no longer flawless. You have a small little trip on the glass.

A little chip in the glass of the valuation question, a little chip in the glass as to whether this is akin to a dot com crisis, but where could be sustained? Will Energy survive this? We saw such significant sell off to certain of those.

A little chip in the glass of the valuation question, a little chip in the glass as to whether this is akin to a dot com crisis, but where could be sustained? Will Energy survive this? We saw such significant sell off to certain of those.

Names, you know, I think when we're taking a look at Nvidia or Energy, I think there's more vulnerability there, simply because this is getting at the heart of the thesis there that they are the you know, especially in Vidia, the dominant provider of this capability that our roads lead back to in video when it comes to supply, And this story is really tackling that idea that potentially there's more ways to skin a cat. You can focus on efficiency rather than share mine. Of course, so I think the idea of a chip in the glass, I think that's important, and it's getting at the heart of Nvidia. But whether this is the beginning of the unraveling of all things AI, I think that's a little bit more extreme or a bridge too far today, simply because that unraveling would depend on the use case, the use case of AI being intact, and I don't think that's what we're seeing here. It's more of the supply chain question. And really at this point, I think there's still more that we would need to see to really suggest that companies are going to pull back on their capital expenditures in any meaningful way.

Names, you know, I think when we're taking a look at Nvidia or Energy, I think there's more vulnerability there, simply because this is getting at the heart of the thesis there that they are the you know, especially in Vidia, the dominant provider of this capability that our roads lead back to in video when it comes to supply, And this story is really tackling that idea that potentially there's more ways to skin a cat. You can focus on efficiency rather than share mine. Of course, so I think the idea of a chip in the glass, I think that's important, and it's getting at the heart of Nvidia. But whether this is the beginning of the unraveling of all things AI, I think that's a little bit more extreme or a bridge too far today, simply because that unraveling would depend on the use case, the use case of AI being intact, and I don't think that's what we're seeing here. It's more of the supply chain question. And really at this point, I think there's still more that we would need to see to really suggest that companies are going to pull back on their capital expenditures in any meaningful way.

Martin Norton Chief Investment Strategies that Empowered Thank You.

Martin Norton Chief Investment Strategies that Empowered Thank You.

Coming up, we're.

Coming up, we're.

Going to discuss deep seaks open source approach and what it means for competitors. The chief science officer at AI platform Hugging Face will join us on that.

Going to discuss deep seaks open source approach and what it means for competitors. The chief science officer at AI platform Hugging Face will join us on that.

This is Bloomberg.

This is Bloomberg.

China's deepseek AI model up ended markets largely though those AI infrastructure plays.

China's deepseek AI model up ended markets largely though those AI infrastructure plays.

What about model providers?

What about model providers?

Clearly open source is impacting a HI development. We're joined by Thomas Wolf Now here's the chief science officer at hugging Face and open source and collaborative platform for AI builders is our one the huge breakthrough that the market clearly thinks it is.

Clearly open source is impacting a HI development. We're joined by Thomas Wolf Now here's the chief science officer at hugging Face and open source and collaborative platform for AI builders is our one the huge breakthrough that the market clearly thinks it is.

I think there is a thin bida for overreaction.

I think there is a thin bida for overreaction.

We've seen a steady increase in open source model performance, but we also have to be honest. It's the first model, I would say that really reached the performance of closed source. So the gap is closed now between the clos source models and the open source performance.

We've seen a steady increase in open source model performance, but we also have to be honest. It's the first model, I would say that really reached the performance of closed source. So the gap is closed now between the clos source models and the open source performance.

Let's just talk about how the derivatives have expanded. Because you are all about open source, you're about community, you're about the innovation one model can provide to many others. From what we understand from Clem the CEO over with hugging face, he's saying that there's been five hundred derivatives already created from deep seek. How are you seeing an exponential growth of the use of this model.

Let's just talk about how the derivatives have expanded. Because you are all about open source, you're about community, you're about the innovation one model can provide to many others. From what we understand from Clem the CEO over with hugging face, he's saying that there's been five hundred derivatives already created from deep seek. How are you seeing an exponential growth of the use of this model.

Yeah, it's even growing, right, So I was just checking.

Yeah, it's even growing, right, So I was just checking.

I can give you a fresh new stats just now. We're over six six hundred and seventeen models already created by the community, more than three point two million downloads of all these models, with seven hundred thousand dollars for the original model.

I can give you a fresh new stats just now. We're over six six hundred and seventeen models already created by the community, more than three point two million downloads of all these models, with seven hundred thousand dollars for the original model.

So I think that's really the power of open source. Right. We see basically a growth of.

So I think that's really the power of open source. Right. We see basically a growth of.

More than thirty person of downloads day to day, which kind of is a testament to all this ecosystem that is already starting to build around deep seek with basically all these companies, all these teams, all these.

More than thirty person of downloads day to day, which kind of is a testament to all this ecosystem that is already starting to build around deep seek with basically all these companies, all these teams, all these.

Organizations that are already you.

Organizations that are already you.

Know, taking this open source model and finding in it, adapting it, testing it on the unused cases. So that's that's maybe the most beautiful thing about these open source capabilities, which is still this ecosystem grow live day by day around the original Deepsick model.

Know, taking this open source model and finding in it, adapting it, testing it on the unused cases. So that's that's maybe the most beautiful thing about these open source capabilities, which is still this ecosystem grow live day by day around the original Deepsick model.

Thomas, we can't separate the story of deep seek from the geopolitics here. What concerns do you have that a reaction from Washington or other governments might be to restrict open source use in some fashion as a way of keeping technology out of China's hands.

Thomas, we can't separate the story of deep seek from the geopolitics here. What concerns do you have that a reaction from Washington or other governments might be to restrict open source use in some fashion as a way of keeping technology out of China's hands.

Yeah, I think there's a lot of I would say a lot of way of reframing these stories as a US China. But really the more general story here is the open source effect of this model. It could have come out of almost any countries, and I would expect actually open source model to keep coming out of China. But we also have European companies like Mixed Trial starting to open source model and very small teams.

Yeah, I think there's a lot of I would say a lot of way of reframing these stories as a US China. But really the more general story here is the open source effect of this model. It could have come out of almost any countries, and I would expect actually open source model to keep coming out of China. But we also have European companies like Mixed Trial starting to open source model and very small teams.

So mordinally, I think hopefully.

So mordinally, I think hopefully.

We'll see move from a geopolitical inpretation of this story to really interpretation at open source versus closed source, and our belief attacking face is open source is really the way to foster development, to foster a breakthrough technology, to foster growing communities, and a lot more business use cases.

We'll see move from a geopolitical inpretation of this story to really interpretation at open source versus closed source, and our belief attacking face is open source is really the way to foster development, to foster a breakthrough technology, to foster growing communities, and a lot more business use cases.

Basically, Thomas, as a software creator yourself, you must have some admiration for what Deep Seek has pulled off, apparently at a much lower cost and rivals.

Basically, Thomas, as a software creator yourself, you must have some admiration for what Deep Seek has pulled off, apparently at a much lower cost and rivals.

Here in the US.

Here in the US.

But I bet you have some questions too, what would you like to learn more about what the company did and how it pulled it off?

But I bet you have some questions too, what would you like to learn more about what the company did and how it pulled it off?

So what is interesting is we already started a tragging pace to actually explore, you know, can we reproduce this model? Can we reproduce it in poticlar on the open right? So we have right the diepsick model. I was trying its last year, last day yesterday, and it does really, you know, offer what we see in the benchmark, which is it's a very powerful model. But what we would like to know is exactly can you retrain it? Can you actually apply the same recess? Is two more models, So I've study this project called open Air one, which is basically a reproduction and open reprodiction of the deep Sick pipeline. Thankfully, they shared a lot of details on how they.

So what is interesting is we already started a tragging pace to actually explore, you know, can we reproduce this model? Can we reproduce it in poticlar on the open right? So we have right the diepsick model. I was trying its last year, last day yesterday, and it does really, you know, offer what we see in the benchmark, which is it's a very powerful model. But what we would like to know is exactly can you retrain it? Can you actually apply the same recess? Is two more models, So I've study this project called open Air one, which is basically a reproduction and open reprodiction of the deep Sick pipeline. Thankfully, they shared a lot of details on how they.

Train the model, much more than than we see recently.

Train the model, much more than than we see recently.

So I'm quite confident in the coming month we'll be able to basically, you know, understand all the breakthrough that we need to make in this model.

So I'm quite confident in the coming month we'll be able to basically, you know, understand all the breakthrough that we need to make in this model.

What does it mean for a closed source focused open AI or for anthropic in this.

What does it mean for a closed source focused open AI or for anthropic in this.

Moment, Well, I think it's quite positive. And you saw probably the reaction of some outman, right.

Moment, Well, I think it's quite positive. And you saw probably the reaction of some outman, right.

I think for a good competition in the field is something that is just a net positive for developing a technology.

I think for a good competition in the field is something that is just a net positive for developing a technology.

And in particular here because a lot of.

And in particular here because a lot of.

This model and as I was saying, a lot of recipes are open, it means I would I would be very surprised they don't, you know, directly take the recipes that can be useful for improving both open AI, anthropic Google or the coming LAMMA models, and that this model basically.

This model and as I was saying, a lot of recipes are open, it means I would I would be very surprised they don't, you know, directly take the recipes that can be useful for improving both open AI, anthropic Google or the coming LAMMA models, and that this model basically.

You know, quickly catch So I think it's a good thing.

You know, quickly catch So I think it's a good thing.

That's also the good thing about open sources because you share a lot of information about your models. You know, you actually lift the whole fields up with you by you know, explaining how how you make your breakthrough.

That's also the good thing about open sources because you share a lot of information about your models. You know, you actually lift the whole fields up with you by you know, explaining how how you make your breakthrough.

But some people don't want to see everyone rise up. They don't want to see China rise up. Ultimately, is that a false narrative a strong man to be, even saying that China is behind the US when there's open source communities such as yours.

But some people don't want to see everyone rise up. They don't want to see China rise up. Ultimately, is that a false narrative a strong man to be, even saying that China is behind the US when there's open source communities such as yours.

Yeah, the Open Source Committee generally don't really know any border, right, as I was saying today, it's a Chinese team, but generally, you know, it's just it's just a very smart, edge edge round team.

Yeah, the Open Source Committee generally don't really know any border, right, as I was saying today, it's a Chinese team, but generally, you know, it's just it's just a very smart, edge edge round team.

Right.

Right.

There are teams like that in many countries, and that's why we keep saying it would keep seeing new actors in AI, right, So I think ultimately, I believe in fair market. I think having competition, sharing more actively, you know, is a good way to make progress together. So you know, in your future, we will like to see much more actors active in AI. We would like to see basically a larger company a bit everywhere in the world. And I think that's maybe the first step, you know, in this direction.

There are teams like that in many countries, and that's why we keep saying it would keep seeing new actors in AI, right, So I think ultimately, I believe in fair market. I think having competition, sharing more actively, you know, is a good way to make progress together. So you know, in your future, we will like to see much more actors active in AI. We would like to see basically a larger company a bit everywhere in the world. And I think that's maybe the first step, you know, in this direction.

Are we expecting to see similar innovations coming from Europe? There have been questions and concerns raised in the European Union about the level of regulation and then it might be restricting development in AI.

Are we expecting to see similar innovations coming from Europe? There have been questions and concerns raised in the European Union about the level of regulation and then it might be restricting development in AI.

Yeah, it's obviously a big discussion, right.

Yeah, it's obviously a big discussion, right.

I was a divorce a bit last week, and if you see a lot of the discussion was, Okay, what is about your regulation?

I was a divorce a bit last week, and if you see a lot of the discussion was, Okay, what is about your regulation?

I just think the teams are really good.

I just think the teams are really good.

I would be surprised, for instance, in the UK, in Germany, you know in France that we that we don't see all these teams that basically helped train you know, the models of Mistual, at Meta, at Opena, at Entropic.

I would be surprised, for instance, in the UK, in Germany, you know in France that we that we don't see all these teams that basically helped train you know, the models of Mistual, at Meta, at Opena, at Entropic.

We've seen a lot of people also living op Ai to start the und startup.

We've seen a lot of people also living op Ai to start the und startup.

So I think one takeaway from Deep Sick is that basically the recipe to build a very good quality large language model nowadays is something that's almost accessible to everyone, right, So I think all these people leaving the big tech companies will start the out team, and because you kind of just need a few millions, I would be surprised we don't see a lot more teams coming out of Europe and Botska, but also as a region this year.

So I think one takeaway from Deep Sick is that basically the recipe to build a very good quality large language model nowadays is something that's almost accessible to everyone, right, So I think all these people leaving the big tech companies will start the out team, and because you kind of just need a few millions, I would be surprised we don't see a lot more teams coming out of Europe and Botska, but also as a region this year.

Thomas Wolf, chief science officer at Hugging Face, thanks for joining us. Microsoft is in talks that acquire the US arm of TikTok. At least that's according to President Trump last night, who did not elaborate further.

Thomas Wolf, chief science officer at Hugging Face, thanks for joining us. Microsoft is in talks that acquire the US arm of TikTok. At least that's according to President Trump last night, who did not elaborate further.

Microsoft declient to comment.

Microsoft declient to comment.

Let's bring in Bloomberg's Balance and Power co host Kaylee lines for more. Kaylee, is this another case of Trump trying to make a deal happen? He casts himself as the consummate deal maker. We are so short on details, though, walk us through what more we know, if anything beyond last night.

Let's bring in Bloomberg's Balance and Power co host Kaylee lines for more. Kaylee, is this another case of Trump trying to make a deal happen? He casts himself as the consummate deal maker. We are so short on details, though, walk us through what more we know, if anything beyond last night.

Well, the details are pretty limited, Mike.

Well, the details are pretty limited, Mike.

He was asked directly by a reporter if Microsoft was in talks to acquire TikTok, and the President said, quote, I would say yes, And that's really all we got on that specific matter. As he said, Microsoft isn't commenting on this either. Keep in mind, though, that during the first Trump administration, back in the summer of twenty twenty, Bloomberg did report Microsoft was looking at acquiring TikTok's US operations back then, when the first kind of pressure around divesting or banning it over national security concerns was a rising. Oracle was reportedly looking at it too, And we know just last week when the Stargate project was being announced at the White House and Larry Ellison of Oracle was in the room, Donald Trump suggested he'd be open to Ellison buying TikTok or Elon Musk when he was asked about that. We know there are other players involved as well, including Frank McCourt, who you speak with frequently on this program, who have made bus and it does seem that is what Donald Trump's preference really is here, a bidding war. He said as much last night that he thinks bidding war's result in the best deals. As for what that deal ultimately looks like, that remains unclear. What he was clear on yesterday when speaking to the House Republican Conference in his to Raw Club in Florida is that he does not want China involved in whatever happens here. Of course, China is going to have some say in that ultimately, would the US government have involvement still, Katie.

He was asked directly by a reporter if Microsoft was in talks to acquire TikTok, and the President said, quote, I would say yes, And that's really all we got on that specific matter. As he said, Microsoft isn't commenting on this either. Keep in mind, though, that during the first Trump administration, back in the summer of twenty twenty, Bloomberg did report Microsoft was looking at acquiring TikTok's US operations back then, when the first kind of pressure around divesting or banning it over national security concerns was a rising. Oracle was reportedly looking at it too, And we know just last week when the Stargate project was being announced at the White House and Larry Ellison of Oracle was in the room, Donald Trump suggested he'd be open to Ellison buying TikTok or Elon Musk when he was asked about that. We know there are other players involved as well, including Frank McCourt, who you speak with frequently on this program, who have made bus and it does seem that is what Donald Trump's preference really is here, a bidding war. He said as much last night that he thinks bidding war's result in the best deals. As for what that deal ultimately looks like, that remains unclear. What he was clear on yesterday when speaking to the House Republican Conference in his to Raw Club in Florida is that he does not want China involved in whatever happens here. Of course, China is going to have some say in that ultimately, would the US government have involvement still, Katie.

Well, that's the question.

Well, that's the question.

He's talked about this fifty percent ownership structure, whoever buys it sharing equity with the United States essentially, so it would be some kind of half and half deal, But it remains unclear whether or not that can be done by the now April fourth deadline, which has been extended by Trump's executive order. There's also a massive question around whether anti trust concerns would be raised by some of these individuals or companies like Microsoft acquiring operations of this size, which could be tens of billions of dollars and obviously, as you guys will know, one hundred and seventy million users in the US. While Donald Trump and the people he's instilled at places like the FTC or at the Department of Justice may have some alignment on this, it still could face scrutiny, especially from big tech skeptical lawmakers on Capitol Hill and.

He's talked about this fifty percent ownership structure, whoever buys it sharing equity with the United States essentially, so it would be some kind of half and half deal, But it remains unclear whether or not that can be done by the now April fourth deadline, which has been extended by Trump's executive order. There's also a massive question around whether anti trust concerns would be raised by some of these individuals or companies like Microsoft acquiring operations of this size, which could be tens of billions of dollars and obviously, as you guys will know, one hundred and seventy million users in the US. While Donald Trump and the people he's instilled at places like the FTC or at the Department of Justice may have some alignment on this, it still could face scrutiny, especially from big tech skeptical lawmakers on Capitol Hill and.

Whether bite don'ts whatever said it, Katie Hines, Yeah, thanks so much.

Whether bite don'ts whatever said it, Katie Hines, Yeah, thanks so much.

Welcome back to med Technology. I'm Caroline Hyde in New York and I'm.

Welcome back to med Technology. I'm Caroline Hyde in New York and I'm.

Mike Shepard in San Francisco.

Mike Shepard in San Francisco.

Let's discuss the impact that Deep seak is having on US tech companies now with Bloomberg Sharen Gafari. Sharen, thanks so much and thanks for all your reporting today. There's a lot of soul searching going on in Silicon Valley over the past forty eight hours. Tell us a little bit more about what's happening. They set up war rooms. What is the conversation like?

Let's discuss the impact that Deep seak is having on US tech companies now with Bloomberg Sharen Gafari. Sharen, thanks so much and thanks for all your reporting today. There's a lot of soul searching going on in Silicon Valley over the past forty eight hours. Tell us a little bit more about what's happening. They set up war rooms. What is the conversation like?

So the top a I labs right now in the US are trying to figure out how the Chinese startup Deep Seek was able to catch up so quickly. Right, you have their latest R one model. Really exploding on the scene in the past week, and everyone is astounded by how competitive it is. It is actually leading by some metrics on these AI models that have taken Western companies, you know, years end, a lot more money.

So the top a I labs right now in the US are trying to figure out how the Chinese startup Deep Seek was able to catch up so quickly. Right, you have their latest R one model. Really exploding on the scene in the past week, and everyone is astounded by how competitive it is. It is actually leading by some metrics on these AI models that have taken Western companies, you know, years end, a lot more money.

The Chinese company.

The Chinese company.

Deep Sea claims to build well, we can old bait as to how much it was copying building off Western technology. But the key question is will capex remain the same and ultimately what it means for open AI and Anthropic in terms of reducing the cost of their models.

Deep Sea claims to build well, we can old bait as to how much it was copying building off Western technology. But the key question is will capex remain the same and ultimately what it means for open AI and Anthropic in terms of reducing the cost of their models.

What do you think the ripple effects Ascherene.

What do you think the ripple effects Ascherene.

Yeah, I think we're starting to see people really question whether we need these astronomical budgets for building the most advanced AI models and whether, you know, because.

Yeah, I think we're starting to see people really question whether we need these astronomical budgets for building the most advanced AI models and whether, you know, because.

Deep Seek was able to make some gains in.

Deep Seek was able to make some gains in.

How efficiently they use the computing power, if those you know, gains can be applied now to US companies and sort of questioning why US companies didn't come up with that first.

How efficiently they use the computing power, if those you know, gains can be applied now to US companies and sort of questioning why US companies didn't come up with that first.

It's a fascinating big take.

It's a fascinating big take.

Go and read it from Sharene Gafari and the meta war rooms that are currently being set up.

Go and read it from Sharene Gafari and the meta war rooms that are currently being set up.

We appreciate it.

We appreciate it.

Now we've got to assess what President Trump had to say about the competition from deep Seek.

Now we've got to assess what President Trump had to say about the competition from deep Seek.

I think if it's if it's fact and if it's true, and nobody really knows what it is, but I view that as a positive because you'll be doing that too, so you won't be spending much and you'll get the same result. Hopefully, the release of Deepseek AI from a Chinese company should be a wake up call for our industries that we need to be laser focused on competing to win.

I think if it's if it's fact and if it's true, and nobody really knows what it is, but I view that as a positive because you'll be doing that too, so you won't be spending much and you'll get the same result. Hopefully, the release of Deepseek AI from a Chinese company should be a wake up call for our industries that we need to be laser focused on competing to win.

Let's talk about that competition.

Let's talk about that competition.

Jacqueline Rice Nelson is with us CO Founracy of Tribe Ai provides AI services for leading enterprises, and I have a feeling a lot of them are rushing to understand how they can use this cheap and innovative AI model.

Jacqueline Rice Nelson is with us CO Founracy of Tribe Ai provides AI services for leading enterprises, and I have a feeling a lot of them are rushing to understand how they can use this cheap and innovative AI model.

Absolutely first, thrilled to be here. I think this twenty twenty five is the year for enterprises to get ROI from their AI efforts, and the ROI calculation just changed dramatically, So I think that kind of is the headline for businesses, which is use cases that weren't possible just a few weeks ago or even last week are now possible. And I think we're about to see an explosion of AI experimentation and also value delivery to organizations and enterprises away.

Absolutely first, thrilled to be here. I think this twenty twenty five is the year for enterprises to get ROI from their AI efforts, and the ROI calculation just changed dramatically, So I think that kind of is the headline for businesses, which is use cases that weren't possible just a few weeks ago or even last week are now possible. And I think we're about to see an explosion of AI experimentation and also value delivery to organizations and enterprises away.

Have any of those organizations been reticent to use it simply because of where it was born?

Have any of those organizations been reticent to use it simply because of where it was born?

And it's a great question.

And it's a great question.

I actually had the same question and dove into this myself, and I think it all comes down to how you use these models. So there are lots of ways to be using LAMA or open source models today in ways that have lots of guardrails that are set up to be more secure and can be run locally on your own environment. In many ways, actually it's almost easier with open source than it is with closed source models, And so everything comes down to the implementations of these models. I think today a lot of businesses have these same questions, but that's in many ways why they're sort of coming to Tribe and trying to help navigate the landscape across all of these different models. What are best to use and for what types of use cases and how to set it up in the optimal ways Jacqueline.

I actually had the same question and dove into this myself, and I think it all comes down to how you use these models. So there are lots of ways to be using LAMA or open source models today in ways that have lots of guardrails that are set up to be more secure and can be run locally on your own environment. In many ways, actually it's almost easier with open source than it is with closed source models, And so everything comes down to the implementations of these models. I think today a lot of businesses have these same questions, but that's in many ways why they're sort of coming to Tribe and trying to help navigate the landscape across all of these different models. What are best to use and for what types of use cases and how to set it up in the optimal ways Jacqueline.

One of the key questions that's come up in relation to deep seek is the one on spending. How is that factoring into the way you are guiding people through the AI landscape?

One of the key questions that's come up in relation to deep seek is the one on spending. How is that factoring into the way you are guiding people through the AI landscape?

Now?

Now?

Is it a different message that you're having to deliver about efficiency and about bringing a product to market for a lot less.

Is it a different message that you're having to deliver about efficiency and about bringing a product to market for a lot less.

So the short answer is yes, I think that we are. I compare it to a highway. We have just added a lane or multiple lanes to the highway. When you do that, the traffic does not go down. Actually it only increases, and that's because driving and going on road trips gets more attractive. The same is true right now for AI. So I think we're about to see really an explosion of activity and that sort of across companies, across enterprises within the large and to your point on efficiency and for product innovation, I think we're going to see proliferation across these use cases. And then that doesn't even include the large hyper scalers who are still on this quest for AGI and nothing changes there. I don't think anyone is taking their foot off the gas. And if anything, competition is just in dramatically.

So the short answer is yes, I think that we are. I compare it to a highway. We have just added a lane or multiple lanes to the highway. When you do that, the traffic does not go down. Actually it only increases, and that's because driving and going on road trips gets more attractive. The same is true right now for AI. So I think we're about to see really an explosion of activity and that sort of across companies, across enterprises within the large and to your point on efficiency and for product innovation, I think we're going to see proliferation across these use cases. And then that doesn't even include the large hyper scalers who are still on this quest for AGI and nothing changes there. I don't think anyone is taking their foot off the gas. And if anything, competition is just in dramatically.

And the open source model, is this something that is feasible to be scaled at large enterprises, Big corporations that also may have security considerations and other factors to bring in them might make them question whether open source is the right choice for them.

And the open source model, is this something that is feasible to be scaled at large enterprises, Big corporations that also may have security considerations and other factors to bring in them might make them question whether open source is the right choice for them.

Yeah, I think there are a lot of considerations that go into what is the right model selection, and so I think it's really clear that we have entered an era, and actually I've always thought we were in this era, which is that we are in a multimodel world. Businesses need to be able to build, to swap between models seamlessly to optimize for performance, for latency, for accuracy, and for cost. And what that means is they also need the guardrails, the security, the infrastructure to set those things up in proper ways. They also need the evals, the evaluation framework to actually be able to compare and contrast across models so they know what models to use. And so I think there, while there might be some hesitance, we have done lots of development on closed source models and lots of development on open source models, and the considerations still come down to what is that company trying to achieve and what are the things we're optimizing for. That's what determines the model. So I, oh, please go ahead.

Yeah, I think there are a lot of considerations that go into what is the right model selection, and so I think it's really clear that we have entered an era, and actually I've always thought we were in this era, which is that we are in a multimodel world. Businesses need to be able to build, to swap between models seamlessly to optimize for performance, for latency, for accuracy, and for cost. And what that means is they also need the guardrails, the security, the infrastructure to set those things up in proper ways. They also need the evals, the evaluation framework to actually be able to compare and contrast across models so they know what models to use. And so I think there, while there might be some hesitance, we have done lots of development on closed source models and lots of development on open source models, and the considerations still come down to what is that company trying to achieve and what are the things we're optimizing for. That's what determines the model. So I, oh, please go ahead.

Well I'm interested in that because I want to go back to sort of the Jevons paradox piece that you know, the more AI innovation there is, ultimately the more people on those highways the more innovation, but also the same amount of compute. Can you speak a bit to like the inferencing part of this, because that seems to be the silver lining that indeeded videos trying to see from this look, you're still going to need our GPUs, just not for training.

Well I'm interested in that because I want to go back to sort of the Jevons paradox piece that you know, the more AI innovation there is, ultimately the more people on those highways the more innovation, but also the same amount of compute. Can you speak a bit to like the inferencing part of this, because that seems to be the silver lining that indeeded videos trying to see from this look, you're still going to need our GPUs, just not for training.

It's the inference.

It's the inference.

I think that's fair. Look, I think we have not cracked the code on the hardware that's needed. Like it's clear that compute is still needed at really high levels. There is no way that we have even with these new deep seek models, we haven't found the answers yet. Right, We're not stopping. And I think that that's the goal case for how and why you're going to see continued investment here is that we are in a continuous innovation cycle and ultimately, I think that drives utilization and I think the question is for what. And then the other piece is that ultimately consumers are the biggest winners here, and I think that is the most exciting story. There's a lot of fear, there's a lot of you know, China versus US dynamics. I think the reality is that competition is good. And what I'm hearing from the US companies is you know, nothing has kind of the US large AI companies, nothing has kind of blown their socks deef right. This is innovation they at least, you know, feel that they already have. And the difference is that there has been an optimization for open source and an optimization for cost in ways that they have not done. And so I think we're about to see a lot of fast follow and Sam Alman signaled as much last night.

I think that's fair. Look, I think we have not cracked the code on the hardware that's needed. Like it's clear that compute is still needed at really high levels. There is no way that we have even with these new deep seek models, we haven't found the answers yet. Right, We're not stopping. And I think that that's the goal case for how and why you're going to see continued investment here is that we are in a continuous innovation cycle and ultimately, I think that drives utilization and I think the question is for what. And then the other piece is that ultimately consumers are the biggest winners here, and I think that is the most exciting story. There's a lot of fear, there's a lot of you know, China versus US dynamics. I think the reality is that competition is good. And what I'm hearing from the US companies is you know, nothing has kind of the US large AI companies, nothing has kind of blown their socks deef right. This is innovation they at least, you know, feel that they already have. And the difference is that there has been an optimization for open source and an optimization for cost in ways that they have not done. And so I think we're about to see a lot of fast follow and Sam Alman signaled as much last night.

Yeah, he said, we're going to drop models faster or is.

Yeah, he said, we're going to drop models faster or is.

It going to drop the cost because that it must be something that puts off your.

It going to drop the cost because that it must be something that puts off your.

Client's definitely going to drop the cost. And I actually think we are likely to see a cost curve decrease like that's dramatic from them, but also a latency decrease. And I think that that's how they're going to play the game is to try to now one up completely on both dimensions.

Client's definitely going to drop the cost. And I actually think we are likely to see a cost curve decrease like that's dramatic from them, but also a latency decrease. And I think that that's how they're going to play the game is to try to now one up completely on both dimensions.

Jacqueline Rice Nelson, CEO of Tribe AI, Thank you, Caraw's just.

Jacqueline Rice Nelson, CEO of Tribe AI, Thank you, Caraw's just.

Check on these markets because these are all the questions that investors are trained on at the moment. What does it mean for compute going forwards, what does it mean for the competitors in the generative AI model space? And what does it ultimately mean for software too? Now we're clawing back some of our losses of yesterday, but not March eight tens percent higher on than as that one hundred Meta.

Check on these markets because these are all the questions that investors are trained on at the moment. What does it mean for compute going forwards, what does it mean for the competitors in the generative AI model space? And what does it ultimately mean for software too? Now we're clawing back some of our losses of yesterday, but not March eight tens percent higher on than as that one hundred Meta.

In a new record high.

In a new record high.

We'll talk more about Lama there, but Bitcoin up nine tens percent. We're going to delve into the world of crypto and the ripple effects in a moment where one hundred and two thousand move on.

We'll talk more about Lama there, but Bitcoin up nine tens percent. We're going to delve into the world of crypto and the ripple effects in a moment where one hundred and two thousand move on.

The individual movers.

The individual movers.

That you've got to keep your eyes trained on have been, of course some of the points contributors we've seen Meta new record. As I mentioned, Apple has been doing significantly well in video bounces back, but hardly at all. Up two point eight percent after seventeen percent sell off, We're only up about thirty billion. It will six hundred billion yesterday Tesla of by two percent. Remember, earnings are almost upon us Tesla tomorrow out of the gate. We're gonna have the likes of Microsoft to chew on and Meta as well. But coming up more on musks World and questions around his approach to efficiency, because apparently it's rather good at it, don't It would seem this is gluebog technology. Elil musks X has announced a new partnership with Visa. The social media platform is tapping the payment company to enable digital wallets on its app and website, in what marks the first step for the company to create the so called Everything app.

That you've got to keep your eyes trained on have been, of course some of the points contributors we've seen Meta new record. As I mentioned, Apple has been doing significantly well in video bounces back, but hardly at all. Up two point eight percent after seventeen percent sell off, We're only up about thirty billion. It will six hundred billion yesterday Tesla of by two percent. Remember, earnings are almost upon us Tesla tomorrow out of the gate. We're gonna have the likes of Microsoft to chew on and Meta as well. But coming up more on musks World and questions around his approach to efficiency, because apparently it's rather good at it, don't It would seem this is gluebog technology. Elil musks X has announced a new partnership with Visa. The social media platform is tapping the payment company to enable digital wallets on its app and website, in what marks the first step for the company to create the so called Everything app.

Now.

Now.

The move comes as bankers are now looking to offload some free billion dollars of X's debt. According to sources, Pimco Apollo are now said to be among the asset managers looking to purchase a portion of the debt being sold by group of banks at by Morgan Stanley. Some interesting sweetness in that offering too, and staying with Elil Musk, Many are now scrutinizing the tech billionaires approach to efficiency with his own companies.

The move comes as bankers are now looking to offload some free billion dollars of X's debt. According to sources, Pimco Apollo are now said to be among the asset managers looking to purchase a portion of the debt being sold by group of banks at by Morgan Stanley. Some interesting sweetness in that offering too, and staying with Elil Musk, Many are now scrutinizing the tech billionaires approach to efficiency with his own companies.

This as he gears up to cut spending and waste in the.

This as he gears up to cut spending and waste in the.

US government with of course, the Dose initiative for mores Cretrudel, it's a perfect person to discuss as to how good is mascut efficiency in the private sector.

US government with of course, the Dose initiative for mores Cretrudel, it's a perfect person to discuss as to how good is mascut efficiency in the private sector.

Well, I think it's it's worth kind of, you know, taking a look at his track record and maybe sort of you know, being open to the idea that there's maybe some more similarities in how he has run his companies and you know, how his criticism of the government is you know, characterized, then then he is possibly let on. You know, this is it's been the case that Tesla, for example, you know, took a good decade before it was making its investors any money. Uh And and you know there was plenty of waste, you know, even according to him, or inefficiency according to him within the company that was sort of allowed to.

Well, I think it's it's worth kind of, you know, taking a look at his track record and maybe sort of you know, being open to the idea that there's maybe some more similarities in how he has run his companies and you know, how his criticism of the government is you know, characterized, then then he is possibly let on. You know, this is it's been the case that Tesla, for example, you know, took a good decade before it was making its investors any money. Uh And and you know there was plenty of waste, you know, even according to him, or inefficiency according to him within the company that was sort of allowed to.

Fester for some time before he turned things around.

Fester for some time before he turned things around.

And so you know, no one's disputing that Tesla and SpaceX aren't you know, quite efficient and now quite you know, lucrative companies for their shareholders. But you can find, you know, your fair share of inefficiency or waste within his own companies. And you know, even on his own earnings calls, you know, him sort of talking about ways in which his companies haven't necessarily been as efficient as you would expect from somebody who's about to run run Doge.

And so you know, no one's disputing that Tesla and SpaceX aren't you know, quite efficient and now quite you know, lucrative companies for their shareholders. But you can find, you know, your fair share of inefficiency or waste within his own companies. And you know, even on his own earnings calls, you know, him sort of talking about ways in which his companies haven't necessarily been as efficient as you would expect from somebody who's about to run run Doge.

Craig, your reporting pointed to some pretty visible example of maybe a pro fligod approach flying tires from the Czech Republic to the US to ensure their delivery that had to have been expensive. How does that kind of approach translate to to government where the consequences and stakeholders are very different.

Craig, your reporting pointed to some pretty visible example of maybe a pro fligod approach flying tires from the Czech Republic to the US to ensure their delivery that had to have been expensive. How does that kind of approach translate to to government where the consequences and stakeholders are very different.

I think what what Denni's Danna Hole in San Francisco, uh, you know, pointed out in this story is essentially that you know, there's there's a willingness to sort of allow for you know, some inefficiency if it means sort of uh, you know, other deliverables and uh, you know within the government. I think you know, the answer that we're clearly going to get is you know, something different in terms of you know, not so much forgiveness of Okay, yes we were inefficient, but we delivered X or y uh.

I think what what Denni's Danna Hole in San Francisco, uh, you know, pointed out in this story is essentially that you know, there's there's a willingness to sort of allow for you know, some inefficiency if it means sort of uh, you know, other deliverables and uh, you know within the government. I think you know, the answer that we're clearly going to get is you know, something different in terms of you know, not so much forgiveness of Okay, yes we were inefficient, but we delivered X or y uh.

You know what we're what we're seeing from.

You know what we're what we're seeing from.

Doze early on is is this you know, relatively new X account that is just you know, kind of highlighting all the ways that the government is you know, so as of blowing taxpayer dollars and all the ways in which you know, Musk and his team are coming in and sort of you know, writing those wrongs in his view. And so I think, you know, he's not showing a whole lot of willingness to you know, cut slack in terms of trying different things or you know, trying things and then not going well as he maybe has been in his sort of you know times as CEO of many of these companies.

Doze early on is is this you know, relatively new X account that is just you know, kind of highlighting all the ways that the government is you know, so as of blowing taxpayer dollars and all the ways in which you know, Musk and his team are coming in and sort of you know, writing those wrongs in his view. And so I think, you know, he's not showing a whole lot of willingness to you know, cut slack in terms of trying different things or you know, trying things and then not going well as he maybe has been in his sort of you know times as CEO of many of these companies.

Bloomberg's Craig Trudell, thank you.

Bloomberg's Craig Trudell, thank you.

Turning to crypto, deep seek sell off pose a threat across all markets, including crypto, with bitcoin seeing its biggest intra day drop in more than a month. All this comes just as President Trump signed an executive order last week calling for the creation of a White House Advisory Group on digital currencies. Joining us now to discuss all of this is Melton Demr's Crucible Capital Group General partner and founder, Melton we.

Turning to crypto, deep seek sell off pose a threat across all markets, including crypto, with bitcoin seeing its biggest intra day drop in more than a month. All this comes just as President Trump signed an executive order last week calling for the creation of a White House Advisory Group on digital currencies. Joining us now to discuss all of this is Melton Demr's Crucible Capital Group General partner and founder, Melton we.

Really have to get right to it.

Really have to get right to it.

We were talking about Elon Musk Department of Government efficiency. One of the biggest questions facing your industry is regulation. David Sachs, the new AI and cryptos are what are you looking for him and the Trump team to clear away?

We were talking about Elon Musk Department of Government efficiency. One of the biggest questions facing your industry is regulation. David Sachs, the new AI and cryptos are what are you looking for him and the Trump team to clear away?

Well, I think I'm going to say something controversial.

Well, I think I'm going to say something controversial.

The last four years by an administration, the lack of clarity on regulatory policy in many ways I think was actually constructive for the crypto industry in the sense that there was not a lot of external pressure. Clarity I think can be really challenging for markets.

The last four years by an administration, the lack of clarity on regulatory policy in many ways I think was actually constructive for the crypto industry in the sense that there was not a lot of external pressure. Clarity I think can be really challenging for markets.

Yes, there are obviously bright spots.

Yes, there are obviously bright spots.

The rollback of SAB one twenty one will now allow banks to hold crypto on their balance sheet, make it easier for institutions to hold crypto. Sure, that's great, but clarity, I think also creates more perspective on what will work and what won't work in crypto.

The rollback of SAB one twenty one will now allow banks to hold crypto on their balance sheet, make it easier for institutions to hold crypto. Sure, that's great, but clarity, I think also creates more perspective on what will work and what won't work in crypto.

So far, the view has been number go up.

So far, the view has been number go up.

Right.

Right.

We sometimes joke that coin as number go up technology, and there's a meme in the industry.

We sometimes joke that coin as number go up technology, and there's a meme in the industry.

Me we're all going to make it.

Me we're all going to make it.

I think what's happening in week one of the Trump administration is this clarity is helping people and particularly markets understand that we are not all going to make it. They're going to be winners and they're going to be losers. And this administration has made it very clear that they're perfectly content picking winners and losers.

I think what's happening in week one of the Trump administration is this clarity is helping people and particularly markets understand that we are not all going to make it. They're going to be winners and they're going to be losers. And this administration has made it very clear that they're perfectly content picking winners and losers.

AI coin is going to be winners in the future.

AI coin is going to be winners in the future.

There's been this Steve tailing of the AI trade within crypto, and they've taken a brutal hit of course, in the CAR narrative.

There's been this Steve tailing of the AI trade within crypto, and they've taken a brutal hit of course, in the CAR narrative.

Now, look, I think the AI crypto narrative is a confusing one. Two things I look at One, how does crypto make AI better or safer? And the jury is out there and then the reverse is how does.

Now, look, I think the AI crypto narrative is a confusing one. Two things I look at One, how does crypto make AI better or safer? And the jury is out there and then the reverse is how does.

AI make crypto better or safer?

AI make crypto better or safer?

There I think we've used AI to create new casinos in crypto in the form of agents or online accounts tied to lms that are creating their own coins and launching their own coins.

There I think we've used AI to create new casinos in crypto in the form of agents or online accounts tied to lms that are creating their own coins and launching their own coins.

To me, that's not what's interesting.

To me, that's not what's interesting.

What I'm looking at is how can crypto and some of the opportunities around aggregation, optimization, and financialization help crypto make AI better. And then I'm really looking at what Apple is doing smaller models run locally on devices I think is very interesting opportunity for crypto. Obviously, the big story around deep seek is what's going to happen to all of this energy and compute capex and I think there are some of the early efforts we're seeing in crypto to aggregate the long tail of compute into these marketplaces where you can pay in stable coins or dollars.