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

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

Live from New York.

Live from New York.

I'm Caroline Hyde, and this is BlueBag Technology coming up tes the sales slump forty percent in Europe, having fallen in ten of the last twelve months. We get the analysis, plus foreign officials and tech execs push Trump's administration to rethink the US's global chip strategy and export limits.

I'm Caroline Hyde, and this is BlueBag Technology coming up tes the sales slump forty percent in Europe, having fallen in ten of the last twelve months. We get the analysis, plus foreign officials and tech execs push Trump's administration to rethink the US's global chip strategy and export limits.

This is the debate.

This is the debate.

OURAI regulation heats up, and Ali Baba chairman Joe Side criticizes US tech giants for their massive spending on AI infrastructure and warns of a potential bubble in data center construction. We shine a light what's happening in the markets, bring you also breaking news as well as we understand that Russia is currently in the US saying that Russia agrees to ban on striking Ukraine energy assets. That was, of course something that had been discussed in the previous end of the show, but we are seeing of course the United States coming out there and saying indeed that Russia agrees to a ban on the striking of Ukrainian energy assets. Will bring you more on that story in a moment and the implications to the broader market. But right here, right now, we go back to what's happening in the tech space. I'm looking at US that currently off about five tens percent after yesterday's significant rally. I want to drill into some of the individual companies that have been on the move as well, and interestingly, after the phenomenal rally that we saw in Tesla yesterday, it's off by only about two tents of percent. That's in the light of that significant drop once again in European sales that are down forty percent from the month of February after performing a similar amount in the month of January, and we're now down forty three percent over the last two months. I'm shining like what happens to BYD as well. It's not by more than four percent, maybe even five percent after yesterday's rally, as it finally shows that it crescendoed further than Tesla in terms of its revenue for fiscal twenty twenty four. Let's drill into all of this, the pushes in the pools and pleased to welcome Craig.

OURAI regulation heats up, and Ali Baba chairman Joe Side criticizes US tech giants for their massive spending on AI infrastructure and warns of a potential bubble in data center construction. We shine a light what's happening in the markets, bring you also breaking news as well as we understand that Russia is currently in the US saying that Russia agrees to ban on striking Ukraine energy assets. That was, of course something that had been discussed in the previous end of the show, but we are seeing of course the United States coming out there and saying indeed that Russia agrees to a ban on the striking of Ukrainian energy assets. Will bring you more on that story in a moment and the implications to the broader market. But right here, right now, we go back to what's happening in the tech space. I'm looking at US that currently off about five tens percent after yesterday's significant rally. I want to drill into some of the individual companies that have been on the move as well, and interestingly, after the phenomenal rally that we saw in Tesla yesterday, it's off by only about two tents of percent. That's in the light of that significant drop once again in European sales that are down forty percent from the month of February after performing a similar amount in the month of January, and we're now down forty three percent over the last two months. I'm shining like what happens to BYD as well. It's not by more than four percent, maybe even five percent after yesterday's rally, as it finally shows that it crescendoed further than Tesla in terms of its revenue for fiscal twenty twenty four. Let's drill into all of this, the pushes in the pools and pleased to welcome Craig.

Trudell with us and Craig.

Trudell with us and Craig.

Look, the moon music has been sour for Tesla in terms of sales when it comes to Asia, when it comes to Europe, and this is more of the same, but it's not dragging on the stock too much today.

Look, the moon music has been sour for Tesla in terms of sales when it comes to Asia, when it comes to Europe, and this is more of the same, but it's not dragging on the stock too much today.

Yeah, I think it's really been something to watch the last few days now that we've seen this real rally in the shares. They were really getting beaten down and we saw, you know, the Trump administration sort of mount this push, you know, with the Commerce Secretary coming out, Howard Lutnik and saying, you know, go out and buy Tesla stock. It's never going to be this cheap again. We you know, didn't see an immediate sort of perking up of the shares as a result of that, but they really sort of furiously, you know, rallied to begin this week. And you know, even despite the fact that these numbers from the European Auto Manufacturers Association are really ugly, as you say, you know, this isn't just a last couple of months. It's ten of the last twelve that we've seen the red, as this chart shows.

Yeah, I think it's really been something to watch the last few days now that we've seen this real rally in the shares. They were really getting beaten down and we saw, you know, the Trump administration sort of mount this push, you know, with the Commerce Secretary coming out, Howard Lutnik and saying, you know, go out and buy Tesla stock. It's never going to be this cheap again. We you know, didn't see an immediate sort of perking up of the shares as a result of that, but they really sort of furiously, you know, rallied to begin this week. And you know, even despite the fact that these numbers from the European Auto Manufacturers Association are really ugly, as you say, you know, this isn't just a last couple of months. It's ten of the last twelve that we've seen the red, as this chart shows.

I think what's important is to shine a light on how much it's the opposite of the trend in you're more broadly though EV sales are actually are more than thirty percent.

I think what's important is to shine a light on how much it's the opposite of the trend in you're more broadly though EV sales are actually are more than thirty percent.

It really is an outlier.

It really is an outlier.

Yeah, absolutely, And we should of course note that this is not just a story about you know, Elon Musk and potential brand damage. There is a transition of the model. Why that's really important to keep in mind here where you know, when you change over a vehicle from one generation to the next, it means some disruption in your output that is having an effect on Tesla the beginning to begin the year. But you know, this is also the case that you know, the industry was preparing for twenty twenty five being a much tougher compliance year from and emissions perspective. So Tesla also is just going to have a lot more to deal with in terms of competition because other carmakers feel the need to bring their emissions down for those compliance reasons.

Yeah, absolutely, And we should of course note that this is not just a story about you know, Elon Musk and potential brand damage. There is a transition of the model. Why that's really important to keep in mind here where you know, when you change over a vehicle from one generation to the next, it means some disruption in your output that is having an effect on Tesla the beginning to begin the year. But you know, this is also the case that you know, the industry was preparing for twenty twenty five being a much tougher compliance year from and emissions perspective. So Tesla also is just going to have a lot more to deal with in terms of competition because other carmakers feel the need to bring their emissions down for those compliance reasons.

If competition wasn't stiff enough coming from China's byd creature, Dell, we thank you so much. Meanwhile, let's get an investigate because Kathy would well maybe unsurprising me for many, is remaining bullish on Tesla but still calling for the stock to hit two than six hundred dollars in five years, almost ten times its current price, but a Megs daviding there sat down for an exclusive interview with the invest CEO that was over at HSBC Global Investment Summit in Hong Kong.

If competition wasn't stiff enough coming from China's byd creature, Dell, we thank you so much. Meanwhile, let's get an investigate because Kathy would well maybe unsurprising me for many, is remaining bullish on Tesla but still calling for the stock to hit two than six hundred dollars in five years, almost ten times its current price, but a Megs daviding there sat down for an exclusive interview with the invest CEO that was over at HSBC Global Investment Summit in Hong Kong.

Take listen, China is very important to Tesla, and I actually think that Elon Musk and May Musk his mother are are sort of ambassadors for the United States. Yes, yes, yes, yes, and rightly so so. But to answer your question directly, if China were to fail, that would be a short term hit to the stock. Would it take us away from twenty six hundred dollars? No, because the robotaxi story is much more a function of the Western world where ride hailing costs are so much higher than they are in China.

Take listen, China is very important to Tesla, and I actually think that Elon Musk and May Musk his mother are are sort of ambassadors for the United States. Yes, yes, yes, yes, and rightly so so. But to answer your question directly, if China were to fail, that would be a short term hit to the stock. Would it take us away from twenty six hundred dollars? No, because the robotaxi story is much more a function of the Western world where ride hailing costs are so much higher than they are in China.

That's going to take in Bailey Lipshitz, who's been delving into the resilient pollition coming from ARC invest. But really this isn't so much about warries and blips of European sales. This is about long time focus on AI and robotaxis No.

That's going to take in Bailey Lipshitz, who's been delving into the resilient pollition coming from ARC invest. But really this isn't so much about warries and blips of European sales. This is about long time focus on AI and robotaxis No.

Exactly, And as Craig Treudale pointed out earlier, she's been predicting the dawn of robotaxies from Tesla since at least twenty seventeen, so long term bullish. It is their biggest holding in the rc ETF. But one thing I want to call out when you look at this company when it trades on it's multiple If you pull the pe on Tesla relative to the rest of the mag seven p is north of ninety.

Exactly, And as Craig Treudale pointed out earlier, she's been predicting the dawn of robotaxies from Tesla since at least twenty seventeen, so long term bullish. It is their biggest holding in the rc ETF. But one thing I want to call out when you look at this company when it trades on it's multiple If you pull the pe on Tesla relative to the rest of the mag seven p is north of ninety.

Are you saying that Tesla doesn't trade on fundamental They don't trade on fundamentals.

Are you saying that Tesla doesn't trade on fundamental They don't trade on fundamentals.

And also, keep in.

And also, keep in.

Mind, show us, Bailey, you show us if you bought.

Mind, show us, Bailey, you show us if you bought.

ARC five years ago, you're up twenty seven percent. You're lagging the S and P five hundred by one hundred and twenty five percent, okay, and the Nazak by one hundred and fifty percent. So been a losing bet in the long term. But nonetheless, Kathy would sticking to those guns. It kind of does sound like some of the retail investors I talked to and the idea that the cyber truck was only part of a thesis and now we're looking to driverless taxis as well as the humanoid robot.

ARC five years ago, you're up twenty seven percent. You're lagging the S and P five hundred by one hundred and twenty five percent, okay, and the Nazak by one hundred and fifty percent. So been a losing bet in the long term. But nonetheless, Kathy would sticking to those guns. It kind of does sound like some of the retail investors I talked to and the idea that the cyber truck was only part of a thesis and now we're looking to driverless taxis as well as the humanoid robot.

And she doesn't even facts.

And she doesn't even facts.

You're in the human eye on robots, right, Yeah, No, I mean again, if you do the math with a current share count, that's an eight and a half trillion dollar company with her forecasts, So they're going to be doing a lot with driverless technology. Even if you add up some of the bigger carmakers with the likes of an Uber, you're still not even close to what that would look like. She's obviously been bullish. She's pounded the table for bitcoin to hit a million dollars at some point in the not too distant future. So really talking her book, but definitely something.

You're in the human eye on robots, right, Yeah, No, I mean again, if you do the math with a current share count, that's an eight and a half trillion dollar company with her forecasts, So they're going to be doing a lot with driverless technology. Even if you add up some of the bigger carmakers with the likes of an Uber, you're still not even close to what that would look like. She's obviously been bullish. She's pounded the table for bitcoin to hit a million dollars at some point in the not too distant future. So really talking her book, but definitely something.

To take a bit with a grain.

To take a bit with a grain.

Of salt we put into perspective of Kathy would the bets that has won out and she was a long term bull on Nvidio but actually removed her options and ultimately exposure to the company just as it started to rally hard. With Tesla, she has main committee, but they have pulled some of their chips off the table.

Of salt we put into perspective of Kathy would the bets that has won out and she was a long term bull on Nvidio but actually removed her options and ultimately exposure to the company just as it started to rally hard. With Tesla, she has main committee, but they have pulled some of their chips off the table.

Right, Yeah, it's a lower percentage of the holding of when you look at the flagship ETF that Ark Innovation ETF, now about eleven twelve percent of the ETF is allocated to that. That was closer to like one fifth when you look in that looked towards the beginning of the year the end of last year, so pulling back, but as you mentioned, kind of as the stock was rallying. Yes, it's down about a third year to date, but nonetheless, taking that long term view is retail investors will say, you've been right about Tesla for five six years at this point, and you're sitting pretty strongly in the green. But if you look at the rest of some of the investments that ARC has been pitching and been leaning into, they haven't all really worked out, and that's why there's been such a lag between the flagship ETF and pretty much every other tech index.

Right, Yeah, it's a lower percentage of the holding of when you look at the flagship ETF that Ark Innovation ETF, now about eleven twelve percent of the ETF is allocated to that. That was closer to like one fifth when you look in that looked towards the beginning of the year the end of last year, so pulling back, but as you mentioned, kind of as the stock was rallying. Yes, it's down about a third year to date, but nonetheless, taking that long term view is retail investors will say, you've been right about Tesla for five six years at this point, and you're sitting pretty strongly in the green. But if you look at the rest of some of the investments that ARC has been pitching and been leaning into, they haven't all really worked out, and that's why there's been such a lag between the flagship ETF and pretty much every other tech index.

Any Lipshaw's bringing us one investor take when it comes to Tesla, Let's go broader in terms of the overall market analysis of these EV numbers and the.

Any Lipshaw's bringing us one investor take when it comes to Tesla, Let's go broader in terms of the overall market analysis of these EV numbers and the.

Future for the company.

Future for the company.

Seth Goalstea and please say welcomes from morning Star Equity Strategist. You're also the chair of the EV committee over there. You currently have a hold rating Tesla. You've got a price target of two fifty, so actually below where we currently are after yesterday's rally. Why are we not sinking more on these yet further dire sales news out of Europe?

Seth Goalstea and please say welcomes from morning Star Equity Strategist. You're also the chair of the EV committee over there. You currently have a hold rating Tesla. You've got a price target of two fifty, so actually below where we currently are after yesterday's rally. Why are we not sinking more on these yet further dire sales news out of Europe?

Well, I think there's a lot of enthusiasm with the full self driving technology. Yesterday's news that full self driving was approved in China bodes well for China sales is a far bigger market for Tesla than Europe. And so when you look at full self driving, we have the robo taxi testing that's going to be launched in Austin, the full self driving unsupervised launch in Austin, and we'll come to California later this year. And then with the positive news of being able to launch the supervised level two version of full self driving in China, that bodes well for Tesla delivery. So I think that's the momentum that's that's carrying heavier today versus the European deliveries being down.

Well, I think there's a lot of enthusiasm with the full self driving technology. Yesterday's news that full self driving was approved in China bodes well for China sales is a far bigger market for Tesla than Europe. And so when you look at full self driving, we have the robo taxi testing that's going to be launched in Austin, the full self driving unsupervised launch in Austin, and we'll come to California later this year. And then with the positive news of being able to launch the supervised level two version of full self driving in China, that bodes well for Tesla delivery. So I think that's the momentum that's that's carrying heavier today versus the European deliveries being down.

Okay, it has that optimism enough to vindicate the about one hundred times future earnings that we currently trade at for Tesla. As we were just hearing from Bailey, well.

Okay, it has that optimism enough to vindicate the about one hundred times future earnings that we currently trade at for Tesla. As we were just hearing from Bailey, well.

Tesla's a very high growth stock, has been for years, and with Tesla's still having strong growth prospects, whether that's the energy storage system, whether that's robotaxis, full self driving, subscription softwarees, there is still a lot of room for the Tesla growth story to play out. So I think the market is still valuing the Tesla does still have a lot of growth left. Even if the Mile three model y are approaching that limit of deliveries, they still have the new more formal suv coming out later this year that should then push deliveries back into growth.

Tesla's a very high growth stock, has been for years, and with Tesla's still having strong growth prospects, whether that's the energy storage system, whether that's robotaxis, full self driving, subscription softwarees, there is still a lot of room for the Tesla growth story to play out. So I think the market is still valuing the Tesla does still have a lot of growth left. Even if the Mile three model y are approaching that limit of deliveries, they still have the new more formal suv coming out later this year that should then push deliveries back into growth.

Seth get into the details here. Therefore, is it the fact that they haven't really had an overhaul of their current product that is limiting current sales and of course the mismatches they try and iron out a new form of production, or actually is it the politicking of La must taking an effect here.

Seth get into the details here. Therefore, is it the fact that they haven't really had an overhaul of their current product that is limiting current sales and of course the mismatches they try and iron out a new form of production, or actually is it the politicking of La must taking an effect here.

It's still unclear what the drivers are behind the first two months to client, especially in the European market, you could have a lot of consumers waiting for their new model Why, which just began deliveries in Europe in March, so consumers could have been holding off until they could secure a new model Why. You also have the more affordable vehicle being launched, and so some consumers may be waiting for a lower price point vehicle from Tesla. But in the European market especially you finally have long range ed competition at a comparable price for years, a Tesla Model three year model. Why was the only long range in this case, I'm defining it at at least four under kilometers or more of range at the same price that would be as the same as an IC after subsidies. So for key markets like Germany or the UK, a Tesla was the most affordable long range eed. Now you have other competitors who are offering long range evs at a similar or slightly cheaper price point, and so there's true competition for the first time in the European market, and that could be leading some consumers to choose a different vehicle besides the Tesla.

It's still unclear what the drivers are behind the first two months to client, especially in the European market, you could have a lot of consumers waiting for their new model Why, which just began deliveries in Europe in March, so consumers could have been holding off until they could secure a new model Why. You also have the more affordable vehicle being launched, and so some consumers may be waiting for a lower price point vehicle from Tesla. But in the European market especially you finally have long range ed competition at a comparable price for years, a Tesla Model three year model. Why was the only long range in this case, I'm defining it at at least four under kilometers or more of range at the same price that would be as the same as an IC after subsidies. So for key markets like Germany or the UK, a Tesla was the most affordable long range eed. Now you have other competitors who are offering long range evs at a similar or slightly cheaper price point, and so there's true competition for the first time in the European market, and that could be leading some consumers to choose a different vehicle besides the Tesla.

Latin America Europe can access BYD and I was interested in Kathywood's take there that BWEY isn't a compation competive so when it comes to av but we've heard that they are focusing on autonomous vehicle technology, So could it start to ramp up and take on the robotaxi future of Tesla too?

Latin America Europe can access BYD and I was interested in Kathywood's take there that BWEY isn't a compation competive so when it comes to av but we've heard that they are focusing on autonomous vehicle technology, So could it start to ramp up and take on the robotaxi future of Tesla too?

Well, they very well could. Bid has a level two product that they offer in China for free right now, whereas even if you buy a Tesla and China you still have to pay for full self driving.

Well, they very well could. Bid has a level two product that they offer in China for free right now, whereas even if you buy a Tesla and China you still have to pay for full self driving.

So that could lead.

So that could lead.

Some consumers to choose a bid, both will be level two products inside China, and China is a unique market because the data for ad testing has to stay within China. You can't send it back to Tesla's headquarters in the US for refinement, and so China maybe a different market altogether where BID is more comparable to a Tesla. But if you're looking at a market like the US or Europe right now, I think Tesla would be more comparable with Alphabet's Waymo product as a robo taxi competitor.

Some consumers to choose a bid, both will be level two products inside China, and China is a unique market because the data for ad testing has to stay within China. You can't send it back to Tesla's headquarters in the US for refinement, and so China maybe a different market altogether where BID is more comparable to a Tesla. But if you're looking at a market like the US or Europe right now, I think Tesla would be more comparable with Alphabet's Waymo product as a robo taxi competitor.

So with the current price, we're trading app more than your two fifty dollars, call you hold and brace for further volatility. Are we ever going to just see a calmer up into the right trajectory for Tesla stock.

So with the current price, we're trading app more than your two fifty dollars, call you hold and brace for further volatility. Are we ever going to just see a calmer up into the right trajectory for Tesla stock.

Well, if there are months and quarters of good news that comes out, then we could see Tesla's stocks start to rally. But when it was trading in the high four hundreds, like it was in mid December, we had a one star rating, we thought Tesla was to sell because we thought a lot of the good news was priced in, a lot of it was priced for perfection. Even when you're looking at valuing the robotaxi business, we assigned maybe.

Well, if there are months and quarters of good news that comes out, then we could see Tesla's stocks start to rally. But when it was trading in the high four hundreds, like it was in mid December, we had a one star rating, we thought Tesla was to sell because we thought a lot of the good news was priced in, a lot of it was priced for perfection. Even when you're looking at valuing the robotaxi business, we assigned maybe.

A lower valuation of some of the more.

A lower valuation of some of the more.

Bullish forecasts, because when you think of robotaxi, it's going to be a cheaper price point, which means the lower total addressable market for consumers and for Tesla's profitability. And they can't just take a thirty percent take like an uber can. They also have to manage their expensive That's another whole set of additional overhead expenses. So I do think it's going to be a very profitable business for them, but maybe not as profitable as the market's implying.

Bullish forecasts, because when you think of robotaxi, it's going to be a cheaper price point, which means the lower total addressable market for consumers and for Tesla's profitability. And they can't just take a thirty percent take like an uber can. They also have to manage their expensive That's another whole set of additional overhead expenses. So I do think it's going to be a very profitable business for them, but maybe not as profitable as the market's implying.

How warried have you been about key man risk with Tesla as well, concerns about access to the pay he'd been promised, and indeed the focus he has over at the White House right now.

How warried have you been about key man risk with Tesla as well, concerns about access to the pay he'd been promised, and indeed the focus he has over at the White House right now.

Well, Elon Musk has always had multiple positions, you know, whether that was buying Twitter, turning into X a couple of years ago, or helping to lead SpaceX. He wasn't the CEO, but he still does take a leadership position in that company. He also has boring company, Neurolinks, so I'd imagine that Elon is still focusing most of his time and energy at Tesla. I think last week's event highlighted that that he's still focused on Tesla, and he's probably taking a little bit of a step back at some of his other companies, letting the management teams at places like SpaceX and X do more of the projects, take more of a leadership role so he can spend more time at the White House. I'm not too concerned right now that Elon's going to leave Tesla. I think they'll work out a deal that'll be a very favorable compensation package because the shareholders did both for it. So there is a lot of shareholders report for Elon wants to get paid, and I think what we'll see is Elon will get a pay package, we'll stay at Tesla, and so I don't see a lot of keyper service for testing.

Well, Elon Musk has always had multiple positions, you know, whether that was buying Twitter, turning into X a couple of years ago, or helping to lead SpaceX. He wasn't the CEO, but he still does take a leadership position in that company. He also has boring company, Neurolinks, so I'd imagine that Elon is still focusing most of his time and energy at Tesla. I think last week's event highlighted that that he's still focused on Tesla, and he's probably taking a little bit of a step back at some of his other companies, letting the management teams at places like SpaceX and X do more of the projects, take more of a leadership role so he can spend more time at the White House. I'm not too concerned right now that Elon's going to leave Tesla. I think they'll work out a deal that'll be a very favorable compensation package because the shareholders did both for it. So there is a lot of shareholders report for Elon wants to get paid, and I think what we'll see is Elon will get a pay package, we'll stay at Tesla, and so I don't see a lot of keyper service for testing.

Seth Golstein, it has been great catching up with you. Thank you, morning star Crity strategists on things Tesla. Meanwhile, coming up major tech companies and foreign officials. They are pushing the Trump administration to rethink the country's global semiconductor strategy.

Seth Golstein, it has been great catching up with you. Thank you, morning star Crity strategists on things Tesla. Meanwhile, coming up major tech companies and foreign officials. They are pushing the Trump administration to rethink the country's global semiconductor strategy.

We'll have the details next.

We'll have the details next.

Meanwhile, let's talk about some of those key tech executives and companies in Vidia, Broadcom, also Intel. Interesting report coming out this time. From analysis over at UBS, it looks as though Intel is reportedly strategizing to rejuvenate its chip design and broaden its foundry business. Could this be about securing these clients in VideA broadcom that being written up by UBS analysts and within a chury this has been big technology. Our own officials, our major tech companies are lobbying the White House so loose some trade restrictions placed on AI chips. Of course, that was back in the final days of the Biden administration. REUMAGS Mike Sheppard joins us for more on this. Now. It's a so called AI diffusion rule here, and it feels as though Oracle Nvidia are the key companies that would like this not.

Meanwhile, let's talk about some of those key tech executives and companies in Vidia, Broadcom, also Intel. Interesting report coming out this time. From analysis over at UBS, it looks as though Intel is reportedly strategizing to rejuvenate its chip design and broaden its foundry business. Could this be about securing these clients in VideA broadcom that being written up by UBS analysts and within a chury this has been big technology. Our own officials, our major tech companies are lobbying the White House so loose some trade restrictions placed on AI chips. Of course, that was back in the final days of the Biden administration. REUMAGS Mike Sheppard joins us for more on this. Now. It's a so called AI diffusion rule here, and it feels as though Oracle Nvidia are the key companies that would like this not.

To go into act.

To go into act.

Well, that's right, Caro, they have the most at stake here. And to back up a little bit to reminder audience of what this AI diffusion rule does to help understand where the companies are. Look, this rule divides the world into three tiers. It sets up a first tier of countries the closest US allies maybe about twenty of them that get unlimited access. And then there's another tier of countries the adversaries of the Usa, China, and Russia that are really cut off from access to the most advanced AI chips. But then there's this big fat middle of nations and that includes Israel, the United Arab Emirates, and even India, which all have their own ambitions and are all markets where Nvidia and Oracle are looking to do a lot of business. And the prospect of having to face restrictions on how much computing power they can sell to anyone nation, or having to deal with guardrails that could prove to be regulatory hurdles that might steer business elsewhere, is what is prompting this lobbying push by Nvidia and also by foreign leaders.

Well, that's right, Caro, they have the most at stake here. And to back up a little bit to reminder audience of what this AI diffusion rule does to help understand where the companies are. Look, this rule divides the world into three tiers. It sets up a first tier of countries the closest US allies maybe about twenty of them that get unlimited access. And then there's another tier of countries the adversaries of the Usa, China, and Russia that are really cut off from access to the most advanced AI chips. But then there's this big fat middle of nations and that includes Israel, the United Arab Emirates, and even India, which all have their own ambitions and are all markets where Nvidia and Oracle are looking to do a lot of business. And the prospect of having to face restrictions on how much computing power they can sell to anyone nation, or having to deal with guardrails that could prove to be regulatory hurdles that might steer business elsewhere, is what is prompting this lobbying push by Nvidia and also by foreign leaders.

I mean, just think if you're not able to house more than seven percent of your overall compute capacity in certain countries, that's really going to impact Oracle exactly its plants at the moment, plans over Malaysia, for example. So would they want a complete repeal? Are we likely to see a complete repeal?

I mean, just think if you're not able to house more than seven percent of your overall compute capacity in certain countries, that's really going to impact Oracle exactly its plants at the moment, plans over Malaysia, for example. So would they want a complete repeal? Are we likely to see a complete repeal?

Well, the reporting from our colleagues Jenny Leonard and Mackenzie Hawkins, and a shout out to them for the great work that they did with this report. What they turned up was that Nvidian Oracle are most steadfastly against this role. They are the ones who really want to see it next all together and then started again from scratch. Everyone recognizes that there is a need for some sort of governance about where AI chips go. They do provide a security advantage or risk if they spread to widely, and the US is already subjected in video to restrictions on exports of chips also used in AI to China. We've seen that come up, for instance with deep Seek. But now what they want to do is they want this started from scratcher. Are there companies though, like Google and Anthropic that are willing to work with the rule but would like to see it recast in ways that are a little bit more favorable in bugs.

Well, the reporting from our colleagues Jenny Leonard and Mackenzie Hawkins, and a shout out to them for the great work that they did with this report. What they turned up was that Nvidian Oracle are most steadfastly against this role. They are the ones who really want to see it next all together and then started again from scratch. Everyone recognizes that there is a need for some sort of governance about where AI chips go. They do provide a security advantage or risk if they spread to widely, and the US is already subjected in video to restrictions on exports of chips also used in AI to China. We've seen that come up, for instance with deep Seek. But now what they want to do is they want this started from scratcher. Are there companies though, like Google and Anthropic that are willing to work with the rule but would like to see it recast in ways that are a little bit more favorable in bugs.

Mike Shefford, thank you so much on the AI diffusion rule.

Mike Shefford, thank you so much on the AI diffusion rule.

It's time now for talking tech.

It's time now for talking tech.

First up, another TikTok executive steps down.

First up, another TikTok executive steps down.

Rick Channeley, who.

Rick Channeley, who.

Oversaw ad sales and global marketing, will step into an advisory role as part of a reorganization. Now it's the leadst management change by the social media company as it faces an April fifth deadline to reach a US sale deal. Now, according to the information at least eight other executives of Left TikTok since twenty twenty five plus Deep Seek unveiled its latest V three model, promising better programming capabilities. Chinese ai startup dropped the update without actually a formal announcement as it looks to remain competitive against its rivals. Deep Seak claims the V three model could address real world challenges while remaining accurate and efficient, and Ali Baba chairman Joe Sai says AI data centers maybe at the beginning of a bubble. Who's speaking over the HSBC Global Investment Summit in Hong Kong, and Sai said a lot of US data center announcements were duplicative and overlap with each other. So let's get more on that exact story of Bloomberg's Peter Elstrom and finding talk trying to push against these US giants that met the Amazons about their commitment to AI infrastructure.

Oversaw ad sales and global marketing, will step into an advisory role as part of a reorganization. Now it's the leadst management change by the social media company as it faces an April fifth deadline to reach a US sale deal. Now, according to the information at least eight other executives of Left TikTok since twenty twenty five plus Deep Seek unveiled its latest V three model, promising better programming capabilities. Chinese ai startup dropped the update without actually a formal announcement as it looks to remain competitive against its rivals. Deep Seak claims the V three model could address real world challenges while remaining accurate and efficient, and Ali Baba chairman Joe Sai says AI data centers maybe at the beginning of a bubble. Who's speaking over the HSBC Global Investment Summit in Hong Kong, and Sai said a lot of US data center announcements were duplicative and overlap with each other. So let's get more on that exact story of Bloomberg's Peter Elstrom and finding talk trying to push against these US giants that met the Amazons about their commitment to AI infrastructure.

Yeah, it's interesting comments from Joe Sai. As you mentioned, he's chairman of Ali Baba. He's been through this for many, many years. He got a start in the dot com bubbles, so he's seen some of these bubbles in the past, and he's calling it out. He was at this conference in Hong Kong talking with investors and tech executives at that point, and he said he's concerned about this AI bubble forming, particularly around data centers. We have seen incredible amounts of money getting poured into these data centers, especially from the US tech companies Amazon and Microsoft and Google all are pouring tens of billions of dollars into these data centers. Of course, you'll re call that open Ai and SoftBank talked about spending five hundred billion dollars on data centers in the US, so they're really kind of crazy numbers. Alibab has not been shy about making these investments. In fact, they plan to spend more than fifty billion dollars. But the numbers are starting to add up, and the question is whether those are going to pay off with some profitable services down the line.

Yeah, it's interesting comments from Joe Sai. As you mentioned, he's chairman of Ali Baba. He's been through this for many, many years. He got a start in the dot com bubbles, so he's seen some of these bubbles in the past, and he's calling it out. He was at this conference in Hong Kong talking with investors and tech executives at that point, and he said he's concerned about this AI bubble forming, particularly around data centers. We have seen incredible amounts of money getting poured into these data centers, especially from the US tech companies Amazon and Microsoft and Google all are pouring tens of billions of dollars into these data centers. Of course, you'll re call that open Ai and SoftBank talked about spending five hundred billion dollars on data centers in the US, so they're really kind of crazy numbers. Alibab has not been shy about making these investments. In fact, they plan to spend more than fifty billion dollars. But the numbers are starting to add up, and the question is whether those are going to pay off with some profitable services down the line.

And it speaks to investor anxiety over the last few months that we're just putting too much money in not getting enough reward out. In fact, Mizuho analysis coming out today, I always love the notes coming out from Jordan client and he pointed, perhaps these are sort of these pot shots being fired over in video and US giants buy China tech internet leaders, and he said, it's kind of funny that just straight after GtC, we're getting these negative shots against in video and the entire AI investment narrative that generally centers around one hundred percent on US suppliers.

And it speaks to investor anxiety over the last few months that we're just putting too much money in not getting enough reward out. In fact, Mizuho analysis coming out today, I always love the notes coming out from Jordan client and he pointed, perhaps these are sort of these pot shots being fired over in video and US giants buy China tech internet leaders, and he said, it's kind of funny that just straight after GtC, we're getting these negative shots against in video and the entire AI investment narrative that generally centers around one hundred percent on US suppliers.

Is there a theme that.

Is there a theme that.

This is almost geopolitical, that this is China fighting back against US, and how US has basically ridden the wave of AI more than them so far.

This is almost geopolitical, that this is China fighting back against US, and how US has basically ridden the wave of AI more than them so far.

Well, I think it's important to look at the China tech industry, China business for broadly, not as a monolith. These are individual companies making individual choices, but when you look at how they add up. There have been more than ten AI models introduced just over the past two weeks. They're coming out fast and furious after Deep Seek, and you're exactly right. They are positioning themselves as quite different from the US models. They're lower costs, they're much more efficient in a lot of ways, and they're not spending the same amount of money. Part of that is because of US restrictions. The US has stopped them from buying the highest end in video chips in particular, so rather than spend tens of billions of dollars on some of these efforts. They're spending much more and they're using a lot of engineering expertise to be able to come out with models that are very competent. They are competitive globally, and they're innovative in a lot of ways. So they're going at a different part of the market, and they could be bringing down profits overall for the whole market.

Well, I think it's important to look at the China tech industry, China business for broadly, not as a monolith. These are individual companies making individual choices, but when you look at how they add up. There have been more than ten AI models introduced just over the past two weeks. They're coming out fast and furious after Deep Seek, and you're exactly right. They are positioning themselves as quite different from the US models. They're lower costs, they're much more efficient in a lot of ways, and they're not spending the same amount of money. Part of that is because of US restrictions. The US has stopped them from buying the highest end in video chips in particular, so rather than spend tens of billions of dollars on some of these efforts. They're spending much more and they're using a lot of engineering expertise to be able to come out with models that are very competent. They are competitive globally, and they're innovative in a lot of ways. So they're going at a different part of the market, and they could be bringing down profits overall for the whole market.

Just good to remind use of that.

Just good to remind use of that.

Ali Baba's CEO, though tod say that AI is one in a generation opportunities. So kind of speaking from two sides of the mouth here, Peter Elstrom is so good to have you. Thank you, Welcome back to blumel Technology and Caroline hid in New York. Let's get a quick check on these markets, because we remain tentatively higher after yesterday's big rally on the NASSACK. Across all benchmarks, we're up another five ten percent on the Nasdaq one hundred.

Ali Baba's CEO, though tod say that AI is one in a generation opportunities. So kind of speaking from two sides of the mouth here, Peter Elstrom is so good to have you. Thank you, Welcome back to blumel Technology and Caroline hid in New York. Let's get a quick check on these markets, because we remain tentatively higher after yesterday's big rally on the NASSACK. Across all benchmarks, we're up another five ten percent on the Nasdaq one hundred.

You dig into the detail who leads.

You dig into the detail who leads.

Us on a points perspective on the downside's video, We've still got some anxiety around geopolitics on restraints from exporting for that name.

Us on a points perspective on the downside's video, We've still got some anxiety around geopolitics on restraints from exporting for that name.

But go into the.

But go into the.

Companies that lead us on the higher side, and it's Apple from a points perspective, we're off well currently up by one and a quarter percent. We're seeing once again maybe some feel good factors coming from the EU for once for this particular name, but it really is your biggest points contributor. We're now back on the last like one hundred to where we're training at the beginning of March. But in video, as I say, is still the worst on the points downside, We're off by eight tenths of percent as we're still trying to understand how much they are going to be able to get their incredibly sophisticated chips in More broadly around the world. I'm looking at Tesla though, flitting between gains and losses. Today we have negative news when it comes to EU sales down forty percent again from the month of February. However, we saw a significant rally yesterday up almost eleven percent, so maybe we just pull back a little bit and a little bit of profit taking. We're down three tenths toer percent, but there is so much volatility in this market. Let's get a broader context for you amid tariff threats and so much else for big tech. Denise Chisholm is with US fidelity investments, quantitive marks strategy direct to and you put such a historical lens, which we need at this moment because often it feels unprecedented. Take us back to a sentiment right now and how it makes ultimately the context of what it was like back in what the Gulf War. You say, we've never had as much pessimism.

Companies that lead us on the higher side, and it's Apple from a points perspective, we're off well currently up by one and a quarter percent. We're seeing once again maybe some feel good factors coming from the EU for once for this particular name, but it really is your biggest points contributor. We're now back on the last like one hundred to where we're training at the beginning of March. But in video, as I say, is still the worst on the points downside, We're off by eight tenths of percent as we're still trying to understand how much they are going to be able to get their incredibly sophisticated chips in More broadly around the world. I'm looking at Tesla though, flitting between gains and losses. Today we have negative news when it comes to EU sales down forty percent again from the month of February. However, we saw a significant rally yesterday up almost eleven percent, so maybe we just pull back a little bit and a little bit of profit taking. We're down three tenths toer percent, but there is so much volatility in this market. Let's get a broader context for you amid tariff threats and so much else for big tech. Denise Chisholm is with US fidelity investments, quantitive marks strategy direct to and you put such a historical lens, which we need at this moment because often it feels unprecedented. Take us back to a sentiment right now and how it makes ultimately the context of what it was like back in what the Gulf War. You say, we've never had as much pessimism.

Yeah, I mean, in some ways we've had a very cluster of anomalous signals in this tempercent correction. I mean, obviously this correction has been one of the fastest on record, but I think the unique part of it was the decline and sentiment from you know, you can look at the AAII measure from you know, bullish to bearish. You can look at the Google trends in terms of recession sentiment. You can look at a lot of the sentiment indicators, the defense of rotation we've seen, just the rotation in international stocks. All of these signals happen less than three and one percent of the time, and in some ways much of it has been during war crises or prior recession. So without a recessionary event, this is incredibly unique. I think when you look at the signaling perspective and you're willing to take a media term time horizon of six to twelve months. All of these extreme signals are usually contrarian buy signals for the overall market. But the extreme anomaly this time is that the market isn't really down a lot as much as we've seen a ten percent correction, and even over the last six months you can say it's flat. So to the extent that investors are uniquely concerned about the fact that, hey, we're seeing google recessionary trends spiking to recessionary levels to the extent that that has been the case in history. Should stocks go down to meet that recessionary sentiment, you actually find the opposite correlation, meaning the less stocks are down when you are at these peak recession sentiment levels, usually that's better signals in terms of a stock market advance in the future. It's almost like the lack of correction in stocks gets it right, or that stocks are potentially looked throughing something, looking through something. So I think that those unique signals in the data that actually do suggest that opity.

Yeah, I mean, in some ways we've had a very cluster of anomalous signals in this tempercent correction. I mean, obviously this correction has been one of the fastest on record, but I think the unique part of it was the decline and sentiment from you know, you can look at the AAII measure from you know, bullish to bearish. You can look at the Google trends in terms of recession sentiment. You can look at a lot of the sentiment indicators, the defense of rotation we've seen, just the rotation in international stocks. All of these signals happen less than three and one percent of the time, and in some ways much of it has been during war crises or prior recession. So without a recessionary event, this is incredibly unique. I think when you look at the signaling perspective and you're willing to take a media term time horizon of six to twelve months. All of these extreme signals are usually contrarian buy signals for the overall market. But the extreme anomaly this time is that the market isn't really down a lot as much as we've seen a ten percent correction, and even over the last six months you can say it's flat. So to the extent that investors are uniquely concerned about the fact that, hey, we're seeing google recessionary trends spiking to recessionary levels to the extent that that has been the case in history. Should stocks go down to meet that recessionary sentiment, you actually find the opposite correlation, meaning the less stocks are down when you are at these peak recession sentiment levels, usually that's better signals in terms of a stock market advance in the future. It's almost like the lack of correction in stocks gets it right, or that stocks are potentially looked throughing something, looking through something. So I think that those unique signals in the data that actually do suggest that opity.

Okay, so if you are willing to take on the abrupt fall or two coming going forward, are we nearing a bottle is bottom. Is that sort of the signal that you're getting from historical context right now?

Okay, so if you are willing to take on the abrupt fall or two coming going forward, are we nearing a bottle is bottom. Is that sort of the signal that you're getting from historical context right now?

Yeah, I think when you look at it historically, it doesn't really nail the bottom. In terms of picking bottoms, I think that the signals that I look at from a probability perspective or longer term in nature. So when I look and say you want to look out six to twelve months and absorb the volatility, I think that there's opportunities in that. That's less to say that the bottom was yesterday or today, or maybe even in two months from now, but it is to say that after the correction, I think that it might be too late to be bearished to the extent that you have that year long time horizon.

Yeah, I think when you look at it historically, it doesn't really nail the bottom. In terms of picking bottoms, I think that the signals that I look at from a probability perspective or longer term in nature. So when I look and say you want to look out six to twelve months and absorb the volatility, I think that there's opportunities in that. That's less to say that the bottom was yesterday or today, or maybe even in two months from now, but it is to say that after the correction, I think that it might be too late to be bearished to the extent that you have that year long time horizon.

And Denny's what we've seen is a real flip around in terms of who's outperformed, healthcare dominating even a bit of financials, but technology has lagged. Is it now that we start to see people recommit, have fundamentals changed at the same time as human anxieties and any pessimism across the border markets.

And Denny's what we've seen is a real flip around in terms of who's outperformed, healthcare dominating even a bit of financials, but technology has lagged. Is it now that we start to see people recommit, have fundamentals changed at the same time as human anxieties and any pessimism across the border markets.

Yeah, So back to that defensive rotation. The defensive sectors in the market, consumer staples, healthcare, the old telecommunications services, and utilities have outperformed by about eleven hundred basis points. That again has only happened less than three percent of the time in history, and you usually see a cyclical rotation after that, despite the fact that fundamentals may in fact deteriorate, which is to say that, look, a lot of that concern around numbers or around the economy has been somewhat priced in. So I do think that there are opportunities in technology. I think the intriguing part about technology is that we've seen really more multiple compression than we have seen a decline in earning estimates. So once you're out of that top quartile, when I look back in history and say, okay, you're out of the top quartile of relative forward PE or even relative trailing PE, and you're now into that muddy middle, you usually have a positive risk reward to the extent that fundamentals continue to improve.

Yeah, So back to that defensive rotation. The defensive sectors in the market, consumer staples, healthcare, the old telecommunications services, and utilities have outperformed by about eleven hundred basis points. That again has only happened less than three percent of the time in history, and you usually see a cyclical rotation after that, despite the fact that fundamentals may in fact deteriorate, which is to say that, look, a lot of that concern around numbers or around the economy has been somewhat priced in. So I do think that there are opportunities in technology. I think the intriguing part about technology is that we've seen really more multiple compression than we have seen a decline in earning estimates. So once you're out of that top quartile, when I look back in history and say, okay, you're out of the top quartile of relative forward PE or even relative trailing PE, and you're now into that muddy middle, you usually have a positive risk reward to the extent that fundamentals continue to improve.

And the positive risk reward dominates in any of a part of technology. Are we still thinking hardware the pix and shovels where we reallocate or do software, which hasn't had so much whiplash continue to support too.

And the positive risk reward dominates in any of a part of technology. Are we still thinking hardware the pix and shovels where we reallocate or do software, which hasn't had so much whiplash continue to support too.

Yeah, So I think software looks the most intriguing in my data set. So again we have the data going back to nineteen sixty two, and once you're into that bottom half of the distribution on any valuation measure, and software is there. So you're getting in again cheap relative to usually wear software trades. You usually have a positive risk reward. Again, you don't have to necessarily be right on fundamentals because you have above fifty to fifty ydds of outperformance even if fundamentals tend to deteriorate. This isn't to say that software is set up to outperform right this second, but it is to say that it looks like from a historical context your downside is limited and to the extent that you have a call option for future growth, your upside is actually shifting the positive risk reward. So I think that of the three major subsectors, hardware software and semiconductor software looks the most intriguing to me.

Yeah, So I think software looks the most intriguing in my data set. So again we have the data going back to nineteen sixty two, and once you're into that bottom half of the distribution on any valuation measure, and software is there. So you're getting in again cheap relative to usually wear software trades. You usually have a positive risk reward. Again, you don't have to necessarily be right on fundamentals because you have above fifty to fifty ydds of outperformance even if fundamentals tend to deteriorate. This isn't to say that software is set up to outperform right this second, but it is to say that it looks like from a historical context your downside is limited and to the extent that you have a call option for future growth, your upside is actually shifting the positive risk reward. So I think that of the three major subsectors, hardware software and semiconductor software looks the most intriguing to me.

A glasshow full kind of a feeling coming from Denise, We thank you so much, enjoying the show. As always, dnis Chism of Fidelity Investments, Now I'll invest. Kathy would actually spoke exclusively with Bloomberg over at the HSBC Global investors someone in Hong Kong to discuss the global economic outlook. Let's give the context of how AI can help in the long term.

A glasshow full kind of a feeling coming from Denise, We thank you so much, enjoying the show. As always, dnis Chism of Fidelity Investments, Now I'll invest. Kathy would actually spoke exclusively with Bloomberg over at the HSBC Global investors someone in Hong Kong to discuss the global economic outlook. Let's give the context of how AI can help in the long term.

Just take a listen.

Just take a listen.

We think the economy is getting hit by a lot of uncertainty, and I think a lot of people are scared for their jobs. In the US, anyone involved with the government, so federal, state, and local or quasi government in the healthcare and education space. You know, there could be as much as thirty percent of the labor force in the United States. And then we've got AI as another layer of uncertainty. We're seeing middle management teams actually being let go because of the productivity gains associated with AI. You know, their bosses can handle more and more and more over time. So that's another source of uncertainty, but we think that is going to play out positively longer term. Technology and breakthroughs in technologies are always associated with new jobs that we can't even imagine. We're very impressed by what is going on in China, and of course there was the Deep Seek moment, which for China, or it was the equivalent in China for the and the rest of the world. That chat GPT was in late twenty two. I think so that was a big wake up call. And one of the things we learned so interesting is that yes, they may have done it less expensively, maybe much less expensively. We're not quite sure about that, but the algorithm very creative. It had not been created in the West. This is from China. It is open source. So now everyone is starting to use it. They say, we love that idea and we're it. So what we've also learned and did not know until we started studying this open source movement here in China is that it really started a decade ago because a lot of software providers from the Western world we're not providing their software to China out of fear of IP theft. So China said, okay, let's do it ourselves and move open source. I love open source and I think it's going to create a lot of competition out there, which when it comes to innovation, is a very good thing, especially for the end consumer.

We think the economy is getting hit by a lot of uncertainty, and I think a lot of people are scared for their jobs. In the US, anyone involved with the government, so federal, state, and local or quasi government in the healthcare and education space. You know, there could be as much as thirty percent of the labor force in the United States. And then we've got AI as another layer of uncertainty. We're seeing middle management teams actually being let go because of the productivity gains associated with AI. You know, their bosses can handle more and more and more over time. So that's another source of uncertainty, but we think that is going to play out positively longer term. Technology and breakthroughs in technologies are always associated with new jobs that we can't even imagine. We're very impressed by what is going on in China, and of course there was the Deep Seek moment, which for China, or it was the equivalent in China for the and the rest of the world. That chat GPT was in late twenty two. I think so that was a big wake up call. And one of the things we learned so interesting is that yes, they may have done it less expensively, maybe much less expensively. We're not quite sure about that, but the algorithm very creative. It had not been created in the West. This is from China. It is open source. So now everyone is starting to use it. They say, we love that idea and we're it. So what we've also learned and did not know until we started studying this open source movement here in China is that it really started a decade ago because a lot of software providers from the Western world we're not providing their software to China out of fear of IP theft. So China said, okay, let's do it ourselves and move open source. I love open source and I think it's going to create a lot of competition out there, which when it comes to innovation, is a very good thing, especially for the end consumer.

I'll convess Kathy with there. Let's keep talking about competition. Stick with chatchibt in the impact. For decades, Google dominated online search, and now Generator AI and the competitiveness coming from open AI are forcing the company to rethink it's most well known product. Blue Meg's Julia Love joins us now today Bloomg's big take, and Elizabeth Read is a Google veteran that you really shine a light on in your Bloomberg BusinessWeek story because she's now got some big overhauls to do and she's doing them.

I'll convess Kathy with there. Let's keep talking about competition. Stick with chatchibt in the impact. For decades, Google dominated online search, and now Generator AI and the competitiveness coming from open AI are forcing the company to rethink it's most well known product. Blue Meg's Julia Love joins us now today Bloomg's big take, and Elizabeth Read is a Google veteran that you really shine a light on in your Bloomberg BusinessWeek story because she's now got some big overhauls to do and she's doing them.

Yes, so Liz Read is a fascinating rising star within doodle She is now in the top job leading doodle Search. And she came to this role from the Maps division. That's where she spent most of her career. And so while she knew searched very well, she was a little bit less wedded to some of the traditional ways of doing things, and she brought a more experimental spirit that has been really crucial in this new age when so many of the basics about search are being challenged.

Yes, so Liz Read is a fascinating rising star within doodle She is now in the top job leading doodle Search. And she came to this role from the Maps division. That's where she spent most of her career. And so while she knew searched very well, she was a little bit less wedded to some of the traditional ways of doing things, and she brought a more experimental spirit that has been really crucial in this new age when so many of the basics about search are being challenged.

And here comes AI overviews for example. Now, just go back in history a little bit and talk about why there was a lack of well real innovation on the product side of things. Why were people curtailed from upending what we all knew and understood in terms of the blue links.

And here comes AI overviews for example. Now, just go back in history a little bit and talk about why there was a lack of well real innovation on the product side of things. Why were people curtailed from upending what we all knew and understood in terms of the blue links.

Yes, with our reporting, we actually unearthed some new examples of how doodle search employees were pushing to roll out generative AI and search well before the launch of chat GPT, but they faced a lot of resistance. I think there was a lot of self regulation happening that Doodlers just weren't inclined to challenge the company's fundamental business model. Executives were also concerned about whether the technology could deliver the necessary level of accuracy because people just hold Doodle to such a high bar, a much higher bar than a startup would be held too.

Yes, with our reporting, we actually unearthed some new examples of how doodle search employees were pushing to roll out generative AI and search well before the launch of chat GPT, but they faced a lot of resistance. I think there was a lot of self regulation happening that Doodlers just weren't inclined to challenge the company's fundamental business model. Executives were also concerned about whether the technology could deliver the necessary level of accuracy because people just hold Doodle to such a high bar, a much higher bar than a startup would be held too.

And there's the frustration that actually their transformers innovation is then used by someone else. But the question is monetization. Have they really got to the bottom of that, because many a warrant. What about the ads that you can put into an AI overview?

And there's the frustration that actually their transformers innovation is then used by someone else. But the question is monetization. Have they really got to the bottom of that, because many a warrant. What about the ads that you can put into an AI overview?

Yes, I think that remains the big question. Doodle has incorporated ads into AI over views and so far their search market share is pretty much unchanged, but there are some concerns among analysts that growth in search will begin to level off, and in the meantime, Goodle's embrace of generative artificial intelligence is raising huge concerns for all of the publishers who depend on Doodle for traffic.

Yes, I think that remains the big question. Doodle has incorporated ads into AI over views and so far their search market share is pretty much unchanged, but there are some concerns among analysts that growth in search will begin to level off, and in the meantime, Goodle's embrace of generative artificial intelligence is raising huge concerns for all of the publishers who depend on Doodle for traffic.

It's a fascinating story. Deep read go take it on with Julia Love.

It's a fascinating story. Deep read go take it on with Julia Love.

We thank you.

We thank you.

Coming up, US drone makers are battling for a biggest share with the domestic market. I'll speak with Scudio CEO about the growth.

Coming up, US drone makers are battling for a biggest share with the domestic market. I'll speak with Scudio CEO about the growth.

And Chinese competition. That's next. This is Blue Meg Technology.

And Chinese competition. That's next. This is Blue Meg Technology.

The global drone market is dominated by Chinese makers, but there were growing efforts by US rulemakers, defense strands, and startups to gain a bigger foothold in markets.

The global drone market is dominated by Chinese makers, but there were growing efforts by US rulemakers, defense strands, and startups to gain a bigger foothold in markets.

Including the US domestic.

Including the US domestic.

One showing US now is Adam Murrie, the CEO of drone maker Skuydio, and I love a quote that you've been making saying that basically drones are revolving from toys to tools to infrastructure. Well, how do you break down your growth right now in those three contexts.

One showing US now is Adam Murrie, the CEO of drone maker Skuydio, and I love a quote that you've been making saying that basically drones are revolving from toys to tools to infrastructure. Well, how do you break down your growth right now in those three contexts.

So I think we're at a really exciting moment for the industry where historically drones have been manually flown. You know, if you're using it for work, you send an operator out in the field to fly the drone, and people have done all kinds of amazing things and that kind of operating paradigm. But the big shift that we're seeing now is you can put the drone in a docking station. It can be flown remotely and autonomously. It basically becomes a fully autonomous robotic system. And the impact and the use cases that you unlock when you do that are just incredible. So one of the areas where we're seeing this accelerate the most is in public safety, where you could put drones in docking stations and they can autonomously fly out in response to nine one one calls and just fundamentally change the outcome because they can get there in a few seconds. They give the responding officers better situational awareness. And you know, I think we're at the beginning of this just entirely new chapter drones is infrastructure.

So I think we're at a really exciting moment for the industry where historically drones have been manually flown. You know, if you're using it for work, you send an operator out in the field to fly the drone, and people have done all kinds of amazing things and that kind of operating paradigm. But the big shift that we're seeing now is you can put the drone in a docking station. It can be flown remotely and autonomously. It basically becomes a fully autonomous robotic system. And the impact and the use cases that you unlock when you do that are just incredible. So one of the areas where we're seeing this accelerate the most is in public safety, where you could put drones in docking stations and they can autonomously fly out in response to nine one one calls and just fundamentally change the outcome because they can get there in a few seconds. They give the responding officers better situational awareness. And you know, I think we're at the beginning of this just entirely new chapter drones is infrastructure.

Talk to us about the chapter of US versus Chinese main drones in this police and fire department demand. How much are you now able to fulfill it?

Talk to us about the chapter of US versus Chinese main drones in this police and fire department demand. How much are you now able to fulfill it?

So there's interesting historical context here. So if you think about what a drone is, at its core, it's basically consumer electronics combined with a radio control airplane a radio control helicopter. That's the origin of the industry, and historically both those things have been made in China, and so the Chinese companies really got out to a substantial early lead, especially in the kind of toy market and then the tools market. You know, we believe very strongly it's critical that there are strong US companies, strong Western companies that can provide this technology. I think we're it's still early days to the industry. It's going to become more and more important over time.

So there's interesting historical context here. So if you think about what a drone is, at its core, it's basically consumer electronics combined with a radio control airplane a radio control helicopter. That's the origin of the industry, and historically both those things have been made in China, and so the Chinese companies really got out to a substantial early lead, especially in the kind of toy market and then the tools market. You know, we believe very strongly it's critical that there are strong US companies, strong Western companies that can provide this technology. I think we're it's still early days to the industry. It's going to become more and more important over time.

You know, we're.

You know, we're.

Installing these things across our cities, across critical infrastructure, and the risks from a data perspective, from a national security perspective, from a cybersecurity perspective, are substantial. Our goal is to build the best products in the world for this new chapter of drones right here in the US. We made very big early bets on AI and autonomy when we started the company ten years ago, and we're now at the moment where we're starting those to see those payoff.

Installing these things across our cities, across critical infrastructure, and the risks from a data perspective, from a national security perspective, from a cybersecurity perspective, are substantial. Our goal is to build the best products in the world for this new chapter of drones right here in the US. We made very big early bets on AI and autonomy when we started the company ten years ago, and we're now at the moment where we're starting those to see those payoff.

Yeah, and talk about the payoff though, because when we think about what China has done so well, it is about efficiency. It is about the scale at which they've been able to streamline production. How are you now managing to replicate that here in the US.

Yeah, and talk about the payoff though, because when we think about what China has done so well, it is about efficiency. It is about the scale at which they've been able to streamline production. How are you now managing to replicate that here in the US.

So you know, this is not the kind of thing that's going to happen overnight. The strength of China and the Chinese companies that we compete with is definitely in their hardware scale, their cost leverage, you know, the hardware ecosystem that they're taking advantage of in China. We've been manufacturing our drones in the US from the beginning. You know, we didn't start doing this honestly because we thought it was going to be critical from a national security perspective. We started doing it because we felt like it was the best way to build the best product. And we've gotten to the point now where we ship close to fifty thousand drones, which is still small relative to our Chinese competitors, but our market share in the enterprise segments that we focus on, you know, public safety, critical infrastructure like energy utilities is substantial, and the more scale we get up to, the more cost advantages that we get, I think from a capability standpoint now, just on the hardware, you know, we've we've gotten to be very competitive with the Chinese companies, and we have more advance capabilities in AI and autonomy, so you know, it's it's it's tough competition for sure. You know, we have the exciting position of being the US underdog against big Chinese incumbents. But I feel very good about our position. And I think especially as these things become more air driven, more autonomous, more and more the capabilities to find through software that really plays to our strengths as a country and as a company.

So you know, this is not the kind of thing that's going to happen overnight. The strength of China and the Chinese companies that we compete with is definitely in their hardware scale, their cost leverage, you know, the hardware ecosystem that they're taking advantage of in China. We've been manufacturing our drones in the US from the beginning. You know, we didn't start doing this honestly because we thought it was going to be critical from a national security perspective. We started doing it because we felt like it was the best way to build the best product. And we've gotten to the point now where we ship close to fifty thousand drones, which is still small relative to our Chinese competitors, but our market share in the enterprise segments that we focus on, you know, public safety, critical infrastructure like energy utilities is substantial, and the more scale we get up to, the more cost advantages that we get, I think from a capability standpoint now, just on the hardware, you know, we've we've gotten to be very competitive with the Chinese companies, and we have more advance capabilities in AI and autonomy, so you know, it's it's it's tough competition for sure. You know, we have the exciting position of being the US underdog against big Chinese incumbents. But I feel very good about our position. And I think especially as these things become more air driven, more autonomous, more and more the capabilities to find through software that really plays to our strengths as a country and as a company.

Are they becoming ever more supported by the administration. What's on your wish list?

Are they becoming ever more supported by the administration. What's on your wish list?

Well, look, we're you know, we're a product and technology company. We're really focused on, you know, on making our products as useful as they can be. I think that, you know, looking back now, I think the first Trump administration deserves a lot of credit for recognizing the nature of competition with China, the kind of unfair trade practices that they had been partaking in, and that has now become kind of mainstream consensus view. I will say with the new administration, we're very optimistic about seeing a lot of people from the tech world in there that I think really understand that technology at a deep level. And you know, it's still early days, but we're optimistic.

Well, look, we're you know, we're a product and technology company. We're really focused on, you know, on making our products as useful as they can be. I think that, you know, looking back now, I think the first Trump administration deserves a lot of credit for recognizing the nature of competition with China, the kind of unfair trade practices that they had been partaking in, and that has now become kind of mainstream consensus view. I will say with the new administration, we're very optimistic about seeing a lot of people from the tech world in there that I think really understand that technology at a deep level. And you know, it's still early days, but we're optimistic.

Skydio CEO Adam Ray, thanks for the optimism and for joining us. Levittown It's a new six part podcast series from Bloomberg investigating the rise of deep fake pornography online.

Skydio CEO Adam Ray, thanks for the optimism and for joining us. Levittown It's a new six part podcast series from Bloomberg investigating the rise of deep fake pornography online.

It tells a story of a group.

It tells a story of a group.

Of young women in a New York City suburb, horrified to learn that their photographs have been manipulated and posted online, and how they took matters into their own handsmerg's Margie Murphy joins us. Now for more, you go back to twenty twenty. You discuss how female called Kayla in particular, finds a manipulated photo of herself online.

Of young women in a New York City suburb, horrified to learn that their photographs have been manipulated and posted online, and how they took matters into their own handsmerg's Margie Murphy joins us. Now for more, you go back to twenty twenty. You discuss how female called Kayla in particular, finds a manipulated photo of herself online.

But this is a global.

But this is a global.

Story of issues of deep fake pornography.

Story of issues of deep fake pornography.

But start here in Levittown.

But start here in Levittown.

Absolutely, I mean, we start with Kayla and just to it's not even Kayla who discovers a seemingly pornographic image of herself, it's her father.