Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us Live weekdays at ten am Eastern on Apple Car playing Android Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us Live weekdays at ten am Eastern on Apple Car playing Android Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Let's continue the conversation with Uber and Live to get the read on what's going on here, Man Deep saying Lubering Intelligence. Senior tech industry analyst joins us. Now Mande for Uber, was it they're investing in other stuff that's why they're disappointing Or is it Paul's fault because he compareson shops between Lived and Uber.

Let's continue the conversation with Uber and Live to get the read on what's going on here, Man Deep saying Lubering Intelligence. Senior tech industry analyst joins us. Now Mande for Uber, was it they're investing in other stuff that's why they're disappointing Or is it Paul's fault because he compareson shops between Lived and Uber.

I think Uber does have a stickier business model now in the sense that people are more used to taking Uber simply because it's become part of their habits, so that price compares and narrative is sort of fading, although it's still i would say, used by a few subscribers. The overarching question is how big is this market in terms of the writer base. So what you're seeing with both Uber and Lyft is a flat lineling or flat lining of you know, the new customer ads, and that is a bigger problem because then the market suddenly feels saturated. How do you grow revenue? Do you boost right frequency or you layer in some other service? And I think the answer isn't that obvious because to an extent, there is a discretionary part to both their business models. Like if I choose to take public transportation instead of Uber, I could do that and it's just still a nice to have in.

I think Uber does have a stickier business model now in the sense that people are more used to taking Uber simply because it's become part of their habits, so that price compares and narrative is sort of fading, although it's still i would say, used by a few subscribers. The overarching question is how big is this market in terms of the writer base. So what you're seeing with both Uber and Lyft is a flat lineling or flat lining of you know, the new customer ads, and that is a bigger problem because then the market suddenly feels saturated. How do you grow revenue? Do you boost right frequency or you layer in some other service? And I think the answer isn't that obvious because to an extent, there is a discretionary part to both their business models. Like if I choose to take public transportation instead of Uber, I could do that and it's just still a nice to have in.

A lot of the rides that people take.

A lot of the rides that people take.

So that's the aspect.

So that's the aspect.

I think that's what's driving the guidance and the tapering of bookings growth. And I think investors are reality.

I think that's what's driving the guidance and the tapering of bookings growth. And I think investors are reality.

This is a global I think about areas for growth.

This is a global I think about areas for growth.

I would agree if I would guess the US market is added close to saturation. I don't know, everybody's been using Uber for years now, so you cant and lift the card right string. But you know they get almost half of the revenue.

I would agree if I would guess the US market is added close to saturation. I don't know, everybody's been using Uber for years now, so you cant and lift the card right string. But you know they get almost half of the revenue.

Outside of the US.

Outside of the US.

Yeah, so what's the call there.

Yeah, so what's the call there.

Well, so again you have to compare it to what will drive the next leg of growth, And to my mind, their take rates aren't going to expand, so take rates are coming under pressure.

Well, so again you have to compare it to what will drive the next leg of growth, And to my mind, their take rates aren't going to expand, so take rates are coming under pressure.

In the US.

In the US.

There are specific cities that are saying you should give higher wages to the workers, So that debate will always be with these companies. You can never get your way out of, you know, no matter how fast you grow. And Uber announced a buy back last quarter, but I think that's where the regulatory pressure is unlikely to abate. And to my mind, you know, these companies, even though they have an established business model, that right frequency element is huge and I just find it hard if Tesla is going to come up with robotaxis, that's going to impact.

There are specific cities that are saying you should give higher wages to the workers, So that debate will always be with these companies. You can never get your way out of, you know, no matter how fast you grow. And Uber announced a buy back last quarter, but I think that's where the regulatory pressure is unlikely to abate. And to my mind, you know, these companies, even though they have an established business model, that right frequency element is huge and I just find it hard if Tesla is going to come up with robotaxis, that's going to impact.

The take rates for Uber and Lyft.

The take rates for Uber and Lyft.

I mean, imagine Tesla adding a new tab within their app for ride sharing. That's I think it's a big risk.

I mean, imagine Tesla adding a new tab within their app for ride sharing. That's I think it's a big risk.

I mean, clearly they're really going to do that.

I mean, clearly they're really going to do that.

Elon Musk has said there will be a robotaxi launch on August seventh.

Elon Musk has said there will be a robotaxi launch on August seventh.

I bet you will not get so.

I bet you will not get so.

Maybe not today, but your point is over time and the.

Maybe not today, but your point is over time and the.

Market will obviously look way ahead of that. And I'm more concerned about the take rates. Right now, Uber's take rates are close to forty percent for certain type of rides, even though the blended take rate is close to thirty. But forty percent take rate, I mean, imagine what would happen to that take rate if robotaxis come in the equation, it will be a lot lower than forty percent, for sure.

Market will obviously look way ahead of that. And I'm more concerned about the take rates. Right now, Uber's take rates are close to forty percent for certain type of rides, even though the blended take rate is close to thirty. But forty percent take rate, I mean, imagine what would happen to that take rate if robotaxis come in the equation, it will be a lot lower than forty percent, for sure.

But also I guess that but if you do with the ROBOTAXI thing like, can't Uber then get their own robotaxis and invest or does that? Just arow and then their take rates one hundred percent.

But also I guess that but if you do with the ROBOTAXI thing like, can't Uber then get their own robotaxis and invest or does that? Just arow and then their take rates one hundred percent.

So Uber has a partnership with Wevemo because Vemo doesn't want to deploy on their own network and being the business of maintaining the cars, so they want to use Uber's network. But test I mean, they want to do everything by themselves, so right now they haven't announced any partnership.

So Uber has a partnership with Wevemo because Vemo doesn't want to deploy on their own network and being the business of maintaining the cars, so they want to use Uber's network. But test I mean, they want to do everything by themselves, so right now they haven't announced any partnership.

I think it's.

I think it's.

There's all the more reason for Lift to partner with a Tesla simply because they're the smaller player and this kind of gives them an opportunity to catch up, which is what Uber seems to be doing with the instacart partnership is how can I make my network bigger, even if that means partnering with your competitor. And I do think it's going to impact their delivery bookings in the near term, but still they want to grow their network.

There's all the more reason for Lift to partner with a Tesla simply because they're the smaller player and this kind of gives them an opportunity to catch up, which is what Uber seems to be doing with the instacart partnership is how can I make my network bigger, even if that means partnering with your competitor. And I do think it's going to impact their delivery bookings in the near term, but still they want to grow their network.

All right.

All right.

Lift head numbers last night a little better than expected.

Lift head numbers last night a little better than expected.

How do you differentiate the call between Reddit.

How do you differentiate the call between Reddit.

Yeah, I don't take an it's a question of lift gaining market share from Uber in anyway. This was more of a case of expectations being really low and they came out and showed, Okay, we are showing some cost discipline.

Yeah, I don't take an it's a question of lift gaining market share from Uber in anyway. This was more of a case of expectations being really low and they came out and showed, Okay, we are showing some cost discipline.

We're not losing any more.

We're not losing any more.

Market share, which was the case for the past three quarters, and the stocks seems to have reacted ten percent.

Market share, which was the case for the past three quarters, and the stocks seems to have reacted ten percent.

So to your point, Paul, the opposite of what happened with Reddit, good IR department.

So to your point, Paul, the opposite of what happened with Reddit, good IR department.

Yeah. Yeah.

Yeah. Yeah.

For example, we.

For example, we.

Were talking earlier with Reddit being hit or Shopify, I should say Shopify that the IR department just didn't manage expectations.

Were talking earlier with Reddit being hit or Shopify, I should say Shopify that the IR department just didn't manage expectations.

What's up with Reddit? What do you make of them numbers?

What's up with Reddit? What do you make of them numbers?

Wait, first of all, what is Reddit? I'm not read in on this Reddit thing. I missing you.

Wait, first of all, what is Reddit? I'm not read in on this Reddit thing. I missing you.

Think of them as another social media platform, even though social media definition continues to broaden. But they're a platform where users spend twenty to twenty five minutes of their time every day, and their daily active users seems to be that's a lot okay in the social media sphere. And look, their sequential daily active user growth was nine million, so they added almost nine million new users. That's a big number and their relevance in large anglid models. That's the biggest driver. Every company that has their foundational large anglid model needs Reddit data to train their model on.

Think of them as another social media platform, even though social media definition continues to broaden. But they're a platform where users spend twenty to twenty five minutes of their time every day, and their daily active users seems to be that's a lot okay in the social media sphere. And look, their sequential daily active user growth was nine million, so they added almost nine million new users. That's a big number and their relevance in large anglid models. That's the biggest driver. Every company that has their foundational large anglid model needs Reddit data to train their model on.

So that was the whole pitch in the IPO that it was like, people are going to pay Reddit to get their user's posts because it helps their language model, right, yes, are they making money from that and how much?

So that was the whole pitch in the IPO that it was like, people are going to pay Reddit to get their user's posts because it helps their language model, right, yes, are they making money from that and how much?

Yesterday they called out the incremental traffic they're getting from Google because of that. So a lot of the Google large acrid model results linked to Reddit posts, so they get those automatic clicks because the large acrid model generates a response that has a blue link to a Reddit post. So clearly that traffic, incremental traffic has been a big boost for Reddit, and now they are trying to monetize it through ads. But their ad systems aren't as sophisticated as your Meta and some of the other social media players, so that will take them a while to catch up in terms of building their ads.

Yesterday they called out the incremental traffic they're getting from Google because of that. So a lot of the Google large acrid model results linked to Reddit posts, so they get those automatic clicks because the large acrid model generates a response that has a blue link to a Reddit post. So clearly that traffic, incremental traffic has been a big boost for Reddit, and now they are trying to monetize it through ads. But their ad systems aren't as sophisticated as your Meta and some of the other social media players, so that will take them a while to catch up in terms of building their ads.

So the Reddit story is just an advertising story.

So the Reddit story is just an advertising story.

Advertising, it's the same old, same old same and data licensing.

Advertising, it's the same old, same old same and data licensing.

Yeah, data, I'm not sure I'm buying that, but the IPO bought it. I mean thirty four bucks and start looking at the lone.

Yeah, data, I'm not sure I'm buying that, but the IPO bought it. I mean thirty four bucks and start looking at the lone.

Compared to a meta, this company has got a lot of runway to add users, to add data licensing. Why won't you buy a social media story at an earlier stage as opposed to a mature stage.

Compared to a meta, this company has got a lot of runway to add users, to add data licensing. Why won't you buy a social media story at an earlier stage as opposed to a mature stage.

Yep?

Yep?

So where is this? All right? San Francisco?

So where is this? All right? San Francisco?

All right?

All right?

Another good San Francisco story?

Another good San Francisco story?

Who's this guy? Steve Hoffman the founder?

Who's this guy? Steve Hoffman the founder?

Is he a player?

Is he a player?

I mean, look, the company has been around for eighteen plus years, so that's right, that's.

I mean, look, the company has been around for eighteen plus years, so that's right, that's.

Right, that's right.

Right, that's right.

Big on it, John Tucker, he's all over.

Big on it, John Tucker, he's all over.

He's hit Yep, he's hit me.

He's hit Yep, he's hit me.

On social media.

On social media.

You're not even on the instant message on the Bloomberg's.

You're not even on the instant message on the Bloomberg's.

Dangerous to put my thoughts out there.

Dangerous to put my thoughts out there.

I have sent you just like the link of the met Gala outfits, and he still won't look at it. Mandy, thanks a lot, We appreciate you, and we deep seeing a Bloomberg Intelligence senior tech industry analyst joining us.

I have sent you just like the link of the met Gala outfits, and he still won't look at it. Mandy, thanks a lot, We appreciate you, and we deep seeing a Bloomberg Intelligence senior tech industry analyst joining us.

There.

There.

You're listening to the Bloomberg Intelligence Podcast live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa playing Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa playing Bloomberg eleven thirty.

Let's hear on that Apple story for a moment. So Apple stock is down by about three tens one percent as John Tucker was reporting, the Chinese iPhone shipments jumped about twelve percent in March after Apple and it's retailers slashed prices. This is according to official data.

Let's hear on that Apple story for a moment. So Apple stock is down by about three tens one percent as John Tucker was reporting, the Chinese iPhone shipments jumped about twelve percent in March after Apple and it's retailers slashed prices. This is according to official data.

So what does that? What does that mean? What do price cuts actually look like?

So what does that? What does that mean? What do price cuts actually look like?

Joining us now is anarag Rana Bloomberg Intelligence technology analysts on Apple's China iPhone shipments? What kind of price cuts? I read the headline quickly and I thought it was twelve percent price cuts? What kind of price cuts are we looking for?

Joining us now is anarag Rana Bloomberg Intelligence technology analysts on Apple's China iPhone shipments? What kind of price cuts? I read the headline quickly and I thought it was twelve percent price cuts? What kind of price cuts are we looking for?

See again, this is very old. Also showed why the people are getting so excited about it.

See again, this is very old. Also showed why the people are getting so excited about it.

I mean, they already reported the quarter in April, and you know, I mean a few days ago, and you know Tim Cook said that they grew their sales in China. So I'm not so sure why people getting so excited about March. The big thing is there's an event coming in June. The big version would be whether Apple's going to repeat the price cuts in June or not because right now everything hangs out and what will happen in the second quarter because the guidance though it's good, but if you back into it, iPhone stalls will still be down in the second quarter.

I mean, they already reported the quarter in April, and you know, I mean a few days ago, and you know Tim Cook said that they grew their sales in China. So I'm not so sure why people getting so excited about March. The big thing is there's an event coming in June. The big version would be whether Apple's going to repeat the price cuts in June or not because right now everything hangs out and what will happen in the second quarter because the guidance though it's good, but if you back into it, iPhone stalls will still be down in the second quarter.

For Apple, Anra, can we step back and can you help us just kind of frame out the competitive landscape for the phone business in China. What was it like for Apple several years ago and what is it now?

For Apple, Anra, can we step back and can you help us just kind of frame out the competitive landscape for the phone business in China. What was it like for Apple several years ago and what is it now?

So you know, Apple has been gaining share over the last several years steadily, and it is extremely important for Apple to do well in China because that is the growth engine. That is only place where they're going to you know, show a decent amount of actual number of units growth. However, what happened was Huawei, which is this is a local brand, had not released a big phone for years because of certain restrictions and other things, and they released a big five V phone for the first time after a long you could say break. What happened with that is who had those phones early on went in you know quite a bit of them, increased the sales of that particular brand, while Apple continue to struggle at that time for that particular period only because you know, eight there was a lot of discussion about not you know, government officials not using Apple phones want to use something local.

So you know, Apple has been gaining share over the last several years steadily, and it is extremely important for Apple to do well in China because that is the growth engine. That is only place where they're going to you know, show a decent amount of actual number of units growth. However, what happened was Huawei, which is this is a local brand, had not released a big phone for years because of certain restrictions and other things, and they released a big five V phone for the first time after a long you could say break. What happened with that is who had those phones early on went in you know quite a bit of them, increased the sales of that particular brand, while Apple continue to struggle at that time for that particular period only because you know, eight there was a lot of discussion about not you know, government officials not using Apple phones want to use something local.

As well as consumer weakness.

As well as consumer weakness.

Apple for the first time, I would say, a few months ago, you know, did unusual price cuts and which is what we are hearing, you know, led to the unit ship increase.

Apple for the first time, I would say, a few months ago, you know, did unusual price cuts and which is what we are hearing, you know, led to the unit ship increase.

The big question or the big debate for all of.

The big question or the big debate for all of.

Us, including you know, what we have discussed with you as well, is whether this is a cyclical problem for Apple in China or whether there's a structural problem of people not buying iPhones.

Us, including you know, what we have discussed with you as well, is whether this is a cyclical problem for Apple in China or whether there's a structural problem of people not buying iPhones.

We think it's a cyclical issue.

We think it's a cyclical issue.

Over time, it's going to play out because you know, you have ups and downs in unit shipments and if Apple is going to be as great have been investing in China adding more factories over there. You know, I don't see a reason why the Chinese government is going to be against them.

Over time, it's going to play out because you know, you have ups and downs in unit shipments and if Apple is going to be as great have been investing in China adding more factories over there. You know, I don't see a reason why the Chinese government is going to be against them.

But on the other side of the equation, if.

But on the other side of the equation, if.

The US government is very strict with you know, Huawei and other local brands, you know they're going.

The US government is very strict with you know, Huawei and other local brands, you know they're going.

To go after Apple.

To go after Apple.

So there is a lot hanging on on Apple at this point when it comes to the phone market.

So there is a lot hanging on on Apple at this point when it comes to the phone market.

What did you make of the iPad announcement yesterday? I got to say, it was like the least covered Apple event I think I've ever seen. So they have AI focused pro model. So that was where really sted it out to me, and I kind of want to know, did you like it? Would you think of it? And is there a template now that we're going to use from the iPad to then what an AI phone maybe looks like.

What did you make of the iPad announcement yesterday? I got to say, it was like the least covered Apple event I think I've ever seen. So they have AI focused pro model. So that was where really sted it out to me, and I kind of want to know, did you like it? Would you think of it? And is there a template now that we're going to use from the iPad to then what an AI phone maybe looks like.

That's a brilliant question because I really was thinking on the same lines yesterday that, Ah, this is an interesting because if they had chip.

That's a brilliant question because I really was thinking on the same lines yesterday that, Ah, this is an interesting because if they had chip.

Ready for the for the iPad, maybe they're working hard to do something similar for the phone because that's what's going to drive growth for them now as well as the product existence concerned.

Ready for the for the iPad, maybe they're working hard to do something similar for the phone because that's what's going to drive growth for them now as well as the product existence concerned.

I was blown away. It was beauty for I'm actually they're going to have.

I was blown away. It was beauty for I'm actually they're going to have.

It in my local store on Wednesday, and I'm going to go test it out and see how it plays.

It in my local store on Wednesday, and I'm going to go test it out and see how it plays.

Now.

Now.

The thing that's relevant is Apple iPad really got a boost in FY twenty, right around the pandemic. That year, I iPad sales grew up thirty four percent, with a you know, high watermark of thirty one billion dollars that year. Since then, the sales have been declining only because you have this massive pull forward in demand because of the pandemic app iPad refresh rate or you know, typically you know, the years it takes for one to replace it or it goes bad is about five years. So we are really not expecting mathematically this release to do a fair amount of stuff in terms of revenue for this year. For next year, we are expecting that to have a double digit growth rate for iPad for FI twenty five.

The thing that's relevant is Apple iPad really got a boost in FY twenty, right around the pandemic. That year, I iPad sales grew up thirty four percent, with a you know, high watermark of thirty one billion dollars that year. Since then, the sales have been declining only because you have this massive pull forward in demand because of the pandemic app iPad refresh rate or you know, typically you know, the years it takes for one to replace it or it goes bad is about five years. So we are really not expecting mathematically this release to do a fair amount of stuff in terms of revenue for this year. For next year, we are expecting that to have a double digit growth rate for iPad for FI twenty five.

So that's really the iPad story.

So that's really the iPad story.

But I think the read through is if they have an AI chip that's doing you know, it's performing so well. If that, if something similar to that comes to the phone, I think it could be a game changer.

But I think the read through is if they have an AI chip that's doing you know, it's performing so well. If that, if something similar to that comes to the phone, I think it could be a game changer.

Okay, all right on Rock.

Okay, all right on Rock.

I think I'm going out to San Francisco next month for this developer conference.

I think I'm going out to San Francisco next month for this developer conference.

I think that's the place to be.

I think that's the place to be.

Am I if I go out there, am I going to see an AI oh wow moment from Apple?

Am I if I go out there, am I going to see an AI oh wow moment from Apple?

Do you think?

Do you think?

I think?

I think?

I personally think if it is just left for Apple, it's not kind of to it only because they just started pushing a lot of R and D into this over the last six to twelve months. But if they announced the deal with Google that they're going to license some of the Google's product to run on the iOS.

I personally think if it is just left for Apple, it's not kind of to it only because they just started pushing a lot of R and D into this over the last six to twelve months. But if they announced the deal with Google that they're going to license some of the Google's product to run on the iOS.

I think that could make a difference.

I think that could make a difference.

Now, remember they already have a very strong partnership with Google on the search side, and I'm hoping for you know, both the company's sake because you know, we heard, we have heard, like all the trouble that Google has to you know, overpower it, all the discussions around search and stuff. If they do a partnership with Apple, it's going to help both the companies. And it's really going to help Apple in order to get a small language model onto the phone that can help me with you know, a lot of the AI related queries. Now, assuming the you know, the hardware is there to support it, I think it helps out both the companies.

Now, remember they already have a very strong partnership with Google on the search side, and I'm hoping for you know, both the company's sake because you know, we heard, we have heard, like all the trouble that Google has to you know, overpower it, all the discussions around search and stuff. If they do a partnership with Apple, it's going to help both the companies. And it's really going to help Apple in order to get a small language model onto the phone that can help me with you know, a lot of the AI related queries. Now, assuming the you know, the hardware is there to support it, I think it helps out both the companies.

For let you go, you mentioned that you said the iPad was amazing and YadA YadA, you're gonna go to the store and look at it really like it was that it was that cool, like like like Paul and I need to care it was.

For let you go, you mentioned that you said the iPad was amazing and YadA YadA, you're gonna go to the store and look at it really like it was that it was that cool, like like like Paul and I need to care it was.

I mean, it is it is something that you know, I don't carry a laptop nowadays.

I mean, it is it is something that you know, I don't carry a laptop nowadays.

I mean it's certainly the phone that you deal with.

I mean it's certainly the phone that you deal with.

But if you do want a device that is extremely thin, extremely light, and it can take care of all your computing needs. I mean, why not, you know, make the leap, then get rid of the laptop altogether. Because remember the iPad was always supposed to be a replacement for the.

But if you do want a device that is extremely thin, extremely light, and it can take care of all your computing needs. I mean, why not, you know, make the leap, then get rid of the laptop altogether. Because remember the iPad was always supposed to be a replacement for the.

For for for the laptop, but it never has you know, occurred.

For for for the laptop, but it never has you know, occurred.

A lot of people use it to watch moviesm and that's where it ends usually. But you know, but but I but but I think I'm gonna try to make that lead now interesting?

A lot of people use it to watch moviesm and that's where it ends usually. But you know, but but I but but I think I'm gonna try to make that lead now interesting?

Well that actually, I mean, so I don't have a computer. Did you know this about me?

Well that actually, I mean, so I don't have a computer. Did you know this about me?

I don't have one other?

I don't have one other?

Okay, okay, because you have your phone, yep. But if you could do it on the iPad or the bigger screen, I work.

Okay, okay, because you have your phone, yep. But if you could do it on the iPad or the bigger screen, I work.

But I use it less and less and less and less because I use the phone more and more and more.

But I use it less and less and less and less because I use the phone more and more and more.

That's even to work and do all those things.

That's even to work and do all those things.

Yes, the whole thing on the phone.

Yes, the whole thing on the phone.

Interesting. Well, yeah, go ahead, an rock.

Interesting. Well, yeah, go ahead, an rock.

Can you tell me what Shopify is and why the stock are down twenty percent today?

Can you tell me what Shopify is and why the stock are down twenty percent today?

Shopify is one of the most innovative companies that's out there.

Shopify is one of the most innovative companies that's out there.

In fact, I would you know, I equate their founder to be one of the smartest people that I have seen, you know, from our generation.

In fact, I would you know, I equate their founder to be one of the smartest people that I have seen, you know, from our generation.

Very equivalent to when I asked, yeah.

Very equivalent to when I asked, yeah.

Equivalent to what Steve Jobs was on, you know, let's say fifteen years ago. So yeah, it is as a remarkable company. The starts down today because the guidance is a bit light. So I'm sure all the heydphones are getting out of this thing. But this is a company. I think it's going to be there for a very long period of time. But I have liked this company for you know, I think six seven years. It's just a phenomenal story.

Equivalent to what Steve Jobs was on, you know, let's say fifteen years ago. So yeah, it is as a remarkable company. The starts down today because the guidance is a bit light. So I'm sure all the heydphones are getting out of this thing. But this is a company. I think it's going to be there for a very long period of time. But I have liked this company for you know, I think six seven years. It's just a phenomenal story.

And the software I don't use it, So explain to me what they do.

And the software I don't use it, So explain to me what they do.

Yeah, so they allow merchants to get onto line and start you know, stores immediately.

Yeah, so they allow merchants to get onto line and start you know, stores immediately.

It's it's it's just like you can.

It's it's it's just like you can.

You can you know if if you are an entrepreneur, if you are a millennial, you know, if you are you know, if you are one of the influencers, you're going to be using their software to sell sell their products. I mean, this is a this is the next gen company for in what I call digital commerce software. So in principle they help people get online and sell products. It's they sell the software, they sell the platform.

You can you know if if you are an entrepreneur, if you are a millennial, you know, if you are you know, if you are one of the influencers, you're going to be using their software to sell sell their products. I mean, this is a this is the next gen company for in what I call digital commerce software. So in principle they help people get online and sell products. It's they sell the software, they sell the platform.

I mean it is it is for the people.

I mean it is it is for the people.

Frankly so I don't go and shop there, but any website that I may go to helps me.

Frankly so I don't go and shop there, but any website that I may go to helps me.

Yes, that's what's helping me do that.

Yes, that's what's helping me do that.

Yeah, it is.

Yeah, it is.

If you see one of the coolest websites on your phone, on your web on the browser, it's most likely being driven.

If you see one of the coolest websites on your phone, on your web on the browser, it's most likely being driven.

By something that Shopify, that's built on Shopify. So is it.

By something that Shopify, that's built on Shopify. So is it.

So if I'm shopping on Instagram, though, and then I go to a website from Instagram, is that still Shopify?

So if I'm shopping on Instagram, though, and then I go to a website from Instagram, is that still Shopify?

Yes?

Yes?

So Shopify is one of the very few companies that can integrate with any digital channel. You can shop through your you know, Instagram, through any of the other social media platforms, you know, if you If I'm a merchant and I want to sell a product, I can go onto the shop of Ice platform, create my own websites, billing system, front end system, back end system, payment systems.

So Shopify is one of the very few companies that can integrate with any digital channel. You can shop through your you know, Instagram, through any of the other social media platforms, you know, if you If I'm a merchant and I want to sell a product, I can go onto the shop of Ice platform, create my own websites, billing system, front end system, back end system, payment systems.

They take care of everything on the back end. All you have to do is have a good product to sell.

They take care of everything on the back end. All you have to do is have a good product to sell.

All right, Very cool, explain it now, I understand. All right, And this seems like, again I'm going to reiterate, just a bad job of investor relations managing expectations.

All right, Very cool, explain it now, I understand. All right, And this seems like, again I'm going to reiterate, just a bad job of investor relations managing expectations.

It seems like a rag.

It seems like a rag.

Rana technology analyst at Bloomberg Intelligence, big fan of Shopify, who knew? Joining us from that technology capital that is known as Chicago, Illinois?

Rana technology analyst at Bloomberg Intelligence, big fan of Shopify, who knew? Joining us from that technology capital that is known as Chicago, Illinois?

Who knew about that?

Who knew about that?

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Affo card playing Android Oro with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Affo card playing Android Oro with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

So one other story we want to focus on here is Tikno So, China based a byte Dance made it clear that it will not comply with a new US law requiring it to sell its popular TikTok video sharing app, and that sets up, guess what it's all for the lawyers and the judges, a prolonged court battle that basically is going to pit free speech rights against national security interests. And the rumor is that it could wind up at the Supreme Court. So we want to get more data on this. Matthew Shettenhelm is Bloomberg Intelligence media litigation analyst. I just think the fact that we have a media litigation analyst I know says a lot about where we are in m and A and in big tech growth, et cetera.

So one other story we want to focus on here is Tikno So, China based a byte Dance made it clear that it will not comply with a new US law requiring it to sell its popular TikTok video sharing app, and that sets up, guess what it's all for the lawyers and the judges, a prolonged court battle that basically is going to pit free speech rights against national security interests. And the rumor is that it could wind up at the Supreme Court. So we want to get more data on this. Matthew Shettenhelm is Bloomberg Intelligence media litigation analyst. I just think the fact that we have a media litigation analyst I know says a lot about where we are in m and A and in big tech growth, et cetera.

Matthew, what do you make. But first of all, walk us through what this lawsuit is.

Matthew, what do you make. But first of all, walk us through what this lawsuit is.

Yeah, so this is the First Amendment lawsuit that we expected TikTok to bring, basically saying that Congress's action violates its First Amendment rights, that it, like any other platform, think about The New Times or any other media outlet, if Congress were to effectively ban it, that it violates the First Amendment to do so unless Congress can pass a pretty tough test. And so I think this is a pretty substantial First Amendment case because we've rarely seen Congress take such drastic action with respect to such a major media platform.

Yeah, so this is the First Amendment lawsuit that we expected TikTok to bring, basically saying that Congress's action violates its First Amendment rights, that it, like any other platform, think about The New Times or any other media outlet, if Congress were to effectively ban it, that it violates the First Amendment to do so unless Congress can pass a pretty tough test. And so I think this is a pretty substantial First Amendment case because we've rarely seen Congress take such drastic action with respect to such a major media platform.

You know what we hired, Matt. He was just a kid, gray hair. I know, I don't know what happened exactly.

You know what we hired, Matt. He was just a kid, gray hair. I know, I don't know what happened exactly.

As a grizzled veteran there, Matt. I know it's important which court these things go to. So tell us where you think this case will be litigated initially and kind of how that might play.

As a grizzled veteran there, Matt. I know it's important which court these things go to. So tell us where you think this case will be litigated initially and kind of how that might play.

Yeah, So this one's pretty easy to figure that out because Congress limited where the companies can sue, and they said any suit can only be filed at the DC Circuit here here in Washington, which is sometimes referred to as the second most important court in the United States below below the U. S. Supreme Court. This is a court that that takes most of its cases actually involved challenges to US government action, usually agencies, the the alphabet soup of agencies, the FCC, the the f A A, the.

Yeah, So this one's pretty easy to figure that out because Congress limited where the companies can sue, and they said any suit can only be filed at the DC Circuit here here in Washington, which is sometimes referred to as the second most important court in the United States below below the U. S. Supreme Court. This is a court that that takes most of its cases actually involved challenges to US government action, usually agencies, the the alphabet soup of agencies, the FCC, the the f A A, the.

E p A.

E p A.

But here it's it's Congress actually taking the action. So so this is a pretty experienced court. This won't allow a single judge to go out and sort of make a name for himself with an opinion. This will be a three judge panel of very experienced judges, and then the only appeal option would be to the Supreme Court after that.

But here it's it's Congress actually taking the action. So so this is a pretty experienced court. This won't allow a single judge to go out and sort of make a name for himself with an opinion. This will be a three judge panel of very experienced judges, and then the only appeal option would be to the Supreme Court after that.

Does it violate the First Amendment free speech rights?

Does it violate the First Amendment free speech rights?

So I think it's it's a strong argument that that TikTok presents. This is not an easy case on on either side. What what the court is going to look at is whether there's an important interest that Congress was trying to serve and whether it tried to address that interest in an appropriate and narrow way. Did it burden more speech than is necessary to go after the interest. And one of the things that the government has going for it here is that this is a national security question. I think if if if this were just an agency, you know, trying to do this. I think that the DC Circuit would would have issues with the state of the record here and and and require it to do more. There's very little evidence in the legislative record about what exactly is the risk and what exactly why Congress needed to pursue this avenue versus another avenue. If an agency did this, a court would would have issues with it. But this is Congress. This is our biggest policy making body, and it's on national security, something these judges really know nothing about, and they're going to be be very careful about interfering. So at the end of the day, it's a close call, but I give the United States a slight edge because of that deference on national security questions where judges just aren't expert.

So I think it's it's a strong argument that that TikTok presents. This is not an easy case on on either side. What what the court is going to look at is whether there's an important interest that Congress was trying to serve and whether it tried to address that interest in an appropriate and narrow way. Did it burden more speech than is necessary to go after the interest. And one of the things that the government has going for it here is that this is a national security question. I think if if if this were just an agency, you know, trying to do this. I think that the DC Circuit would would have issues with the state of the record here and and and require it to do more. There's very little evidence in the legislative record about what exactly is the risk and what exactly why Congress needed to pursue this avenue versus another avenue. If an agency did this, a court would would have issues with it. But this is Congress. This is our biggest policy making body, and it's on national security, something these judges really know nothing about, and they're going to be be very careful about interfering. So at the end of the day, it's a close call, but I give the United States a slight edge because of that deference on national security questions where judges just aren't expert.

So let's just assume that maybe the second this DC District rules in favor of Congress, Tiktak presumably would then take it to the Supreme Court. Do you think the Supreme Court would hear such a case.

So let's just assume that maybe the second this DC District rules in favor of Congress, Tiktak presumably would then take it to the Supreme Court. Do you think the Supreme Court would hear such a case.

Yeah, so every Supreme Court case is discretionary. They could say no, you know, I think more likely if the scenario were flipped, I think the Supreme Court would take it that if the DC Circuit rules initially in TikTok's favor, I think the United States would would almost certainly get a second chance at the Supreme Court. And that's one of the reasons why I like the United States chances here is that I see even if it doesn't go well for the United States at the DC Circuit, I think it it might go better at the Supreme Court.

Yeah, so every Supreme Court case is discretionary. They could say no, you know, I think more likely if the scenario were flipped, I think the Supreme Court would take it that if the DC Circuit rules initially in TikTok's favor, I think the United States would would almost certainly get a second chance at the Supreme Court. And that's one of the reasons why I like the United States chances here is that I see even if it doesn't go well for the United States at the DC Circuit, I think it it might go better at the Supreme Court.

It gets two shots at it.

It gets two shots at it.

If the DC Circuit rules for the United States, I could say this, I could see the Supreme Court saying, you know what, the DC Circuit got it right. We don't need to take it up and say the same thing. So you know, it's definitely going to be on the Supreme Court's radar, assuming the timing fits. That's going to be the first question is how do you squeeze all this in on Congress's timeline by January nineteenth, we're supposed to have a divestiture. The courts usually take much longer than that.

If the DC Circuit rules for the United States, I could say this, I could see the Supreme Court saying, you know what, the DC Circuit got it right. We don't need to take it up and say the same thing. So you know, it's definitely going to be on the Supreme Court's radar, assuming the timing fits. That's going to be the first question is how do you squeeze all this in on Congress's timeline by January nineteenth, we're supposed to have a divestiture. The courts usually take much longer than that.

If Minutian gets together as buddies, or if somebody else comes in and wants to buy it, how does that complicate.

If Minutian gets together as buddies, or if somebody else comes in and wants to buy it, how does that complicate.

The court case.

The court case.

Yeah, so that's a great question because for all of this to happen on such a short timeline is almost impossible. And so, you know, I think the court case is going to press ahead, and one of the first things we're going to see is a filing from TikTok giving us its strategy the timing. Is it going to ask the court to expedite this case. Is it going to ask the court to pause Congress's deadlines to give more time for for those sorts of negotiations.

Yeah, so that's a great question because for all of this to happen on such a short timeline is almost impossible. And so, you know, I think the court case is going to press ahead, and one of the first things we're going to see is a filing from TikTok giving us its strategy the timing. Is it going to ask the court to expedite this case. Is it going to ask the court to pause Congress's deadlines to give more time for for those sorts of negotiations.

We don't know yet.

We don't know yet.

That should come.

That should come.

I think in the next couple of days. You know, some some look at the strategy there, but it's definitely difficult to see how you squeeze both a potential divestiture and litigation in at the same time. I think they have to be going at the same time on two tracks.

I think in the next couple of days. You know, some some look at the strategy there, but it's definitely difficult to see how you squeeze both a potential divestiture and litigation in at the same time. I think they have to be going at the same time on two tracks.

Who argues this case on behalf of the US government?

Who argues this case on behalf of the US government?

Good question, Yeah, I would I would think it's it's pretty high level attorneys in the Attorney's General Office, you know, and so so the potentially the Solicitor General of the United States if this goes to the US Supreme Court. Uh, this suit named Merrick Garland, the Attorney General, as the defendant, so I would think he would he would name one of his top attorneys to represent him and the United States in this case.

Good question, Yeah, I would I would think it's it's pretty high level attorneys in the Attorney's General Office, you know, and so so the potentially the Solicitor General of the United States if this goes to the US Supreme Court. Uh, this suit named Merrick Garland, the Attorney General, as the defendant, so I would think he would he would name one of his top attorneys to represent him and the United States in this case.

All right, presumably we have some good attorneys working for us in the government.

All right, presumably we have some good attorneys working for us in the government.

I would like to think.

I would like to think.

I think this is a David So David Weston is a recovering lawyer.

I think this is a David So David Weston is a recovering lawyer.

He's anti trust but still and years and years and years ago, he was like, you know what, anything is just good.

He's anti trust but still and years and years and years ago, he was like, you know what, anything is just good.

For lawyers, good for all of this just puts lawyers more.

For lawyers, good for all of this just puts lawyers more.

Job because they built by the hour, by the minute. Matt Shuttingham, thank you so much.

Job because they built by the hour, by the minute. Matt Shuttingham, thank you so much.

We appreciate it. He doesn't build by the hour. We get him on a straight retainer. Come on to Bloomberg Intelligence radio show, Matt Sheltenhelm Middy media litigation analysts for Bloomberg Intelligence. He's down in DC where all this A lot of this stuff happens, you know, all these agencies in the litigation arising there. So again, TikTok important. I mean, I don't know how many gajillions of people are on tiktech, but a lot. It's important for the kids and support for John Tucker. He's got a huge presence. He's in I think he's an influencer, is what they call. So he's paying close attention to this litigation.

We appreciate it. He doesn't build by the hour. We get him on a straight retainer. Come on to Bloomberg Intelligence radio show, Matt Sheltenhelm Middy media litigation analysts for Bloomberg Intelligence. He's down in DC where all this A lot of this stuff happens, you know, all these agencies in the litigation arising there. So again, TikTok important. I mean, I don't know how many gajillions of people are on tiktech, but a lot. It's important for the kids and support for John Tucker. He's got a huge presence. He's in I think he's an influencer, is what they call. So he's paying close attention to this litigation.

You're listening to the Bloomberg Intelligence Podcast. Don't catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven.

You're listening to the Bloomberg Intelligence Podcast. Don't catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven.

Thirty and I'm Alex Steel alongside Paul Sweeney. This is Bloomberg Intelligence Radio. We cover all the top news for you in the financial and business world. Where are great analysts that cover all the industries worldwide, one hundred and thirty industries in two thousand plus companies. Let's get more on this Intel thing. So apparently the withdrawal of the license affects US sales of chips for using Huawei phones and laptops. That's according to people familiar with the matter. Now, the overall decision may not affect a significant volume of chips, but it's really about the US government's determination to curtail China's access to a huge swath of the semiconductor technology.

Thirty and I'm Alex Steel alongside Paul Sweeney. This is Bloomberg Intelligence Radio. We cover all the top news for you in the financial and business world. Where are great analysts that cover all the industries worldwide, one hundred and thirty industries in two thousand plus companies. Let's get more on this Intel thing. So apparently the withdrawal of the license affects US sales of chips for using Huawei phones and laptops. That's according to people familiar with the matter. Now, the overall decision may not affect a significant volume of chips, but it's really about the US government's determination to curtail China's access to a huge swath of the semiconductor technology.

That's why Intel stock is down almost three percent.

That's why Intel stock is down almost three percent.

Michael Shepherd is Bloomberg News a senior editor, and he's standing by to help us break all of this down, walk us through the revenue pain that Intel sees from this, and the intricacy is of what kind of chips they can and cannot sell.

Michael Shepherd is Bloomberg News a senior editor, and he's standing by to help us break all of this down, walk us through the revenue pain that Intel sees from this, and the intricacy is of what kind of chips they can and cannot sell.

Well, that's a great question, Alex. And for Intel, the company is under some pressure to produce on the turnaround that pet Gelsinger has outlined to try to get the company back into the vanguard of manufacturing, but here in the US in particular, So analysts are out there looking for any sign of potential trouble for Intel as it tries to execute this plan. And here, even though we're not seeing a significant market for Intel with Huahwei, nonetheless any sign of trouble is something that they have to take into account.

Well, that's a great question, Alex. And for Intel, the company is under some pressure to produce on the turnaround that pet Gelsinger has outlined to try to get the company back into the vanguard of manufacturing, but here in the US in particular, So analysts are out there looking for any sign of potential trouble for Intel as it tries to execute this plan. And here, even though we're not seeing a significant market for Intel with Huahwei, nonetheless any sign of trouble is something that they have to take into account.

So, you know, for I guess the bigger picture here as you step back, it just feels like this technology cold war between China and the West, China and the US is intensifying. Is that the feeling in Washington is that where Washington really wants to take this.

So, you know, for I guess the bigger picture here as you step back, it just feels like this technology cold war between China and the West, China and the US is intensifying. Is that the feeling in Washington is that where Washington really wants to take this.

But Paul, I'm glad you brought it up that way in those terms, because we really are seeing much more of a frost when it comes to technology settling in the US. Has been making clear we heard Commerce Secretary Gina Raymonder just a few weeks ago say technological security is national security, and they are drawing a line when it comes to the more sophisticated and more advanced technology, especially when it comes to computer chips. The US is a leading innovator, if not a leading producer, of some of the most advanced and tiniest semiconductors that are out there powering technology everywhere. And one of the emerging fronts is, of course, artificial intelligence. And we spoke yesterday to House Foreign Affairs Committee Chairman Michael McCall, who's been pushing for these WAWEE restrictions, and he said, the idea of the export controls that we've reported on yesterday was to keep the most advanced AI tech out of China's hands.

But Paul, I'm glad you brought it up that way in those terms, because we really are seeing much more of a frost when it comes to technology settling in the US. Has been making clear we heard Commerce Secretary Gina Raymonder just a few weeks ago say technological security is national security, and they are drawing a line when it comes to the more sophisticated and more advanced technology, especially when it comes to computer chips. The US is a leading innovator, if not a leading producer, of some of the most advanced and tiniest semiconductors that are out there powering technology everywhere. And one of the emerging fronts is, of course, artificial intelligence. And we spoke yesterday to House Foreign Affairs Committee Chairman Michael McCall, who's been pushing for these WAWEE restrictions, and he said, the idea of the export controls that we've reported on yesterday was to keep the most advanced AI tech out of China's hands.

What about tech that's already in their hands that then China can adapt themselves. Wasn't there like a Huawei phone that really scratched everyone's head on like how what kind of chips they actually used?

What about tech that's already in their hands that then China can adapt themselves. Wasn't there like a Huawei phone that really scratched everyone's head on like how what kind of chips they actually used?

I mean, how do you restrict that kind of stuff?

I mean, how do you restrict that kind of stuff?

Well, the US is actually investigating what happened with the May ninety This device was unveiled as Gina Raimondo was visiting China, and it was taken as a you know, something that was aimed directly at her during her visit to say that, look, you're trying to put these restrictions in place, we will show you. Now. The US has launched an investigation into how Huawei was able to develop it and whether there are other companies that are forming this shadow network of suppliers to Huawei, in other words, creating proxies that allow the device maker to obtain the chips at an otherwise can't.

Well, the US is actually investigating what happened with the May ninety This device was unveiled as Gina Raimondo was visiting China, and it was taken as a you know, something that was aimed directly at her during her visit to say that, look, you're trying to put these restrictions in place, we will show you. Now. The US has launched an investigation into how Huawei was able to develop it and whether there are other companies that are forming this shadow network of suppliers to Huawei, in other words, creating proxies that allow the device maker to obtain the chips at an otherwise can't.

So what's the response been from China? What can we It's just gonna be a tit for tat type of thing. So I'm Tim Cook, I'm paying attention here.

So what's the response been from China? What can we It's just gonna be a tit for tat type of thing. So I'm Tim Cook, I'm paying attention here.

Well, American technology executives should be watching this space. China overnight responded, calling the moves economic coercion and a violation of what it sees as World Trade Organization rules, and they may very well decide to proceed with the case. At the same time, the US is trying to draw a line around the whole question of national security, and that is going to be something that we see as a tension point between the two countries. The US is made clear that it wants to do business with China, but just not that far. It is only willing to go so far when it comes to trade in more advanced technologies. It wants to preserve the American edge here at home.

Well, American technology executives should be watching this space. China overnight responded, calling the moves economic coercion and a violation of what it sees as World Trade Organization rules, and they may very well decide to proceed with the case. At the same time, the US is trying to draw a line around the whole question of national security, and that is going to be something that we see as a tension point between the two countries. The US is made clear that it wants to do business with China, but just not that far. It is only willing to go so far when it comes to trade in more advanced technologies. It wants to preserve the American edge here at home.

How hard is it for Intel to make up that revenue elsewhere?

How hard is it for Intel to make up that revenue elsewhere?

You know, it's a good question. It's unclear exactly how much they would be losing here. It was only a slight drop. If you read between the lines on it. You know they're now seeing something more to the midpoint of their guidance, but it is still within the revenue that they have projected between twelve and a half billion and thirteen and a half billion.

You know, it's a good question. It's unclear exactly how much they would be losing here. It was only a slight drop. If you read between the lines on it. You know they're now seeing something more to the midpoint of their guidance, but it is still within the revenue that they have projected between twelve and a half billion and thirteen and a half billion.

You know, Michael, we've all grown up with Intel, and you know, kind of I guess we now consider kind of the older generation of Silicon Valley of technology. It appears that they just have not been able to catch that AI wave, at least from investors perspective, in any way, shape or form. Is there any optimism that maybe they can infect pivot their company to go to where the puck is going, which is for AI.

You know, Michael, we've all grown up with Intel, and you know, kind of I guess we now consider kind of the older generation of Silicon Valley of technology. It appears that they just have not been able to catch that AI wave, at least from investors perspective, in any way, shape or form. Is there any optimism that maybe they can infect pivot their company to go to where the puck is going, which is for AI.

Well, Paul, we all remember the Intel inside jingle from those ads years ago, and that is something that Pat Gelson is really trying to recapture and he is seizing upon the Biden Administration's Chips Act. All those investments. We're seeing the company launch plants in Arizona and in Ohio. We just profiled the construction of this new facility in Ohio was really impressive. Look inside what they are trying to build there. It's ambitious, but it will take some time too. These plants can't be built overnight, and it is a race against the clock when it comes.

Well, Paul, we all remember the Intel inside jingle from those ads years ago, and that is something that Pat Gelson is really trying to recapture and he is seizing upon the Biden Administration's Chips Act. All those investments. We're seeing the company launch plants in Arizona and in Ohio. We just profiled the construction of this new facility in Ohio was really impressive. Look inside what they are trying to build there. It's ambitious, but it will take some time too. These plants can't be built overnight, and it is a race against the clock when it comes.

To ai well, and also is a question.

To ai well, and also is a question.

I mean a lot of the stuff if you announce it doesn't mean it actually happens. Things get pushed back or paired back. You're going to start off with, say a plant that's going to do X amount and then you reduce it to M amount or are we expecting anything along those lines from Intel? I think there was a great chart on Bloomberg today that showed where chips come from now and it was an amazing circle charts, circle chart they called circle charts pie chart, Oh my goodness, pie chart that showed a Taiwan and Korea and then how in like nine years, eight years, and just the diversification was tremendous and the majority of that coming from the US.

I mean a lot of the stuff if you announce it doesn't mean it actually happens. Things get pushed back or paired back. You're going to start off with, say a plant that's going to do X amount and then you reduce it to M amount or are we expecting anything along those lines from Intel? I think there was a great chart on Bloomberg today that showed where chips come from now and it was an amazing circle charts, circle chart they called circle charts pie chart, Oh my goodness, pie chart that showed a Taiwan and Korea and then how in like nine years, eight years, and just the diversification was tremendous and the majority of that coming from the US.

Well, what the US is really hoping to do through the Chips Act is to get twenty percent of production of advanced semiconductors done domestically. Currently that figure is zero, so that and they would like to achieve this goal by twenty thirty. That is a really ambitious target and they're pushing all out to see if they can achieve it. But the European Union also has a similar goal of trying to amp up its own percentage of advanced semiconductor production. And the idea also is as a hedge in the event that China decides to actually make some move against Taiwan militarily. The US wants to be sure that it can produce chips in the event of a severe supply chain disruption akin to the one that we saw during the pandemic.

Well, what the US is really hoping to do through the Chips Act is to get twenty percent of production of advanced semiconductors done domestically. Currently that figure is zero, so that and they would like to achieve this goal by twenty thirty. That is a really ambitious target and they're pushing all out to see if they can achieve it. But the European Union also has a similar goal of trying to amp up its own percentage of advanced semiconductor production. And the idea also is as a hedge in the event that China decides to actually make some move against Taiwan militarily. The US wants to be sure that it can produce chips in the event of a severe supply chain disruption akin to the one that we saw during the pandemic.

Yeah, I mean that drove home kind of.

Yeah, I mean that drove home kind of.

I think kind of just brought to the forefront this whole you know, reshoring or friend shoring for a lot of different industries, including technology.

I think kind of just brought to the forefront this whole you know, reshoring or friend shoring for a lot of different industries, including technology.

Michael Sheppard, thanks so much for joining us there.

Michael Sheppard, thanks so much for joining us there.

Michael Sheppard, he's a senior editor for Bloomberg News, joining us from Washington, DC. And I remember that you know, I guess we all remember that kind of in the beginning of the pandemic, when the global economy really shut down.

Michael Sheppard, he's a senior editor for Bloomberg News, joining us from Washington, DC. And I remember that you know, I guess we all remember that kind of in the beginning of the pandemic, when the global economy really shut down.

You're like, oh, we a lot. We import a lot of stuff, a lot of.

You're like, oh, we a lot. We import a lot of stuff, a lot of.

Important stuff, and from some places that may or may not be that dependent, I guess are dependable, and therefore that whole reshoring friend shoring, and I guess Mexico has been one of the real beneficiaries of that.

Important stuff, and from some places that may or may not be that dependent, I guess are dependable, and therefore that whole reshoring friend shoring, and I guess Mexico has been one of the real beneficiaries of that.

Yeah.

Yeah.

Absolutely, And that's what was so staggering about this pie chart, just to show how bifurcated it actually is now in terms of how much market share Korea and Taiwan have and then how much money apparently will be poured in even like Europe is going to gain some share, nothing like the US, but nonetheless, I mean the first mover advantage, right, Like, if you put a lot of money into some thing and you build something, now, are you going to go then build a second plan in Europe? Or is it kind of a one and done kind of thing when you're looking at billions and billions and billions dollars worth of investments.

Absolutely, And that's what was so staggering about this pie chart, just to show how bifurcated it actually is now in terms of how much market share Korea and Taiwan have and then how much money apparently will be poured in even like Europe is going to gain some share, nothing like the US, but nonetheless, I mean the first mover advantage, right, Like, if you put a lot of money into some thing and you build something, now, are you going to go then build a second plan in Europe? Or is it kind of a one and done kind of thing when you're looking at billions and billions and billions dollars worth of investments.

And Michael's referencing a piece of work done by Bloomberg News, the Big Take story of a week or two ago about that Ohio plant. Yes, and how big that's going to be in the investment there. So that's a huge investment. But as Michael is suggesting, if your intel, the payoff's going to be a while.

And Michael's referencing a piece of work done by Bloomberg News, the Big Take story of a week or two ago about that Ohio plant. Yes, and how big that's going to be in the investment there. So that's a huge investment. But as Michael is suggesting, if your intel, the payoff's going to be a while.

It's going to be a while.

It's going to be a while.

And that makes it hard for an investor too, because you're still in a cyclical business with structural change. And I keep going back to that this is a brook Settle and special Bloomberg opinion and check her out there. But and how you invest then for something along those lines, and what your timeline has to be like when you're looking at something along a cyclical versus structural world.

And that makes it hard for an investor too, because you're still in a cyclical business with structural change. And I keep going back to that this is a brook Settle and special Bloomberg opinion and check her out there. But and how you invest then for something along those lines, and what your timeline has to be like when you're looking at something along a cyclical versus structural world.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business. You can also listen live on Amazon Alexa for our flagship New York station, Just Say Alexa, playing Bloomberg eleven.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business. You can also listen live on Amazon Alexa for our flagship New York station, Just Say Alexa, playing Bloomberg eleven.

Thirty and Alex Steel alongside Paul Sweeney. This is Bloomberg Intelligence Radio. We bring you all the top news from Bloomberg News but also the analysis from Bloomberg Intelligence. They cover about one hundred and thirty companies excuse me, industries and two thousand companies worldwide. We also keep you updating all the great enterprise reporting that we do here at Bloomberg, and this one ties nicely into some earnings that we're seeing. So affirm that stock is off by over seven percent. Now, this is a buy now, pay later company, which, from what I hear is literally what it is, you buy now and you pay later. Their forecast revenue for the fourth quarter did beat average analyst estimates. Third quarter was also strong, yet the stock is down. The macro read, of course, is when these guys do well, what does that say about the underlying economy? Now, luckily, the Big Take addresses some of this. The Big Take is an in depth story that we cover every day on Bloomberg and joining us to discuss it. It's Paige Smith, consumer finance reporter, and also Paulina Chro she joins us. They're both joining us in the studio. This is about phantom debt, and the quote is Americans are racking up phantom debt that Wall Street can't track. Presumably you guys did this because of Firmer's reporting, and that's part of the phantom debt.