April 17, 2025 • 38 mins
Bloomberg's Ed Ludlow details the pressures facing Nvidia and the semiconductor sector as CEO Jensen Huang heads to China. And, Archer Aviation unveils a new air taxi plan to transform NYC's skies. Plus, Wall Street eyes streaming as a tariff safe-haven ahead of Netflix earnings.
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Speaker 1 (00:00):
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde and Ed Ludlow.
Speaker 2 (00:27):
Live from San Francisco. This is Bloomberg Technology coming up
in Nvidia under pressure as Jensen one heads to China.
Plus arch aviation plots in New York City, network for
flying taxis, and TSMC earnings project confidence ahead of.
Speaker 3 (00:43):
A critical week of tech reports.
Speaker 2 (00:46):
We have some breaking news crossing the Bloomberg terminal. A
federal judge says Google illegally monopolized some online advertising technology market.
It is a blow to a very key part of
this company's business. We're showing the stock. It moved to
a session low down two percent following those headlines.
Speaker 3 (01:06):
Bloombos.
Speaker 2 (01:07):
Kaylee Lines joins me from Washington. Okay, the judge is
given a partial ruling, so in some areas a yes,
it says that Google has monopoly in advertising tech markets,
not in others.
Speaker 3 (01:18):
What is the language the judge used? What do we know?
Speaker 4 (01:22):
Yeah, that's exactly right.
Speaker 5 (01:23):
Ed.
Speaker 6 (01:23):
The judges finding that Google has violated the Sherman Anti
Trust Acts, Section two of it, specifically by wilfully and
this is the judge's words, acquiring and maintaining monopoly power
in the open web display publisher ad server market and
the open Web display ad exchange market. So servers and
exchanges are what they have found to violate antitrust laws here,
and the judge goes on to say that the court
is going to be setting a briefing schedule at a
(01:45):
hearing date to determine the appropriate remedies for these anti
trust violations. It becomes a question, of course, of what
those remedies are. Knowing that this is not the first
anti trust difficulty that alphabet is facing, as Google already
was found in a separate case to have also monopolize
the search market, and the Justice Department is looking for
a spinoff of its Chrome browser, specifically in a case
(02:06):
related to search. So it becomes a question of whether
or not there may be advertising portions of Google's business
that also will be looking at spinning off if that
is what the US pursues. The judge is going to
consider all avenues. But the point here at is this
is a second big loss for Google in the courts
is they have been found to violate antitrust rules when
it comes to at exchanges and servers. The judge did
(02:27):
not find justification of a monopoly for a third market
of tools that is used by advertisers to buy display ads,
but still on two.
Speaker 3 (02:35):
Out of three.
Speaker 6 (02:36):
Essentially, the judge has ruled against this giant technology company.
Speaker 2 (02:39):
Often antitrust headlines the stock can be insulated from it.
But we're down two percent. There's a clear reaction here.
Bloomos K lines out of DC with an excellent summary
of that breaking news. There is a lot happening in
financial markets right now. This is a sort of picture
of the session, and the themes of the moment are
very similar to what we've discussed all week long. We're
(03:01):
down around four tenths percent on the AZE like one hundred,
but the underperformance is in the semiconductor space. That's the
Philadelphia semi Conductor Index or SOCKS. It is under pressure
in large part because of Nvidia, and Vidia's market cap
now below two point five trillion dollars. The news continues
to be that the United States requires them to hold
(03:22):
an export license to ship h twenties the custom chip
they made for the China market to that market. They
did a write down. We're waiting to see what happens
next gens and one is in Beijing.
Speaker 3 (03:34):
As we speak.
Speaker 2 (03:34):
TSMC is now at a session kind of low. It's
up four tenths percent, but it's lost a great deal
of its gains.
Speaker 3 (03:41):
Very simple story.
Speaker 2 (03:43):
This is the contract manufacturers of the world, the fabricator
of the key chips in AI. They said that AI
revenue will double and that they will grow twenty percent,
and that the demand from what they're seeing is still intact.
And that's where I want to start the analysis. Let's
get to Bloomberg Mandeep saying of Bloomberg Intelligence, I mean
(04:03):
there is a difference between a headline on tariffs and
the real world impact on the supply chain for semiconductors.
When you read the commentary that TSMC gave, it seems,
particularly in the context of capital expenditures from the hyperscalers,
things are still going well.
Speaker 7 (04:19):
They are.
Speaker 8 (04:20):
And look, they gave a long term guide when it
comes to AI revenue, which they expect to expand. It
a five year cake off mid forty percent, very impressive numbers.
And even with this macro environment, they didn't see any
demand destruction on the AI side. And I think that's
key because you know, we saw Nvidia and AMD take
(04:42):
a charge on the age twenties.
Speaker 9 (04:44):
I mean you could think, you know, they may.
Speaker 8 (04:46):
Have some capacity that goes under utilized, but certainly that's
not the case. They did say smartphones was still weak.
So if you talk about a pull forward scenario, I
think it's definitely happening when it come to AI chips,
but probably not so much at least in TSMC's numbers
when it comes to smartphones.
Speaker 3 (05:07):
In video is worth discussion.
Speaker 2 (05:08):
The stocks down four percent, but I don't see any
single catalyst, right. We know that Jensen Wong is in Beijing.
Gensen one goes to China all the time to meet
with employees. Principally, my interpretation of doing a write down
is that this is not America saying age twenty doesn't
conform to the rules. But the write down indicates that
(05:29):
the license requirement in Vidio probably won't apply or has
not applied.
Speaker 3 (05:34):
How do you read that, Mandy?
Speaker 8 (05:36):
I mean, look, I think the fact that they have
to go through the process all over again, it's gonna
take some time, and we know things move really fast
when it comes to this AI chip wave.
Speaker 3 (05:48):
I mean they are.
Speaker 8 (05:48):
Already to their next architecture Blackwell and they're talking about Rubin,
So from that perspective, I don't know how they'll be
able to sell to that market. You know, chips that
are two generations behind. I'm the current one that they
are selling, and that's where you know, it's hard to
sell that to someone else, even though the market is
under supply. That's what we are hearing from TSMC. So
(06:10):
clearly there is a lot of demand, but probably not
for chips that are two generations behind. And I think
that's how I would look at it.
Speaker 2 (06:18):
Man deep Seeing, who leads the team covering tech at
Bloomberg Intelligence. Thank you two key names in the market.
Let's take a deeper look at the chip sector. Jordan
Klein by side desk analysts that Missouri, Americas, and I'm
trying to understand the pressure that's in the market right now.
TSMC's ADRs are just modestly higher, but that was seen
(06:40):
as a sort of a projection of confidence in the
face of tariffs. What were the phone calls like that
you had this morning and the things that crossed your.
Speaker 4 (06:49):
Desk, Well, hey, thanks for having me.
Speaker 10 (06:52):
I mean it's relatively quiet, which I don't know if
is a good thing or a bad thing. I think
there would have been a lot more discussion and incoming
calls had TSM change their outlook or not provided a
very positive second quarter guide. I think people are really
in that watch and weight mode obviously TSM and ASML.
This week in the semiconductor space, with the two big
(07:15):
earnings reports that people were going to you know, react to.
ASML was a bit disappointing. Stock fell seven percent. TSM
was very good and it was expected to be good,
but it was all.
Speaker 4 (07:27):
You know, all signs clear.
Speaker 10 (07:29):
Everything looks good, both on the consumer front because they
make a lot of product for Apple and PCs, as
well as the AI front. So I think in Nvidia
and I think it's pretty disheartening for people when they
see the stock fading most of the early gains, because.
Speaker 4 (07:44):
This creates sort of a well, if the companies that.
Speaker 10 (07:46):
Are reiterating and sounding positive are not really trading up,
what's that going to mean when the rest of semis
or even tech reports and possibly lowers guidance.
Speaker 4 (07:56):
You know, what are the stocks going to do going
to do?
Speaker 11 (07:58):
Then?
Speaker 10 (07:59):
So that's why I think no really rushing to buy
either strength or add any to any names until they
really see the stock reactions.
Speaker 2 (08:08):
We should point out in America it's a short trading
week or shorter four day trading week, and though markets
don't close earlier or anything on Thursday, I'm sure that
there's some consideration of that towards the end.
Speaker 3 (08:23):
Of the week.
Speaker 2 (08:23):
But you said in your note that investors are highly engaged.
Speaker 3 (08:28):
What does that mean?
Speaker 2 (08:29):
They're going deeper on the research into supply chains or
they want to know specifically about each of the fabulous
chip names exposed to China or the fabs exposed as China.
Speaker 3 (08:39):
What do you mean by that.
Speaker 10 (08:40):
Jordan, Well, what I mean is is that people are
definitely reaching out, asking questions, wanting to know what their
peers are and the investment community are doing and thinking
that's because the fundamentals really don't matter that much right now, unfortunately,
So everyone's kind of feeling around trying to get a
sense of these macro headlines, what would be perceived as
(09:03):
you know, positive or negative, and what would cause people
to get off their hands and deploy more capital.
Speaker 4 (09:08):
So that's what I mean by people are very engaged.
They're not.
Speaker 10 (09:11):
They're not Actually, how do I say this? They're not
anxious to go out and buy the dip. They're they're basically,
but they do have a short list I think of
names that they would prefer or names they would avoid.
Speaker 4 (09:24):
But they're very curious to see, like what is.
Speaker 10 (09:27):
It going to take to get people on the in
the investment community incrementally more positive or negative?
Speaker 4 (09:32):
And unfortunately we just haven't seen enough yet to go
off of.
Speaker 2 (09:38):
Next week we get earnings reports from the likes of
Tesla and Intel. What do you need to see from
those reports to give you some confidence.
Speaker 4 (09:48):
Well, they're very different, obviously.
Speaker 10 (09:50):
I mean for Tesla, I think it's it impacts a
lot more of the retail investment community. I don't tend
to speak to a lot of large mutual fund funds
or institutional owners. Who are you hanging a lot on
how Tesla sounds. I think the bar is relatively low
for Tesla, so I think it's more about plans for
(10:11):
new potential vehicles and timing on that front, because most
of the checks and the initial monthly reports have not
been great in terms of their unit sales. I think
for Intel, it's not about the numbers. I think this
quarter should be fine. There is some risk that maybe
there's a little bit of downside next quarter. I think
more so it's the new CEO taking charge and outlining
(10:35):
some of the strategy and recall that the bigger event
for Intel probably is going to come, I think on
April twenty ninth, when they're hosting a investor update on
their foundry business. I think that's where you'll get more
details again on their strategy and the technology that they're
trying to move forward.
Speaker 3 (10:55):
Jordan Klin in Missouri. It's great to have you back
on the program. Thank you very much. Now, coming up
on blue Berg Technology, the week comes to a close for.
Speaker 2 (11:02):
The ftc anti trust case against Meta. Will bring you
the latest next, this is Bloomberg Technology. We've been covering
(11:27):
the ftc anti trust trial against Meta all week. Yesterday,
Meta's former COEO, Cheryl Samberg, was on the stand talking
about the company's efforts to block competitors from advertising.
Speaker 3 (11:40):
On the platform.
Speaker 2 (11:41):
Bloomberg's Riley Griffin, who covers Meta for US, is back
here in the San Francisco studio. That's interesting Cheryl Samberg
kind of returning as a witness in this case. What
was she asked? What was she talking about? And where
did we end the week.
Speaker 12 (11:55):
Yeah, it's really a great question. And one of the
things the FTC has argued is that the introduction of
ads to the platforms have actually degraded the quality of
the services. And Cheryl Sandberg, the former CEOO, actually reversed
that point and said that it has been a boon
to the product, it has benefited users and really countered
(12:18):
the argument the FTC has been making in this milestone.
Speaker 13 (12:21):
Of a week.
Speaker 2 (12:22):
Over the course of this short week, Meta stock is
down seven percent.
Speaker 3 (12:27):
It's hard to draw a causal.
Speaker 2 (12:29):
Relationship between what's happening in that trial and the events
of the stock market. Where do we kind of leave it?
And I think it's probably important for the audience to
understand this is a multi week process.
Speaker 3 (12:39):
It's going to go on for a while.
Speaker 12 (12:40):
We've got several weeks ahead of us. This was the headliner,
if you will. We had three days of testimony from
Mark Zuckerberg ten hours and several revelations from his emails.
If you take a tour through them, you'll learn that
Instagram was considered to be spun was considered to be spun.
Speaker 9 (12:59):
Off in twenty eighteen.
Speaker 12 (13:01):
We also learned about a six billion dollar bid for Snapchat.
So a lot came up, but more weeks to come,
and I think we'll continue to see volatility throughout The's.
Speaker 3 (13:11):
Riley Griffin covering all things Meta. Thank you very much.
Speaker 2 (13:14):
Over to DC, a bipartisan House committee says Chinese AI
firm Deep Seek is a quoite profound threat to US
national security, citing its ties to Chinese government interests and
alleged circumvention of US export controls. Bast Mike Shepherd joins
us with the details. There's a lot going on right
(13:35):
now in the political sphere, but we're paying attention to
the commentary of this committee.
Speaker 3 (13:40):
Why and what was said, Mike.
Speaker 14 (13:44):
Well, this is an important episode in this long running
fubue with China over advanced technology, especially artificial intelligence. Remember,
deep Seek made its big breakthrough writer as Donald Trump
was taking the oath of office, and in the following
week we really saw equities here in the US slide
on fears that maybe this AI boom was oversold and
(14:06):
overpriced because Deep Seek was promising to do things cheaper
and perhaps faster and more efficiently using whatever technology it may.
Speaker 9 (14:14):
Have had at its disposal.
Speaker 14 (14:16):
Now the committee is raising questions about deep Seek on
a couple of different levels. One is just what it does,
and it is echoing concerns it has flagged about TikTok,
and those are namely security related.
Speaker 9 (14:27):
One it's concerned that the.
Speaker 14 (14:29):
App is collecting user data here in the US and
siphoning it back to China.
Speaker 9 (14:34):
Two, it is.
Speaker 14 (14:35):
Concerned that it may have ties and it cited corporate
filings to the Chinese government similar claim it's made with
relation to ByteDance and its ownership of TikTok. And three
there's also concern that the platform itself could be censored
to reflect Chinese views.
Speaker 9 (14:51):
And we have seen if you just run.
Speaker 14 (14:53):
A test on putting what happened in Tianamen Square, you're
going to get a very different answer, and one that
is much more in line with the Chinese government. The
other question ed though, is export controls, and the committee
recommended those because there is a concern that maybe deep
Seek managed to get around those to obtain the chips.
Speaker 9 (15:10):
That it used.
Speaker 2 (15:12):
There was also a sort of forensic discussion of Nvidia's
role with deep Seek. The number GPUs the deep Seak
had from Nvidia, and amongst everything I saw the response
from Nvidia. You know, in summary, that they follow the
instructions of the US government to the letter. That's consistently
what Nvidia says. What else do we need to know?
Speaker 14 (15:31):
Well, one thing that's important to understand here is that
the committee is applying separate pressure on in Nvidia to
get more information about how its chips are being sold
across Asia, and they want information going all the way
back to twenty twenty about its customers, not only in China,
but in eleven nations across the Pacific Rim.
Speaker 9 (15:53):
They want to know how those H twenty chips.
Speaker 14 (15:55):
That Deep Seek is believed to have used may have
ended up en mass in the firm's possession and helped
it to develop that R one model and make it
such a breakthrough. The concern is that in video, maybe
it knows its customers, but maybe it doesn't as well
in video. Of course, Yesterday responding very quickly to say
that it abides by all US export restrictions and is
(16:18):
eager to continue working with the US government, even as
it tries to protect its business in China, which we
see Jensen Wang doing with a visit to Beijing just
in the past twenty four hours.
Speaker 2 (16:30):
Bloomberg's Mike Shepard thank you very much. Coming up on
Bloomberg Technology, Perplexity is nearing a deal with smartphonemakers to
take on the likes of Google's Gemini Virtual Assistant. We've
got some details on Bloomberg reporting ahead. This is Bloomberg Technology.
(17:23):
Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.
I thought we'd look at markets over the course of
five days, and that includes last Friday session, where then
as that one hundred in particular ended.
Speaker 3 (17:34):
That week strong.
Speaker 2 (17:36):
It is a short trading week here in the United States.
Fridays is a market's holiday. The overriding story is tariffs
and tariff's anxiety. But when it comes to technology, I'm
showing them as that one hundred, but it could as
well just as well be semiconductor stocks. It's also about
technology export controls. We've been talking about that all week
(17:56):
on the five day track. With down about seven percent
sixtens a percent on the Nasdaq one hundred in terms
of single names, we're now going to shift how we focus. Right,
all of the oxygen this week has been consumed by
the chip names.
Speaker 3 (18:09):
Intel is down three percent.
Speaker 2 (18:11):
In part because on its earnings called TSMC said without
naming Intel. It isn't working with anyone on technology or
manufacturing sharing. That seems to have hit that stock. Tesla
reports next week very interesting, not just on the company
and supply chain, but Elon Musk and his role with
DOGE and the US government. And then Netflix has buoyancy.
If there's one name where things are different, it's in
(18:34):
this name.
Speaker 3 (18:34):
Now. Wall Street's hoping Netflix can.
Speaker 2 (18:36):
Continue to provide the escapism it desperately needs. Shares of
the streaming giant have risen nearly eight percent so far
this year, risen eight percent, with many investors hoping it
could be a safe haven away from the Tarif turmoil
that has ruled much of financial markets. Nine percent, i
should say, so far. In twenty twenty five, blumo's Ryan
(18:56):
Voselica made this the subject of his musings and right
this morning, first thing I read two am Pacific time.
Why is Netflix able to stand out in this environment?
Speaker 7 (19:07):
Hey?
Speaker 9 (19:07):
Thanks for having me.
Speaker 15 (19:08):
So I'll say what one analyst said in a recent
research report. Netflix has both offensive and defensive characteristics. It's
still growing quite strongly. It's improving profitability in cash flow.
The multiple is coming down, especially relative to its own history.
But at the same time it is seen as quite
recession resilient. People say that, you know, if there is
(19:29):
a broader economic contraction or weakness, and Netflix subscription is
not going to be the thing that you cut in
order to save money.
Speaker 3 (19:35):
People think it gives you a good.
Speaker 15 (19:37):
Bang for your buck, and that's why people think you're gonna,
you know, stay with it no matter what happens. So
that's the reason why we're seeing the stock, you know,
perform quite well this year.
Speaker 2 (19:47):
Next week for you, for I, for the Bloomberg Technology
team is a big week because earning star in earnest
is there a common thread between the Tesla's intels, netflixes
and then this mag seven names the following week that
the team is preparing for in its coverage.
Speaker 3 (20:05):
From the stock perspective, at least, well.
Speaker 15 (20:08):
I think everyone has focused so much on tariffs and
outlooks and what these companies say about their expectations for
the remainder of the year.
Speaker 3 (20:17):
There are so much uncertainty out there.
Speaker 15 (20:18):
We've already seen some very big companies pull their outlooks
talk about how difficult it is to make forecasts in
this kind of environment. If we see that continue with
the big tech is given their size and influence and
major indexes, it's likely that's going to have some broader ramifications.
Speaker 2 (20:35):
Ryan BLACEELCA have a good long holiday weekend in the States,
get ready for next week, and Netflix is really what
kicks it off right for more and what we can
expect from Netflix in the streaming landscape more broadly, Magli
grossim Science senior research analysts, joins us Now, I find
that so interesting. I actually did a double take when
(20:55):
we showed like the Netflix performance so far in the year,
because all the other companies that we cover in our
world are going through such pain. The streaming business broadly
seems healthy.
Speaker 3 (21:08):
Is that what you see, Maglie, Yes, it is.
Speaker 7 (21:12):
I would say Netflix definitely has some different characteristics going
on this quarter than some of their peers, and we
definitely would see them as you know, like Ryan was saying,
as safe haven through the rest of this year if
we are to face increasing consumer uncertainty. I think Netflix
has also really shown over the last few quarters, especially
(21:34):
in Q four, with the blockbuster numbers they put up,
that they're really separating from the pack and the others
aren't able to compete in the same way that Netflix
is largely due too.
Speaker 13 (21:44):
I think it's content slate.
Speaker 3 (21:46):
Well and just let's go. I was going to ask,
what is it that separates them from the pack.
Speaker 2 (21:52):
You know, at home, we just started watching the latest season.
Speaker 3 (21:55):
Of Black Mirror.
Speaker 2 (21:56):
There are no spoilers on this show ever, no spoilers
on Blueboats Analogy, but episode one was deeply upsetting. Had
a very sort of big name cost. Is it just content?
Is it pricing?
Speaker 7 (22:08):
Like?
Speaker 3 (22:08):
Why do they stand out?
Speaker 7 (22:11):
I think there's a few reasons. Content is a big one.
Speaker 2 (22:14):
You had.
Speaker 7 (22:15):
So if we go back a couple of years, a
lot of the other streamers, even pre writer strike, they
had started to cut content, spent in efforts to you know,
try to aim toward profitability, given that's been such a
challenge for these other streamers. So that was, you know,
kind of gave them an additional hit on top of
(22:36):
the writer's strike. And you really only get from these
other streamers a couple Tempole releases. There's some great stuff,
you know, Max Hulu, Paramount, but you don't get quite
the volume. And all of these surprises that come out
of Netflix continue to amaze people adolescents. I think is
a big one. Not many people would have expected that
(22:56):
to be, you know, top three of all time for
Netflix series engagement, and that was again I think just
a piece of evidence that they've got such an amazing
global content engine.
Speaker 3 (23:10):
Maglie. How proactive does Netflix.
Speaker 2 (23:12):
Need to consider pricing when we think about the health
of consumers around the world.
Speaker 7 (23:18):
I think they have a decent amount of pricing power
left to go for sure. They obviously right now are
in the midst of doing a price hike that they
announced a couple months ago. We just saw that flow
through to existing subscriber bills in March. So at a science,
what we do is use all data in order to
(23:39):
look at all of the subscriber trends, which we'll still
be able to see even though the company is removing
the reported subscriber numbers. So what we see with pricing
right now, we are seeing a hit to churn, which
we think is both related to price hikes as well
as some cycle in cycle out activity from live events
(24:00):
in Q four. But we ultimately think that's going to
be temporary, and usually after Netflix pricykes, you get this
temporary couple months of elevated churn relative to seasonal norms,
and then it kind of abates thereafter, so we would
expect it likely to be temporary. Even with that elevated churn,
they still are far better than all of their peers
(24:22):
in terms of retention.
Speaker 2 (24:24):
When I travel principally on tablet or my smartphone, I
play a little bit with Netflix's mobile games. I don't
really get the Netflix gaming story.
Speaker 3 (24:36):
I don't I get that.
Speaker 2 (24:37):
They're committed to it, But what do you see is
the kind of long term from that business line, and
what do you expect them to tell us more near
term about what they're doing.
Speaker 7 (24:49):
Yeah, I think the near term is probably going to
be a continuation of what we have heard from them
on games the last few quarters, which is that it's
still a small piece of the overall puzzle. They more
so are viewing it as you know, a franchise benefit.
So can they create a game about Emily and Paris
that also drives, you know, overall engagement of the show
(25:13):
and therefore it's part of their whole flywheel. So I
think probably near term we'll see it continue to be
a small piece of the overall puzzle for them, but
long term could be contributing a bit more. I don't
think it's ever going to be necessarily a key driver
for them outside of you know, everything else that they
have going on.
Speaker 2 (25:33):
Maglie, what's the biggest threat to Netflix and where does
the competition come from?
Speaker 7 (25:41):
Biguess threat? I would say, I think, you know, content
is something that they have to continue to stay ahead
of the game on live events. I think in terms
of what they have to spend on live events, that
could become a trickier part. As they've gotten more involved
in sports, which you know we've seen that do pretty
(26:04):
well for them, that has caused, like I mentioned earlier,
some cycle in, cycle out activity, So I think that
could potentially change the retention profile, but also going to
be you know, a great tool for them to get
different parts of the market that they weren't previously able
to get. And then the AD tier that's something that
(26:25):
they've been you know, behind some of their peers on
in terms of getting into that market. So that's something
we definitely think that they should continue to ramp up.
That that had a little bit slower of a start
than I think a lot of people expected initially, but
has done well the last few quarters. Q four they
stated around fifty percent of sign ups that were choosing
(26:48):
that AD tier and then we're seeing that continue to
grow about ten percent year year in terms of the
selection rate for gross ads opting into that ad.
Speaker 2 (26:57):
Tire Michaely Gross of M Science. Great to have you
on the show. Thank you very much. Now coming up,
we speak with Archer Aviation CEO Adam Goldstein.
Speaker 11 (27:07):
This is Bloomberg Technology.
Speaker 2 (27:25):
Arch Aviation hopes to reshape New York's air transportation, linking
Manhattan to major airports using its midnight ev Tol aircraft.
It's a vision that could take your journey from one
to two hours in the car to as little as
five minutes. Joining us now, Adam Goldtein, CEO and co
founder of arch Aviation. Okay, let's go to the basics first,
(27:46):
the map, the hubs and the airports that you want
to connect.
Speaker 9 (27:50):
Well, thanks Ed.
Speaker 5 (27:51):
We are building the future of aviation here, and so
today we announced our New York route network where we
will be really trying to execute on the home to
airport trips, really focusing on nine core locations, the large
international airports GfK, LaGuardia, Newark, the big heliports located in
Manhattan West Side, east Side, and the Downtown Skyport, and
(28:13):
then also the big regionals, Teterborough, Westchester.
Speaker 2 (28:17):
Air Long Island, Adam, we need to reflect on the
tragic events of last week, right of a helicopter that
crashed in New York City to the Hudson. I bring
that back with the context. I've spent a lot of
time with arch aviation, right, and one of the pitches
that you have is that the technology relies in part
(28:37):
on pre certified components.
Speaker 3 (28:40):
In other words, the FAA knows.
Speaker 2 (28:43):
These components because they are more commonplace in other aircraft.
But those watching want to know the safety confidence that
you have. How does the Midnight compare to a normal
helicopter and what redundancies have you put in place to
make it safe.
Speaker 5 (29:01):
So these aircraft are powered by an electric powertrain, and
that's really the key new technology that enables this new
level of redundancy that we haven't seen before with vertical
left aircraft. And so the Midnight aircraft has twelve electric engines,
it has a big wing, and it has redundancy built
into the entire system that enables a very very safe flight.
(29:22):
And that's the type of safety that cannot be offered
today with helicopters. So this is something that we're aligned
with not only the FAA, but really the future of
aviation to keep bringing and keep innovating in the aviation industry,
to make products.
Speaker 3 (29:35):
Safer and safer.
Speaker 2 (29:37):
Adam, you have an aggressive and ambitious timeline. Not just
in New York City, other parts of America, are the
parts of the world where does FAA certification stand, because
you cannot deploy until you get that.
Speaker 5 (29:49):
So actually, we've been working around the world to enable
an ecosystem to allow us to launch, and in fact,
one of our biggest supporters and big investors in DABI,
has created a pathway to allow us to launch as
early as this year, and so we've been partnered with
the country and we have found a pathway to now
start early operations. Now, of course it'll be very low
(30:12):
scale to really prove out the concepts, prove out a
lot of the safety case here, but then the global
regulators can leverage that data to really de risk the platforms.
And so we will launch there as soon as this year,
with a goal to launch in the US via the
FAA shortly after that.
Speaker 2 (30:29):
Have you met with the new administration and key members
like Transport Secretary Duffy.
Speaker 5 (30:34):
I have the new administration has been very forward leaning
and very supportive of the industry. They want to see
products made in America, they want American innovation, they want
America to lead in aviation. So yes, I did spend
time with Secretary Duffy. I have spent time down at
mar Lago, and the new administration has been very supportive
and I'm confident will continue to be a good alley
(30:55):
of the industry.
Speaker 2 (30:56):
Adam Goldstein of Archre Aviation, It's great to have you
here on Bloomberg Technology, Thank you very much. Meanwhile, ev
Maaker x Pong is looking to ramp up its global
expansion despite geopolitical uncertainty. CEO he Jupeg spoke exclusively with
Bloomberg Steven Engel and began by addressing the tariff uncertainty.
Speaker 11 (31:17):
That's all.
Speaker 16 (31:18):
She also, for a company, we expect stability in any case.
Stability will bring political, economic and cultural certainty, and only
then we can formulate a clear corporate strategy. So we
deeply believe that stability is above all. In fact, Europe
(31:41):
is the focus of Explain's globalization strategy, and we will
strengthen our business in regions including Southeast Asia, the Middle East,
Central America and South America. However, we still hope that
one day more Chinese companies will be able to expand
their businesses into other countries, including North America, understable policy conditions.
Speaker 17 (32:02):
We know that the Chinese and the Europeans have restarted
talks about this minimum price mechanism potentially to replace the
tariffs which can go as high as forty five percent
into the EU. How would that affect your plans for
the European market Potentially would that mean scaling back on
the immediate need to have your own production bases in Europe.
Speaker 16 (32:25):
Well, we have noticed this news, but I believe the
talks are still in their early stages. For me, the
certainty lies in the terror policies that China and you're
clearly implement it last year. As we expanin, we firmly
believe that only through localization in areas of localized R
and D service, manufacturing and sales, can we ultimately achieve
(32:50):
comprehensive globalization. So we are working on how to better
implement our localization strategy in Europe and other regions. In
the future, we will announce our localization strategy in certain
countries and expect to have more localization strategy in more markets.
Speaker 17 (33:09):
Let's talk about chips, because you need these chips across
the board, whether it's your flying cars, your humanoid robots,
your industrial robots, and of course self driving robotaxis and
the like.
Speaker 9 (33:24):
How critical was it to build.
Speaker 17 (33:26):
These chips in house, not necessarily rely on the Nvidia
for chips and create your own touring chips. Was this
because it's cheaper, or because of export controls, or because
you have to meet certain requirements from the Chinese government
that more chips in these kind of products need to
be made in China.
Speaker 16 (33:49):
Yeah, Actually, companies like Tesla and Apple are developing their
own chips, and they're certainly collaborating with Nvidia and many
other chip suppliers. According to our research, each expang vehicle
contains fifty five hundred chips from global suppliers. Given the
large number of chips, the reason the XPAN is working
(34:10):
on the in house chips is that we hope we
can leverage our own capabilities. For instance, if we aim
to achieve autonomous driving and use global autonomous driving systems,
we need chips that can help our autonomous driving perform
better in conditions like nighttime and glare. We hope to
maximize the performance of the chips, and at this point
(34:32):
there is a huge value of customized chip. So in
the future, we believe we will collaborate with many chip suppliers,
including Nvidia, while continuing to focus on developing our own
customized AI chips.
Speaker 2 (34:47):
That was x Pong CEO hu Jaopeng speaking with their
own Steven engeln are coming up. Open ai looks to
a three billion dollar acquisition that could supercharge its coding ambitions.
Speaker 3 (34:59):
That Bloomberg scoop.
Speaker 2 (35:00):
Next, let's get a quick check back on that breaking
story about Google. A judge has found that Google was
partially guilty of illegally monopolizing parts of the advertising technology market.
And what we're seeing is alphabet shares under pressure down
one point five percent. Elsewhere advertising in ad tech related
(35:23):
socks really rallying on that news a partial finding a
monopolistic practice by Google.
Speaker 3 (35:29):
More.
Speaker 11 (35:29):
Next, this is Bloomer Technology.
Speaker 2 (35:45):
Open ais and talks to acquire AI assisted coding tool
Windsurf for about three billion dollars.
Speaker 3 (35:51):
That's according to sources.
Speaker 2 (35:52):
Bloomberg's Rachel Metz broke the story with the team and
if I remember correctly, until several days ago, Windsurf was
known as Odium. But this is a significant acquisition for
open ai if it happens, In fact, the biggest by
open ai.
Speaker 18 (36:07):
Yeah, but the biggest pie quite a bit if it
goes through. In our reporting we found out that open
ai and Windsurf are talking about open THEI buying Windsurf
for about three billion dollars. And you know, things could change,
but it would make a lot of sense for open
ai to buy this company given that it and other
(36:28):
companies have increasingly expanded into the market for AI coding assistance.
Speaker 2 (36:34):
Okay, what's the space for coding assistance like Windsluf's not
the only name, and why is it something that open
ai just can't do themselves.
Speaker 13 (36:42):
Open ai actually does some of this stuff itself.
Speaker 18 (36:46):
Also competitors like Anthropic, their AI models focus increasingly on coding,
and in a lot of cases, these large language models
have gotten better and better.
Speaker 13 (36:56):
They've been trained to be better and better at coding.
Speaker 18 (36:58):
But there's also like an increasing space here their companies
such as Windsurf. There's also there's githubs codec or sorry
co pilot. There's also Cursor, which comes from any sphere,
and these companies are growing fast and they're getting users,
and they're users that are paying, and that's a key here.
Speaker 13 (37:17):
You need people to pay for these AI products.
Speaker 2 (37:19):
Well, it wasn't long ago that I was introduced to
windsurf at that time known as Codium, Like literally not
long ago. It seems to have grown and commercialized very quickly.
Speaker 13 (37:30):
Yeah, it is.
Speaker 18 (37:31):
It's funny because a few months ago, people were constantly
talking about Cursor.
Speaker 13 (37:36):
Everywhere you went, it was Cursor, Cursor, Cursor, within this
everywhere you went, within this AI sphere.
Speaker 18 (37:41):
People are still talking about Cursor a lot, and it's
still extremely popular. But then I started to hear, you
know a little bit more recently windsurf, Windsurf, windsurf. So
there's a there's definitely room for a few competitors here,
and it seems like open Ai thought that this would
be a really good one to snap up the.
Speaker 2 (37:59):
Most Rachel Mets with great reporting from the tech team
appreciate it. But that does it for this edition of
Bloomberg Technology. I want to go back to some of
the names that we've been watching throughout the show. Right,
this is what they look like in the moment, specifically
focused on Google, A judge finding that partially they had
monopolistic practices in the ad tech market that breaking news.
Speaker 3 (38:18):
TSMC's US shares.
Speaker 2 (38:20):
Have given up gains after really strong earnings report, and
Netflix is just around the corner and it is standing
out in the tech sector which is under pain. So
much more to come next week. This is Bloomberg Technology
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde and Ed Ludlow.
Speaker 2 (00:27):
Live from San Francisco. This is Bloomberg Technology coming up
in Nvidia under pressure as Jensen one heads to China.
Plus arch aviation plots in New York City, network for
flying taxis, and TSMC earnings project confidence ahead of.
Speaker 3 (00:43):
A critical week of tech reports.
Speaker 2 (00:46):
We have some breaking news crossing the Bloomberg terminal. A
federal judge says Google illegally monopolized some online advertising technology market.
It is a blow to a very key part of
this company's business. We're showing the stock. It moved to
a session low down two percent following those headlines.
Speaker 3 (01:06):
Bloombos.
Speaker 2 (01:07):
Kaylee Lines joins me from Washington. Okay, the judge is
given a partial ruling, so in some areas a yes,
it says that Google has monopoly in advertising tech markets,
not in others.
Speaker 3 (01:18):
What is the language the judge used? What do we know?
Speaker 4 (01:22):
Yeah, that's exactly right.
Speaker 5 (01:23):
Ed.
Speaker 6 (01:23):
The judges finding that Google has violated the Sherman Anti
Trust Acts, Section two of it, specifically by wilfully and
this is the judge's words, acquiring and maintaining monopoly power
in the open web display publisher ad server market and
the open Web display ad exchange market. So servers and
exchanges are what they have found to violate antitrust laws here,
and the judge goes on to say that the court
is going to be setting a briefing schedule at a
(01:45):
hearing date to determine the appropriate remedies for these anti
trust violations. It becomes a question, of course, of what
those remedies are. Knowing that this is not the first
anti trust difficulty that alphabet is facing, as Google already
was found in a separate case to have also monopolize
the search market, and the Justice Department is looking for
a spinoff of its Chrome browser, specifically in a case
(02:06):
related to search. So it becomes a question of whether
or not there may be advertising portions of Google's business
that also will be looking at spinning off if that
is what the US pursues. The judge is going to
consider all avenues. But the point here at is this
is a second big loss for Google in the courts
is they have been found to violate antitrust rules when
it comes to at exchanges and servers. The judge did
(02:27):
not find justification of a monopoly for a third market
of tools that is used by advertisers to buy display ads,
but still on two.
Speaker 3 (02:35):
Out of three.
Speaker 6 (02:36):
Essentially, the judge has ruled against this giant technology company.
Speaker 2 (02:39):
Often antitrust headlines the stock can be insulated from it.
But we're down two percent. There's a clear reaction here.
Bloomos K lines out of DC with an excellent summary
of that breaking news. There is a lot happening in
financial markets right now. This is a sort of picture
of the session, and the themes of the moment are
very similar to what we've discussed all week long. We're
(03:01):
down around four tenths percent on the AZE like one hundred,
but the underperformance is in the semiconductor space. That's the
Philadelphia semi Conductor Index or SOCKS. It is under pressure
in large part because of Nvidia, and Vidia's market cap
now below two point five trillion dollars. The news continues
to be that the United States requires them to hold
(03:22):
an export license to ship h twenties the custom chip
they made for the China market to that market. They
did a write down. We're waiting to see what happens
next gens and one is in Beijing.
Speaker 3 (03:34):
As we speak.
Speaker 2 (03:34):
TSMC is now at a session kind of low. It's
up four tenths percent, but it's lost a great deal
of its gains.
Speaker 3 (03:41):
Very simple story.
Speaker 2 (03:43):
This is the contract manufacturers of the world, the fabricator
of the key chips in AI. They said that AI
revenue will double and that they will grow twenty percent,
and that the demand from what they're seeing is still intact.
And that's where I want to start the analysis. Let's
get to Bloomberg Mandeep saying of Bloomberg Intelligence, I mean
(04:03):
there is a difference between a headline on tariffs and
the real world impact on the supply chain for semiconductors.
When you read the commentary that TSMC gave, it seems,
particularly in the context of capital expenditures from the hyperscalers,
things are still going well.
Speaker 7 (04:19):
They are.
Speaker 8 (04:20):
And look, they gave a long term guide when it
comes to AI revenue, which they expect to expand. It
a five year cake off mid forty percent, very impressive numbers.
And even with this macro environment, they didn't see any
demand destruction on the AI side. And I think that's
key because you know, we saw Nvidia and AMD take
(04:42):
a charge on the age twenties.
Speaker 9 (04:44):
I mean you could think, you know, they may.
Speaker 8 (04:46):
Have some capacity that goes under utilized, but certainly that's
not the case. They did say smartphones was still weak.
So if you talk about a pull forward scenario, I
think it's definitely happening when it come to AI chips,
but probably not so much at least in TSMC's numbers
when it comes to smartphones.
Speaker 3 (05:07):
In video is worth discussion.
Speaker 2 (05:08):
The stocks down four percent, but I don't see any
single catalyst, right. We know that Jensen Wong is in Beijing.
Gensen one goes to China all the time to meet
with employees. Principally, my interpretation of doing a write down
is that this is not America saying age twenty doesn't
conform to the rules. But the write down indicates that
(05:29):
the license requirement in Vidio probably won't apply or has
not applied.
Speaker 3 (05:34):
How do you read that, Mandy?
Speaker 8 (05:36):
I mean, look, I think the fact that they have
to go through the process all over again, it's gonna
take some time, and we know things move really fast
when it comes to this AI chip wave.
Speaker 3 (05:48):
I mean they are.
Speaker 8 (05:48):
Already to their next architecture Blackwell and they're talking about Rubin,
So from that perspective, I don't know how they'll be
able to sell to that market. You know, chips that
are two generations behind. I'm the current one that they
are selling, and that's where you know, it's hard to
sell that to someone else, even though the market is
under supply. That's what we are hearing from TSMC. So
(06:10):
clearly there is a lot of demand, but probably not
for chips that are two generations behind. And I think
that's how I would look at it.
Speaker 2 (06:18):
Man deep Seeing, who leads the team covering tech at
Bloomberg Intelligence. Thank you two key names in the market.
Let's take a deeper look at the chip sector. Jordan
Klein by side desk analysts that Missouri, Americas, and I'm
trying to understand the pressure that's in the market right now.
TSMC's ADRs are just modestly higher, but that was seen
(06:40):
as a sort of a projection of confidence in the
face of tariffs. What were the phone calls like that
you had this morning and the things that crossed your.
Speaker 4 (06:49):
Desk, Well, hey, thanks for having me.
Speaker 10 (06:52):
I mean it's relatively quiet, which I don't know if
is a good thing or a bad thing. I think
there would have been a lot more discussion and incoming
calls had TSM change their outlook or not provided a
very positive second quarter guide. I think people are really
in that watch and weight mode obviously TSM and ASML.
This week in the semiconductor space, with the two big
(07:15):
earnings reports that people were going to you know, react to.
ASML was a bit disappointing. Stock fell seven percent. TSM
was very good and it was expected to be good,
but it was all.
Speaker 4 (07:27):
You know, all signs clear.
Speaker 10 (07:29):
Everything looks good, both on the consumer front because they
make a lot of product for Apple and PCs, as
well as the AI front. So I think in Nvidia
and I think it's pretty disheartening for people when they
see the stock fading most of the early gains, because.
Speaker 4 (07:44):
This creates sort of a well, if the companies that.
Speaker 10 (07:46):
Are reiterating and sounding positive are not really trading up,
what's that going to mean when the rest of semis
or even tech reports and possibly lowers guidance.
Speaker 4 (07:56):
You know, what are the stocks going to do going
to do?
Speaker 11 (07:58):
Then?
Speaker 10 (07:59):
So that's why I think no really rushing to buy
either strength or add any to any names until they
really see the stock reactions.
Speaker 2 (08:08):
We should point out in America it's a short trading
week or shorter four day trading week, and though markets
don't close earlier or anything on Thursday, I'm sure that
there's some consideration of that towards the end.
Speaker 3 (08:23):
Of the week.
Speaker 2 (08:23):
But you said in your note that investors are highly engaged.
Speaker 3 (08:28):
What does that mean?
Speaker 2 (08:29):
They're going deeper on the research into supply chains or
they want to know specifically about each of the fabulous
chip names exposed to China or the fabs exposed as China.
Speaker 3 (08:39):
What do you mean by that.
Speaker 10 (08:40):
Jordan, Well, what I mean is is that people are
definitely reaching out, asking questions, wanting to know what their
peers are and the investment community are doing and thinking
that's because the fundamentals really don't matter that much right now, unfortunately,
So everyone's kind of feeling around trying to get a
sense of these macro headlines, what would be perceived as
(09:03):
you know, positive or negative, and what would cause people
to get off their hands and deploy more capital.
Speaker 4 (09:08):
So that's what I mean by people are very engaged.
They're not.
Speaker 10 (09:11):
They're not Actually, how do I say this? They're not
anxious to go out and buy the dip. They're they're basically,
but they do have a short list I think of
names that they would prefer or names they would avoid.
Speaker 4 (09:24):
But they're very curious to see, like what is.
Speaker 10 (09:27):
It going to take to get people on the in
the investment community incrementally more positive or negative?
Speaker 4 (09:32):
And unfortunately we just haven't seen enough yet to go
off of.
Speaker 2 (09:38):
Next week we get earnings reports from the likes of
Tesla and Intel. What do you need to see from
those reports to give you some confidence.
Speaker 4 (09:48):
Well, they're very different, obviously.
Speaker 10 (09:50):
I mean for Tesla, I think it's it impacts a
lot more of the retail investment community. I don't tend
to speak to a lot of large mutual fund funds
or institutional owners. Who are you hanging a lot on
how Tesla sounds. I think the bar is relatively low
for Tesla, so I think it's more about plans for
(10:11):
new potential vehicles and timing on that front, because most
of the checks and the initial monthly reports have not
been great in terms of their unit sales. I think
for Intel, it's not about the numbers. I think this
quarter should be fine. There is some risk that maybe
there's a little bit of downside next quarter. I think
more so it's the new CEO taking charge and outlining
(10:35):
some of the strategy and recall that the bigger event
for Intel probably is going to come, I think on
April twenty ninth, when they're hosting a investor update on
their foundry business. I think that's where you'll get more
details again on their strategy and the technology that they're
trying to move forward.
Speaker 3 (10:55):
Jordan Klin in Missouri. It's great to have you back
on the program. Thank you very much. Now, coming up
on blue Berg Technology, the week comes to a close for.
Speaker 2 (11:02):
The ftc anti trust case against Meta. Will bring you
the latest next, this is Bloomberg Technology. We've been covering
(11:27):
the ftc anti trust trial against Meta all week. Yesterday,
Meta's former COEO, Cheryl Samberg, was on the stand talking
about the company's efforts to block competitors from advertising.
Speaker 3 (11:40):
On the platform.
Speaker 2 (11:41):
Bloomberg's Riley Griffin, who covers Meta for US, is back
here in the San Francisco studio. That's interesting Cheryl Samberg
kind of returning as a witness in this case. What
was she asked? What was she talking about? And where
did we end the week.
Speaker 12 (11:55):
Yeah, it's really a great question. And one of the
things the FTC has argued is that the introduction of
ads to the platforms have actually degraded the quality of
the services. And Cheryl Sandberg, the former CEOO, actually reversed
that point and said that it has been a boon
to the product, it has benefited users and really countered
(12:18):
the argument the FTC has been making in this milestone.
Speaker 13 (12:21):
Of a week.
Speaker 2 (12:22):
Over the course of this short week, Meta stock is
down seven percent.
Speaker 3 (12:27):
It's hard to draw a causal.
Speaker 2 (12:29):
Relationship between what's happening in that trial and the events
of the stock market. Where do we kind of leave it?
And I think it's probably important for the audience to
understand this is a multi week process.
Speaker 3 (12:39):
It's going to go on for a while.
Speaker 12 (12:40):
We've got several weeks ahead of us. This was the headliner,
if you will. We had three days of testimony from
Mark Zuckerberg ten hours and several revelations from his emails.
If you take a tour through them, you'll learn that
Instagram was considered to be spun was considered to be spun.
Speaker 9 (12:59):
Off in twenty eighteen.
Speaker 12 (13:01):
We also learned about a six billion dollar bid for Snapchat.
So a lot came up, but more weeks to come,
and I think we'll continue to see volatility throughout The's.
Speaker 3 (13:11):
Riley Griffin covering all things Meta. Thank you very much.
Speaker 2 (13:14):
Over to DC, a bipartisan House committee says Chinese AI
firm Deep Seek is a quoite profound threat to US
national security, citing its ties to Chinese government interests and
alleged circumvention of US export controls. Bast Mike Shepherd joins
us with the details. There's a lot going on right
(13:35):
now in the political sphere, but we're paying attention to
the commentary of this committee.
Speaker 3 (13:40):
Why and what was said, Mike.
Speaker 14 (13:44):
Well, this is an important episode in this long running
fubue with China over advanced technology, especially artificial intelligence. Remember,
deep Seek made its big breakthrough writer as Donald Trump
was taking the oath of office, and in the following
week we really saw equities here in the US slide
on fears that maybe this AI boom was oversold and
(14:06):
overpriced because Deep Seek was promising to do things cheaper
and perhaps faster and more efficiently using whatever technology it may.
Speaker 9 (14:14):
Have had at its disposal.
Speaker 14 (14:16):
Now the committee is raising questions about deep Seek on
a couple of different levels. One is just what it does,
and it is echoing concerns it has flagged about TikTok,
and those are namely security related.
Speaker 9 (14:27):
One it's concerned that the.
Speaker 14 (14:29):
App is collecting user data here in the US and
siphoning it back to China.
Speaker 9 (14:34):
Two, it is.
Speaker 14 (14:35):
Concerned that it may have ties and it cited corporate
filings to the Chinese government similar claim it's made with
relation to ByteDance and its ownership of TikTok. And three
there's also concern that the platform itself could be censored
to reflect Chinese views.
Speaker 9 (14:51):
And we have seen if you just run.
Speaker 14 (14:53):
A test on putting what happened in Tianamen Square, you're
going to get a very different answer, and one that
is much more in line with the Chinese government. The
other question ed though, is export controls, and the committee
recommended those because there is a concern that maybe deep
Seek managed to get around those to obtain the chips.
Speaker 9 (15:10):
That it used.
Speaker 2 (15:12):
There was also a sort of forensic discussion of Nvidia's
role with deep Seek. The number GPUs the deep Seak
had from Nvidia, and amongst everything I saw the response
from Nvidia. You know, in summary, that they follow the
instructions of the US government to the letter. That's consistently
what Nvidia says. What else do we need to know?
Speaker 14 (15:31):
Well, one thing that's important to understand here is that
the committee is applying separate pressure on in Nvidia to
get more information about how its chips are being sold
across Asia, and they want information going all the way
back to twenty twenty about its customers, not only in China,
but in eleven nations across the Pacific Rim.
Speaker 9 (15:53):
They want to know how those H twenty chips.
Speaker 14 (15:55):
That Deep Seek is believed to have used may have
ended up en mass in the firm's possession and helped
it to develop that R one model and make it
such a breakthrough. The concern is that in video, maybe
it knows its customers, but maybe it doesn't as well
in video. Of course, Yesterday responding very quickly to say
that it abides by all US export restrictions and is
(16:18):
eager to continue working with the US government, even as
it tries to protect its business in China, which we
see Jensen Wang doing with a visit to Beijing just
in the past twenty four hours.
Speaker 2 (16:30):
Bloomberg's Mike Shepard thank you very much. Coming up on
Bloomberg Technology, Perplexity is nearing a deal with smartphonemakers to
take on the likes of Google's Gemini Virtual Assistant. We've
got some details on Bloomberg reporting ahead. This is Bloomberg Technology.
(17:23):
Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.
I thought we'd look at markets over the course of
five days, and that includes last Friday session, where then
as that one hundred in particular ended.
Speaker 3 (17:34):
That week strong.
Speaker 2 (17:36):
It is a short trading week here in the United States.
Fridays is a market's holiday. The overriding story is tariffs
and tariff's anxiety. But when it comes to technology, I'm
showing them as that one hundred, but it could as
well just as well be semiconductor stocks. It's also about
technology export controls. We've been talking about that all week
(17:56):
on the five day track. With down about seven percent
sixtens a percent on the Nasdaq one hundred in terms
of single names, we're now going to shift how we focus. Right,
all of the oxygen this week has been consumed by
the chip names.
Speaker 3 (18:09):
Intel is down three percent.
Speaker 2 (18:11):
In part because on its earnings called TSMC said without
naming Intel. It isn't working with anyone on technology or
manufacturing sharing. That seems to have hit that stock. Tesla
reports next week very interesting, not just on the company
and supply chain, but Elon Musk and his role with
DOGE and the US government. And then Netflix has buoyancy.
If there's one name where things are different, it's in
(18:34):
this name.
Speaker 3 (18:34):
Now. Wall Street's hoping Netflix can.
Speaker 2 (18:36):
Continue to provide the escapism it desperately needs. Shares of
the streaming giant have risen nearly eight percent so far
this year, risen eight percent, with many investors hoping it
could be a safe haven away from the Tarif turmoil
that has ruled much of financial markets. Nine percent, i
should say, so far. In twenty twenty five, blumo's Ryan
(18:56):
Voselica made this the subject of his musings and right
this morning, first thing I read two am Pacific time.
Why is Netflix able to stand out in this environment?
Speaker 7 (19:07):
Hey?
Speaker 9 (19:07):
Thanks for having me.
Speaker 15 (19:08):
So I'll say what one analyst said in a recent
research report. Netflix has both offensive and defensive characteristics. It's
still growing quite strongly. It's improving profitability in cash flow.
The multiple is coming down, especially relative to its own history.
But at the same time it is seen as quite
recession resilient. People say that, you know, if there is
(19:29):
a broader economic contraction or weakness, and Netflix subscription is
not going to be the thing that you cut in
order to save money.
Speaker 3 (19:35):
People think it gives you a good.
Speaker 15 (19:37):
Bang for your buck, and that's why people think you're gonna,
you know, stay with it no matter what happens. So
that's the reason why we're seeing the stock, you know,
perform quite well this year.
Speaker 2 (19:47):
Next week for you, for I, for the Bloomberg Technology
team is a big week because earning star in earnest
is there a common thread between the Tesla's intels, netflixes
and then this mag seven names the following week that
the team is preparing for in its coverage.
Speaker 3 (20:05):
From the stock perspective, at least, well.
Speaker 15 (20:08):
I think everyone has focused so much on tariffs and
outlooks and what these companies say about their expectations for
the remainder of the year.
Speaker 3 (20:17):
There are so much uncertainty out there.
Speaker 15 (20:18):
We've already seen some very big companies pull their outlooks
talk about how difficult it is to make forecasts in
this kind of environment. If we see that continue with
the big tech is given their size and influence and
major indexes, it's likely that's going to have some broader ramifications.
Speaker 2 (20:35):
Ryan BLACEELCA have a good long holiday weekend in the States,
get ready for next week, and Netflix is really what
kicks it off right for more and what we can
expect from Netflix in the streaming landscape more broadly, Magli
grossim Science senior research analysts, joins us Now, I find
that so interesting. I actually did a double take when
(20:55):
we showed like the Netflix performance so far in the year,
because all the other companies that we cover in our
world are going through such pain. The streaming business broadly
seems healthy.
Speaker 3 (21:08):
Is that what you see, Maglie, Yes, it is.
Speaker 7 (21:12):
I would say Netflix definitely has some different characteristics going
on this quarter than some of their peers, and we
definitely would see them as you know, like Ryan was saying,
as safe haven through the rest of this year if
we are to face increasing consumer uncertainty. I think Netflix
has also really shown over the last few quarters, especially
(21:34):
in Q four, with the blockbuster numbers they put up,
that they're really separating from the pack and the others
aren't able to compete in the same way that Netflix
is largely due too.
Speaker 13 (21:44):
I think it's content slate.
Speaker 3 (21:46):
Well and just let's go. I was going to ask,
what is it that separates them from the pack.
Speaker 2 (21:52):
You know, at home, we just started watching the latest season.
Speaker 3 (21:55):
Of Black Mirror.
Speaker 2 (21:56):
There are no spoilers on this show ever, no spoilers
on Blueboats Analogy, but episode one was deeply upsetting. Had
a very sort of big name cost. Is it just content?
Is it pricing?
Speaker 7 (22:08):
Like?
Speaker 3 (22:08):
Why do they stand out?
Speaker 7 (22:11):
I think there's a few reasons. Content is a big one.
Speaker 2 (22:14):
You had.
Speaker 7 (22:15):
So if we go back a couple of years, a
lot of the other streamers, even pre writer strike, they
had started to cut content, spent in efforts to you know,
try to aim toward profitability, given that's been such a
challenge for these other streamers. So that was, you know,
kind of gave them an additional hit on top of
(22:36):
the writer's strike. And you really only get from these
other streamers a couple Tempole releases. There's some great stuff,
you know, Max Hulu, Paramount, but you don't get quite
the volume. And all of these surprises that come out
of Netflix continue to amaze people adolescents. I think is
a big one. Not many people would have expected that
(22:56):
to be, you know, top three of all time for
Netflix series engagement, and that was again I think just
a piece of evidence that they've got such an amazing
global content engine.
Speaker 3 (23:10):
Maglie. How proactive does Netflix.
Speaker 2 (23:12):
Need to consider pricing when we think about the health
of consumers around the world.
Speaker 7 (23:18):
I think they have a decent amount of pricing power
left to go for sure. They obviously right now are
in the midst of doing a price hike that they
announced a couple months ago. We just saw that flow
through to existing subscriber bills in March. So at a science,
what we do is use all data in order to
(23:39):
look at all of the subscriber trends, which we'll still
be able to see even though the company is removing
the reported subscriber numbers. So what we see with pricing
right now, we are seeing a hit to churn, which
we think is both related to price hikes as well
as some cycle in cycle out activity from live events
(24:00):
in Q four. But we ultimately think that's going to
be temporary, and usually after Netflix pricykes, you get this
temporary couple months of elevated churn relative to seasonal norms,
and then it kind of abates thereafter, so we would
expect it likely to be temporary. Even with that elevated churn,
they still are far better than all of their peers
(24:22):
in terms of retention.
Speaker 2 (24:24):
When I travel principally on tablet or my smartphone, I
play a little bit with Netflix's mobile games. I don't
really get the Netflix gaming story.
Speaker 3 (24:36):
I don't I get that.
Speaker 2 (24:37):
They're committed to it, But what do you see is
the kind of long term from that business line, and
what do you expect them to tell us more near
term about what they're doing.
Speaker 7 (24:49):
Yeah, I think the near term is probably going to
be a continuation of what we have heard from them
on games the last few quarters, which is that it's
still a small piece of the overall puzzle. They more
so are viewing it as you know, a franchise benefit.
So can they create a game about Emily and Paris
that also drives, you know, overall engagement of the show
(25:13):
and therefore it's part of their whole flywheel. So I
think probably near term we'll see it continue to be
a small piece of the overall puzzle for them, but
long term could be contributing a bit more. I don't
think it's ever going to be necessarily a key driver
for them outside of you know, everything else that they
have going on.
Speaker 2 (25:33):
Maglie, what's the biggest threat to Netflix and where does
the competition come from?
Speaker 7 (25:41):
Biguess threat? I would say, I think, you know, content
is something that they have to continue to stay ahead
of the game on live events. I think in terms
of what they have to spend on live events, that
could become a trickier part. As they've gotten more involved
in sports, which you know we've seen that do pretty
(26:04):
well for them, that has caused, like I mentioned earlier,
some cycle in, cycle out activity, So I think that
could potentially change the retention profile, but also going to
be you know, a great tool for them to get
different parts of the market that they weren't previously able
to get. And then the AD tier that's something that
(26:25):
they've been you know, behind some of their peers on
in terms of getting into that market. So that's something
we definitely think that they should continue to ramp up.
That that had a little bit slower of a start
than I think a lot of people expected initially, but
has done well the last few quarters. Q four they
stated around fifty percent of sign ups that were choosing
(26:48):
that AD tier and then we're seeing that continue to
grow about ten percent year year in terms of the
selection rate for gross ads opting into that ad.
Speaker 2 (26:57):
Tire Michaely Gross of M Science. Great to have you
on the show. Thank you very much. Now coming up,
we speak with Archer Aviation CEO Adam Goldstein.
Speaker 11 (27:07):
This is Bloomberg Technology.
Speaker 2 (27:25):
Arch Aviation hopes to reshape New York's air transportation, linking
Manhattan to major airports using its midnight ev Tol aircraft.
It's a vision that could take your journey from one
to two hours in the car to as little as
five minutes. Joining us now, Adam Goldtein, CEO and co
founder of arch Aviation. Okay, let's go to the basics first,
(27:46):
the map, the hubs and the airports that you want
to connect.
Speaker 9 (27:50):
Well, thanks Ed.
Speaker 5 (27:51):
We are building the future of aviation here, and so
today we announced our New York route network where we
will be really trying to execute on the home to
airport trips, really focusing on nine core locations, the large
international airports GfK, LaGuardia, Newark, the big heliports located in
Manhattan West Side, east Side, and the Downtown Skyport, and
(28:13):
then also the big regionals, Teterborough, Westchester.
Speaker 2 (28:17):
Air Long Island, Adam, we need to reflect on the
tragic events of last week, right of a helicopter that
crashed in New York City to the Hudson. I bring
that back with the context. I've spent a lot of
time with arch aviation, right, and one of the pitches
that you have is that the technology relies in part
(28:37):
on pre certified components.
Speaker 3 (28:40):
In other words, the FAA knows.
Speaker 2 (28:43):
These components because they are more commonplace in other aircraft.
But those watching want to know the safety confidence that
you have. How does the Midnight compare to a normal
helicopter and what redundancies have you put in place to
make it safe.
Speaker 5 (29:01):
So these aircraft are powered by an electric powertrain, and
that's really the key new technology that enables this new
level of redundancy that we haven't seen before with vertical
left aircraft. And so the Midnight aircraft has twelve electric engines,
it has a big wing, and it has redundancy built
into the entire system that enables a very very safe flight.
(29:22):
And that's the type of safety that cannot be offered
today with helicopters. So this is something that we're aligned
with not only the FAA, but really the future of
aviation to keep bringing and keep innovating in the aviation industry,
to make products.
Speaker 3 (29:35):
Safer and safer.
Speaker 2 (29:37):
Adam, you have an aggressive and ambitious timeline. Not just
in New York City, other parts of America, are the
parts of the world where does FAA certification stand, because
you cannot deploy until you get that.
Speaker 5 (29:49):
So actually, we've been working around the world to enable
an ecosystem to allow us to launch, and in fact,
one of our biggest supporters and big investors in DABI,
has created a pathway to allow us to launch as
early as this year, and so we've been partnered with
the country and we have found a pathway to now
start early operations. Now, of course it'll be very low
(30:12):
scale to really prove out the concepts, prove out a
lot of the safety case here, but then the global
regulators can leverage that data to really de risk the platforms.
And so we will launch there as soon as this year,
with a goal to launch in the US via the
FAA shortly after that.
Speaker 2 (30:29):
Have you met with the new administration and key members
like Transport Secretary Duffy.
Speaker 5 (30:34):
I have the new administration has been very forward leaning
and very supportive of the industry. They want to see
products made in America, they want American innovation, they want
America to lead in aviation. So yes, I did spend
time with Secretary Duffy. I have spent time down at
mar Lago, and the new administration has been very supportive
and I'm confident will continue to be a good alley
(30:55):
of the industry.
Speaker 2 (30:56):
Adam Goldstein of Archre Aviation, It's great to have you
here on Bloomberg Technology, Thank you very much. Meanwhile, ev
Maaker x Pong is looking to ramp up its global
expansion despite geopolitical uncertainty. CEO he Jupeg spoke exclusively with
Bloomberg Steven Engel and began by addressing the tariff uncertainty.
Speaker 11 (31:17):
That's all.
Speaker 16 (31:18):
She also, for a company, we expect stability in any case.
Stability will bring political, economic and cultural certainty, and only
then we can formulate a clear corporate strategy. So we
deeply believe that stability is above all. In fact, Europe
(31:41):
is the focus of Explain's globalization strategy, and we will
strengthen our business in regions including Southeast Asia, the Middle East,
Central America and South America. However, we still hope that
one day more Chinese companies will be able to expand
their businesses into other countries, including North America, understable policy conditions.
Speaker 17 (32:02):
We know that the Chinese and the Europeans have restarted
talks about this minimum price mechanism potentially to replace the
tariffs which can go as high as forty five percent
into the EU. How would that affect your plans for
the European market Potentially would that mean scaling back on
the immediate need to have your own production bases in Europe.
Speaker 16 (32:25):
Well, we have noticed this news, but I believe the
talks are still in their early stages. For me, the
certainty lies in the terror policies that China and you're
clearly implement it last year. As we expanin, we firmly
believe that only through localization in areas of localized R
and D service, manufacturing and sales, can we ultimately achieve
(32:50):
comprehensive globalization. So we are working on how to better
implement our localization strategy in Europe and other regions. In
the future, we will announce our localization strategy in certain
countries and expect to have more localization strategy in more markets.
Speaker 17 (33:09):
Let's talk about chips, because you need these chips across
the board, whether it's your flying cars, your humanoid robots,
your industrial robots, and of course self driving robotaxis and
the like.
Speaker 9 (33:24):
How critical was it to build.
Speaker 17 (33:26):
These chips in house, not necessarily rely on the Nvidia
for chips and create your own touring chips. Was this
because it's cheaper, or because of export controls, or because
you have to meet certain requirements from the Chinese government
that more chips in these kind of products need to
be made in China.
Speaker 16 (33:49):
Yeah, Actually, companies like Tesla and Apple are developing their
own chips, and they're certainly collaborating with Nvidia and many
other chip suppliers. According to our research, each expang vehicle
contains fifty five hundred chips from global suppliers. Given the
large number of chips, the reason the XPAN is working
(34:10):
on the in house chips is that we hope we
can leverage our own capabilities. For instance, if we aim
to achieve autonomous driving and use global autonomous driving systems,
we need chips that can help our autonomous driving perform
better in conditions like nighttime and glare. We hope to
maximize the performance of the chips, and at this point
(34:32):
there is a huge value of customized chip. So in
the future, we believe we will collaborate with many chip suppliers,
including Nvidia, while continuing to focus on developing our own
customized AI chips.
Speaker 2 (34:47):
That was x Pong CEO hu Jaopeng speaking with their
own Steven engeln are coming up. Open ai looks to
a three billion dollar acquisition that could supercharge its coding ambitions.
Speaker 3 (34:59):
That Bloomberg scoop.
Speaker 2 (35:00):
Next, let's get a quick check back on that breaking
story about Google. A judge has found that Google was
partially guilty of illegally monopolizing parts of the advertising technology market.
And what we're seeing is alphabet shares under pressure down
one point five percent. Elsewhere advertising in ad tech related
(35:23):
socks really rallying on that news a partial finding a
monopolistic practice by Google.
Speaker 3 (35:29):
More.
Speaker 11 (35:29):
Next, this is Bloomer Technology.
Speaker 2 (35:45):
Open ais and talks to acquire AI assisted coding tool
Windsurf for about three billion dollars.
Speaker 3 (35:51):
That's according to sources.
Speaker 2 (35:52):
Bloomberg's Rachel Metz broke the story with the team and
if I remember correctly, until several days ago, Windsurf was
known as Odium. But this is a significant acquisition for
open ai if it happens, In fact, the biggest by
open ai.
Speaker 18 (36:07):
Yeah, but the biggest pie quite a bit if it
goes through. In our reporting we found out that open
ai and Windsurf are talking about open THEI buying Windsurf
for about three billion dollars. And you know, things could change,
but it would make a lot of sense for open
ai to buy this company given that it and other
(36:28):
companies have increasingly expanded into the market for AI coding assistance.
Speaker 2 (36:34):
Okay, what's the space for coding assistance like Windsluf's not
the only name, and why is it something that open
ai just can't do themselves.
Speaker 13 (36:42):
Open ai actually does some of this stuff itself.
Speaker 18 (36:46):
Also competitors like Anthropic, their AI models focus increasingly on coding,
and in a lot of cases, these large language models
have gotten better and better.
Speaker 13 (36:56):
They've been trained to be better and better at coding.
Speaker 18 (36:58):
But there's also like an increasing space here their companies
such as Windsurf. There's also there's githubs codec or sorry
co pilot. There's also Cursor, which comes from any sphere,
and these companies are growing fast and they're getting users,
and they're users that are paying, and that's a key here.
Speaker 13 (37:17):
You need people to pay for these AI products.
Speaker 2 (37:19):
Well, it wasn't long ago that I was introduced to
windsurf at that time known as Codium, Like literally not
long ago. It seems to have grown and commercialized very quickly.
Speaker 13 (37:30):
Yeah, it is.
Speaker 18 (37:31):
It's funny because a few months ago, people were constantly
talking about Cursor.
Speaker 13 (37:36):
Everywhere you went, it was Cursor, Cursor, Cursor, within this
everywhere you went, within this AI sphere.
Speaker 18 (37:41):
People are still talking about Cursor a lot, and it's
still extremely popular. But then I started to hear, you
know a little bit more recently windsurf, Windsurf, windsurf. So
there's a there's definitely room for a few competitors here,
and it seems like open Ai thought that this would
be a really good one to snap up the.
Speaker 2 (37:59):
Most Rachel Mets with great reporting from the tech team
appreciate it. But that does it for this edition of
Bloomberg Technology. I want to go back to some of
the names that we've been watching throughout the show. Right,
this is what they look like in the moment, specifically
focused on Google, A judge finding that partially they had
monopolistic practices in the ad tech market that breaking news.
Speaker 3 (38:18):
TSMC's US shares.
Speaker 2 (38:20):
Have given up gains after really strong earnings report, and
Netflix is just around the corner and it is standing
out in the tech sector which is under pain. So
much more to come next week. This is Bloomberg Technology
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