Europeans Privately Tell Russia They’re Ready to Shoot Down Jets

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2:20Carol Massar:Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. It is Bloomberg Business Week Daily. That is Carol Masser. I'm Tim Stenevek. A story that we're following closely and it's a Bloomberg exclusive, actually. Bloomberg obtaining exclusive details of private discussions between European and Russian diplomats. European diplomats warning the Kremlin that NATO is ready to respond to further violations of its airspace with full force, including by shooting down Russian planes. Russian officials have denied their planes crossed into Estonian airspace and insisted that they are not trying to test NATO, saying Russian military fights are guided by international rules.

3:04I want to bring in Becca Wasser, Becca's defense lead for Bloomberg Economics. She joins us from our Washington, D.C. Bureau. So, Becca, what would it mean if NATO would respond in this way? I mean, isn't that the entire point of NATO, to respond collectively if there is such an incursion?

3:23Carol Massar:Thanks so much for having me today. I think you're exactly right. NATO's core focus is for the alliance to essentially treat an attack on one to be an attack on all. What we are seeing here is not necessarily an attack, but rather incursions that violate sovereign airspace. And so what we are having is a collective response. It's just not necessarily taking overt military means. What I think we have seen today with this scoop that Bloomberg News had is a warning from NATO and NATO allies to communicate that should Russia continue to violate NATO airspace, there may be repercussions for those actions.

4:07Carol Massar:A core part of deterrence, which is what NATO is all about, is trying to communicate to someone that their actions have consequences. And I think that's exactly what these NATO allies have done today. And they're trying to make it so that there isn't a potential escalation or any accident that could spiral further and lead Russia and NATO into conflict. So. U.S. part of NATO. I mean, so I am curious. We have certainly seen from President Trump saying that Kiev and Ukraine can win and that they are in a position to fight and win back. Specifically, it just to be fair, the president's got kind of back and forth in terms of his support of Ukraine or also support of Russian President Vladimir Putin.

4:57Carol Massar:So is the U.S. all in on this and supportive of NATO all in 100 percent? The U.S. is a founding member of NATO and therefore has said that they are all in and that they will ensure the security of NATO and the NATO alliance. That said, if you are looking at President Trump's comments, he makes it very clear that he sees NATO likely to be a European project. So while the U.S. is part of NATO and has reaffirmed many of its collective commitments, there is this emphasis on European nations doing more. And within that, the idea that the rest of the alliance, now that they are spending 5 % of GDP on defense, are going to be able to step up and take on the lion's share of the burden.

5:49Carol Massar:And I think we've already seen that in the initial response to these airspace violations. NATO has stood up Operation Eastern Century in order to deter any further incursions, and the U.S. has not contributed additional forces or equipment to that. We're also seeing something very similar play out as it relates to President Trump's comments about Kiev being able to fight Russia and take back territory that it had previously lost during Russia's invasion of Ukraine. Yeah, that was a surprising development this week. Absolutely. I think fundamentally what it really means is that there is no change on the ground if the U.S.

6:33Carol Massar:were not to step up its military aid. And we don't see any indications right now that the U.S. is planning to do so. What is happening is that the U.S. is willing to provide weapons, but through NATO and only if other NATO allies will pay for those weapons to be sent on to Ukraine. So absent any change in the provision of military aid, both equipment, additional intelligence support and potentially taking some of the training wheels off of long range strike capabilities, there probably isn't going to be the ability of Ukraine to be able to take that take back that territory. Hey, listen, Becca, one of the things we want to ask you, you're our defense lead for Bloomberg Economics.

7:17Carol Massar:You led studies in war games for the U.S. Department of Defense at the Center for a New American Security in the Rand Corporation. What can you – we're switching gears a little bit, but there is a story that has definitely popped up high on the Bloomberg terminal, and it has to do with the defense secretary, Pete Hegseth, summoning top military commanders for a meeting early next week. apparently has not talked about what this meeting is about. What do we know? What are we hearing? How unusual is this? I think you've hit the nail on the head. It's quite unusual. This is something where no one really knows exactly why everyone has been called back to Washington, D.C., why they're all going to be meeting at once.

8:03Carol Massar:I can't think of a single moment in military history where every single general was located in the same room as the Secretary of Defense and senior leadership. What does this mean? How many generals are out there? And are they been pulled from posts around the globe? Like, what are we talking about? Size and scope here. We are talking about hundreds of people. So we are talking about some of the senior leaders in the Army, the Air Force, the Navy. So every military service, we are talking about the folks who are currently leading operations overseas. We are talking about people who are based at NATO, at European command, at Central Command.

8:47Carol Massar:We're talking about everyone coming from all over the globe to meet in one place all at once. This is truly unprecedented. I have to ask, so who's watching everything? Well, the good news is that the U.S. military is highly well-trained and highly capable, and there's going to be a lot of command staffs that are going to be doing a great job holding down the fort wherever it is that they are. So there is going to be oversight, but what won't be there is some of that guidance that you have from some of your top leadership and your top military officials to ensure that things are going according to plan and according to the guidance set forth by the Secretary of Defense and the Department of War.

9:32Perhaps it's a question about organization and what Pete Hegseth, the Secretary of Defense, wants the military to look like just in the last 30 seconds that we have with you. We know he's made some changes at the top. He's fired some longstanding members of the military. He's done some reorganization. How would you characterize the image that he wants to portray?

9:54Carol Massar:The Secretary of Defense has been very clear about what his priorities are and how he wishes to remake the U.S. military in that image. One of his top priorities has been, in his words, lethality. But lethality has not been well defined. Some people think that it focuses on capability. Others tend to think that it focuses on military readiness, as well as the way in which the U.S. military presents itself. Ultimately, I think the secretary is the only one who knows truly what he means. And perhaps maybe this meeting is an opportunity for him to communicate that more broadly. All right. Interesting stuff.

10:33Carol Massar:Becca Wasser, thanks so much. Defense lead for Bloomberg Economics joining us from our D.C. Bureau. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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13:25Carol Massar:You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. We're going to stay on the tech world because we did have some headlines involving TikTok. Yeah, Oracle, Silver Lake, and MGX will be the main investors in TikTok. This is according to CNBC's David Faber. He reported this on air. He cited people familiar with the matter. Oracle, Silver Lake, and MGX will have a combined 45 % ownership of TikTok. That's according to Faber. Looking at shares at Oracle right now, Carol, down about 5.8%.

14:01Carol Massar:All right, we're talking TikTok. We just talked about a possible Intel Apple kind of tie-up there with our Mark Gurman. We want to stay again on really the tech world and even that tie-up or possible tie-up. We've got the head of a company that's one of the world's biggest sellers of the chips at the heart of mobile phones, including Apple, which is its second biggest customer, at least according to Bloomberg Data. Great to have with us Cristiano Amon. He is CEO and president of Qualcomm. Tommy joins us from the Snapdragon Summit in Maui, Hawaii, along with our B-Tech co-host, Ed Ludlow, which you can find on BTV every day at 11 a.m.

14:35Carol Massar:Wall Street time. Ed out there in our San Francisco Bureau. Gentlemen, great to have you both here on Bloomberg Business Week Daily. Cristiano, I want to start with you. I got to ask you, Apple is, according to our data, your second biggest customer. What would a possible Apple Intel tie-up mean to you guys? look there there's there's no relationship and actually it has been widely reported for years now that over the next few years i think apple will stop you know getting chips from qualcomm and the company has really moved on on not only what we're doing within the android ecosystem but we're now in pcs and automotive in industrial in robots we're even into the data center so qualcomm It's a different company right now.

15:25We continue to execute on this strategy. And there's really no relationship.

15:29Carol Massar:But in terms of a tie-up, do you think that's even something likely, that there is some deeper relationship between those two companies? The way I think about it, and I don't know details, but I can only see two possible angles. One possible angle is Intel continued to invest to become a foundry. In that case, you know, as we are a fabulous company, we welcome more foundries. Today, we manufacture our chips with TSMC, with Samsung. And if Intel has the capability to become a competitive founder in America, we're very happy and we will look at them as a manufacturer. As far from a product standpoint, I can't really see a connection because Apple have their own processors.

16:16Carol Massar:And we want to get on to other stuff. One more question, though. How are you feeling about the government investing in Intel? Do I don't know, would it be fair for other companies, even a Qualcomm to say, wait, you know, what about us?

16:31Look, my understanding of this is there is there is an overarching strategic topic, which is manufacturing of semiconductors. And I think we know and it's been widely reported that Intel had a struggle to compete with companies like TSMC and Samsung. So anything that is driven towards enhancing the industry manufacturing capability, especially in the United States or even other places, so we have a more geographically diversified manufacturing, that's actually good news. We're looking at the big picture. Cristiano, the thing definitively that's changed is the landscape in both PC and mobile. But I really want to start on the PC bit.

17:19I look at what's come out of Maui, generation to generation from a year ago. And what's really clear is you want to push even deeper into Windows-based PC. Could you just explain how the generational updates on the tech help you do that and why it's important? Yes. And I wish you were all here with us. This is actually not that place at all. We wish we were there also. Yes. This has been day three of a lot of announcements, all the chip announcements. And one thing that we're actually very proud, I think, as I said earlier to Carol, I think the company is diversifying. We're building products for many different industries.

18:04And PCs is one of the growth vectors of the company. So we announced our second generation PC. We just entered this market. And in our second generation, I think people are seeing one of the biggest leaps in performance from generation to generation. We have 40 % improvement in the CPU, 80 % improvement in the GPU. And we actually have the very first processor in a thin and light laptop running at 5 gigahertz of clock frequency. but the real news is the amount of AI performance. I think the transition of phones and PCs to AI is happening and those chips are designed to do. Cristiano, I don't want to make statements because I'm the journalist and as you know, I love to ask you questions but I go very deep on what's happening and so there's an acceptance that this is edge technology that's deployed in the real world but I kind of want to hold you to how it's going You know, in February, you basically said that in really specific category, you know, Windows PC priced$800 and above.

19:12I think you said you had 10 percent market share in that. And I'm looking at the specifics of what came out of Maui in the last three days. Do you have an update on the ownership you have in that market or what this latest gen of chipsets will do to push you deeper into it? Yes, this is a great question. We are, you know, as we're new in this market, and it has been, you know, it's actually we can leverage a lot of technology. It's actually accretive, I think, to Qualcomm. And we're tracking to what we said. We actually only launched this, you know, you see PCs with our chips in the United States in the top five European markets.

19:50And we're tracking about 9 % right now. I think our projection was by 2029 to get to about 12%. Very reasonable. But what is exciting right now, and that's, I think, in your question, is the edge AI transition is happening. Actually, the foundational models now are being designed so they have cloud and edge working side by side. And that is actually creating an opportunity for us to accelerate. And it is reflecting a number of designs. We actually, you know, a while ago, just a couple quarters ago, we talked about having 100 designs across all the major PC OEMs. HP, Dell, Lenovo, Acer, Asus, Samsung.

20:32Now that number is significantly higher and we're seeing the excitement. To Carol's question, I think it's fair, like the NVIDIA Intel product collaboration puts this emphasis back on 8x86 against ARM-based chips. how are you tracking the penetration of both in the market you know if you if you're going to react to that in nvidia and intel deal and how it changes the market you must also be tracking it in that context you know how you are pushing yes to that territory yes when you actually and i'm gonna i'm gonna quote to you uh when you just said when you actually dig deeper on it and it It was interesting, actually, when that announcement happened, it was interesting.

21:20We were slightly up. It was kind of neutral to positive to Qualcomm. And we saw, I think, the market stock reaction on ARM, on AMD, and then Intel was up. And the way we actually look at this, we're incredibly excited. Because what it basically means is, I think, Intel is sending a message that their integrated GPU and their AI products are likely not to continue with that. Because that's what the market is saying. It's going to be NVIDIA. So then, as NVIDIA comes in to the integrated GPU market, combining their GPU with Intel x86, he started to bring AI into the PC market. And that is the moment we've been waiting for.

22:07And I think that's what we do. And I think the Qualcomm DNA is anything that is battery power, is high performance, low battery life, and a lot of AI. That's where we want the market to be. So Cristiano, sell us on this moment, because I think a lot of people's experience with AI so far has been LLMs. And LLMs that you can use on your phone, LLMs that you can use in a browser. So if that's the way they are experiencing AI, why will they think that they need to buy a computer that is specialized for AI? OK, so this is a little different. And I wish I, you know, I have time to walk you to all the details.

22:46Maybe that's an invitation for you all to come here, I think, next year. OK, we're done. We'll come. Yes. But here's I'll give you some simple I'll give you some very simple data points. The first thing is we used to learn how to interact. We had to learn how to interact with your phone, interact with PC. But now with AI, whether it's what we say, what we write, what we see, the computer knows how to interact with us. So the user interface is changing. And the user interface actually runs where the human is. It runs on your phone. It runs on your PC. So we're starting to see right now, you see Microsoft doing that with the agents.

23:27You see that Google doing that with the agents. Then now the computer has this agent ready to interact with you as your assistant, as you do things. That's the first thing that is happening. The second thing that is happening is there is incredible amount of processing power that is available. And as companies starting to see AI getting scale, because now it's about not just creating AI in the data center. I need to deploy it. I need to make money. they realize that you can leverage all of this computer it's transparent to you it's the wrong thing to talk about ai is cloud or is edge that it doesn't work like that just think for example if you're office 365 customer you have cloud and you have a client and ai is going to be deployed like that and i and companies are saying if i bring this to the edge my cost goes down my latency improves and I have privacy.

24:20And that's what we demonstrated. Many ISVs starting to deploy AI on PCs and in phones.

24:27Carol Massar:All right. Going to leave it there. I'm glad we could get that time with you and really cover a lot of ground. Cristiano, thank you so much. Enjoy Maui. We certainly wish we were there. It's a pretty great day here in New York City. Cristiano Aman, he is CEO and president of Qualcomm from the Snapdragon Summit in Hawaii, along with B-Tech co-host Ed Ludlow in San Francisco. Check him out every day with Caroline Hyde there on Bloomberg Television at 11 a.m. Wall Street time. And be sure to check out Ed's reporting out on this story. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

25:05Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve the workflow and your agent handles the rest. Monitoring the market, watching for your conditions and executing your strategies exactly as defined.