Trump Media Targets Nuclear Fusion Through Merger With TAE

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1:02Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. The newest company to get into the energy sphere, admittedly in nuclear energy, is the Trump Media and Technology Group. DJT is the ticker, of course, and it's President Trump's company, basically a social media company because it owns Truth Social. But they are now in nuclear fusion. So we want to understand what's going on here.

1:44Simon Casey is Bloomberg News' managing editor for Energy and Commodities. Simon, Trump Media and Technology is now a nuclear fusion company. How does this work? Yeah, I don't think anybody had this on their bingo card this morning. We certainly didn't. It appears that they are a fusion company as much as they're a social media company or a crypto company now. They're merging with a company called TAE. It's a, far as we can see, a credible fusion player. They've been around for over two decades. They've raised money from the likes of Goldman Sachs, from Google and various other big investors. I think Chevron, the oil company's venture capital arm, has put money in as well.

2:23um this deal gives them uh i believe something in the region of 200 million dollars of a cash infusion to continue their work um for the for for djt um they are touting this as a pivot to the exciting world of nuclear fusion which is the the future of cheap affordable abundant energy for everybody um and that's been the dream for decades of course there was a breakthrough in 2022 where fusion was actually created for a brief moment in a laboratory, Lawrence Livermore Laboratory. And that was a fairly significant achievement. And it's been recreated since, but only sort of sporadically and not at commercial scale.

3:07We're a long way off. You know, it's very technically challenging to do this, let alone commercially. I'll ask the elephant in the room question. Where are we in conflicts of interest with this president and this administration and investments in business and that type of thing where's the market kind of evolved to this is this is before the trump administration this stuff i would say rarely happened it almost i can i i struggle to remember it happening now it's commonplace isn't it and you know we let's be clear the trump administration has a very a very robust i would say very sort of clearly outlined energy agenda and energy dominance agenda um they are pro-fossil fuel they uh also support the nuclear industry and um the nuclear industry has you know taken it's gained a lot of momentum since that discussion discovery i mentioned in 2022 but since trump has come in he's been very supportive of the nuclear industry to build new nuclear reactors uh look we have we have serious issues here in this country with nuclear with power demand from the ai industry and how we're going to service that demand and keeping a lid on prices uh the energy secretary chris wright is It's also very pro-nuclear, been very vocal on that front.

4:20But yeah, it's kind of amazing, nevertheless, to see this kind of deal this morning. Well, just looking at the DES function for DJT, 12 employees. That's, I guess, in the trailing 12 months, 3.7 million of revenue. 1.3 billion of cash, though, 950 million of total debt. so what does Donald Trump company Trump Media and Technology Group Corporation what is that? What do they really bring to this deal other than maybe some cash? The name I guess, the ticker. Yeah, it's to a large extent it is a meme stock I think it's fair to say and with a cash pile and if they can use some of that cash pile to fund nuclear research and development then maybe that's a sensible use of that cash.

5:05Yeah, name recognition goes a long way in 2025 and 2026. Simon, how big is the investable universe of nuclear companies right now? Wow, that's a good question. I mean, in terms of fusion companies, I think this is the first, this will be the first company fusion developer that's actually listed on a stock exchange. So there's a handful of these companies, some of them on the East Coast here. There's a big, there's a cluster around the Boston area. And they're all privately held apart from this one. in terms of other nuclear stocks there's a handful of them there's a company called fermi which has got had a lot of interest recently which is trying to develop a a campus down in west texas that would include ai data centers and a potentially a new nuclear reactor to power those data that data center that's a very ambitious project um then you have a handful as i say of other companies that are trying to develop small, medium-sized nuclear reactors.

6:07And this is the other thing that the Trump administration is very keen on, to kind of lower the cost of entry, if you like, into the nuclear industry. What can you tell us about the timetable associated with commercially deploying utility-scale fusion power companies? So, well, if we're talking fusion, it hasn't been proved at commercial scale. So we're probably talking decades before, I would say. So I'm just looking at the Bloomberg reporting, and this might – the combined company plans to begin construction next year on the world's first utility-scale fusion power plant. So that's going to take a long time to construct that.

6:45I mean, we don't even know if it can work at a commercial scale. Now they can pour the concrete and build the foundations. Nothing to stop them doing that. And this sounds like a multi-billion-dollar type of plant for these things. Potentially. No one's ever built one before. So we don't really know. I mean, we know that conventional fission reactors, which have been around since the end of the Second World War, they take the last one built in this country went over budget, and it was about over$10 billion, I believe. Who's going to provide the financing on all that? I think if it can work at scale, then a lot more investors might take a look at this, including mainstream investors.

7:23But it's so hypothetical at the moment, it's almost impossible to say. What is the return on investment going to be for something like that? It's early innings, not even first inning at this point? It's very early innings. I mean, the well-worn joke, it's not even funny anymore, that nuclear fusion, it's the future. It's the future 30 years out, and it always will be 30 years out. That's kind of where we've always been. It exists in the textbooks. It now exists in the laboratory, which, don't get me wrong, is a big step forward. But transferring that, creating nuclear fusion for a fraction of a second and then evolving that to where it's on all the time and being able to power a town or a city is a quantum leap.

8:06SMR, small modular reactors. Yes. That seems like pretty cool technology to me, but that's still years out. That is, again, probably years out because it's technically challenging, but it does exist. I mean, you use them in nuclear submarines and aircraft carriers. Yep. So there's nothing to stop you taking one of those out of a ship and having it on land. The challenge there is actually possibly more regulatory. And again, that's something that the Trump administration is actually trying to address in terms of permitting reform and so forth. So there are companies listed that are developing these things.

8:41We haven't seen one yet that's been produced and it's been proven it can be manufactured at scale, but it's more achievable, I would say. Stay with us. More from Bloomberg Intelligence coming up after this.

8:59You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Paul, I think we need to take a closer look at Micron given the roaring comeback it's made this year. I mean, Memory Chipmaker, that's an old school product, but it's having its day. Let's bring in Jake Silverman, Bloomberg Intelligence semiconductor analysts to recap these results. Jake, let's start just with the big massive gain Micron has seen this year, up 200%.

9:32What were investors pricing in and did they get what they wanted with yesterday's earnings report? Yeah, I think investors were expecting a little bit more of a subdued outlook for the second fiscal quarter, primarily just due to typical, a little bit of conservatism for management, but also the February ended quarter tends to be a little bit bit more seasonally weak. You get the December portion of that, but usually consumer products, PCs and smartphones tend to see a little bit of a sequential decline just off of strong holiday seasonality. We all kind of knew that pricing was going to be the most important factor going into the quarter.

10:09And obviously demand from AI is pretty strong. But there are areas like high bandwidth memory where they're actually, Micron's actually somewhat constrained in terms of their ability to supply just simply because they haven't invested in that much additional capacity and they need to improve yields. And they're transitioning over from HBM3E to 4, which is to support NVIDIA's next architecture and other customers. So there's a few factors going on here that I think had investors a little bit more maybe conservative in terms of what they were expecting. I don't know a lot about semiconductors, and I want to keep it that way.

10:41But what I do know is it's a cyclical business has this ai spending thing kind of evened out the cycles or just throw the cycles out the window it's um a little unprecedented i don't think that we're necessarily at that point where we can say that there aren't going to be uh cycles or at least not uh in the next i don't know call it five ten years something like that typically what we see with memory i'll just focus on that specifically. We tend to see something like seven to 10 quarters, about two years plus of up cycles. And then what happens from there is that we tend to see some sort of cyclical decline.

11:21And that really is because of supply ending up being a little bit more, a little bit more supply growth relative to demand growth. AI is structurally limiting some of that. We're seeing AI inferencing demand being really strong. That's both for DRAM and NAND. At this point, DRAM is more important for Micron. It's a much larger percentage of their sales, and that's where high bandwidth memory is included in their revenue. And so what this does to the cycle, it's definitely extending it. It's elongating what we would expect, and it's making it a lot more difficult for investors, I think, to capture what will be the ultimate peak of the cycle.

12:04But on the other hand, we have to look at what's happening with pricing. If customers like PC, smartphone, automotive, you know, run the gamut, if they can't get supply, someone's going to need to meet that, which means that Micron or their peers are going to at some point need to expand capacity. They're kind of working on it. They hinted at it with the additional CapEx increases for the fiscal 26 going up from 18 to 20 billion. But it's just a question of how fast and to what magnitude can they actually increase capacity. Right. And I'm glad you bring that up because we know that the industry is shifting production to the more advanced technology for AI data centers.

12:45And therefore, there's a shortage of less sophisticated memory chips for PCs. Doesn't that mean that Micron has the upper hand when it comes to Dell or HP and they can call the shots more? I mean, what does a Dell, what does an HP do then if they can't get what they need? Yeah, it's complicated. So Micron has to decide how they want to allocate that capacity that they have, whether that goes to PC. I think that when you're a larger customer like Dell HP, you kind of have to just take the product at the price that Micron is offering it. Now, I do think if you can buy in larger volumes, you can mitigate some of those price increases.

13:20But at the end of the day, you're being dictated by the market demand, the market forces. But also when prices have declined in the past, PC makers have also benefited from that. So if there is a cyclical decline, which I expect to happen at some point, they'll also benefit from a decline in memory pricing as well. Where does Micron manufacture its chips? Yeah, so it's primarily in Taiwan, but also in Japan as well. and they have a fab in Manassas, Virginia, but they're also expanding now to Boise, Idaho, and they're eventually going to bring a fab online in New York. So it's pretty geographically diverse.

14:03Do we know? Clay, New York. Where's Clay, New York? I'm going to say up there. Cornell. Upstate, okay. So not near us. No, upstate. I didn't know there's upstate, and I think there's midstate, some people call it. Well, everyone in Manhattan thinks upstate is like Westchester. Right, yes. But I learned this during the pandemic. There's different regions of the state of New York. I have to go Google that now. I wasn't aware of that. Well, you're a New Jersey guy, so there's just a city and then that's it. Exactly. Exactly right. Stay with us. More from Bloomberg Intelligence coming up after this.

14:38You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts. or watch us live on YouTube. Activist investor Elliott Investment Management has built a stake of more than$1 billion in Lululemon Athletica. The stock is up 6.5 % today, but I think the problem is it's down 42 % year to date. So let's see what's going on over there at Lulu. Poonam Goyal, senior U.S. e-commerce and retail analyst, Bloomberg Intelligence. She's based down there in Princeton.

15:13She joins us. Poonam, what's going on with Lululemon? What's the problem here? And what do you think Elliott believes it can do to fix it? The problem is that they've had plenty of execution missteps over the past few years led directly to product innovation. And as they search for a new leader at home, the candidate that he's outlined seems like a strong one. You know, she's led a turnaround or help lead a turnaround at Ralph Lauren in the past, at Coach, both iconic brands that struggled in that time. and she helped lead that turnaround. So I think Lululemon, while a different turnaround, she has the track record, if she is at the lead, to really help drive this turnaround.

15:59Poonam, tell us a little bit more about the role of Chip Wilson. He founded Lululemon and he's been making comments, really agitating for change, accusing Calvin McDonald of killing innovation and some serious strategic missteps. But he is not part of management at Lululemon. So why does this voice carry such weight? I mean, he was the founder, right? He did find this brand. He did grow this brand very quickly into a strong, loved, well-known brand. And I think the brand emerged by having great product. Like if you think about Lululemon in the past, it was all of our product. You could not find Lululemon product or something like it anywhere else.

16:43leggings that made you feel good, leggings that performed, that's how they made their mark. And the question is, what's next? Have they been able to innovate fast enough to prevent competition from encroaching that space? And the answer is no. And that's the struggle that they're having right now. Is it just a question of money, putting more money into, I don't know, research and development of leggings? I don't know how that works. I think it's execution, right? It's about staying ahead of trends and really innovating faster than competition. Clearly today with AI and other mediums, there is the ability for a competition to come on faster.

17:20But that said, Lululemon was ahead of the game and they've kind of fallen behind. So they do need someone who knows the product story and can lead a product led turnaround. Stay with us. More from Bloomberg Intelligence coming up after this.

17:37you're listening to the bloomberg intelligence podcast catch us live weekdays at 10 a.m eastern on apple carplay and android auto with the bloomberg business app listen on demand wherever you get your podcasts or watch us live on youtube more earnings out there this time from our friends at darden restaurants um put out some i think surprisingly pretty good news out there uh let's check on the rachel flewer she covers uh the restaurants for bloomberg news she drinks is here in our studio. Rachel, what did we hear from Darden today? Yeah, so the company has done well today. It saw same-store sales rise.

18:12It actually raised its sales forecast, and stock is up as much as 4.5 % today, which is the biggest gain in almost seven months. And I mean, while sales are up, though, its profits have kind of taken a hit because of high beef prices. You know, we've been hearing about that um this has affected their earnings for a little bit but now they do expect beef prices to hopefully come down in the near future okay um i guess their fast casual is kind of their stuff so like uh i'm sitting down i've got a waitress i'm doing all that stuff but it's it's talk to us about their brands and what they're saying about their brands sure yeah so i i guess they would call themselves a bit more more casual dining yeah and fast casual i guess you know this this industry has their terms.

18:59But yeah, they're actually kind of saying that it's still been pretty resilient. You know, their target audience are these like middle and high income customers and those haven't been so much affected by the economy. Maybe they're a bit more worried, but that hasn't really stopped them from spending. And, you know, they see these restaurants as kind of a treat to them. And, you know, for many consumers too, I think they're starting to see these restaurants like Olive Garden and Longhorn Steakhouse as a place where they can kind of get pretty good food for, you know, a pretty good price right now, especially when you see places like Kava and Chipotle, which those are your fast casual places.

19:35And, you know, they're pretty expensive now with inflation. And so the comparison is, you know, like as a consumer, you know, why don't I just pay a little bit more and I can get a better experience at an Olive Garden? So they're raising their four-year forecast. Is that more on the revenue side or is that costs or what are they doing there? So they actually increase their same store sales, the comparable sales. And so they do expect, you know, consumers to keep coming. You know, they have other tools in their belt to kind of keep drawing the consumers like they are small. They introduce like smaller portions.

20:07They are on Uber Eats now. But yeah, they actually maintain their earnings per share guidance just because of commodity prices. So again, And what are some of the, are you seeing differences within the restaurant industry, you know, the lower end to the higher end about just sales trends, how their customers are doing? Or is it a different discussion? I think it's a different discussion. I think we've heard a lot about how a lot of the fast food chains, a lot of the fast casual chains, you know, they're still getting hit by your lower income consumers kind of pulling back, you know, like inflation and commodity prices are high.

20:41Whereas your casual dining restaurants, you know, they seem to still be pretty resilient. and like Chili's is another example, they're still able to draw that consumer, which is who are still able to spend a little bit more. So as a reporter covering the restaurant industry, you got to get out of New York City because we don't have a lot of that stuff here. That's true. So you got to travel around the country, right? Go to where the Cracker Barrels are and the Chili's are. Yeah, you definitely have to. I think for most of us, I mean, in New York City, unfortunately, you have to try to get into Times Square just to get that.

21:13but I want to get one pasta, which is not the most fun experience. Yeah, exactly. So what's the format? What's the buzz within the restaurant industry these days? Maybe the format or is there a new cool company? For a while there was Shake Shack and all the burger stuff and the smash burgers and all that stuff. I mean, I think Chili's was the cool company for a bit. They had really good social media. A lot of their items were going viral. So I think with Olive Garden, you know, I think what we've seen today is the popularity of smaller portions seem to be something that consumers are gravitating towards, you know, especially with some of them, you know, going on weight loss drugs, you know, becoming more like health conscious.

21:58You know, this might be actually a good play for them. Yeah. So was that ever a thing with the GLP One Drugs and restaurants or is that faded? I think they're still trying to figure it out. I think we are still trying to figure out too how many people are actually really going to go on the drugs, how are people going to go off it. So I think they are also watching it. They did say they are slightly affected, like they're seeing some diners cut back on appetizers and desserts, but they also say that it's mostly alcohol, which they're pulling back on, which is the longer-term trend. This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and anywhere else you get your podcasts.

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