Nvidia's Huang Meets With Trump, Tesla Taxis Move West

24:40And we invest aggressively in technology. We have two platforms. One is Velocity, which tracks billions of data points on Amazon specifically, so we understand consumer signal. The other is Alley, which brings together marketing spend, return, and consumer insight across all channels. And with that, we have a pretty unique perspective on the customer. And all the brands that we're interacting with are trying to look at the customer journey as it moves across search, social, retail. And you're starting to see retail and media coming together in major ways. Is this sort of a new or relatively new approach, I should say?

25:13Is it effective? And by that, I mean, I know there's a lot coming out of the fire hose when it comes to these new ad platforms. But are you seeing, and more importantly, our clients seeing a true return on that investment? Absolutely. And so, you know, what we're seeing is in Cannes earlier this year, just a few weeks back, you know, retail media, as it's called, leveraging retailer data to target and measure the effectiveness of media has become one of the fastest growing segments of media overall. More money is spent on retail media than on TV advertising now. And increasingly, retail data is being used to target television advertising.

25:56So at Cannes, Amazon announced a huge partnership with Roku. They're able to take data on consumer behavior on sites like Amazon and then target specifically people based on what they buy in the past. And then you can measure the downstream impact on did they search for a specific product on a site like Amazon? Did they check out? Did they buy, et cetera? And that's the shape of where this is going, which is really exciting. Yeah. And you see that with Amazon. There was an interesting deal with DoorDash as well. And quite a few other companies have really started to jump on this. Great to talk to you, John.

26:26John Shea there, he is over at Head of Commerce for PMG. as Bloomberg Tech continues to roll on. We're going to check back in on some of the big stocks moving on today, and that includes the MAG 7 as earnings season kicks off, a big reaction to Trump's tariff threats, and maybe a potential big reaction to the earnings up ahead over the next couple of weeks. This is Bloomberg Tech.

27:07Welcome back to Bloomberg Tech. Romain Bostic, Ed Ludlow, and Caroline Hyde on assignment on the day, a day where we look at the NASDAQ down for two straight days, setting up for what could be a down week, the first down week in three. Some concerns here about high valuations coming off what have been record highs for several of the big names in that big index, including Microsoft, including Oracle and, of course, including NVIDIA. NVIDIA earlier this week hitting that$4 trillion market cap, pulling back just a touch, actually, excuse me, now reversing and now moving higher on the day, up about 1.5%.

27:44You see Microsoft there, which hit a record high the other day, adding slightly to those gains as well. And there were a couple of interesting upgrades earlier this week on Microsoft, as well as some of its brethren. The idea that AI is benefiting these companies, not in terms of what they're selling, but benefiting from internal productivity and their own internal use of AI. Meta Platform's down slightly on the day, and you can see CoreWeave still taking it on the chin. Still some concerns here about that acquisition of Core Scientific and what that means for valuations. So as we head into an earnings season, an earnings season that, at least for tech, ostensibly kicks off in about a week's time with Netflix.

28:20And then shortly after that, with some of the other big brethren in the MAG-7, let's bring in Eric Sheridan. He co-leads the tech, media, and telecom group business over at the Global Investment Research over at Goldman Sachs. Eric, great to see you. Thanks for having me on. We have this idea that AI is either going to kill us all or it's going to be just the nirvana for everything that has ailed us in the past. And I know there's a lot of nuance that goes in between that. But all of the hype that we've seen since ChatGPT kind of came onto the radar two and a half years ago, We are starting to see some real ROI for some of the companies that have deployed AI, whether it's to their clients and customers or internally to themselves.

29:00And I am curious if you expect to see that really start to show up in the earnings results that we're going to get over the next few weeks. I think in the form of earnings over the next couple of weeks, there's a couple of things I'd point out. You're likely going to see very strong, if not re-accelerating revenue from the cloud computing companies. We would highlight AWS within Amazon, which you talked about in your last segment, and elements of Google Cloud within Alphabet. Could particularly surprise more to the upside than not. Microsoft surprised very positively last quarter with this theme of going from capacity constrained to less constrained, and then all of a sudden the AI backlogs turn into revenue.

29:37Secondarily, the advertising landscape is narrow. We're seeing old practices turn into new practices. We're seeing AI as a bit of a democratizing effect on how advertising is made and deployed. We think that's going to build in momentum. We also think on the margin side of the equation, you're going to hear a lot more about efficiency narratives inside these companies, doing more with the employees they have, or even some elements of redundancies leading to better margin trajectories going forward as well. How much wiggle room is there, though? Because I felt like that was a big narrative a year ago when we saw Meta and some of these other big companies really start to pare back the number of employees that they have with the idea that there was a lot of overlap.

30:19And there was an outsized redundancy move by Meta a number of years ago, and they've been in digestion mode of that since. And if anything, Meta has moved into hiring some very high-priced AI talent in the more recent weeks. But there are press reports around layoffs at Alphabet. There's layoffs at other technology companies in Silicon Valley. And more interestingly, the rate of change or new employee hiring has been relatively flat in the technology landscape, as shown in some of the macro data as well. When we talk about the potential help to margins by the idea of pairing the workforce, and yeah, Microsoft announced 9 ,000, or we have reporting 9 ,000 jobs apparently being paired there.

30:59They're still spending a lot on CapEx to build out and chase this AI dream. And I am curious about the balance. I mean, getting rid of a few million dollars in salary isn't necessarily going to help the idea that they're spending billions and billions of dollars on CapEx. Where's the balance? Yeah, I think it's more than just millions. I think there's also processes and workflows and ways in which they work internally. So Alphabet's really an interesting company because going back to when Ruth Peratt was CFO and now the new CFO, Anand Asghassani, I think at the end of the day what they talk about are elements of striking a balance.

31:34If we are going to keep investing in AI, we have to find efficiencies in the core business. And generally these are companies that have been surprising more in margins to the upside than the downside. So they are finding elements of those balance in their own operations. When you hear people become concerned about the CapEx spend, what is your response to that? Well, I think the CapEx narrative has been on an evolution. When there was nothing to pinpoint that could measure return on CapEx, it was a little bit harder. In a note we did recently at Goldman, we tried to move the narrative forward a little bit because what had been happening was I'm spending a CapEx dollar.

32:14Is that good or bad? But how do I measure it? Now what we're trying to do is identify different profit pools that could possibly move from legacy practices to newer AI-led practices. And if there are profit pools you can identify, then all of a sudden you have a dollar amount where you can actually measure ROI. I think that's what investors have really been looking for. It's one thing to say CapEx dollar, cloud computing revenue. It's another thing to say, how does the AI generate revenue? So we've been trying to move the debate towards that. We're in the early stages of that debate. But I think that debate has to prove out for AI to actually be a technology that scales and earns a return.

32:52And for investors looking for the potential winners in all this, for the last couple of years, it's been a pretty narrow field, at least the ones in the public markets. Obviously, NVIDIA, some of the hyperscalers. Are you seeing more of a broadening of the AI trade or the AI opportunity trade? So I think coming back to this profit pool theme in the advertising industry and the note we just wrote, yes, there was a huge section around Alphabet and Meta and we are bi-rated on both. There also was a section around Pinterest and how they're building an AI platform called Performance Plus. That doesn't get anywhere near the coverage that maybe a Meta or an Alphabet does.

33:26We are neutral rated on a company called Ablovin, but we said, look, look longer term. This is another company that you have to keep on your radar screen for becoming more AI first than not going for the longer term. So there are companies out there, again, anchored around some of these industry shifts and practices and themes that we would articulate to watch. When we start to talk about the use case, the end use case for AIs, to this extent, a lot of the, at least the more profitable cases seem to be in the corporate space. You know, corporate software, SaaS, agentic AI. On the consumer side, where are we with that beyond just me going to perplexity and having them ask, you know, ask, you know, how to help me plan my vacation?

34:10Well, the secret with consumer Internet is there's only three ways to monetize. subscription, commerce, and advertising. We've been at this in the internet for a long time, so consumer internet is going to see all different flavors of that. I'm a Google Gemini pro subscriber. I'm also a ChatGPT pro subscriber. I'm paying a subscription to have access to these services. The vast majority of individuals typically monetize not through subscription, but through advertising or commerce, and we think there's going to be elements of all of that at play in the AI world as we move from adoption to utility, which is always the bridge.

34:46Whether it was desktop computing or mobile computing, AI is going to be no different. Do you think those subscription fees are going to go up significantly? I have yet to see a subscription fee in my coverage of technology over 20 years that's gone down. All right. Well said. Well, I'll just start planning for that right now. Eric, great to have you. Thank you. Eric Sheridan of Goldman Sachs there, a closer look at the tech space, a closer look at AI, the end use case, and of course, the big slate of earnings coming down the pike over the next three weeks. All right, when we come back, a big week ahead for the crypto space.

35:19Former CFTC commissioner and newly appointed CEO of the Blockchain Association, Summer Merzinger, she's going to join us to talk about the push for crypto legislation. This is Bloomberg Tech.

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38:37Taking a look at crypto exposed stocks rising today, rising on the week. Bitcoin, of course, a big catalyst for that. A rally past$118 ,000 for the first time ever. A record-breaking rally for the OG in the crypto space. This comes, of course, as lawmakers are gearing up to focus on several key bills for the industry next week. a laundry list, a wish list that now potentially comes to fruition. It's being dubbed Crypto Week in Washington, and it includes the Senate's Genius Act as well as the Clarity Act. Earlier today, the Blockchain Association and two other crypto trade groups issued a letter to the House urging it to pass the Clarity Act, saying it represents meaningful progress toward the regulatory certainty needed for the digital asset industry.

39:21Summer Mercinger joins us right now. She is the CEO of the Blockchain Association and a former CFTC commissioner. Certainty. I haven't heard that word in this space in quite some time. You think we're finally going to get it, Summer? I think we're certainly going to get it. We will see at least the Genius Act signed into law maybe as early as the end of this week. And we're going to see clarity pass the House floor with bipartisan support and really have that momentum going into the Senate consideration. This is, for a lot of folks, they see this as a huge milestone, not just so much in that you're getting guardrails and the such, but the idea that you're getting more direct attention from this administration and from Congress, for that matter, for an industry that has kind of been in limbo pretty much since its inception more than a decade ago.

40:09Where do we go from here, assuming these bills are passed and signed by the president, Summer? Yeah, this is really step one. From here, we have a regulatory agenda. We will work closely with the regulators as they put together implementing regulations. So it's not over once the bills are signed into law, but this is such an important first step and one that has been many years in the making. And it really is historic that there are three major pieces of legislation on the floor of the House of Representatives next week that are all about the crypto industry. Do you think that the rules that are being outlined in the legislation will bring the U.S.

40:53more in line with some of the rules that we see overseas? This has been a big bugaboo for a lot of crypto investors, particularly those in the VC space. The idea that, you know, depending on what country you're operating in, you have dramatically different rules. And at least here in the U.S., no rules at all, at least as of today. Yeah, the U.S. has kind of gone its own way. There are other frameworks out there in other countries, but the U.S. is unique. We've had the most robust capital markets in the world. And we'll have the most robust cryptocurrency markets in the world as well once clarity is signed into law.

41:30Do you think that will attract more crypto businesses to not only do business in the U.S., but more importantly, to set up shop here rather than offshore? Absolutely. In fact, at the Blockchain Association, we have over 130 members who are innovators and small businesses or startups. And not only will we see more of those innovators come onshore, we'll see the ones who are already here grow, bring more jobs to the economy. and really supercharge the United States economy going forward. With regards to the Clarity Act and as its name implies, the idea that it would provide clarity as to what crypto is or at least how it's classified within that regulatory structure, the idea that, at least based on the way the act is written, this would fall under the umbrella of the CFTC, what is the message that that sends?

42:24It sends that these are markets and they need a market regulator who has a principles-based regulatory framework. That's the CFTC. They're well-prepared to take on this jurisdiction. And they have a lot of experience in global markets. They know how to work with other countries to harmonize roles and make sure that markets can be robust and global and really can be not just in the United States, but trading around the world 24-7. Obviously, one of the big trends and certainly at least for investors over the last few weeks has been a renewed focus on stable coins. And that's obviously largely with a couple of big IPOs, including Circle.

43:09And obviously really just a big push by the White House and the administration to support that effort. As stable coins start to become maybe a bigger factor in the crypto space, you're already starting to hear regulators, at least regulators overseas, raise some alarms. And that includes the folks at the Bank of International Settlements who are concerned about whether this could usurp some of the sovereign nature of the way finance now is controlled by each individual country and their central banks. The Stablecoin Genius Act and stablecoin legislation here in the United States is really going to secure the U.S.

43:49dollar as the primary backing for these coins. these coins. So it's critically important that we maintain that dominance. It's been the currency of choice. We want to continue to see these as dollar-backed stablecoins. And so we're going to look at what works here in the United States and make sure that we are the global leader here in stablecoin issuance and remittance. All right, Summer, I really appreciate you taking time for us. And of course, All eyes right now on Washington, those three pieces of legislation, the two most importants, of course, the Clarity Act and the Genius Act, potentially set to get a formal vote as early as next week.

44:35Two pieces of legislation that the president has said he supports. Sarah Mersinger there, the CEO of the Blockchain Association. As Bloomberg Tech rolls on, we're going to focus in on the robo-taxi because Tesla is planning an expansion of its driverless taxi service to California and to Arizona. details on what they have in store. That's coming up next here on Bloomberg Tech.

45:12All right, what if I told you autonomous trucks will be the biggest transformation in transportation in a century? Well, that's what the CEO of Aurora says, Chris Urmson. He had a chance to sit down with our very own Ed Ludlow, who's on assignment in Sun Valley, Idaho, to discuss the company's autonomous trucking service, the regulatory environment, and its partnership with NVIDIA. We really work with them. We're one of their lead customers for this next generation of automotive computer system on a chip. And then we develop the software that sits above that and operates all the autonomous driving.

45:46They're a bit of an unlock, aren't they? It's an enabler. Yeah. We see them as a strategic partner. having the density of computation available in a truck. We think we can only get that with the Thor SoC. It seems that this administration has a different approach or at least attitude towards autonomous technology in all of its different mediums. We're talking about the movement of passengers and goods. Do you recognize that change of approach? And how do you think it will accelerate what you want to do? It's great to see that whether it's the Secretary of Transportation or the Vice President, both of them speaking about the benefits of automation, particularly in trucking, and seeing them have statements on the record and starting to push initiatives to support this technology, I think it's vitally important.

46:37This is going to be the biggest transformation in transportation in a century. And we want America to be leading it. If you'll allow me to, Chris, you have been for a long time one of the leaders in Silicon Valley, at least, looking at autonomous technology. That might actually be a little bit of an understatement. But what I find consistently comes up is concern from Silicon Valley or American-based engineers that recognize maybe the biggest technological competition is in China right now. In your domain of autonomous trucking, where do you see the most progress being made on the engineering side and also, I guess, the regulatory environment?

47:18So I think we're ahead. In America. I think we're ahead globally. I think Aurora right now has the best technology. We can do things literally no one else can do safely on the road. That said, we cannot afford to rest on our laurels. that as a nation, we've lost technological leadership in so many places. This is a big, important one, and it's ours to go win. So let's go do that, and we appreciate both at state and federal level the support we're seeing for the technology, and now it's on us in the corporate sector to go and deliver and go compete and help win. And that was the CEO of the autonomous trucking company, Aurora, speaking with Ed Ludlow out there in Sun Valley, Idaho, as we move on away from autonomous trucking to robo-taxis because Tesla is aiming to bring its driverless taxis to California and Arizona, plotting an expansion on the heels of last month's limited rollout in Austin, Texas.

48:19Craig Trudell joins us right now, who leads our automotive coverage. And Craig, I'm a little lost in the sauce here as to exactly where we stand with the robo-taxi rollout. I mean, I sort of look on paper as to what Bloomberg has reported. But then, of course, like everyone else, you know, I follow Musk on X. And he seems to think that we're much further along than maybe what the media has been reporting. Where are we? Yeah, I think yesterday was a good example of sort of the ways in which Musk can sort of command the narrative in this really meaningful way. Because you had Tesla stock trade up almost 5 percent for the day.

48:57And, you know, a lot of activity was going on on his X account. One bit of posting had to do with bringing Grok to Tesla's, which he says is, you know, coming in a matter of days. But some of his other posts had to do with, you know, sort of where Tesla is going to deploy next and what it's going to be doing in Austin, where, you know, as you mentioned, they have deployed, but it's quite limited. He said they're going to go into more of Austin with their driverless vehicles. But what he said about this idea that the company is going to deploy in San Francisco pending regulatory approval was a bit misleading in that he sort of suggested regulators are holding up Tesla when, in fact, Tesla has not even initiated the process of getting the permits it's going to need there.

49:47Well, that's what I'm curious about. I mean, anyone who's been in some of the cities we've talked about, particularly out in California, I mean, we've seen alternatives on the street already. Obviously, Waymo appears to be really leading the pack. I mean, millions of miles clocked in those vehicles already. Where does Tesla's robo-taxi stand in terms of the miles that it's actually logged in this process? Yeah, in California, they're at zero. They have a permit to test vehicles with a human behind the wheel. And, of course, the companies in the space, you know, very much distinguished between that and actually putting cars out on the road that doesn't have a human, you know, in the driver's seat.

50:30And Tesla has not taken that step yet after, you know, many years now of that being, you know, sort of an opening. The company, I think, has really sort of leaned into this messaging that they're on their way. But a lot remains to be seen in terms of proving that. All right. Craig Trudell, who helps to lead our automotive coverage here at Bloomberg, as we wrap up this edition of Bloomberg Tech. We want you to tune in on Monday. Bloomberg Tech will be back along with its regular hosts. And they're going to be live from Panasonic's new EV battery plant out there in Kansas. us and don't forget to check out our podcasts on the terminal and elsewhere.

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