Trump Advances Plans for TikTok US Deal

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23:54Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system So care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together.

24:33Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. The race to bring driverless taxis to the world. It is on. And while the likes of Waymo have focused on establishing domestic strongholds, Chinese companies are aggressively expanding internationally. Here is Baidu Apollo's global manager of overseas business, Halton Neu, speaking with Bloomberg Tech Asia, Annabelle Drunas.

25:11I think both Waymo and Baidu Apollo, we are the only two companies who provide over 1 ,000 cars in all the cities. What does your expansion plan and your scale-up look like? We have already signed several legally binding contracts with different partners globally. Any single one of them is regarding thousands of levels of robotaxis deployment. I believe once we remove the safety driver from the car, you know, the numbers of deployment can raise gigantically, right? Since what we are aiming for is the real autonomous driving is without safety driver. With working with U.S. companies, Uber and Lyft, do you see any risk of geopolitics coming into the equation as well?

26:03From Baidu's perspective, we think both China and the U.S. have enough ability and wisdom to overcome such kind of geopolitical problems or difficulties. So we believe since we are also communists working for new technology, also for generating profits for both companies. So I think everything will be good in the end.

26:33Caroline Hyde:That was Baidu Apollo's Holton New, along with our own Annabelle Droolers. Check out the full episode of Bloomberg Tech Asia online or on the Bloomberg Terminal. A lot of stories coming out of the region. Now, coming up, more on TikTok as President Trump advances plans for U.S. investors to buy the social media platform in the U.S. We'll have that story next. This is Bloomberg Tech.

27:09Caroline Hyde:Welcome back to Bloomberg Tech. Cara, I'm sounding the tech IPO watch klaxon, the alarm. And the name I'm looking at is Klarna, down almost 6 % in the session. But the reason that's notable is the shares trading at$39.09 a share, meaning they are down below the$40 IPO price. Pretty quickly as well, like think of all the other IPOs as you and I have covered in recent weeks and months, and some of them had a lot of long-term momentum. This feels like a pretty quick drop back. And there is a broader sell-off in fintech right now, but it's one to watch this Friday. Sorry to bring the mood down, but it's a notable moment.

27:48Caroline Hyde:So do. Yeah. Sorry, I just got carried away. I'm having a good time. Oracle, over the course of five days, is down almost 8%. Also bearing in mind broader momentum that it's had in recent weeks, right? but a kind of sell the news week where we got a lot more detail on its participation in US TikTok and how it's going to operationally and as an anchor investor and board seat member run things. But that's five day drop, biggest since April. Please take it away. I will because yes, Oracle's run far higher in recent months and no wonder there's been a profit taking. But we are going to drill into Oracle, its potential TikTok investment and the role that it plays with Bloomberg's priority forward who covers the company.

28:28And there was a great opinion piece out of our colleague Dave Lee, who really puts out really the question of what expertise does Oracle, a cloud company, have when it comes to social media algorithms? Brody. Not a whole lot. I think maybe they would tell you as much as well. I think it's very interesting how much rhetorical value the administration has placed on Oracle's involvement. They are the kind of technological underpinning of a lot of the operations, but they're the cloud vendor, right? I mean, they are not an algorithm designing company. They're not a business operation, social media.

29:07They're not a consumer company, period, right? And so as Oracle takes a very large role on the stage of how this TikTok deal is rolled out, my anticipation is that their role doesn't change a whole lot from what it is today, which is a cloud infrastructure vendor.

29:25Caroline Hyde:Brody, you and I have spent a lot of the last 36 hours on the phone trying to work this out. So let's swap notes. My understanding is that the Trump administration went to MGX, which is a basically state backed investment firm in the UAE and invited them to participate. You also have some details on these kind of anchor investors and what role they'll take. Just give us your notes, please. Right. So these three anchor investors will likely get about a 15 percent share each and a board seat. The exact numbers may shift around, but the idea is that these are the kind of three anchor non-Chinese investors, kind of each coming from somewhat different backgrounds.

30:10Oracle, we've discussed MGX being an Emirati investment company and Silverlight being a U.S. tech focused investment company. And so I think the idea is showing that, hey, there's a breadth of folks behind this initiative. Though, of course, the reporting is very live in terms of exactly what these three companies are going to be buying.

30:32Caroline Hyde:Blumos, Brody Ford, busy week for you. A lot more reporting to come. Thank you very much. Let's bring in Teresa Payton. She's the CEO of Fortalist Solutions and the former White House chief information officer under the George W. Bush administration. Teresa, if we may, I want to go to the UAE piece of this first, because the emphasis from the administration was making U.S. TikTok American. The UAE is an ally of the United States. In defense, for example, there is weapons and other agreements there. But in the context of something that is digital, what do you make of MGX participating as an anchor investor and potential board seat holder of a U.S.

31:12Caroline Hyde:TikTok? talk? Well, I think it's very interesting. Obviously, they have deep enough pockets to be a part of this, which is, you know, kind of part of the deal negotiation. But I have some open questions because there's some open questions about how they feel about social media for their own citizens. And so now we're talking about we're going to have some type of a twin algorithm because ByteDance is still going to have the algorithm, but we're going to have it here in the United States and we're going to be retraining it on U.S. data. And so I've got a lot of questions around that board seat and what kind of voting rights, what kind of direction, what kind of influence they may have over this sort of digital twin of an algorithm we're going to have in the U.S.

31:55and how that retraining is going to happen.

31:58Caroline Hyde:Okay. From a pure technology standpoint, how do you think this is going to work, re the algorithm, or is it going to work at all?

32:10Well, hopefully they've got some really great engineers working on this. So whenever you kind of go into this mode of there's going to be a master copy and then we're going to have our own local regional copy. But it's going to be essentially the same, except for it's not. We're going to be training it on U.S. data. I end up having a lot of questions like what's the quality assurance for this? Will it still feel and look the same? I mean, TikTok may lose its hip and cool factor once we take sort of the global piece out of it and start to run it locally. So it'll be very interesting to see what the knowledge transfer will be.

32:46I know as part of Project Dallas, TikTok USA has been doing a lot of work to be in compliance with the foreign control, you know, kind of regulations around CFIUS. And so it could be they already have people very well trained up to take the reins of TikTok USA's algorithm. But if they don't, I'm a little worried about how it's going to be tuned. And it may be a little bumpy once we kind of do this split and have this algorithm twin of sort of the master copy. But it has to be retrained. And let's face it, if they're ByteDance TikTok employees who've been working on Project Texas, who says that ByteDance is going to want them to move to US TikTok?

33:28So we have to question what engineering talent follows through, Teresa. I'm also interested in, there's been some Reuters reporting and Bloomberg's yet to be confirming on it. But the idea that actually ByteDance as a whole has a lot more control than perhaps had been previously thought. Yes, they perhaps give over the algorithm in a certain way and it becomes updated and monitored by the likes of Oracle. But they then hold a separate division that will continue to be wholly owned. And they'll control the revenue generating business operations such as e-commerce and advertising. Teresa, how does that technically work and how does that make us understand it from a national security perspective?

34:06Yeah, this is very interesting to me. So I think a couple of things. One, we know the data has been physically separated, but the algorithm itself, the reason why an algorithm like TikTok's was so popular and beat out most U.S.-based social media companies, at least as it relates to Gen Z, Gen A, and even, you know, candidly, other generations. A lot of people have adopted TikTok. And the reason why it's so good is that algorithm is constantly learning. How does it learn? It has to train itself on data and where you come from, where you go to and all of those things. I don't know how the algorithm stays hip and cool and edgy if it's completely separated from ByteDance?

34:52So how does it learn if it becomes a black box of learning? So lots of questions still around how that engineering is going to work and how are they going to set this up. So, for example, there is a term called digital twin where you can actually have a full production copy of production and essentially have it be the same and potentially have the data be separated. We're going to have to have some really smart engineers on the U.S. side of TikTok to really say whether or not there's backdoors, whether or not some of the data itself is truly anonymized, or if we still have a real issue with kind of foreign interests being able to see U.S.-based citizen data.

35:35And Teresa, I follow up with a relatively sensitive political question here, because a lot of anxiety has been put into the potential biases that creep into this algorithm if it's Chinese. overseen, controlled, whatever you might make of ByteDance. If it's now overseen and controlled by Oracle, what can they put in place to ensure that the users that may or may not migrate over feel comfortable with control of algorithm by them and what biases they need to oversee in the same way that we question other parent companies such as Meta and Snap? I love the question you're asking here. Because of our lack of governance and guardrails over social media platforms, over big tech, as far as understanding the transparency around these algorithms, how they train things.

36:21Do I, as a user, get to reset my algorithm? Do I get to see transparency into what's being served up to me or to my children or to my customers if I have a business account? So because we don't have that today, this is a great question and it has to be asked of all the social media and big tech platforms. And you're right, We don't know potentially who's sitting on that board, not just Oracle, but the other investors. Are they going to have sort of a heavy thumb, if you will, on the algorithms and how they work? More to come, obviously. Evolving story. Teresa Payton there with us. So appreciate it.

36:56CEO of Fortalis Solutions, former Bush White House CIO. Coming up, OpenAI Stargate ambitions could supercharge demand for AI power with big implications for NVIDIA and Oracle. That's next. This is Bloomberg Tech.

37:19Support 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 of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined.

37:57An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. Let's talk about health care for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling.

38:38The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a health care company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients.

39:12And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

39:54the business. Let's create smarter business, IBM.

40:04Qualcomm CEO Cristiano Armand said that the NVIDIA Intel deal from earlier this week is in a way, and I quote, the moment they had been waiting for. He explains why and talks about the impact on Qualcomm and the rest of the industry when the news broke this week. When you actually dig deeper on it, and it was interesting, actually, when that announcement happened, it was interesting. We 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 it's Intel sending a message that their integrated GPU and their AI products, they're likely not to continue with that because that's what the market is saying.

40:56It's going to be NVIDIA. So then as NVIDIA comes in to the integrated GPU market combining their GPU with Intel x86, it started to bring AI into the PC market, and that is the moment we've been waiting for. And 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.

41:24Caroline Hyde:Qualcomm CEO, Cristiano Amon there. Meanwhile, OpenAI's push to scale up its Stargate project is set to accelerate demand for AI compute, potentially lifting other AI sectors from NVIDIA's hardware sales to Oracle's cloud services. For more, we've got Mandeep Singh, Senior Tech Industry Analyst at Bloomberg Intelligence. The thing about everything that's happening is a misunderstanding of where the demand is being sent. And you've done a really good job. Microsoft is outsourcing to Oracle, basically, because they don't have their own capacity to deal with this. Just present the thesis that you're trying to get the market to understand.

42:00Yeah, look, I mean, OpenAI has told us that they expect to get to$200 billion in revenue by 2030. Currently, they will likely close the year at$20 billion in ARR. So, you know, when you look at that 70 % CAGR for the next four years, I think deals like what they have signed with Oracle, the$300 billion deal, and then NVIDIA signing up that$100 billion investment for 10 gigawatt capacity kind of makes sense how they get to that capacity, which will enable that$200 billion in revenue. And we have sliced the different kind of segments they will have. It won't be just chat GPT subscriptions. It will have API sales and AI agent sales.

42:46But the enabling kind of infrastructure for that will come from additional power and data center capacity that they will have from all the deals that they are doing. And that's the vision. And it comes down to how they execute on that vision. There was more news with OpenAI looking towards CoreWeave a little bit more for some of its compute needs. Now, the CoreWeave CEO joined Ed Ludlow-Remain a little bit earlier yesterday. Just take a listen to what he had to say. The challenge that we have is competition among our clients for the infrastructure that we have. right it is not a question of giving up one client for another client because their demand doesn't completely absorb all of our infrastructure it's just a question of we have a 100 units of compute to to to deliver in the next 12 months we could deliver all 100 to client number one all 100 to client number two or all 100 to client number three and the question is is how are we going to divvy that up among those clients.

43:51The issue is supply side, Mandeep, that we say time and time again. And how big, therefore, is the need? I've seen numbers. We started with Bain saying$2 trillion. Then we saw, of course, Alibaba say it's going to be$4 trillion. I've just read McKinsey's bullish case is up to$7.9 trillion. By 2030, what do you have it as? Yeah, look, I think Jensen sort of laid out quite well with the$100 billion investment. He said for 10 gigawatt power, you need a$400 billion investment. They are putting$100 billion. OpenAI will have to find$300 billion from somewhere else. But you can actually see if we end up adding 50 gigawatt of capacity, that would make up, you know, a two trillion number.

44:31And so from that perspective, then you start looking at how much will be the tokens generated from that additional 50 gigawatt power capacity. And the reason why that's the right framework is because every query right now is a function of tokens consumed. I mean, Google says they have 980 trillion tokens per month, and that seems to be growing quite rapidly. Every company right now is quantifying that. And so if you make it a function of power, it's easy to see where we will land up given, you know, the tokens consumed per AI agent or per query or any other use case that GenAI has. And then we just need to source that power.

45:11Mandeep Singh of Bloomberg Intelligence. Great analysis. Go read it. Thank you. Meanwhile, coming up, we'll take a look at how Apple lagged so far behind on AI. How it can catch up. This is Bloomberg Tech.

45:37Apple has long led Silicon Valley in tech, but in the world of AI, it's fallen way behind, continuing with missing steps could arguably threaten the iPhone's dominance. But Inberg Originals took a deep dive into what went wrong and if Apple can catch up. Siri, what's the name of the guy I had a meeting with a couple of months ago at Cafe Grinnell? You met Zach Wingate at Cafe Grinnell. Zach! Actor Bella Ramsey was bailed out by a new version of Apple's Siri that was meant to be available for all. That feature still has not been released. It was originally supposed to come out April, May of 2025, but now it's on track for spring 2026.

46:14Apple took down the ad and is facing a lawsuit over the delay. But the disconnect exposed a deeper issue. The company was losing ground in the AI race. They totally missed the boat. There was indecision. There was lack of concern that this could become a real thing. This is a story about how hard it can be to stay on top. AI is something that wasn't in their DNA. Continued failure doesn't just hurt Siri. It could threaten the iPhone's dominance. The product line accounts for more than half of Apple's revenue. So missteps with what's become its most noticeable missing features could be devastating.

46:51We saw this for many decades. Nokia was at the very top of the phone industry. Apple came out with a much better mousetrap. Blackberry was at the top of the industry. Apple came out with a better mousetrap. They are going to be in danger of the next Apple being created if they don't get their act together soon with some serious acquisitions, changes, and partnerships.

47:14Caroline Hyde:You can catch the full episode at Bloomberg.com on YouTube or on the terminal. Two Wall Street bulls, Tom Lee and Dan Ives, are going against the grain of Wall Street, leveraging social media to bring in fresh inflows and outperformance in their ETFs. For more, Bloomberg cross-asset reporter Isabel Lee joins us. This is one of the most read stories on the Bloomberg terminal and the website. It's not surprising. Two characters, mega tech bulls. but they've launched ETFs. Explain the basics, what we need to know about what they're up to. So these two ETFs really stand out in a sea of 4 ,200 ETFs in the US because they engineer a rare double performance, which is outperformance and flows.

47:56Usually you outperform, but you don't see flows. Usually you have flows, but the performance isn't matched. So both of them have those two. And then both of them also are really these big figures. Tom Lee has 500 ,000 followers on Twitter. Dan Ives has around 200 ,000. So they go straight to their retail investors and they go straight to them with their ideas. And guess what? These retail investors buy them up, buy the billions. Isabel, their ideas go straight to a potential retail and institutional investor. At the same time, say Dan Ives comes on this show as a buy side and sell side analyst.

48:30He's coming on and trying to say, I'm independent and my view is that these companies are going to go higher. and he does think they're all going to go higher. He's a permable. But what if we start to question valuations? What if at some point he goes negative on the idea of certain stocks? Does that damage the ETF inflows? How does he remain independent in this way? That's a good point, Caroline. And this is a new trend we're seeing that these prominent figures are launching their own ETFs. So both Tom Lee and Dan Ives have their own really strong base because of their research. They both just send out research every day.

49:01You get their notes multiple times a day if you pay as a client. And then they thought, you know what, why not? Let me wrap my ideas into this one big ETF so that my followers or my now investors can just buy those ETFs in one click. And that's the beauty of ETFs. In one click, you can really just purchase them. But to your point, that is true because followers are loyal to them. They listen to their every call. But what if they now it's a question of whether there is going to be some self-interest that remains to be seen. I'm sure they practice fiduciary and they're doing what's best for their clients or the best of their interest.

49:31But then it's really interesting because these big name launches from Rubini also, he launched his own ETFs, even GMO, even Rick Reader, who is now in contention to FedShare. He has his own ETF. So it's really a new wave. And I think not all famous people, when they launch their own ETFs, not all of them gain traction. But for them, at least, it's doing well.

49:49Caroline Hyde:They are their own personal brands. Hopefully, let's throw up some picks real quick. But Dan Ives is charismatic. Just explain to those that don't know what he's like. Where do we begin with Dan? Every quote he has is quotable. He wears these colorful clothes. He's always in a cap. Everyone is in black and white. And he's just really this big, bright, colorful figure. Tom Lee is the same. They make these big, audacious bets. And it really is a soundbite that you will forever listen to. Interestingly, they've both recently become chairs of digital asset treasury companies as well. So they seem to be in sync on certain areas of the market.

50:24Bloomberg's Isabel Lee, great reporting and great story. Go read it. That does it from this edition of Bloomberg TechEd.

50:30Caroline Hyde:Yeah, don't forget, check out the podcast. You know where to find it? It's on the Bloomberg Terminal. It's online. It's on Apple. It's on Spotify. And it's on iHeart. What a week it's been. From San Francisco and New York City, this is Bloomberg. When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive.

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