Uber Plans Robotaxi Partnership with Lucid and Nuro

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1:59Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, TSMC, the world's biggest contract chip maker, gets a big boost from AI demand. Plus, Uber teams up with EV maker Lucid and self-driving tech startup Neuro to launch a robo-taxi fleet. We'll speak with the CEO of Neuro. And what to expect from Netflix earnings today? Will it be a blockbuster or a bus? Let's get to that curious three-way deal that is between Uber, Lucid and Neuro. Basically, how it works is Lucid's going to provide the cars, Neuro the self-driving tech, and Uber's going to pay for everything.

2:43We're going to get a lot more detail on that later in the show. But look at shares of Lucid up more than 36%. This is a big move upwards, and we need to find out why. The big story in global technology is TSMC, the world's largest and most important contract chip manufacturer. These are the US-listed shares, ADRs, up 2.8%. Basically, upgraded the growth forecast on the top line to 30%, saying that there is hot AI demand right now. But interestingly, some headwinds from currency, which we can dig into. Luckily, Bloomberg's Ian King is here for more, who leads our coverage of the semiconductor industry.

3:18So actually quite a simple story, that in the numbers in the period gone and what they said about what's to come, AI demand is everything. Yeah, I mean, anytime you're saying 30 % up, you're saying we're having a good year. But it's important to point out that the stock didn't do much locally. And why was that well? Because guess what? Some analysts were expecting even more so. Fantastic, obviously a great derivative for here, but maybe not as fantastic as some had expected. TSMC's business is really interesting because basically two-thirds of it is high-performance compute, the chips that go into data centers.

3:52Historically, it was smartphones. So even though the proportions have changed, I see both of those divisions growing. Yeah, both of them did well. As you said, high-performance computing, which is basically NVIDIA's chips, AMD's chips, anything that any of the hyperscalers design themselves, that's 60 % of its business. That's growing well, And that's really what the focus is right now. That's what everybody wants to see. Is this story that is defining technology still continuing? And the answer was absolutely yes. So TSMC is like the crown jewel of Taiwan. It's their most important entity and company.

4:26They have a big footprint there. But what was really interesting to hear about was the headwind from currency. As I understand it, they book all their revenue in U.S. dollars, but their operating costs are in Taiwanese dollars. What did they say about that and how it's going to impact them? Yeah, I mean, this is obviously a complex story because they're in a distributed supply chain. You've got the currency headwinds. You've got concern about what's going to happen to that supply chain. Are they moving? Are they raising their expenses as they build factories here in the U.S.? What's going to happen with tariffs?

5:00So all of these kind of economic uncertainties and currency was one of them factored into, I think, this kind of conservative or what was considered conservative forecast, but conservative in their context, which is pretty amazing still. Okay, Bloomberg's Ian King, who again leads our coverage of the semiconductor industry. Let's get more of a broader markets perspective and go out to Jay Jacobs, BlackRock, U.S. Head of Equity ETFs. You and I have talked about infrastructure so much, but I almost consider names like TSMC and ASML as being kind of soft data sets rather than kind of hard data sets.

5:36ASML gave us one signal and then TSMC gave us another. As somebody that looks at their exposure to this AI supply chain, what did you make of it? Well, I think you really have to go up to kind of a higher order of capital expenditures, which is impacting so many different semiconductor stocks. If you look at the top four builders of infrastructure this year and combine them with energy and utilities companies, all of that CapEx equals the rest of the S &P 500 combined. So you're just seeing so much investment from semiconductors to energy and power sources across this AI megaforce that it's really providing a ton of ballast to these stocks as we enter into earnings season.

6:16I think we'd agree that AI is having a profound impact on markets. That's probably an understatement at this point. But when you consider the ETFs you're managing, where do you see the enthusiasm or where do you see movement of investors wanting to be exposed to what's happening? Well, you know, if we look more broadly at what's happening in the markets this year, themes are really displacing sectors as having the most explanatory power of what's happening around us. You know, artificial intelligence and baskets of stocks related to that explain a lot of what happened in February. If you look at geopolitical fragmentation and companies in the infrastructure and defense space, that explains a lot of what's been happening since April.

6:56So themes themselves have a ton of explanatory power in the markets. To your question, where are we seeing some of the most excitement in artificial intelligence? We continue to be looking at the build out of digital infrastructure. We know that we are still in the build phase of AI. This is where you're seeing hundreds of billions of dollars of capital expenditure to build the best models, to make them smarter, to make them more scalable. That's where we are today, and that's where a lot of our active portfolio managers, like Tony Kim, who manages BAI for us, has positioned a lot of his portfolio.

7:25BAI is super interesting. We just showed it on the screen, but the ticker BAI. There's this$2.2 billion of interest. You can quantify it. What are the main factors behind that, do you think, Jay? Well, I think a lot of investors are looking at artificial intelligence but realize they don't really have great exposure to it. In fact, we looked at over 10 ,000 portfolios by financial advisors in the United States, and about 95 % of whatever AI exposure they have in their portfolio is coming just from the MAG-7. So maybe it's because they own index funds that are just broad market in nature and getting that MAG-7 exposure.

8:00Maybe they're looking at tech sector and getting MAG-7 through that. But so little of their exposure is to the broader AI value chain across digital infrastructure, power infrastructure, applications, data owners, that we see a lot of investors are more intentionally allocating to AI. Selling down tech sector exposure to allocate to a fund like BAI or even selling down core exposure in U.S. large caps to get exposure to a fund like BAI. I find this sub theme of on-shoring into America and basically re-industrialization really interesting. Is there a sort of specific basket of names which you would not necessarily feel are the technology sector?

8:42I'm thinking a little bit like real estate and all of those names that are involved in the construction of a data center. There's a few areas to look at. I mean, one, we just broadly really like U.S. infrastructure names. We've seen some good flows into IFRA, which is a U.S. infrastructure ETF, because if you want to build semiconductors in the United States or you want to build high-end technologies like electric vehicles, you need roads, you need highways, you need airports, you need ports, you need electricity on the grid, you need waterways. It really takes a wide range of infrastructure to set up these very expensive and complicated manufacturing supply chains within the United States.

9:17So we see that physical infrastructure and digital infrastructure being a really common denominator here. But if you really want to kind of double click into one area, if you look at semiconductor equipment manufacturers, you know, this is kind of the highest upstream way to play more semiconductors being built in the United States. The semi's equipment manufacturers should do quite well. And that's an area we have exposure to in our manufacturing ETF made. Let's bring it back to the news of the day, which is TSMC. and one of the themes that came up was currency headwinds. And it was really interesting because in simple terms, TSMC is a Taiwanese company that books revenue in US dollars, but it operates in Taiwanese dollars.

9:56I give that to you, Jay, to kind of illustrate that this is a name that if you're an American investor, even though it's Taiwanese, you can still get exposure to, but it's a company that's increasingly looking to the US for its own investments and to build out more of its own capacity here onshore or domestically. Yeah, that's right. I mean, what we've seen is, you know, a lot of volatility in the dollar and the weakening of the dollar generally has, you know, boosted international stocks. You know, in fact, just if you look at a lot of what our investors are doing today, it's allocating to international ETFs to benefit from the changing position of the dollar.

10:30So I think we're going to see this more and more this earnings season. Currency is going to be an important factor as companies try to explain how their earnings have done. And there's, you know, there's just a new element to back out of with dollar weakening. Jay, we're a few weeks now into the second half of the year. What are you expecting and watching for most closely in the balance of 2025? Well, we just published our thematic meteor update on iShares.com, and we're really looking at kind of the evolution of two areas, artificial intelligence and geopolitical fragmentation. In AI, what we're looking for is continued breakthroughs in the intelligence of AI.

11:06Right now, we would say AI models are kind of college level of intelligence. I think we're on the precipice of master's degree level of intelligence of AI, and that should really boost even more adoption. On the geopolitical fragmentation front, you know, we talked about infrastructure a bit. Defense spending is still very much in focus. But also, even if you just look at things like people buying gold, a lot of diversification into monetary alternatives. It should be a pretty big trend we see through the end of the year as well. Jay Jacobs of BlackRock, great to have you back on the show. Really appreciate it.

11:36Now, coming up, Congress edges closer to the landmark crypto legislation. We're going to speak with Kristen Smith, Solana Policy Institute president, about everything that's going on in Crypto Week. Let's also take a quick look at shares of Lucid. Now up 40%, almost 41%. A deal with Uber and Neuro over the next six years for a fleet of robotaxis on the platform. Also, a 1 to 10 reverse stock split. a reverse stock split, non-dilutive, reduces the number of shares outstanding, proportionately raises the price. Lots to ask about that. And actually, later in the day on Bloomberg TV, I heard that the Lucid CEO is going to swing by.

12:16Stay with us. This is Bloomberg Tech.

12:33Washington's weighing landmark crypto legislation during what's been dubbed Crypto Week. Digital assets have been surging thanks in part to those regulatory prospects with Ether ETFs seeing a record-breaking$726 million in daily inflows. I want to get out to Kristen Smith, Solana Policy Institute president. And this is the bit that I'm trying to understand. It is Crypto Week. And there seems to be a lot of excitement. And that excitement alone is driving inflows into various places and trading activity across the world of crypto. Is that a good rationale, Kristen? Well, Ed, first of all, happy Crypto Week.

13:10It's great to see you. Yeah, I think there's a lot of excitement within the crypto industry, within the policymaking industry, but within the broader financial services industry around what's happening in Washington here today. Later this afternoon, the House of Representatives is going to vote on three bills, the Genius Act, which regulates stable coins, the Clarity Act, which is the House's version of market structure legislation, and the third bill on central bank digital currencies. So this is a really historic week. And one of those bills, the Genius Act, is going to go on its way to the White House for the president's signature.

13:45This is going to be the first time the U.S. government has put a new federal regulatory framework in place. And so I think this is showing the entire market that this is a technology that's here to stay. And it's got the full backing of the U.S. government. Something very interesting happened this week. It was crypto week, but it was also earnings week for the banks. And I'm looking down at the list. You had the CEOs of JP Morgan, Bank of America and Citigroup all basically acknowledge the digital dollar. But then note that it's a threat to how banking is currently done. In the context of this legislation that's going through, what do you make of that, those heavyweights of Wall Street finance saying we've got to think about this?

14:29Yeah, well, I've also seen a lot of those heavyweights talk about getting into the stablecoin industry themselves. And so I think what we have here is there's going to be an upgrade of our technology. Crypto rails, open public blockchains like Solana, for example, are very good for recording transactions and moving payments around the world in a timely manner. And so I think what we're going to see in the years ahead is a real upgrade to our system, one that will lower costs but will also bring new opportunities. I think what's really great about this legislation is that it will spur innovation across many different sectors, and that innovation is really where the U.S.

15:10economy sees its growth come from. And so this is a real opportunity, I think, for crypto, for traditional finance, and for the businesses and consumers here in the United States. Kristen, you've been involved in different roles in advocating the industry's position to government and to regulators. What does this moment represent? If those different pieces of legislation get done and dusted, how significant is that for what you've been trying to work on in recent years? Yeah, well, I've been in the crypto advocacy space for almost seven years now. And so for me, this week is the highlight of my career.

15:50I have a red dress I bought to hopefully wear to the White House Phil signing ceremony. And I think it's a really big moment. But really, this is, I think, the true opportunity for the American people. I think for a long time, our financial services system has been, you know, sort of stuck in on old technology. And this is the first step forward. And so I'm very excited that we've had such strong leadership with Senator Hagerty, Senator Gillibrand, also Congressman Thompson and Chairman Hill in the House, and then President Trump and David Sachs and Bo Hines for really, really digging in and making this a priority.

16:25I think it's something that we're going to see pay off for all of the American people in due time. There was discussion that I had with David Sachs in the last couple of weeks or few weeks about the bipartisan nature or not of the legislation. So if we take the Genius Act and Stablecoin, for example, there were things that the Democrats wanted in there that ended up not being. From the Solana Policy Institute's perspective, did you get what you felt was needed in the content of that bill? Yes. At Solana Policy Institute, we're very happy with the way that the Genius Bill ended up. And people who know me, I'm very skeptical of early drafts, But that's why we have advocates in Washington who can go with work with Congress, fine tune the legislation and make sure that it has the customer protections that the policymakers want.

17:17But also is done in a way that allows those who are building around the technology to have the certainty that they need in order to build and innovate. And so I think they've nailed it here with the Genius Act. I think it's it's really good language. And I think it's one of the reasons why the House is going to sort of pass it without changes. and send it on to the president's desk. There is another issue, the market structure issue, that that debate is continuing to happen. And so if there's any cleanup that needs to happen, I think we'll get another bite at the apple. Kristen Smith, Solana Policy Institute president.

17:53Great to have you back on the show. Thank you very much. Now, coming up, Uber teams up with EV maker Lucid and self-driving tech startup Neuro to launch a robo-taxi fleet. We're going to speak to the CEO of Neuro. That's coming up next. This is Bloomberg Tech.

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20:46a reverse one to 10 stock split. Basically, it is non-dilutery. It reduces the number of shares outstanding. It proportionately raises the share price for holders of note. Later in the day, we can get into mechanics of that because what's really boosting it is the three-way robo-taxi deal that this company's done. Lucid with Uber is launching a partnership along with self-driving tech startup Neuro. It's a new robo-taxi, which will be available on Uber's ride-hailing service. The details are important. Fortunately, Dave Ferguson, the co-founder and president of Neuro, is with us. Give me a second with this.

21:25Lucid provides the gravity SUVs. You guys provide a part of the technology stack. Uber basically pays for everything. They've invested$300 million into Lucid, several hundred million dollars into you. What happens next? Yes, so, Ed, first, thanks for having me. Great to see you. Great to be here. I think you've got it. So Lucid is integrating Neuro's driver hardware components, so the sense and compute, into their vehicles on the production line. Those vehicles are then shipped to Uber. Uber owns and operates them, and Neuro driver's software provides the driving capability for those vehicles on the Uber network.

22:05What does Uber get out of its investment in you? In fact, let's just be honest about it. Lucid is clear,$300 million. How much is Uber putting into you, and what are they getting in return in terms of IP or guaranteed access to something? I think Uber is investing in Nuro in a standard equity stake. And so I think that they're very, very excited about this partnership and this program, and they want to make sure that all of the parties are very vested in the success of that program. And so they want to make sure that they also have some ownership and frankly, some upside in Nuro, given how deeply we're going to be partnering to build this and the scale that we're going to be embarking on together.

22:42How much are they investing? Well, we carefully worded it as several hundred millions. Why not just give us a number? Yeah, well, I think some of that is within our control and some of that is outside of our control. I think we would not mind so much giving you the number. I think there's more sensitivity in other courts. We'll phone Dara and Uber and ask. you have a very close relationship with NVIDIA, essentially building on top of what NVIDIA offers end-to-end. Just explain it, because it seems like a bit of an unlock for you guys. And this deal kind of involves NVIDIA to a certain extent as well.

23:18Yeah, absolutely. So part of what we believe differentiates Neuro is that we have a dramatically lower-cost hardware set of sensors and compute that powers all of the vehicles that we create as self-driving vehicles. And so NVIDIA plays a very large part of that because they provide for us the SOC that powers all of the compute. So all of the compute on this RoboTaxi platform is going to be based on NVIDIA's Thor SOC. That's right. And for us, for Nuro, that has dramatically simplified our overall compute because before we had that system, we had to have FPGAs that dealt with the raw sensor data.

23:57We had to have CPUs. We had to have GPUs. We had to have safety computers. we've been able to effectively collapse all of that into the Thor SOC. So it's a simplification in the complexity as well as a significant reduction in cost. You've been, I understand, testing a lucid vehicle, but on a closed circuit to make sure the tech stack works. What's the evolution of that? The plan, as I understand it, is gravity goes into production late 2026, and 20 ,000 of them are due to Uber over a six-year period. How do you get to public roads? Yeah, so we as a company, Nuro has been doing fully driverless operation on public roads for over five years now.

24:36So we have a lot of experience with what it takes to validate our tech and to get it out onto those roads safely. With the Lucid platform, it's obviously a new vehicle platform for us to work with. We got the first one going, our first prototype in something like seven weeks, which is unheard of for us and we think the industry. So we've been moving very, very quickly. So Lucid's providing the sensor suite? The sensor suite is Nuro driver hardware. So it's a sensor suite that Nuro has designed, although all of it is automotive-grade off-the-shelf sensing. So Nuro has basically provided a design template for that, and Lucid is going to integrate that.