Bitcoin Soars, Hedge Funds Lose Billions on Tesla | Bloomberg Technology

Bloomberg Technology (0s)

• "Bloomberg Technology" is a program that covers the intersection of money, power, and innovation in Silicon Valley and beyond, hosted by Caroline Hyde and Ed Ludlow (16s).
• The program is broadcast live from New York and San Francisco (29s).
• Bitcoin has reached a new record high, surpassing $84,000, boosted by the election outcome (37s).
• The significant increase in Bitcoin's value has resulted in a 5% rise, with the cryptocurrency reaching unprecedented numbers (1m1s).
• The program also discusses Tesla shorts being a losing bet, and features a conversation with Katherine Boyle about the future of defense tech and American dynamism (47s).

Bitcoin Soars Above $84K (1m11s)

• Bitcoin has reached a level above $84,000, with a significant increase in flow into the cryptocurrency and related stocks, such as Coinbase and MicroStrategy, which have seen gains of 75% over seven days (1m38s).
• The excitement around these stocks is notable, with some stocks performing better than they did on the day of the Trump victory announcement (1m45s).
• The future Trump administration's moves, including the appointment of the SEC chair, could impact the tone for Bitcoin and its potential to go higher (1m59s).
• Other cryptocurrencies, such as Solana and Dodge Coin, have also seen stunning gains (2m9s).
• Some experts, like Frank Speiser, have given a target of $100,000 for Bitcoin by the end of the year and $150,000 by the end of next year, indicating a significant move higher (2m39s).
• While flows have driven the story, fundamentals, such as the approval of new Bitcoin ETFs, have also played a role in the cryptocurrency's performance (3m9s).
• The impact of the SEC's crackdown on different kinds of tokens on exchanges and the potential flow of assets outside of Bitcoin is something to keep an eye on (3m25s).

Aid For Chips, AI Sector (3m51s)

• The semi-conductor sector is experiencing volatility due to uncertainty around President-elect Trump's position on tariffs and their impact on global trade, with the sector having underperformed software since the election but still being one of the top performers year-to-date (4m19s).
• Super Micro Computer is down 11% due to disappointing sales forecasts, accounting probes, a DOJ investigation, and a delayed 10K exposure, raising concerns about the company's future and potential impact on customers and competitors (5m14s).
• The uncertainty surrounding Super Micro Computer is a huge question mark for the AI ecosystem, but it does not change the entire dynamic of AI investment, with demand still exceeding supply (5m52s).
• The risks associated with individual names in the tech industry are highlighted by the Super Micro Computer situation, with the potential for unexpected headlines to negatively impact stocks (6m25s).
• There is uncertainty around President-elect Trump's tariff policy and its impact on the tech industry, particularly with regards to China, but it is unlikely that he will restrict US companies from doing business in China across-the-board (7m4s).
• Trump is expected to incentivize companies to invest in the US, potentially accelerating trends that were already underway, such as the CHIPS Act money, but the actual implications of large tariffs are still unknown (7m37s).
• Cyber stocks are an area to watch closely for investors looking to make money in the coming year (8m29s).
• A survey of over 100 U.S.-based I.T. managers found that companies are looking to spend more on security, not less, with AI driving more investment in the sector (8m57s).
• The survey results suggest that companies such as Microsoft, CrowdStrike, Palo Alto, and Cyber Arc are likely to benefit from increased spending on security, making them a good investment opportunity (9m17s).
• Earnings reports from these companies this week may cause volatility, but their stocks are expected to be higher in a year (9m26s).
• Optical companies, which provide the fastest and most efficient way to upgrade connection points in data centers, are expected to benefit from the shift in CAPEX spend in the data center (10m2s).
• Companies such as Coherent, Momentum, Sterile Labs, Credo, and Broadcom are likely to benefit from the increased spending on optical technology (10m13s).
• The shift in CAPEX spend is driven by the need to connect high-speed GPUs together to produce the output required by cloud companies for AI-enabled applications (10m34s).
• Optical companies are expected to remain in focus and are a cause for optimism in the future (10m44s).

Hedge Funds Shorting Tesla Lost More Than $5B (11m11s)

• Hedge funds have lost billions of dollars due to their bets against Tesla, with a total loss of $5.2 billion between Election Day and Friday's close, as they are clinging to bets against the company since the election of Donald Trump (11m17s).
• The hedge funds' bet was that Tesla's transformation into an AI company would not happen or would be delayed, resulting in bad or delayed news for the company, but the special relationship between Elon Musk and President-elect Donald Trump has changed this calculus (11m57s).
• The relationship between Musk and Trump is expected to lead to EV policies that will help Tesla and a permissive federal framework for autonomous vehicles, which will aid Tesla's plans for robotaxis, causing investors to bet on the company and resulting in significant losses for the shorts (12m14s).
• The percentage of short positions in Tesla is now relatively small, with many people having to buy to cover their short positions, although some are still holding on to their bets, hoping that Trump will eliminate IRA credits and other policies that help EVs (12m56s).
• However, with Elon Musk's close relationship with Donald Trump, it is unlikely that Trump will suggest policies that would hurt clean-air credits or IRA credits, which would negatively impact Tesla (13m34s).
• The current net short position in Tesla is 17%, while the net long position is 8% (13m55s).

China's Singles Day Kicks Off (13m57s)

• China's Singles' Day officially kicks off with many retailers slashing prices and offering promotions, but for many, this has been a weeks-long affair as the country grapples with weak economic data (14m7s).
• Around 25% to 30% of spending is done on the day itself, with the festival getting longer every year, and overall predictions are optimistic for stronger growth compared to last year (14m33s).
• This year's popular purchases include pet-related items, outdoor consumption, personal care, and cosmetics, reflecting a trend towards more practical and everyday items rather than luxury goods (15m5s).
• The shopping experience in China is unique, with people often having their eye on certain items for the year and stocking up on essentials like pet supplies, and advertisements promoting the festival are ubiquitous (15m45s).
• Many brands are expected to do around 15% of their sales during this online shopping festival, which is substantial, and is often combined with the 6/18 shopping festival (16m10s).
• Global brands are expressing nervousness about a continued focus on China given the new administration in the US, and are seeking diversification throughout the region, although China still accounts for two-thirds of the region's sales (16m36s).
• Despite this, learning from the Chinese market is being applied to other areas, such as live-streaming influencer marketing, which is becoming increasingly popular in Asia, particularly with the rise of TikTok sales (17m10s).

Funding for AI Startup 11X (18m4s)

• 11X, an artificial intelligence-powered sales startup, has raised $50 million in a new funding round with a valuation of $320 million (18m16s).
• The startup, which was founded in London, has recently moved to the Bay Area in San Francisco with a significant portion of its team (18m34s).
• 11X is an automation company that builds digital workers, which are AI employees with names and faces that can be hired by companies to execute tasks (19m11s).
• The digital workers focus on revenue teams or go-to-market teams, and the core model is centered around digital workers instead of traditional software (19m30s).
• The company believes that its AI-powered approach will create a huge shift in how people think about software, similar to how Salesforce innovated on the cloud-based software model 25 years ago (20m19s).
• 11X sees itself as a competitor to traditional software companies, but also believes that its approach can create new opportunities for customers and enterprises (20m27s).
• The company's CEO mentions that customers are smart and realize that some companies are better suited to capture the benefits of AI-native technology (20m51s).
• 11X's technology is leading to a much bigger impact for its customers than what would be achieved with incremental software, and the company is operating in a way that is native to the AI cycle (21m20s).
• The company moved from the United Kingdom to the West Coast because it believes that San Francisco is the best place in the world to scale a company, with many customers and a deep talent pool (21m38s).

Tech & Defense Under Trump 2.0 (24m8s)

• The discussion revolves around the outcome of the election and its impact on the American economy, with a focus on production, defense technology, and innovation (24m10s).
• The administration's focus will be on investing in defense, procuring technology quickly, and doing more with less, which is better for the American taxpayer (24m39s).
• Building products for the next generation of war fighters is cheaper than the large exquisite systems that have dominated the Department of Defense for many decades (25m3s).
• The administration understands the importance of American dynamism and how technology makes things more efficient, saving dollars across a range of industries (25m48s).
• Silicon Valley understands company building and the importance of job creation to the American economy, which will be paramount in the administration's policies (26m3s).
• JD Vance's experience in investing in companies in the Midwest and his focus on manufacturing will be an important aspect of the administration's innovation message (26m17s).
• The administration's philosophy emphasizes production, and investing in companies building and supporting manufacturing is crucial for the future of manufacturing in the country (27m14s).
• The future of manufacturing in the country is reliant on those building for defense, aerospace, and bringing next-generation manufacturing capabilities (27m35s).
• Mitch McConnell's statement that it's cheaper to prevent more than to have one is echoed in the administration's focus on investing in manufacturing and defense (27m59s).
• Outside of America, investing in American start-ups and larger defense companies is crucial, with countries like Taiwan and Europe already discussing increasing defense spending (28m9s).
• The understanding is that strong bases in a country are essential for national security, and investing in manufacturing is the best way to stop wars (28m28s).
• There is a growing focus on investing in the American defense industrial base, with other countries also investing in their own defense industries, and there is a lot that they can learn from American companies and the start-up ecosystem in terms of bringing autonomy and investing in drones, autonomy, and unmanned vessels that can be built quickly and cheaply (28m36s).
• American dynamism is one of the few categories of innovation where Republicans and Democrats agree wholeheartedly, and there is a need to invest in the defense industrial base and re-shore and restore it in America (29m50s).
• Venture capitalists focused on American dynamism need to invest in companies that are fantastic for the national interest, such as aerospace, defense, and nuclear companies, and there will be a continuation of investing in these categories (30m41s).
• The strategy for investing in American dynamism does not change with the administration, as every administration understands that the defense department needs to modernize, and aerospace needs to modernize (30m43s).
• There is a growing trend of investment in companies that are important for all Americans, and venture capitalists will continue to see more investment in these categories (30m58s).
• Elon Musk's potential role in the cabinet or as a whisperer to the White House does not worry investors about the leadership of the companies he currently helms, as he is considered a superhuman founder who has supported and built many companies (31m42s).
• Elon Musk's interest in politics and making the government more efficient is seen as a positive development, and his impact on the American government is expected to be significant (31m54s).
• The development of advanced robots and AI technology is rapidly becoming a reality, and there are concerns about the potential misuse of AI in military applications, with many governments refusing to regulate the military use of AI (32m27s).
• Bitcoin has reached a new record high at 84,500, driven by the idea that a pro-crypto Congress and potential changes at the top of the SEC will lead to more regulation and clarity, giving investors more confidence in the market (33m38s).
• MicroStrategy has purchased an additional 25,000 Bitcoins over the last few trading days, bringing its total holdings to a significant amount, and its stock has outperformed even NVIDIA since the start of 2020 (34m7s).
• FTX has filed a lawsuit against Binance to recover $1.8 billion, alleging that Sam Bankman-Fried fraudulently transferred the funds using exchange tokens to pay for a share repurchase deal in 2021 when the company was allegedly insolvent (34m23s).
• Tell, the Middle Eastern subsidiary of Delivery Hero, is looking to diversify into healthcare, beauty, and fintech, and is planning a share sale worth $14.4 billion (35m17s).
• Swaggy has completed a successful $1.4 billion IPO, with demand surging late in the day, and drawing bids for six times the available shares from foreign and domestic money managers (35m40s).
• LNG is planning a potential IPO in its Indian unit, and has added domestic capital to its banks in preparation for a share sale in Mumbai, seeking to raise $1.5 billion (35m57s).
• The US is expected to continue its fight against climate change, with John Podesta stating that the country will move forward with its efforts even with Donald Trump in the White House (36m16s).
• Artificial intelligence is seen as a potential tool to help with climate change efforts, and will be discussed further in the context of climate tech solutions (36m22s).

AI & the Fight Against Climate Change (36m29s)

• James Joaquin's venture firm was founded over a decade ago, and as long-term investors, they focus on bringing breakthrough technologies to market, rather than worrying about the impact of a new administration on climate change investment (36m29s).
• The firm is excited about using AI to solve unsolved climate change problems, such as better battery technology and more renewable energy to power data centers, through a concept called generative science (37m26s).
• Generative science involves using large science models in fields like chemistry, biology, and physics to generate new scientific breakthroughs, rather than relying on large language models on the internet (37m36s).
• Despite uncertainty and fear about the future of climate change policies, there is data to be optimistic about, such as the $200 billion already deployed to states for climate-related projects, with $160 billion going to red states (38m41s).
• The growth of electric battery and vehicle plants in red states like Georgia, North Carolina, and Tennessee is creating good green jobs and is seen as a positive development for climate tech (39m2s).
• Nuclear energy is becoming increasingly important for meeting the needs of the energy grid, particularly as the number of electrons in the grid needs to be doubled to power electric vehicles, bitcoin mining, and AI data centers (39m24s).
• To deliver the required power, two big areas of focus are geothermal energy, which the firm is investing in, and nuclear energy (39m44s).

Apple's Future to Hinge on Modest Bets (40m29s)

• Apple's future growth is expected to come from modest bets rather than a single blockbuster product, as the iPhone, which generates half of the company's revenue, is unlikely to be replicated (41m8s).
• The iPhone is the central product that drives the purchase of other Apple products and services, such as AppleCare, AirPods, and the iPad (41m2s).
• Investors need to understand that Apple's future growth will come from smaller, more modest products and services that can stack up to drive revenue (41m33s).
• Apple is exploring new areas, including headsets, mixed reality, augmented reality glasses, and standalone glasses without displays (41m48s).
• The company is also working on expanded versions of AirPods, tapping into AI home robotics, home energy, and a way to monetize health products into a subscription service (42m0s).
• A major push into the smart home market is expected next year, with Apple diving into smart home appliances and displays, followed by a smart home display with a robotic lid in a couple of years (42m12s).
• The Vision Pro, a product that hasn't taken off as expected, is getting an update with Vision OS 2.2, which includes a new feature that allows users to view their Mac display on a wide or ultra-wide monitor (42m50s).
• The Vision Pro's external monitor feature is a powerful tool for productivity, but the product's design makes it hard to wear for extended periods, although third-party accessories like Belkin's overhead strap can improve wearability (43m23s).