Tesla Boosts Stocks, Apple's Tariff Game Plan | Bloomberg Technology

Market Movers: NVIDIA, Tesla, and Crypto

• NVIDIA's shares have fallen due to reports of potential design issues with its Blackwell chip lineup, ahead of the company's earnings report later in the week (33s).
• Tesla's shares are rallying as the Trump administration considers easing self-driving rules, which could be beneficial for the company's autonomous vehicle technology (45s).
• The equity market is seen as the biggest driver for cryptocurrency, with Bitcoin experiencing a 3.5% increase after a recent selloff (1m15s).
• Tesla's stock is up 7% due to the potential easing of self-driving rules, while Palantir's stock is down 6.5% after rising on Friday (1m32s).

NVIDIA's Blackwell Chip Concerns and Market Impact

• NVIDIA's volatility is attributed to concerns over the design complexity of its Blackwell chip lineup, which could potentially lead to a slowdown and ramp-up of production (2m6s).
• According to Mandeep Singh of Bloomberg Intelligence, NVIDIA's compressed shipping schedule for new architectures and the lack of competitors in the AI training market may mitigate the impact of potential delays (2m50s).
• AMD's stock is higher on the day, with some speculating that the company could gain market share if NVIDIA experiences delays or issues with its Blackwell chip lineup (3m47s).
• The manufacturing of NVIDIA's Blackwell chips is challenging due to the company's goal of achieving high performance with efficiency, which requires advanced technology and can lead to overheating issues (4m8s).

NVIDIA's Earnings and Growth Outlook

• NVIDIA is expected to report an 83% increase in revenue for its fiscal third quarter, with key lines from the report including expectations for the company's future growth and performance (5m8s).
• NVIDIA's growth rates are still strong despite a recent drop, and the company's exposure to crypto could expand its overall addressable market, making it a positive investment opportunity going into 2025 (5m35s).

AI, Quantum Computing, and Investment Opportunities

• The AI trade continues to be a significant trend, but it requires energy to power various technologies such as cloud, data centers, and crypto mining, making companies like Constellation Energy essential for this theme to work (6m54s).
• Quantum computing matters because it enables supercomputers to process data quickly, which is necessary for AI to work efficiently, and companies like T Wave are potential investments in this area (8m12s).
• Palantir is a stock that people are looking at due to its role in AI, defense, and government funding, and a recent pullback could be an opportunity to buy on a dip (8m53s).
• To ride the bouts of volatility in quantum and AI stocks, it's possible to take a broader approach with an ETF perspective, which provides exposure to a range of companies, including smaller, more volatile names that can take off when they get the opportunity (9m53s).

Tesla's Stock Performance and Long-Term Outlook

• Tesla's stock performance is decent, with investors taking profits, but long-term investors are holding onto the stock, expecting AI to play out over years (10m29s).

Cryptocurrency Predictions and MicroStrategy's Bitcoin Strategy

• The speaker is optimistic about cryptocurrency, having predicted it would hit $100,000 in a couple of years, and believes the recent election will be great for crypto due to potential tax cuts and deregulation (11m11s).
• MicroStrategy is up 482% in the last year and has doubled down on its commitment to buying Bitcoin for its balance sheet, with the speaker playing crypto through MicroStrategy (12m14s).

Super Micro Computer's Listing Status

• Super Micro Computer's shares are gaining about 15% as the server maker approaches its deadline to file a delayed report or submit a plan to the NASDAQ to remain listed on the exchange (12m34s).

Brendan Carr's Appointment to the FCC and Potential Regulatory Changes

• President-elect Trump has chosen Brendan Carr to become the FCC chair, who is big on free speech and has expressed concerns about perceived censorship on social media and broadcast TV (13m33s).
• Brendan Carr's appointment may lead to changes in regulations for social media companies, but it's unclear how much he can turn his views into action at the FCC, given the agency's narrow regulatory framework (13m55s).
• Carr has advocated for using the Communications Act to give the FCC a toehold into potentially regulating the way speech is displayed on the internet, which could lead to changes in social media moderation (15m13s).

Apple's China Reliance and Trump's Tariffs

• Apple's reliance on China is also being watched, with potential implications for the company's stock performance (15m54s).
• Apple may be less vulnerable to Donald Trump's tariffs due to a plan by Tim Cook to soften any potential blow, which includes promoting job creation in America, a new campus in North Carolina, and a new chip production point in Arizona (16m1s).
• Despite Trump's tariffs, Cook likely believes he can get tariff waivers and has a plan in place to deal with the new administration, which may run counter to Apple's values and could anger the majority of Apple employees (16m59s).
• There is also a Department of Justice lawsuit regarding the App Store and other Apple practices, which Cook likely believes he can get Trump to pull back on (17m36s).

Elon Musk's Role in the Trump Administration and Doge Coin

• Elon Musk is blurring the lines between reality and internet culture again, bringing Doge to the White House as his latest pet project under President-elect Trump (18m8s).
• Musk is set to lead the Department of Government Efficiency, or DOGE, which will have plans to eliminate fraud and improper payments and conduct financial and performance audits across the federal government (18m27s).
• Backers of Doge Coin saw the currency spike, driven in part by optimism over Trump's digital currency stance and the DOGE announcement (19m5s).

Tesla's Self-Driving Car Ambitions and Regulatory Changes

• Tesla shares surged as the transition team plans to make self-driving cars a priority, with the company targeting 130,000 deliveries on its first electric sedan and expecting its smartphone and EV businesses to grow further in 2025 (19m33s).
• Members of the transition team of President-elect Trump have told advisors a plan to ease rules for self-driving cars, which would benefit Tesla and its plan to put out a fleet of robotaxis (20m48s).
• The National Highway Traffic Safety Administration allows companies to apply for an exemption to have up to 2,500 vehicles without steering wheels or pedals on the road per year, but this number is considered too low for companies like Tesla, and it is difficult to obtain the exemption (21m28s).
• General Motors tried to get an exemption for two years but was unsuccessful, and having the Transportation Department interested in clearing up roadblocks could help companies like Tesla get their technology on the roads and increase their test fleets (21m49s).
• There have been requests to increase the exemption number to 200,000, which would allow robotaxi companies to have a huge fleet in multiple cities and get their business going (22m9s).
• Having an easier way to get an exemption, even with a lower number like 100,000, would be beneficial for companies like Tesla that want to have robotaxis (22m24s).

Trump Administration's Approach to AI and Potential Implications

• The Trump administration's views on AI are unclear, but they are expected to take an accelerationist approach, which could lead to the dismantling of existing AI safety initiatives (24m37s).
• Key accelerationists are celebrating the Trump administration's potential approach to AI, seeing it as a symbol of deregulation and allowing industry to move forward quickly (25m0s).
• Elon Musk's views on AI are a question mark, but he has expressed concerns about existential risk from artificial intelligence in the past, which could influence his role in the Trump administration's AI policies (25m47s).
• The market has been volatile, but the Nasdaq 100 is up a full percentage, and Bitcoin is eclipsing $92,000 again, with MicroStrategy adding another $30 billion in Bitcoin to its balance sheet (23m32s).
• Nvidia's share price has reacted to a report that the company's systems are the most advanced computers ever created, and customers are racing to be first in the market (24m11s).
• Nvidia is working with leading cloud providers as an integral part of their engineering team and process, and the engineering iterations are normal and expected (24m17s).
• Elon Musk has expressed the need for regulations to oversee major AI labs and prevent the technology from getting out of control, a fear prevalent in Silicon Valley (26m1s).
• The accelerationist fervor in AI development plays to the US versus China narrative, with the threat of China advancing beyond the US's capabilities being a bipartisan fear (26m24s).
• Some experts argue that China is not moving as quickly as expected in AI advancements and may not be as much of a threat as perceived (26m40s).
• The Biden administration has taken steps to establish guardrails around AI innovation, including executive orders, but it is likely that an incoming President Trump will repeal some of these measures (27m52s).
• However, a lot of the work done by agencies pursuant to these orders has already been completed, and it may not be possible to undo it overnight (28m7s).
• The incoming administration may want to keep some of the processes in place, as the agencies have done professional work that is not ideological (28m37s).
• The Trump administration may try to undo some of the work done around equity and civil rights, which could lead to biases in AI systems (29m13s).
• Companies building large language models may need to rely on self-regulation to address these biases, as some companies have already faced issues with biased AI systems in the past (29m46s).
• There are concerns about AI systems being biased, with examples including a tool that was not released due to its potential to perpetuate biases, and an Apple credit card that favored men over women due to its data training (30m13s).
• If the federal government does not take the lead in researching and testing AI systems for biases, major publicly traded companies may take it upon themselves to do so, which could lead to duplication and inefficiencies (30m32s).
• The Trump administration had an executive order focused on R&D for AI, which encouraged agencies to understand where AI fits into their work and take proactive steps to get ahead of it (31m12s).
• The Biden administration continued this effort, and it is likely that the Trump administration would continue it as well if they are in charge of policy (31m40s).
• The Trump administration is likely to go full speed ahead on policies that try to accelerate US innovation and hold back China, but this may involve more than just cutting regulations (31m55s).
• There are policies in the AI space that are not simply about cutting regulations, such as export controls, which the Trump team can extend (32m8s).

The Rise of AI Relationships and a Chatbot Girlfriend

• A new episode of "Post-Human" explores the rise of AI relationships, including a girlfriend chatbot that went rogue and a social media influencer who transformed herself into an AI (32m38s).
• The chatbot is available for $1 per minute and has 18,000 "boyfriends", with its developer making $72,000 in the first week (33m8s).
• The AI influencer's creation was shut down but has been brought back online, allowing for an interview with the pioneering and unsettling creation (33m38s).

Bloomberg Technology Discussion and Halozyme's Acquisition of Evotec

• A conversation between Emily and Caryn Marjorie briefly occurred before transitioning to a discussion about Bloomberg TV's airing of an episode at 10:00 P.M. New York time (34m57s).
• Caroline Hyde then shifted the conversation to the world of M&A and biotech, specifically discussing a pharma company that has attracted takeover interest from Nasdaq-listed biotech firm Halozyme (35m29s).
• Helen Torley, CEO of Halozyme, joined the conversation to discuss the company's platform for drug delivery, which licenses its technology to leading companies to transform intravenous therapies for cancer and autoimmune diseases into simple injections under the skin (35m52s).
• Halozyme's technology can save patients and caregivers time and reduce healthcare costs, with the company expecting $600 million in EBITDA this year (36m58s).
• Helen Torley explained that Halozyme is interested in acquiring a company that does drug discovery and manufacturing to further accelerate its growth using its cash (37m3s).
• The acquisition target, Evotec, has a similar business model to Halozyme, with a mission to invent more effective medicines and a manufacturing division using a new process called continuous manufacturing (37m25s).
• The market was initially thrown off by the news, with Evotec's stock down 59%, but Helen Torley believes that the company is poised for growth and that the acquisition will be a great competition for Halozyme (38m1s).
• To convince investors, Helen Torley emphasized that the acquisition will be paid for in cash, avoiding any erosion of value from the share price perspective, and that customer interviews have shown that Evotec's platforms are seeing growth and will be used for the future (38m23s).
• A leading company with well-above-average growth margins for EBITDA and durable revenues for a long time is considered attractive for further fueling growth and returning value to shareholders (38m54s).
• Helen Torley mentions that her company has been working for a couple of years to find the right acquisition to use their cash and return value to shareholders, and they have very strict criteria for the right combination (39m19s).
• Evotec hits the criteria in terms of growth of revenue, growth of EBITDA, pharmaceutical partners, and de-risked businesses, making it a terrific fit for the company (39m37s).
• The acquisition of Evotec will provide opportunities for growth by cross-selling platforms to all of the current partners, as well as attracting new partners with the best and most diverse platform (39m55s).

Netflix's Live Sports Streaming Test and Future Plans

• Netflix is pushing into live sports streaming, with 65 million viewers making the Tyson-Paul fight go viral, but the event resulted in thousands of complaints about connection problems and frozen screens (40m55s).
• The live sports streaming event was a big test for Netflix's ambition, and they failed the test, with audio issues and a glitchy experience (41m26s).
• Netflix's competitors, such as Amazon and Apple, have already proven they can put on live sporting events without glitches, making this a disappointing result for Netflix (41m52s).
• Netflix has been doing live events for about a year and a half, including a live comedy event, tennis, golf, and hot dog eating contests, but this boxing match did not go off smoothly (42m1s).
• To ensure a smooth experience for future live events, Netflix needs to get the expertise and resources, and make sure they can handle the infrastructure demands of supporting a large audience (42m49s).
• Netflix is aiming to shift billions of dollars of ad spending from cable and broadcast TV to streaming, and a smooth execution is necessary to achieve this goal (43m14s).
• There is a possibility that Netflix may exceed its predicted 65 million users, especially with the NFL and exclusive events like Beyoncé, and the fact that it is a holiday season (43m29s).
• Netflix has around six weeks to prepare for this shift, and it is possible that the number of users may be bigger than predicted due to the exclusive events (43m45s).
• The outcome for Netflix seems to be a mix of winning and losing at the same time, while Tyson seems to have definitely lost (43m51s).

Conclusion and Podcast Availability

• The discussion on Netflix concludes this edition of "Bloomberg Technology," and the podcast can be found on various platforms, including the Terminal, Apple, Spotify, and iHeart (44m8s).