Musk's Trump Role, Trump 2.0 Safety and Defense | Bloomberg Technology

Market Performance and Election Impact

• The Nasdaq 100 has reached a new record high, driven by the "Magnificent Seven" tech stocks, with Lyft up 27% due to a strong outlook and finding its niche despite competition from its "big brother" (1m19s).
• Qualcomm's performance has been choppy, while ARM is up 5.5% as consumers in China are buying higher-priced handsets (1m39s).
• China is a key focus for the macro going forward after the election results, with big tech leading the benchmarks (1m53s).
• The biggest player, NVIDIA, is coming up on November 20, following earnings from Meta, Microsoft, Alphabet, and Amazon, which had data centers and fixed assets of around $59 billion in the third quarter alone (2m8s).
• There are questions about what the election results could mean for Biden's Chip Act, particularly with Apple and China, and Biden trying to prohibit them from using Western technology (2m42s).
• NVIDIA is a winner in a lackluster season, and the usual playbook in an election year is a year-end rally after the results (2m53s).
• The tech sector is looking at what Trump 2.0 could mean, with a focus on AI, and government initiatives through the DOD and agencies that could benefit companies like Microsoft, Amazon, and Palantir (4m42s).
• Elon Musk's association with Trump could give Tesla an advantage, particularly if Trump repeals some or all consumer and manufacturer support, making the playing field more even and allowing Tesla to cut prices further (5m11s).
• Trump is expected to fast-track autonomous driving, which would be bullish for Tesla, and could unlock a $1 trillion valuation (6m7s).
• The tech sector is not ready for autonomous driving and FSD, but it could be a major growth area, with initiatives potentially getting fast-tracked in 2027 (6m41s).
• Tesla and Musk are seen as big winners in the Trump sweepstakes, along with big tech, and Khan is likely to be out of the FTC, which would be bullish across big tech (6m53s).
• The infrastructure for AI is a concern, particularly with the growing chip sector in the US dependent on the Chips Act, which may be revised or blown out of the water (7m16s).
• Intel is seen as a potential loser due to revisions to the Inflation Reduction Act, which would put gasoline on the fire in terms of the IRA being a huge opportunity for Intel (7m23s).
• The U.S. will see a focus on chips and AI buildout with the IRA, and there will be carveouts in tariffs with China, which is not expected to negatively impact companies like NVIDIA, Tesla, and Apple (7m51s).

Trump's Potential Influence on Tech

• Elon Musk is expected to have an informal role in the Trump administration, serving as a "whisperer" in the White House, which will give him significant influence (9m23s).
• Musk's role in the administration is expected to be beneficial for his companies, particularly Tesla, and is seen as a strategic bet on Trump (9m31s).
• The semiconductor index has had a positive couple of days, with most companies in the green, including Qualcomm, which beat analyst expectations and had a bullish sales forecast (10m19s).
• ARM, a chipmaker, initially disappointed with a sluggish outlook but has since seen a positive change, with record licensing royalties and a 40% increase in royalties, driven by the premium segment and higher royalty rates for version 9 (11m56s).
• The CEO of ARM, Rene Haas, believes the company is not pricing-dependent and has tailwinds driving growth, including the need for more compute capacity, particularly in AI workloads (12m56s).
• Haas is not concerned about the tension between the U.S. and China in the compute and AI space, and believes the U.S. election result is good for business, but notes that the company will have to see how things develop going forward (14m1s).
• The replacement of phones with more expensive phones is expected to make ARM's numbers resilient going forward, offsetting the fact that people are buying fewer phones (14m43s).

ARM's Performance and Outlook

• The increasing use of AI agents on phones is expected to drive demand for more compute capacity, benefiting ARM (15m4s).
• The next generation of phones will require more compute to run language models, interface with the cloud, and ensure security, which is beneficial for ARM as it provides the necessary technology (15m30s).
• ARM was reportedly interested in buying Intel, but this information cannot be confirmed (15m42s).
• A licensed dispute with Qualcomm, a long-time customer of ARM, is ongoing due to the lack of consent for a company acquisition that involves ARM's technology (15m57s).
• Consent is required for any company acquisition involving ARM's technology, and in the past 35 years, 130 assignments have been made with consent granted every time, except in this case with Qualcomm (16m17s).
• ARM is confident in their position and believes the dispute is about fairness and equity in the ecosystem (16m38s).
• Doing business with a key customer like Qualcomm, which is becoming a "frenemy," is a challenging situation, but ARM has taken a bearish position on the outlook and made assumptions that they will not prevail in the case (17m18s).
• The next phase for ARM at the product level involves compute subsystems, providing a full solution by stitching together pieces of IP, which will save engineering time and time to market for partners (17m46s).
• ARM is experiencing amazing traction, with lots of wins in the design data center space and mobile, and this will allow them to get great benefits to customers and drive higher royalties (18m1s).
• In 10 years, ARM will be involved in computing in a large way, with a focus on AI, and the company has a lot of optionality in terms of how horizontal or vertical they can go (19m24s).

Biden's Concession and Transition

• Autonomous vehicles (AVs) will bring new products that people will like, and some will prefer being driven by a human, while others will prefer a robot, leading to a hybrid future (20m4s).
• President Biden addressed the public from the Rose Garden, discussing the peaceful transition of power and the importance of democracy, where the will of the people prevails (20m43s).
• President Biden congratulated President-elect Trump on his victory and assured him that his administration would work with Trump's team to ensure a peaceful and orderly transition (21m33s).
• Vice President Harris is a partner and public servant who ran an inspiring campaign, and she and her team should be proud of their efforts (21m46s).
• The struggle for the soul of America has been an ongoing debate since the country's founding and is still vital today (22m13s).
• Campaigns are contests with competing visions, and the country chooses one of the other, and the choice should be accepted (22m39s).
• It is essential to love the country and neighbors regardless of winning or losing, and to see each other as fellow Americans rather than adversaries (22m50s).
• The American electoral system is honest, fair, and transparent, and its integrity should be respected (23m16s).
• Election workers who staffed voting sites, counted votes, and protected the integrity of the election should be thanked for their efforts (23m31s).
• As President, the duty is to fulfill the oath and honor the Constitution, and a peaceful transition of power will take place on January 20 (23m56s).
• The past four years have been a historic presidency, with accomplishments that will be felt by the people, including over $1 trillion worth of infrastructure changing lives in rural communities (24m38s).
• The road ahead is clear, and there is much that can be done, with a strong economy being left behind (25m15s).
• The responsibility is to make every day count in the remaining 74 days of the term (25m48s).
• Setbacks are unavoidable, but giving up is unforgivable, and the measure of character is how quickly one gets back up after being knocked down (26m3s).
• The American experiment endures, and it is essential to stay engaged, keep going, and keep the faith (26m40s).
• Vice President Kamala Harris and President Biden have acknowledged Donald Trump's decisive victory and pledged a peaceful transition of power, with Biden calling to congratulate Trump and committing to a smooth transfer on January 20 (27m40s).
• Biden's concession speech also focused on his legacy, accomplishments, and the idea that there is more work to be done in the future, as this is seen as the swan song of his presidency (28m12s).
• Biden is getting a lot of blame within the party for the loss, with some suggesting he stayed in the race for too long (28m26s).
• The transition team is planning to work with the incoming administration, but there could be hiccups due to Trump's skepticism of the General Services Administration and intelligence agencies overseeing background checks (28m49s).
• The focus is now on the 74 days left to enact policies, with a potential focus on infrastructure, which plays to the tech community (29m17s).
• The Chips Act is unlikely to be dealt with in the lame-duck Congress, but rather in the next Congress, with a government funding deadline on December 21 (29m38s).
• The makeup of the new Congress is unclear, but it will be a Republican Senate, and it would take a Republican House to unravel the Chips Act (30m5s).

Cryptocurrency and the New Administration

• Bitcoin has fallen below $76,000 per token, and crypto-related stocks have seen a surge due to the sentiment that President-elect Trump will approach crypto differently and be more supportive of the industry (30m38s).
• The crypto industry is expecting clarity on regulation rather than enforcement, but crypto will not be a top priority for the new administration (31m40s).
• A change of regime at the FCC would be beneficial for crypto assets, and removing the fear of action from the FTC would be a significant step (32m25s).
• The new administration may start by addressing stablecoins and providing clarity on their regulation, as well as considering the makeup of Congress (33m14s).
• There is skepticism about Trump's promise to buy Bitcoin, with concerns that he might walk back on the idea once he realizes it involves selling dollars, and that it would be difficult to get through Congress (33m48s).
• Not selling the US's current stash of Bitcoin would be good news for the market (34m5s).
• The stablecoin bill is bipartisan and is expected to pass easily, being considered the "low-hanging fruit" (34m17s).
• A crypto bill is needed to recognize the changing definitions and new types of rules required (34m39s).

Defense Tech and Spending Under Trump

• As Trump prepares to return to the White House, there are questions about his policies on AI, defense tech, and spending (35m35s).
• Palmer Luckey, a Trump supporter, believes it's great to have someone in office who is aligned with the idea of spending less on defense and getting more, and that the US needs to do a better job of procuring defense tools (36m33s).
• Luckey has been in touch with the transition team and has heard a few names being considered for various roles, but doesn't want to mention them publicly (37m16s).
• Anduril, Luckey's company, has spent years working with the DOD, and he believes that changes are needed in the department's structure, particularly in how the government does business with private enterprise (38m11s).
• Luckey suggests that the current cost-plus contracting system rewards the wrong things and that companies should be aligned with the way business is done in the rest of the economy, where making a good product and making money are the goals (39m20s).
• The success of Anduril has led to the creation of new startups in the defense space, with some raising more money than Anduril itself, which is seen as a viable business model (39m44s).
• The companies that will suffer are those that try to shift responsibility for failures onto the taxpayer, while the beneficiaries will be companies that have been around for a long time (40m8s).
• The defense space has remained nonpartisan, with Anduril's founder being a Republican and its CEO being a Democrat, and the idea of a strong US military and defending allies is a nonpartisan idea (40m38s).
• The election of Donald Trump did not cause Anduril to change its planning for China and allies like Taiwan, as it was already factored into their plans (41m12s).
• Elon Musk's association with Donald Trump is seen as a significant factor, with Musk's ability to keep Trump focused on defense being a key aspect (41m43s).
• Musk has outperformed expectations in managing multiple projects and companies, and it's likely he will be able to keep Trump focused on defense and space exploration (41m56s).
• Anduril's founder believes that Musk will be able to make a significant impact on the Trump administration's focus on space and defense (42m42s).

Musk's Investment in Trump and its Implications

• Elon Musk's investment in Donald Trump has paid off, with Tesla's stock rising, and his other companies, such as SpaceX, potentially gaining billions from Trump's presidency (43m22s).
• X's value has fallen, but its influence and political worth to Musk's other areas is likely worth more than what he paid for it or lost in running it (43m54s).
• SpaceX stands to gain significantly from the election, with Trump talking about Mars and ordering rockets from Elon Musk, potentially worth tens of billions (44m17s).
• Musk's other projects, such as his brain implant and The Boring Company, are federally regulated, which could be impacted by his association with Trump (44m36s).
• The question remains whether Musk will see through his association with Trump, given his strong personality and potential conflicts with Trump's personality (45m19s).
• Musk's wealth, power, and personal brand give him leverage over Trump that others may not have, but he still needs Trump to achieve his goals (45m49s).
• It is argued that Donald Trump and the Republicans need Elon Musk, but there are other positions of power within the U.S. government that could provide checks and balances (45m58s).
• The past Trump presidency and the character of Elon Musk and Donald Trump suggest that they do not pay close attention to the rules, which may lead to conversations about potential ethics violations (46m13s).
• A concern is raised about Elon Musk, as the owner of a major defense contractor, giving the U.S. government advice on defense personnel, which could be seen as an ethics violation (46m27s).
• Elon Musk's potential role in the administration is compared to Palmer Luckey, a major contractor who gave advice to the future administration, but the difference lies in being part of the White House or having a formal or informal role (46m45s).
• The question of whether Elon Musk will have a formal or informal role in the administration remains to be answered (46m51s).