Trump's CHIPS Act, DraftKings' Other Bets | Bloomberg Technology

Market Overview and Election Impact

• Tech stocks have reached new highs, driven by chip demand, with companies like ARM and Qualcomm giving mixed signals (41s).
• The Nasdaq 100 has finally reached a new record, driven by the "Magnificent Seven" which includes big tech companies (59s).
• Lyft's strong outlook has led to a 27% increase in its stock, despite its competitor Uber also doing well (1m19s).
• Qualcomm's stock has been choppy, while ARM is up 5.5%, driven by consumers in China buying higher-priced handsets (1m34s).
• China is a key focus for the macro going forward after the election results, with big tech leading the benchmarks (1m53s).
• NVIDIA is expected to report earnings on November 20, following earnings from Meta, Microsoft, Alphabet, and Amazon, which have invested around $59 billion in data centers and fixed assets in the third quarter alone (2m8s).
• The election results have raised questions about the impact on Biden's CHIPS Act, particularly with regards to Apple and China, and Biden's efforts to prohibit them from using Western technology (2m42s).

Potential Impacts of a Trump Presidency

• A potential Trump presidency could lead to a focus on AI, with companies like Microsoft, Amazon, and Palantir benefiting from government initiatives (4m36s).
• Trump is expected to repeal some or all of the consumer and manufacturer support for electric vehicles, which could give Tesla an advantage over competitors like GM, Ford, and Rivian (5m11s).
• The removal of tax credits could give Tesla a more even playing field and allow them to cut prices further, making them a potential winner in a Trump presidency (5m41s).
• Trump is expected to fast-track autonomous driving, which could be bullish for Tesla and unlock a $1 trillion incremental valuation (6m10s).
• The tech sector may not be ready for the potential changes brought about by a Trump presidency, particularly with regards to AI and autonomous driving (6m28s).
• The CHIPS Act may be revised or blown out of the water, which could be a loser for companies like Intel (7m16s).
• Intel is expected to be a loser in a Trump presidency, as they have been on the wrong side of the trend and the Inflation Reduction Act was seen as a huge opportunity for them (7m27s).
• The US will see more 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).
• Elon Musk is expected to have an unofficial role as a "whisperer" in the White House, giving him significant influence, and this alliance with Trump is considered one of his best strategic bets (9m23s).

Semiconductor Industry Analysis (Focus on Qualcomm and ARM)

• 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 its outlook but has since seen a positive change, with record royalties and a 40% increase in licensing royalties, driven by the premium segment and higher royalty rates for its version 9 (11m56s).
• ARM's CEO, Rene Haas, believes the company is not pricing-dependent, as the market is large and driven by the need for more compute capacity, particularly in the premium segment and for AI workloads (12m56s).
• Haas is not concerned about the tension between the US and China regarding compute and AI, and believes that having a clear result from the US election is good for business (14m1s).
• The replacement of phones with more expensive models is expected to make ARM's numbers resilient going forward, offsetting the fact that fewer phones are being bought, and the increasing use of AI agents on phones will drive demand for more compute capacity (14m58s).
• The increasing capability of premium phones is beneficial for ARM, as next-generation phones require more compute to run apps, language models, and interface with the cloud, which ARM's technology provides (15m10s).
• ARM's technology is necessary for these advanced phone capabilities, and the company has a long history of granting consent for its technology to be used in mergers and acquisitions, with 130 assignments and consents granted in 35 years (16m27s).
• However, a recent dispute with Qualcomm, a long-time customer, has arisen due to a lack of consent for the use of ARM's technology, leading to ongoing litigation (15m57s).
• ARM is confident in its position and believes the dispute is about fairness and equity in the ecosystem, with the company needing to be equitable to its many partners (16m44s).
• Despite the dispute, ARM is focused on its product direction, which includes providing compute subsystems that save engineering time and time to market for its partners (17m46s).
• The company is seeing amazing traction in the design data center space and mobile, with its technology becoming pervasive and driving higher royalties and growth (18m12s).
• Looking ahead, ARM's CEO Rene Haas sees a lot of optionality for the company, with discussions about how horizontal or vertical to go, but is unable to comment on unannounced products (18m51s).
• Haas believes that 10 years from now, ARM will be involved in computing in a large way, particularly in the area of AI (19m24s).

Autonomous Vehicles and Biden's Speech

• The conversation then shifts to a discussion about autonomous vehicles (AVs), with David mentioning that AVs will bring new products that people will like, and that some will prefer being driven by a human while others will prefer a robot (20m4s).
• The discussion also touches on the levels of autonomous driving, with Level Two being sensors in cars and Level Four being full self-driving (20m25s).
• The transcript then cuts to a speech by President Biden, who is addressing the public from the Rose Garden, discussing the importance of democracy and the peaceful transfer of power (20m43s).
• Vice President Harris is a partner and public servant who ran an inspiring campaign, showing true character and a backbone like a ramrod (21m50s).
• The struggle for the soul of America has been an ongoing debate since the country's founding and is still vital today (22m21s).
• Campaigns are contests with competing visions, and the country chooses one of the other, with the choice being accepted (22m39s).
• It is essential to see each other not as adversaries but as fellow Americans, bring down the temperature, and lay to rest the question about the integrity of the American electoral system (23m6s).
• The American electoral system is honest, fair, and transparent, and can be trusted, win or lose (23m17s).
• Respect should be restored for all election workers who busted their neck and took risks, staffing voting sites, counting votes, and protecting the integrity of the election (23m31s).
• Many election workers are volunteers who do it out of love for their country (23m49s).
• As President, the duty will be fulfilled, the oath will be honored, and the Constitution will be respected (23m56s).
• On January 20, there will be a peaceful transition of power in America (24m7s).
• The past four years have been an historic presidency, not because of the President, but because of the work done by the staff, supporters, and cabinet (24m38s).
• Much of the work done is already being felt by the people, and the vast majority will not be felt in the next 10 years (24m42s).
• Legislation has been passed that is only now kicking in, including over $1 trillion worth of infrastructure, changing people's lives in rural communities (24m57s).
• The road ahead is clear, and there is so much that can be done and will be done based on the way the legislation was passed (25m25s).
• The strongest economy in the world is being left behind, and things are changing rapidly (25m35s).
• Together, America has been changed for the better, and there are 74 days to finish the term (25m48s).
• Setbacks are unavoidable, but getting up is unforgivable, and the measure of character is how quickly one gets back up (26m3s).
• A defeat does not mean being defeated, and the America of one's dreams is calling to get back up (26m21s).
• The American experiment endures, and it is essential to stay engaged, keep going, and keep the faith (26m45s).

Post-Election Analysis and Transition

• 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 peaceful transfer on January 20 (27m40s).
• Biden is trying to characterize his legacy and talking about his accomplishments, but is also getting 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 as Donald Trump is skeptical of the General Services Administration and the intelligence agencies overseeing background checks (28m49s).
• The focus is on the 74 days left to enact policies, and the mention of infrastructure plays to the tech community, with the Chips Act likely to be dealt with in the next Congress (29m23s).
• The lame-duck session will likely focus on funding, with a government funding deadline on December 21, and the new Congress will have a Republican Senate, but the makeup of the House is unclear (29m51s).

Cryptocurrency and the New Administration

• Bitcoin has fallen below $76,000 per token, and crypto-related stocks have moved higher due to the sentiment that President-elect Trump will approach crypto differently and be more supportive of the industry (30m30s).
• The new administration's priorities will determine what's next for crypto, but it's unlikely to be at the top of their list, and there will be limits to what they can do in the short term (31m50s).
• A change of regime at the FCC would be good for crypto assets, and the low-hanging fruit for the new administration would be to make a change at the FCC, which would have happened anyway, but the type of change now will be slightly different (32m38s).
• Other potential areas of focus for the new administration include stablecoin and clarity on regulation, as well as the makeup of Congress (33m7s).
• There was a lot of chatter about Trump's promise, but some people are skeptical that it will happen, as it involves selling dollars to get Bitcoin and would be hard to get through Congress (33m43s).
• Not selling the US's current stash of Bitcoin would be good news for the market (34m5s).
• The stablecoin bill is bipartisan and will likely be easy to pass, depending on how fast Congress moves (34m17s).
• A crypto bill is needed to recognize the changed definitions and new types of rules required (34m39s).

Defense Tech and Government Spending Under Trump

• As Trump prepares to go back to the White House, there are questions around his policies on AI, defense tech, and spending (35m31s).
• Palmer Lucky, a Trump supporter, thinks it's great to have someone in power who is aligned with the idea of spending less on defense and getting more (36m33s).
• Lucky believes that the US needs to do a better job of procuring defense tools and that Trump's involvement in the procurement of Air Force 1 indicates his priorities (36m42s).
• Lucky has opinions on who could be the next Defense Secretary but doesn't want to throw out any names as he would be happy with all of them (37m40s).
• Anduril has spent years working with the DOD, and Lucky thinks that the department needs structural changes in terms of how the government does business with private enterprise (38m11s).
• Lucky believes that the current defense procurement system, which is based on cost-plus contracting, rewards the wrong things and that companies should be aligned with the way the rest of the economy does business (38m49s).
• The companies that will benefit from the shakeup are those that build good products and make money, rather than those that make money by making things more expensive or breaking frequently (39m33s).
• The CHIPS Act has led to the emergence of new startups, and the beneficiaries will be companies that have been around for a long time, while those that try to shift responsibility for failures onto taxpayers will suffer (39m44s).
• The defense space has remained nonpartisan, with the idea of a strong US military and defending allies being a shared goal across parties (40m33s).
• The founder of Anduril, Palmer, is a Republican, while the CEO is a Democrat, demonstrating the nonpartisan nature of the defense space (40m38s).
• The election of Donald Trump did not cause Anduril to change its planning for China and allies like Taiwan, as the company's goals were already aligned with the administration's policies (41m12s).
• Elon Musk's association with Donald Trump has raised questions about his potential role in the administration, with some speculating about his ability to keep Trump focused on defense (41m31s).
• Palmer believes that Elon Musk has outperformed expectations and will likely be able to keep the administration focused on space and defense, despite the challenges (41m51s).

Elon Musk's Relationship with Trump and Potential Influence

• Elon Musk's big bet on Donald Trump has paid off, with Tesla's stock rising, and his other ventures, such as SpaceX, potentially gaining from the election (43m22s).
• SpaceX stands to gain tremendously from the election, with Trump's plans for Mars and ordering rockets from Elon Musk potentially worth billions (44m11s).
• Elon Musk's other ventures, such as his brain implant company and The Boring Company, are federally regulated, which could be influenced by his association with Trump (44m36s).
• The question remains whether Elon Musk will see through his association with Trump, given his strong personality and potential for conflict (45m16s).
• Elon Musk's wealth, power, and personal brand give him leverage over Trump, which may be different from other business people who have navigated towards Trump in the past (45m40s).
• There is a possibility that Donald Trump and the Republicans may need Elon Musk, but there are other positions of power within the U.S. government that could provide checks and balances (45m58s).
• The past presidency of Donald Trump and the character of Elon Musk suggest that they do not pay close attention to the rules, which could lead to conversations about potential ethics violations (46m13s).
• Elon Musk's ownership of a major defense contract may raise ethics concerns if he is giving the U.S. government advice on defense personnel (46m27s).
• Elon Musk's potential involvement in the government may not be slowed down by ethics concerns, despite the possibility of running afoul of ethics rules (46m34s).
• There is a distinction between giving advice to the administration and having a formal or informal role in the White House, which raises questions about Elon Musk's potential role (46m50s).
• The nature of Elon Musk's potential role in the government, whether formal or informal, is currently unclear and may be investigated further (46m57s).