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- [00:00]
A
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B
Let's get our arms around TikTok. Right, the big headlines no golden share and an algorithm that will be licensed and operated, protected, if you will, by Oracle. Shep is with us right now with the latest on all of this. Mike, it's good to see you. To what extent should we understand these details as being finalized, or is this a deal in flux?
- [01:17]
C
It's still pretty fluid, Joe, but we are getting at least a clearer picture on some of the finer points that are actually important to lawmakers here in Washington. One of the biggest concerns about TikTok over the years has been about what happens to all that user data on Americans if the company is owned by China. And then who actually runs and controls this algorithm? Is it subject to somehow being tampered with or used to disseminate propaganda? And that really is what got us where we are. And the idea would be that the new U.S. version of TikTok would, would copy, in essence, a version of that recommendation software that gets the videos you want to see in your feed, and then it would retrain it. Oracle would be a partner in that retraining.
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B
What does it mean when we say that retrain for what and for whom?
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C
Well, what they would do is they would try to get the algorithm maybe to respond to prompts and, I guess, requisites set more by and for the American audience and also in a way that would keep it free from the kind of manipulation that US Lawmakers have long feared. So. So we'll be watching for that and exactly how it works. And whether or not the new US TikTok can be fully disentangled from ByteDance on a technical basis really remains to be seen. It's a, it's a tricky proposition, even copying the algorithm. How do you know there's a picture.
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B
Of some guy in There with a thumb drive, and he's going to bring the algorithm over is that. It's a billion lines of code, Mike. This is going to be quite an operation.
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C
It will be quite an operation. And, you know, obviously this is the kind of thing that Oracle does for a living, but even that at that, it will be a big undertaking. And remember, Oracle already does quite a bit of business with TikTok, providing cloud computing and a lot of other data services for the US operations and then elsewhere in the world as well. So they know the company, they understand it. But whether or not this will also satisfy some of the concerns that China may have on its end also remains an open question, because they have their own requirements about allowing a sensitive technology such as the ByteDance own TikTok algorithm to go to a geopolitical rival. An adversary like the US is a sensitive issue there.
- [03:41]
B
I want to ask you about Nvidia, but quickly. No Golden Share was a big headline today and we saw the President, I guess, rebuff a move by on the Pond Steel against the US Steel plant based on that golden share. Still, we're going to stack the board here, right? We're hearing names like Murdoch and so forth. This will not look like the board at ByteDance now.
- [04:01]
C
Yeah, that's absolutely right. We are not expecting this to. ByteDance will have a seat on the board, but they will not be part of the security committee for the company. We don't know who the other six members of the board, but they will all be U.S. investors. And the White House says they will have cybersecurity and national security vetting and experience. We can look for some big names. We did hear the President float the Murdochs there, but it's unclear whether it would be Lachlan or Rupert or somebody else or just somebody from Fox, if that even comes to pass. So, again, details remain to be seen on that front.
- [04:36]
B
We've talked about Nvidia a lot over the past couple of months, Mike. You've spent time with Jensen Huang. You know how close he is to Donald Trump. What was the genesis of the this $100 billion investment. That's $95 billion more than they announced they were putting into intel last week. The money goes to OpenAI. We're talking about the potential of millions of stacks to be put into use here. This is huge business for Nvidia.
- [05:01]
C
This is a huge business and a huge business move on their part because in a way, it really does cement this partnership between a huge potential customer. OpenAI will need all that computing power as it tries to expand its own footprint, build its data centers. And this is a relationship that they will want to build out from the open air. But of course, for Nvidia, this really vindicates their efforts to try to expand its own tech stack here in the US but also abroad because OpenAI is not purely a US venture. They'll have their, their expansion plans globally as well.
- [05:40]
B
Sent Nvidia to an all time high today just since we've been on the air. It's incredible. Mike, thank you so much as thank you, Joe. He's got his hands on one of the best beats in Washington. Mike Shepard live at Bloomberg here in the nation's capital. The House and the Senate are on recess this week. I'm not going to have news for you in the next couple of days on government funding. In fact, we warned you next week, Rosh Hashanah, the Jewish New Year begins this evening at sundown. Lawmakers are gone. They're not going to come back until we're right up against the deadline. The Senate will have, I think, two days, a day and a half to work. The House won't be back until after it's done. So that's why people are talking about so called jamming the Senate with the CR that was passed largely along party lines. A single Democrat voted for the continuing resolution in the House last week. It then failed in the Senate, as did the Democratic plan. And it's something that we have an opportunity to ask Emmanuel Cleaver about. The Democratic congressman from Missouri is with us on Bloomberg TV and radio. Missouri, of course, the most recent state to try to redraw its congressional maps, which Congressman I'm looking forward to asking you about because I know you've been very passionate about this and deeply involved. Just to clear out the business at hand, though, I'm wondering what your expectation is and if the government will shut down on October 1st. A lot of Republicans are already blaming Democrats for what's about to happen.
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D
Well, I think it's important for the people around the nation to understand that what they already know, which is that Democrats are in the minority, we lose every vote. And if the government shut down, it can't shut down because of Democrats, because we're in a minority. I don't know how the minority can shut something down. The other thing that is important is the president of the United States has not and is suggesting that he will not meet with the Democrats. The people around the country did not elect us to go into our different corners and come out and fight Most of the time we're in Washington. But when the President says he's not going to meet with us, what else can we do? And to be sure, our leaders are not wanting to meet with him unless we can get something guaranteed that the money will be spent as we approve it. Remember last March we approved spending spending bill and the President did a recession just took it away, which he is not supposed to be able to do legally, but he did and he might do it again. So my constituents, I have 800,000 like everybody else, they want me to give them some assurance that the money that I vote on will be spent the way I voted.
- [08:27]
B
Yeah, well, I saw the Democratic version of the CR that got a vote in the Senate last week. Congressman, if you had assurances or a deal in place to extend Obamacare subsidies and a promise of no more rescissions, would you be on board?
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D
Well, that would be moving in the right direction. You know, it would be hard for me to say yes or no just simply because, you know, there are little words that you can insert into the language of those bills.
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C
Sure.
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D
Of course, that might be interpreted as giving power to somebody else. I mean, we always have those kind of little things going, which is due to the fact that we have two parties in Washington. And tragically and painfully for to me, they don't trust each other and we certainly don't have trust now. After the rescissions that took place, I had a huge amount of money coming into the state of Missouri which would ultimately be spent in my congressional district to do solar panels on hundreds and hundreds of homes. And the president, just by himself, just woke up one morning and took the money. And that's not the way this government is supposed to work. This is not United States of America, where members of Congress are supposed to have a say. In fact, some might say that our only responsibility is done, handled with power of the purse. That's what we constitutionally been awarded. But during this last eight or nine months, that has not been the case.
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B
So what happens to those solar projects, Congressman? Are they canceled?
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D
Well, we had to counsel them here in my district because. And we'd gone all the way out getting things done, getting the community ready and made announcements that this was going to happen. And the President just took the money, just took it. You know, the same thing happened with places like a woman's shelter where women are able to go if they are being battered or if they're having some other kinds of problems. The people from that shelter will be in my office sometimes sometime this week to tell me that they don't know if they're going to be able to keep the doors open because the president took that money as well. And if you look at it at the nation, my case is not the only one, but it's certainly one of the ones that's been impacted primarily prior to this rescission. And then to the. All of a sudden, the complete redistricting of the state of Missouri. You know, I guess only because the president wants some seats that he believes he can win. And if I can tell you, you know, as inflation is rising, the job market is diving and economic growth is slowing, and as you mentioned earlier, shutdown is a possibility. Why in the world would we want to take time to do redistricting in the middle of a decade where we all. Where we almost never have redistricting because it's based on the census, and the census is three, four years out now. So any decision that is made on redistricting cannot possibly be scientifically done because we don't know where the movement of citizens have gone. We don't know anything except that the president said he wanted it redistricted because he needed a seat, because his popularity as well as the popularity of his policies are down in the tank. And this is a red state. Missouri.
- [12:35]
B
Yeah. We've talked a lot about this redistricting matter, Congressman. I'm glad you brought it up. It's what I wanted to ask you about. Whether it's Texas, California, New York, Indiana, or, yes, Missouri, each seems to have a slightly different wrinkle here. You were the first black mayor of Kansas City, and you know the importance of Troost Avenue.
- [12:55]
A
You're listening to the Blue.
- [12:56]
B
Our remaining couple of moments together, I'd.
- [12:58]
A
Like you to talk to me about.
- [12:59]
B
The cultural and political impact of redrawing the congressional district that you now represent. With Troost Avenue as a dividing line, I think we can say openly a racial line of segregation in the city for some time. This idea is reopening wounds and reminding us that there are nuances when it comes to redistricting. How important is that for the city and your district?
- [13:27]
D
Yes. Troost is a 10.5 miles running almost all the way to the end of the city, going south, coming from north, which is where the airport is. I was born and raised in Texas, moved here after college, and I was told when I got here in the early 1970s, that truce was the line of Demarcation or the Mason Dixon line, whichever you choose. And African Americans had historically not been able to live to the west of Truce. And so Truce became an ugly street because it went into deep decline. Businesses had shuttered. And so the when I was mayor and before for that matter, business leaders along with civil rights leaders worked tirelessly to try to erase what had been become an embarrassment. And we were slowly getting it done. The school district, for example, moved its headquarters on Truce. And there were businesses that opened up and a big child care center. And so this line runs all the way down Truce. And it is not good for our psychological and racially inclusive city. In fact, it is ugly, an ugly and nasty reminder of days gone by. At least we thought they were gone by until we looked at this map and saw that my boundary on one side just went all along Truce. And it causes people to wonder is there a subliminal message here and whether or not the state would reconsider this? But I don't think they will. I went down and testified and I think people were some of the people were stunned to find this out, but I don't think they want to anger the White House. So right now it's standing and we're filing. There have been suits filed and I think there's also an initiative petition underway.
- [15:36]
B
Well, as this plays out in the courts, we'd love to stay in touch with you. Congressman Emanuel Cleaver from Missouri's 5th. It's great to have you back with us on Bloomberg TV and Radio. I'm Joe Matthew in Washington where we have a lot more to talk about today with developments on a potential tick tock deal and a looming announcement from President Trump. There's a White House press briefing that's underway right now. Caroline Levitt, the press secretary, telling reporters that President Trump will speak on the childhood autism epidemic, something that he previewed in his speech at the Charlie Kirk Memorial yesterday in Arizona. Levitt says Trump will give a quote, major speech tomorrow morning. Unclear then if we're going to have an announcement as expected, this afternoon on childhood autism. We'll keep you posted on this. We'll assemble our panel next as well. By the way, Rick Davis and Jeannie Shan Zaino are with us today. And we'll have a lot more to get into with our panel as well, a conversation with the governor of Pennsylvania, Josh Shapiro. Tyler Kendall will bring that to us. And it's all straight ahead on Bloomberg TV and radio. Stay with us. On balance of power. We'll have much more coming up after this.
- [16:47]
E
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- [17:24]
A
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 1130.
- [17:42]
B
Thanks for being with us here on Bloomberg TV and radio. Indeed, as we consider the Nvidia story today, $100 billion investment in open air and it immediately raises questions about energy. The demand for clean, renewable energy to power so many of these projects and data centers that are sprouting out of the earth like weeds energy and securing more of it was a big part of the conversation earlier today with the Governor of Pennsylvania. Shapiro, the Democrat spent some time with Bloomberg's Tyler Kendall as he attended a 13 state summit to discuss the future of the PJM interconnection. This is the biggest power grid operator in the United States, not just in the region, serving over 67 million customers, stretching from Chicago to New Jersey. It's a lot of power. It's the first conference here gathering the 13 states and Tyler started by asking Governor Shapiro about prices and steps that can be taken to lower the cost of energy. Let's listen.
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F
We're here in Philadelphia, which is not only the birthplace of democracy, was here that PJM started 98 years ago. And I think this conversation that we're having right here at the National Constitution center is really the first of its kind opportunity for people from all 13 states, from all the different entities that make up PJM are here to have a conversation on how we can enact real reforms so we can hold down costs and increase power generation and give states, the governors and representatives of our states more of a say in the process. PJM has kind of been a black box for too many years and as a result of that they're too darn slow and they are raising costs at really an alarming rate. And so I think what you're going to hear from all the different states today, by the way, led by Democrats, Democrats and Republicans, is a desire to see real reform at pjm. I just kicked off the conference here And I think folks are ready for a good and honest and spirited discussion about how we fix PJM going forward.
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G
Well, Governor, since you referenced your opening remarks, you said that if PJM refuses to change, we will be forced to go in a different direction. Do you mean leave pjm?
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F
We're willing to, if PJM is unwilling to enact real reforms to give governors and our representatives more of a seat at the table and a say in these policies so we can both control costs and increase power generation. Listen, I'm an all of the above energy governor overseeing a state that's the second largest energy producer in this country. We need to produce more energy as a nation to give us more economic opportunity and more freedom. And because of pjm, we've been stymied in our efforts. It has slowed us down, and at the same time, it's slowing us down. It's increasing costs. So if PJM is not willing to look in the mirror and really reform itself, then I'm willing to go my own way and Pennsylvania can stand alone in this effort. We can produce enough energy for us, and we can produce enough energy at a far quicker rate than PJM is able to right now. We recognize that that would have a significant impact on these 13 states that make up PJM or the 12 other states, I should say, as well as the entire nation, just given the energy dominant position we're standing in. So our first hope is that there'd be real reform. But mark my words, if they're unwilling to do real reform, we're willing to go it alone.
- [21:16]
G
Well, when would you make that decision? Do you have a timeline or a deadline that you're giving PJM to respond? Respond to the changes that you want to see?
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F
Well, look, I've. I've already sued PJM successfully when they tried to jack up rates on Pennsylvania consumers and other consumers in the PJM grid area. We won that suit, and we were able to save consumers nearly $20 billion in added costs. Today, we've just embarked on this important reform conversation. I want to see how that goes. I'm not giving them a long leash here, but I want to give them some time to see if they're willing to reform. If they make clear that they're unwilling to reform, they're going to keep doing it their own way, then we're going to have to go our own way.
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G
And, Governor, we know part of this conversation has to do with the power consumption related to big tech and artificial intelligence. Your state has secured a $20 billion investment pledge from Amazon for data centers, as one example. How much pain do you think US consumers are going to be willing to bear here when it comes to the need to invest in this critical technology?
- [22:26]
F
Well, we have the capacity to be able to do both here in Pennsylvania at affordable rates. You know, we can walk and chew gum here in our commonwealth. We can allow a consumer in their home to be able to flip the switch on and not see added costs when the lights go on in their home. And to know that the lights are going to go on on the hottest days of summer and the coldest days of winter at the same time. We can be open for business and land is, as you noted, you know, an initial $20 billion investment from us to build out data centers. We've got other major economic development announcements that are on the way. And I think energy is a critically important component to any of these big energy deals. What we're doing here in Pennsylvania is turning on energy sources like we did at the old Three Mile Island. We're converting old coal fired power plants into natural gas run power plants which are both cleaner and are now able to produce new energy onto the grid. The problem is we're moving quickly in Pennsylvania, but PJM too oftentimes is slowing us up. I no longer want to be constrained by people JM moving not at the speed of business, but too darn slow. If they can't move quickly, if they can't reform themselves, we're going to figure out how to do this on our own. Economic development in the Commonwealth of Pennsylvania is directly tied to energy generation, which is also directly tied to keeping consumer costs down. We need to do all of it. We need to do it quickly.
- [23:57]
G
And Governor, big tech companies say that they want to pay their fair share when it comes to this. What would that look like in practice?
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F
Well, making sure that they invest in creating new energy or paying for the energy they use on the grid. If the grid has capacity for both them and consumers and other businesses, that's certainly the kind of deals that we negotiate here in Pennsylvania.
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G
And Governor, in the final minutes that we have with you, President Trump last month said that his administration will not approve some solar or wind power projects. This is part of a bid to tighten the federal permitting process around renewables. Has this changed your strategy in Pennsylvania, which is a top energy producing state?
- [24:43]
F
Well, look, I'm an all of the above energy governor. I wish the president was in all of the above energy present. The president's actions are making it harder for us here in Pennsylvania. In fact, as a result of cutting a bunch of tax credits for clean energy projects. The president is putting 26,000 Pennsylvania jobs, mostly union trade jobs, at risk of being lost when these projects shut down. I mean, I don't know why he's trying to make it harder for us to generate energy. We should generate solar and wind energy, natural gas energy, and other nuclear and other forms of energy energy. I don't know why he's taking these steps that are making it harder for us in Pennsylvania. I'm a governor that wants to unleash our full potential. We do that by having a full range of energy options available. I think the President's policies are misguided. It's going to put people out of work and it's going to make it harder for Pennsylvania to compete.
- [25:42]
G
And lastly, Governor, just sticking on the President's policies because part of the conversation when we are talking about energy production does have to do with the workforce. And we saw over the weekend the administration move to impose a $100,000 fee for H1B visa applicants. I'm wondering if you see this first impacting any of the sectors that we're talking about here, particularly around tech, as Pennsylvania wants to attract those, those workers and those investments from these big companies.
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F
I think the President's immigration policies are making it harder for us to compete. And I hear that on our farmlands in the Commonwealth of Pennsylvania, all the way to our universities here in Pennsylvania, when we can't attract great talent to be able to produce our food or to be able to produce the next major invention or innovation that makes us less competitive as a nation. The President's immigration policies combined with his tariff policies are making it harder for us to compete and driving up the cost of goods in this commonwealth and across this country. I think what the President's doing is harming America, isolating America and making it harder for workers here in Pennsylvania, from our farmlands to our universities.
- [27:00]
B
Governor Josh Shapiro, Democrat from Pennsylvania, in conversation with Tyler Kendall today on Bloomberg TV and Radio. And it's that very last issue they brought up the H1B story that was born here at Bloomberg late last week. A scoop from Bloomberg's Josh Wingrove, who covers the White House for us, that I want to get into with our panel, remembering, of course, that the President was asked about this on Friday in the Oval Office. Let's listen.
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C
You're very close to the technology CEOs. Are they concerned about that?
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B
Everyone's going to be happy and we're going to be, be able to keep people in our country that are going to be very productive people. And in many cases, these companies are going to pay a lot of money for them and they're very happy about it. Well, it is going to be a lot of money. We don't know if they're very happy about it. Let's start with our panel now. Bloomberg Politics contributor Rick Davis, partner at Stone Court Capital, a Republican strategist, joined by Bloomberg Politics contributor and Democratic analyst Jeannie Shan Zaino, democracy visiting fellow at Harvard Kennedy School's Ash Center. Great to see you both here. Rick, you're no stranger to the business world. Is this true that companies at $100,000 a pop will be very happy to pay it if it means getting the actual manpower that they need to conduct these projects, whether it's data centers or anything else?
- [28:21]
H
Yeah. The assumption everyone's working from is there's going to be a load of new H1B visas that are issued for this kind of tariff. And if that's the case, that does satisfy a lot of the concerns that the tech community has had with being able to get qualified workers to come in and work in their systems here in the United States. There have been a lot of limitations put on this program over the years that has stifled the growth of these companies. And I would say I don't think it's ever slowed down the recruitment of domestic tech workers. That's been at a premium for a long time. Universities have had to open up new schools to just supply the amount of capability, ability that these companies need, and they still don't have enough. So when you have an engine that is a major part of global growth and certainly a significant part of the growth in the US you want to feed it. And if it costs you $100,000 to get what you want, you know, my guess is a lot of these companies will take whatever they can get to be able to get new H1 visas issued.
- [29:24]
B
I had a feeling you might say that. And I don't know, they may not be happy to shell out the money, as the president said. But Jeannie, you know, high tech is one thing. Farming, for instance, might be a different. Health care is another. The president says there'll be a carve out for doctors. Is is there some good being done here and that it does unlock additional H1BS that would not otherwise be available?
- [29:43]
I
Yeah, you know, I think this is a gray area because we have long known that the visa process is broken. Everybody agrees with that, and the president is right to look at reform. But there's a difference between Taking a hammer and taking a scalpel. And what they've done is taking a hammer. And we saw that over the weekend. We had people on planes who were turned around and came back because they were worried about leaving the country and getting in. And then the administration came out and explained this only applies to new visas. So there's a problem of execution, but there's also long term impacts on the US and just one, you and Mike Shepard have been talking all day today about TikTok. TikTok has been one of the greatest successes in terms of soft power that we've ever seen. And it is at the hands of China. That power matters to our future, economically, militarily, economically. And so if you don't reform the system, if you simply break it and you impact the ability of skilled laborers to get into this country, we are in the danger as a country of losing when it comes to our power base. And so all of these things are critically important. So I think what we have here is important to reform. But that problem of execution is one we've seen over and over again with this administration.
- [31:06]
B
Well, Jeannie went there to tick tock, Rick, so I'm going to ask you about it as somebody who puts deals together every day at Stone Court Capital, what you're thinking about, what we're hearing so far. And I realize some of these things could change and we do not have an actual deal on paper yet, but we're talking about no golden share yet. 6 of 7 board seats and a plan here to license the algorithm that would be controlled by Oracle. Does this sound like we're getting off to the right start here? And by the way, this has followed a series of delays in a law that we're ignoring at the moment. Rick, does this sound like a good deal in the works for the United States?
- [31:46]
H
Yeah, I think devil's in the details on this. I mean, everybody knew Oracle would be at the center of it. As mentioned earlier on the program by Mike, it's the cloud computing center. They've offered to host it in the past. You knew that the synergies with them would be significant enough, especially their cybersecurity capability, to try and keep the Chinese out of the back door. I would say, you know, worries about us, you know, seventh board member appointed by anybody in China or reporting back to anybody in China. You know, if this was a defense company, they wouldn't allow that to happen. Any other kind of strategic companies can't have that. Why would we let Tick Tock have it? So I guess there are going to be some things that, you know, we'll have to chop some wood to get to the bottom of. But the fact that it gets it out of the control in the hands of a bunch of people who have been helping to destroy our society with all the malicious activity done through TikTok, I'm not saying it's the only thing that Tick Tock does, but it has certainly added to the divides within our country and, and hopefully that algorithm can be tweaked to take some of the heat off of the propaganda from China.
- [33:00]
B
Into the U.S. yeah, well, it's amazing. Jeannie, remember, block the talk. This was the most bipartisan affair in Washington, was hating on this thing. It was a national security concern and we were going to shut it down. Things have evolved remarkably since then. I guess my question is what happens to the Republican and for that matter, Democratic lawmakers who are screaming about national security enough to pass a law and how long it'll take them to catch up with President Trump on this?
- [33:32]
I
Yeah, my, how things change when something helps you win an election. And of course, both Trump and Biden used it in 24.
- [33:39]
B
That's right.
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I
You know, I think that we've seen that the Congress has been willing on the Republican side to bend to Donald Trump's will. I think we will likely see that again, but I think the devil's really in the details. What does this agreement look like when they see it? Because the national security component is critically important. And, you know, I think it's really critical to say that again on this H1, this visa issue, this H1B visa issue. Look at China's response to it. China not only sent a fairly cool response to it and, you know, similar to other countries that use it a lot like India, but they also have responded with these K visas. Right. So whereas the United States is closing the door on potentially critically important skilled workers, China is opening it. And I think this is what we mean about long term impact. They now are in a position to sell us potentially this algorithm from TikTok. They are now welcoming young, skilled talent. This has long been where the United States has thrived and excelled. We have been the envy of the world. And that's why, yes, reform the visa system, but do not do it so that you diminish our ability to compete long term. That's the concern on all of these fronts.
- [35:04]
D
Hmm.
- [35:05]
B
Of course, you know, Rick, this deal is still going to require the approval of Beijing and we haven't heard a lot from China about this Tick Tock deal. We got a readout on the call the President had with Xi last week. But should we take the White House as the final word on this? Because that. That's our. Pretty much our only source at the moment.
- [35:27]
H
Yeah, I think that time will tell. The Chinese are not about making snap decisions. Obviously, this thing has been lingering around, starting to stink up the business community a lot. What's going to happen to Tick Tock? You know, is it going to get shut down or is it going to get bought out? The Chinese would be smart to get this done quick. If this hangs over US Chinese relations, it's going to cause a lot of consternation in the Congress to the point where, as you pointed out, a lot of Republican members really went out of their way to try and shut this down because they saw it as an agent of the Chinese government, of the Communist Party. And if this doesn't get done quickly, it gives them the potential to say, you know what, this doesn't go far enough. We don't have enough guarantees. China will still have a backdoor to this process and can really start creating some issues. I've seen a lot of polarization bowling around TikTok and you know, if you're on it, you love it. If you are not on it, you hate it. And a lot of parents whose children are on it, hate it. So, I mean, there is a political dynamic to this. Going into the 26 elections with his.
- [36:42]
B
Two strikes for me, on that one, not on it. Got a kid who is Jeannie. How about the students you see every day at Iona at Harvard? How important is this to them? Because Donald Trump has clearly decided that this is a big deal. When he put the teaser out on social media, remember, he referred to it as a company that young people like a lot. How important is this for the young electorate?
- [37:04]
I
Yeah, I think it's very important, particularly a lot of those people who communicate on it, who make their living on it. We've seen the lobby for it. But the reality is, is that what incentive does China have here? What is the United States giving up to get this deal? Because the power is unfortunately in China's hands. You know, what are they getting out of this? The reality is they have what we want. Donald Trump is famous for going around the world and sort of slapping other countries, but there's a few he can't slap. China has been one, Russia has been another. Right. We're in a multipolar world. Those two in particular, he has a very tough time with. So I think the devil is going to be and what does this deal look like? What did the US Give up to get this algorithm? And Donald Trump has been known, by the way, to say he's got an agreement before it's been inked. And so, yeah, I watch his social media and see that, oh, we've got this deal, things are looking great. That's not what we hear many times from the Chinese side or the other side of these potential deals. So I think we have a ways to go here until we see what this deal actually looks like. And let's not forget in the meantime, the Trump administration is in violation of both a law by Congress and a decision by the Supreme Court. And that is something that doesn't get addressed enough because there was legislation signed on this issue and the Supreme Court did issue a ruling against Trump and he has so far ignored that with absolutely no repercussions.
- [38:41]
B
They always give us a new way of looking at things. Jeannie Shan Zaino and Rick Davis, Bloomberg Politics contributors, thank you both for a great conversation and for going into overtime with us. Thank you today so we could get a chance to bring you a series of other conversations this hour, including our interview with Governor Josh Shapiro. Stay with us on Balance of Power. We'll have much more coming up after this.
- [39:03]
E
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- [39:40]
A
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple Car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play. Bloomberg 11:30.
- [39:59]
B
We're going to connect the dots for you right now, as we have been known to do. President Trump, as we told you, has secured a trade deal with the European Union and he's talked about that as maybe the biggest achievement yet in this attempt to rewrite our trade relationship with dozens of countries countries. But he's still threatening a probe on the eu, as we've told you, over its finding of Alphabet, the company, of course, that owns Google, over its advertising technology business. A probe the White House says could result in new tariffs. This is something that the President was asked about just days ago in the Oval Office when it came to this more than $3 billion fine of Alphabet. Here's what he said did come up. A couple of countries said companies said that they were, they were taxed by the European Union. It's interesting. They weren't complaining about in that regard China, they weren't complaining about other places. It's the European Union. I think we're going to change that around. It's just not fair. We don't want that to happen to our companies. And you know, if somebody does that, we should be doing it to them. They've got to pay. Let him pay us. But you just can't do that to our companies. Now we should note that Alphabet, Google is also proposing some changes in its own response changes to its advertising technology business by early November, just weeks away to meet the European Union's deadline. But that is not everything that the EU was asking for. And it's a pleasure to spend some time now with Teresa Ribera, the European Commission Executive VP for Clean Just and competitive Transition Commissioner. It's great to have you with us on Bloomberg TV and radio. Thank you for your time. Joining us from world headquarters in New York. Knowing that this EU fine is in place with regard to the ad tech industry, what is the Commission's response to what the President just said, his response to the fine?
- [41:57]
J
First of all, it's a pleasure to be with you and thanks a lot for your question. In fact, you know that from Monday onwards Federal court will be also assessing a very similar case because in fact what we tried to do is to defend consumers industrials against monopolies, against behaviors that accumulate power in a given market. And this behavior was accumulating such a big power in the buy and sell sides in the matching of the offer. So to provide the publicity in Internet Internet that in fact it was becoming a kind of monopoly that of course we needed to to face. And our decision is being taken on the basis of the antitrust laws as it is the very same case in the United States.
- [42:48]
B
Well, I'll tell you, as I mentioned, Bloomberg is reporting that Google is planning to make some changes and have this done in time for early November to its advertising tech business. But that would avoid a complete sale, to be clear of Google's ad manager, which is the exchange that we're talking about here. Would the changes outlined by Google be enough to satisfy the commission or do they fall short?
- [43:12]
J
Okay, let's see. We will we will assess what the proposal may be. And as I say, there is also this very same case taking place at the federal court in Virginia. So I think that it is good for consumers worldwide that the two decisions are consistent. And I think that your judges deserve respect in this point in time as your Department of Justice and the teams will be assessing the proposals being made by Google. It's good that Google works to make proposals to ensure that markets function uninsured level playing field in this digital market.
- [43:51]
B
Well of course you're here in the US as UNGA Week gets underway in New York, here on the threshold of the General assembly of the United Nations. I know you've been meeting with some of your US counterparts on this trip, including Gail Slater. And I wonder what your view is on the current antitrust environment here in the US and how much it may have changed since the Biden administration. How would you describe that?
- [44:14]
J
Well, I think that the whole world learned since the end of the 19th century that EU Americans understood that competition and antitrust regulation was there to defend the rights of consumers, the rights of democracy, the rights of people against abusers in the market. And I think that this is still the case and I think that this is augmented. We are forces of the law. And I think that even if it is with different ways to handle this mandate, Gailey Slater deserves our respect. And the Americans of course deserve our respect. I think this is a very important pillar to build democracy and to ensure, as I say, that citizens, consumers, innovators, can count on someone that takes care of this well functioning market and avoids abuses of dominance in the given markets. And it is not something technical that deals with big companies full stop. It impacts in all of us because of the prices that can evolve because of the lack of offers if they kill competitors around. So I'm sure that the mandate, the functions, the responsibilities that the antitrust authorities in the US have been to defend are very much the core of the Americans souls.
- [45:43]
B
Let me ask you about antitrust, if I should even use that term when it comes to the air race. There's a big headline today with Nvidia investing 00 billion into open AI and it's the latest in a series of massive investments that we've been seeing in the US You've the EU has been informally examining in videos dominance in the market for graphics processing units, the GPUs that are powering artificial intelligence. What concerns do you have there and what might this result in?
- [46:13]
J
So allow me to be very cautious in this point in time. You Know that as enforcer of the law, I cannot comment on an ongoing case. But it is true that what we see in the digital context is an increasing concentration of power. So we, not we need to, to pay attention, we need to take care. Normally, what we witness is that it is not only European companies complaining because of the impact in the European markets. There are also American companies realizing that this could affect to their capacity to develop their products and their services. For instance, in the case of Google Attack that you were commenting, it's truth that there is a big shareholder of big tech companies coming from the United States that operate in the European market. But it is also truth that the benefits of what we do does have a positive impact in American companies too. So in this case, seeing these corporate operations, we could pay attention. We have a responsibility to stay watching what it is happening and to prevent any type of damage. But I think that for the time being, we need to be cautious and assess what, what, what it is happening.
- [47:26]
B
Well, many would suggest that we're in a very different world now when it comes to business in the United States. With the US Government's investment now taking a stake in intel, some of the deal making between US Companies that have been encouraged or guided by the Trump administration. Has this changed your calculus? Well, when it comes to competition and.
- [47:46]
J
Antitrust, we've read the news, of course, in any of our countries, there may be an interest to invest as shareholders in corporates and then government's public money can be there. But, but they need to respect the same rules that any private shareholder, any private investor. And as I said, I think that it's good to keep calm, to assess what is going on. And if there is something to be raised, any type of concern that we may identify, we would come up with the companies being involved to clarify whatever may be needed to clarify or to keep on going in an infringement process. But this is the case. But this is not the case. There is not something like that that I can share with you right now.
- [48:36]
B
Understood. I started our conversation by mentioning the trade deal that the US signed with the eu. I only have about one minute left. Based on the elements of this deal, we had a lot of questions about what this meant for you. Did the EU score a good deal here?
- [48:56]
J
We've been working together in the last 80 years. We have been able to shape very good things. The United States and the European Project, the European Communities, European Union right now, global governance, technology breakthroughs, trade all over the world, security. And now we realize that maybe the terms that are being transferred or commented by one of the partners have changed. I think that it is important not to escalate any conflict, but at the very same time it is also important to realize that we need to invest in our own. And that's what we are doing as Europeans try to define and to do within the single market to build on our strengths. And that also applies to this deal, to this political agreement.
- [49:43]
B
She is Executive VP for Clean, just and competitive Transition at the European Commission. Teresa Rivera, thank you so much for your insights today. I'm Joe Matthew, this is Bloomberg. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at Noontime Eastern@Bloomberg.com.
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A
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