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Resilience isn't just about bouncing back, it's about being ready.
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And when the threat comes, you hold back the chaos.
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Learn more@cohesity.com Resilience the Chase Inc. Business.
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Premier card is a painful card with flexibility made for business owners who make things happen. Earn a total of 2.5% cash back on every purchase of $5,000 or more, plus earn unlimited 2% cash back on every other purchase, giving you unlimited earned potential to cash back into your business. Inc. Business Premier is part of a suite of credit cards from Chase for Business designed to meet your needs every step along the way. Learn more@chase.com businesscard Chase for Business make more of what's yours Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC introducing the all new Adobe Acrobat Studio now with AI powered PDF spaces do more with PDFs than you ever thought possible. Need AI to turn a 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat so.
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Have you heard the story about the prescription plan with savings automatically built in, it's where a family of any size can feel confident the cost of their medication won't hold them back. Go to CMK Co Stories to learn how CVS Caremark helps members save just by being members. That's CMK Co Stories.
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Bloomberg Audio Studios Podcasts Radio News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York.
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And Ed Ludlow in San Francisco.
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This is Bloomberg Tech. Coming up, Broadcom suffers a stock slide after its sales outlook or lack of failed to meet investors lofty expectations.
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Plus China eyes the largest ever state backed chip incentives with as much as $70 billion of state money considered for.
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The pivotal and our conversation with White House David Sachs on President Trump's executive order aimed at limiting state level regulation.
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Of AI first and we check on these markets that are dictated by tech, dictated by them and we say that where we're off by 8, 10, 1.8%. Let's look at it on the NASDAQ 100. We are under pressure as we consider not just the macro perspective and bond yields move. What's happening underneath the surface? I'm looking at the Golden Dragon index. Look, this is showing what Chinese names trade in the US in terms of the ideas are up to to what a dichotomy we've got going. What a juxtaposition. China higher. We'll get to that news later. US lower and in large part it's by one key stock.
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You're looking at some breaking news. Bloomberg reporting citing sources that Oracle has pushed back some of the completion dates of data centers that it's developing with and for open air. That pushback is to 2028 from an earlier plan of 2027. The market reacted. Look at the right hand side of the squiggly line. It's paired some of that decline but point session low well beyond 6% I think Carolyn, in the show we're going to get an opportunity to talk to Brody Ford who broke that story, get more of the details. Right now the top story is Broadcom. It is on track for its biggest decline since January of this year. A $73 billion backlog. AI specific but what the street wanted was a very different number. During a conference call, CEO Hock Tan held off giving an annual AI revenue forecast saying it was quote a moving target. Listen to this.
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It's hard for me to pinpoint what.
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26 is going to look like precisely.
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So I rather not give you guys.
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Any guidance and that's why we don't give you guys but we do give it for Q1. Kyle Ackerman, managing director of semiconductors and networking hardware at BNP Paribas joins us for more. His new price target, $475among the highest now for analysts covering the stock. So that's the point. You have different sets of data. They gave us a figure which was a $73 billion backlog this morning. Quite clearly the market would like to see a revenue number that's forward looking.
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Yep, yep, that's true. So you're right. I think the I think what's interesting here, the reason why Broadcom is down is not about the is not about how revenue has perhaps missed expectations. First and foremost, some of the company actually beat and raised guidance I AI sales were above expectations. The outlook for next quarter of 8.2 billion city consensus of 6.8 billion of AI sales which doubled on a year over year basis. When queried, the company indicated that indicated that revenue could perhaps accelerate into fiscal 26 versus that 100% accelerated growth number. We have over 50 billion of sales in fiscal 25. I think the reason why the stock is down Ed, however is in part because there are some investors a bit worried about the margin structure of the Anthropic deal. So of that 73 billion in sales, 21 billion will go to Anthropic as part of a TPU system sale. And a TPU system sale is going to be lower margin than what Broadcom generates.
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Content. How much of the content of a server do you own beyond just the chip? But you like this name, right? Like you've just raised the price target to 475 from 385. That's right. Math. Well, what is it that you like about Broadcom?
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Sure, I mean Broadcom I think is in a league of its own. Akin to Nvidia really where in video and Broadcom dump dominate two of the three main buckets of infrastructure spending. Those include compute, memory and networking. They of course control two of them, networking and compute more than anyone else. And I think what's, what, what is happening here, what the, what the investment community I think is overlooking today on this, on the sell off is the fact that Broadcom is moving toward a full solution stack akin to what Nvidia is doing on, on providing AI compute and AI networking. As we move to a scale up domain where you're going to need optical for both the, for the, both the networking Asics and the, and the compute. And they offer that entire IP stack in house. And that is what I think people are over missing, missing today you're calling it short sighted.
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Carl, I know you don't cover Nvidia as a name, but does Broadcom success come at the expense of others in the market?
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Thanks Caroline. It's a good question. You know, I think, I think it's in a vacuum. You know, we try and pigeonhole Broadcom versus Nvidia or broadcast AMD or GPUs versus customer accelerators. I think what we found out is that it is not a, it is not a winner take all. It is not a singular approach. What you're seeing is that hyperscalers are adopting custom compute as well as GPUs for frontier model training. And that will continue to progress as we move toward inferencing. So it's not so clear, clear sighted there. I think what's important here is that Broadcom offers the full solution stack across networking and compute and similar to in video. Those are about the only two, two companies in all of tech, including semis that offer that capability.
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Of course Hawk Tan's very much aligned in terms of his own pay package with hitting certain revenue numbers for AI in particular. But from your perspective, is there a supply side headache going on at the moment? We're hearing reports that Dell for example, is having to jack up pricing because the pricing that it's feeding on memory. More broadly, we're seeing the breaking news that Oracle is having delay some of its data centers. There is a tussle for the infrastructure that's necessary right now. And is that just not going to happen in the overnight way that the market is anticipating?
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Great question, Caroline. I think what's interesting to hear is, is I would like to tie in this idea that are we in a bubble of infrastructure? I think that's no. The answer is definitive no. I think gigawatt capacity and announcements take time to ramp that ramp and that qualification and filling up that fab is it is now extending the visibility across the entire supply chain, whether it's hard drives, whether it's memory, whether it's networking, whether it's compute. And that is giving companies like Broadcom, companies like Nvidia, companies like everyone across the supply chain very long visibility. And right now things are very tight. And so some of the areas that are the most tight in our ecosystem coverage include lasers for optical transceiver components. There are ways to ameliorate those that tightness among the supply chain. And Hawk and Broadcom announced how they have the sufficient capacity for their chips to meet the demand that they see in fiscal 26 and in fiscal 27.
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Who doesn't love talking lasers? Carl Ackerman of BNP Paribas. It's been great getting your take as we do see stocks fall, sweep the NASDAQ more broadly now under pressure of some 2%. Want to keep up the discussion that's happening between the US And China because the chip markets are in the eye of the storm there. China planning to pour up to $70 billion of state money into the sector deemed pivotal to its technological conflict with the United States. Bloomberg's Maggie Eastland joins us now. And $70 billion would be an extraordinary amount of government support that we've ever seen worldwide, right? Yes, this is a huge number. This would be China's biggest semiconductor specific packaging. And according to Bloomberg reporting, that number could be anywhere between, as you said, 20, 70 billion and it could go down to 28 billion. So it depends here we'll see how large it is. That compares to the US effort at industrial policy for semiconductors, which is $52 billion dollars. So this is a similar scale to what the US has undertaken in recent years.
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Maggie, there are some questions to which we just don't have answers. And that largely relates to what China specifically will do with the funds and where they'll go. But within that, Bloomberg reporting, where do we think China is going to prioritize using the funding to, you know, which champions is it going to elevate?
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Yes. So of course, China is always really looking to support its AI chip makers that compete with Nvidia. So that includes companies like HUAW and Camera Khan. But there are other chip companies including SMI See or SMIC which does the manufacturing. So that would be the corollary to tsmc. So there's a range of companies that could see this investment. But China will face headwinds because it still has restrictions on many of the equipment technologies and, and the foundries that can't access TSMC for those advanced node chips. You have many worrying about just, just what the yields are like from an smic, from a SMIC when they're actually producing these homegrown domestically made chips. But I'm looking at Nvidia under pressure again today. Maggie, more broadly, are we getting any sense of whether this is meaning that China will say no thank you to the two hundreds in the same way that they did the twenties? As you know, China has certainly never been shy about saying no to US Technology when they have their own local champions. But what I will say is we don't know the exact number of H2 hundreds China will accept, if any. What we do know is, is they're clearly not backing down on their commitment to their own chip supply chain and they're not going to readily give way to this US Strategy of selling advanced AI chips in order to undermine their local competitors. So we'll have to wait and see what happens on H2 hundreds.
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Bloomberg's Maggie Eastland, who's been across China's chip efforts all week long, thank you very much. Coming up, we're going to get more on that breaking news report from Bloomberg about Oracle delaying Open Air specific data center project by one year back to 2028. It had an impact on the markets. The NASDAQ 100 is now 2%. Actually, Carrie, as of Thursday night, the state of play was the NASDAQ 100 was flat for the week. So we are now down 2% on the NASDAQ 100 on a weekly basis. Of course, the reaction to Broadcom and some other AI angst is part of what's weighing on this market and we're going to get a lot more on that very, very soon. Stay with us. This is Bloomberg Tech. Okay. Shares of Oracle are down almost 5%. They'd hit session lows of 6.5% decline after Bloomberg's Brody Ford broke the story that the firm will be delaying data centers for open air to 2028 instead of a previously planned 2027. The reason? Labor and material shortage shortages. Bloomberg's Brody Ford runs the set and joins us now. Important reporting for you because this is what a part of Oracle's debate is. Okay, great, you have a great backlog of business, but we are very closely monitoring the ability to execute on it and then book revenue on it. And OpenAI is a big chunk of the exposure. Fill the blanks for us. More reporting. What other details have you got?
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These are unprecedented scale data centers, right? I mean gigawatt scale data centers. Unprecedented. And Oracle is trying to do effectively five of them at once. And so what we have today is that the initial completion dates, the initial full delivery dates have been pushed back in some cases from 27 to 28. And you know, I think if you've spoken with data center for folks over the last couple of months, it's not a huge shocker because I mean, these are such crazy projects, right? And the idea of getting them done in two years was always going to be ambitious. So now getting them done by 28, it's still a tight timeline. It's still frankly an impressive turnaround. But it's maybe just not as quick as the company had initially hoped.
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We're looking at Abilene, Texas right now where on the conference call during earnings we had the co CEO, one of them saying that they had more than 96,000 Nvidia chips delivered. Giving you the sense of scale. But is it a hindrance to what the revenue is ultimately for Oracle here or is it just investors having to be like, oh, it's still jam tomorrow, not today.
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Right.
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I mean Oracle I'm sure will say that as you put, they deliver these sites in chunks, Right. And so Abilene is our already being turned on this massive data center in West Texas. Once you get the servers running, Open Air uses them. That's revenue recognition. Yeah, right. And so really what we're thinking about is the further out sites beyond Abilene.
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Right.
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But we keep seeing these Stargate announcements for Michigan and New Mexico. Right. These sites which are still being kind of put together and Oracle and other vendors too are finding that, wow, there's a lot of stuff out there that's.
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Backlog labor for one of them.
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There's only so many Electricians, right? I mean, you want to build in rural Texas, it's a smaller pool of people you have access to.
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It's a fascinating story. It's going to run and run. Bloomberg's Brody Ford with a real market moving bit of reporting that. Let's talk more about the market implications. We've got Margie Patel with our senior portfolio manager and head of capital allocation over at All Spring Global Investments. Just $629 billion in assets and advisement. And Margie, are you worried these drip drip bits of information that maybe the revenue streams aren't able to be booked tomorrow, it has to be weighted out a little bit more in terms of the returns on investment?
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No, I think the long term trends are still in place. I actually thought that Broadcom's numbers were quite good and people were just I think very nervous at the end of the year particularly with some bad news we've seen such as from Oracle Cycle and, and I think it's really more just end of year jitters rather than anything fundamental. I think when you look out into 2026 you still have to like the tech sector, especially the semi, the memory the those companies, I think you still have to stick with them that they're going to continue to be high growers and these little, little hiccups we have here and there don't change the fundamental trend of very, very strong growth in a year which would be very modest growth next year. So we still like the, the whole sector.
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So Margie, on a day where broadcoms off by 11% when the NASDAQ's off by 2% is that hiccup a buying opportunity?
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Well, I think it is actually because if you look at the leading stocks that have stuck to their plan, that have great growth, great profit margins, great innovation and they're down 10, 15, even 20% from their peaks of a few months ago. So I think that looks like a, a pretty attractive time to add to these names because there's end of year uncertainty. A lot of short term traders want to preserve their gains, cash out and I think that's what you're seeing is this pressure on the sector rather than the change in the fundamentals, the cash flow, the big companies is so large, this isn't going to be derailed anytime soon. So I think next year looks pretty good sailing to Margie.
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It's good to see you. It sounds like at year end you don't personally, personally have many jitters. One of the best read stories on the Bloomberg terminal today is about the debt and the lending that is behind the build out in that infrastructure, where does the debt, does debt as a factor in consideration sit for you when you are tracking all sorts of different hard and soft data sets to work out what's going on here?
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Well, I look at the debt as really a company's choice of how they want to allocate capital. Do they want to borrow, do they want to increase the dividend, do they want to do share buybacks? And particularly the large successful companies really have no need to borrow. Even paying for the capex, they still have plenty of excess cash flow that they have to decide how to utilize. Whereas I think Oracle has really taken on a lot of debt compared to their cash flow. But the rest I think all look pretty good. It's a volatile sector and that's why the returns are higher because you have to be prepared for these little downdrafts in order to get the upside.
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Margie Brody's report on Oracle was very specific that Oracle is delaying those projects by a year because of labor and material shortages elsewhere in the US economy. We have all the chips we need, clearly. Are we good at the other stuff? And is the other stuff where it needs be to, to be to support this build out?
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Yes, I think it is. I think when you have this explosion in demand of these very complex centers, I think you should expect there will be short term problems of supply and so forth. But really that's a, it's a good problem to have rather than lack of demand or pricing pressure. And we're really seeing very strong pricing for the semis that are going into the data centers. So we think it's just nothing to worry about and the fundamentals are still very strong.
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Briefly though, there's reports today from other outlets saying that Dell's going to have to jack up its prices because of pricing strength in memory, other areas of this trade that are overvalued that you shouldn't be piling into from a margin perspective.
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Well, I think when you look at tech it's like any other sector is the best companies usually trade rather richly. The cheap companies usually have problems. They don't have the leading edge, they don't have the innovation. And when you look at tech it's just, and you can see even here with the data centers and concern about what approach that companies are using, you know, Broadcom or Nvidia, whatever in the new products, it's really about innovation and who are the leading innovators. And so companies that don't have that innovation are just going to fall behind. So I think this year up till say, the summer. Everything moved up and now we're seeing a separation between the companies that have leading edge and the companies that are really falling, falling behind and aren't going to catch up. So I think it'll be much more stock selection next year than we've had for the first part of this year.
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With a message that in tech, there's nothing to worry about. Margie Patel from All Spring Global Investments. Great to have you back on the show. Thank you very much. Now coming up, we're going to bring you Bloomberg's exclusive conversation with Uber's CEO on the company's international ambitions, particular focus on Asia. That's next. This is Bloomberg Tech.
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Resilience isn't just about bouncing back. It's about being ready. It's how you show up every single day. Because every name in your system is.
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A person who trusts you and every password is a door you're responsible for locking. And when the threat comes, and it.
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Always comes, you hold back the chaos. Learn more@cohesity.com Resilience support for the show comes from public on public. You can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available@public.com disclosures when you own.
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CEO Dara Khosrowshahi says the company expects to offer robo taxi services in more than 10 markets markets by the end of next year. He spoke with Bloomberg Tech Asia's Annabel Drew as about why he's optimistic in particular about growth potential in Asia, the.
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APEC market, and in particular the North Asia markets as well. They are huge growth markets for us and if you look for example in the rideshare business, over 30% of our global first trips coming into the category come from the APAC region. The area is growing very quickly, including taxi as well, which is actually one of our newest products on the platform. So for me coming here, seeing the teams meeting with local business people and regulators and talking about how we can be part of the future growth the region is really what my agenda is early this year.
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You also put out a statement on on the Robotaxi push as well. And so the Middle east and and Asia were the markets for 2025 launch and we've seen of course that initial deployment in the Middle east already. What's happening on the Asia side?
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Well, lots of discussions on the Asia side. I think what's really important is to set up a regulatory framework to go forward. For example, Hong Kong has various trials and pilots going on and in many other markets where talking to regulators about how we can be a part of shaping rideshare and autonomous rideshare going forward. The technology is absolutely getting there. These are the robot driver doesn't get tired, doesn't get distracted and we very much look forward to working with various authorities to introduce ride share into the markets. We're now live in four markets now as we speak in the US and in the Middle east. And I expect to be in 10 plus markets by next year and we want those markets to be in the Asia Pacific region as well.
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Where then in Asia do you think is the most likely place we'll see?
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I think that certainly Japan has great potential, you know, with they are behind on their regulation. They are behind in their regulation. But I think that they also understand that that with an aging population there's a real need for transportation not just in the large cities but in the rural areas. And for example, I experienced that personally going to Kaga City and where we have communal rideshare and kind of took a rideshare trip and understood what the needs are there. So we're talking with various countries regulatory authorities. I think Japan is going to be part of it. I certainly hope that Hong Kong is to going going to be a part of it. Australia where we were just talking about is a huge market for us. So we're having those dialogues and I think that the the picture will shape up over the next two years because the technology is definitely getting there.
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Uber CEO Dara Khosrow Shahi there, along with our Annabelle Drab, is now sticking with Uber. The company, along with DoorDash is suing New York City to block requirements that the delivery tipping option be available and at the time of checkout and set to at least 10%. The two companies argue this would worsen sticker shock for inflation weary consumers. New tipping laws are set to become effective January 26th. Car Want to watch?
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And meanwhile coming up, you're reporting to watch how Rivian is replacing Nvidia's tech in future vehicles with its own chips. From New York, from San Francisco, this is Bloomberg Tech.
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Welcome back to Bloomberg Tech. Rivian, take a look at its shares. Up currently 16% at one point in the session, up more than 19%. Trading at its highest level since January of 2024. So its highest level in two years. Yesterday it fell quite a lot after it told investors and the world its plans for autonomous driving. Rivian's plan for autonomous driving is based on two big technology bets. And we went to see them. Rivian's developed its own artificial intelligence chip for its future cars. That gamble might pave the way to fully autonomous driving. A lot of the tech world imagines a future where we don't own cars at all. We're talking about fleets of robo taxis that are summoned through an app. Maybe no steering wheel or driver controls at all. But Rivian's in the camp that does see people owning their own cars in the future and being willing to pay top dollar for a software platform that allows the car to drive its. If this idea seems familiar, Tesla has been selling a version of it for years. Full self driving supervised is not technically full autonomy if you read the fine print, but it can get you from point A to point B without needing to put your hands on the steering wheel. Rivian's path to autonomy is rooted in two big bets. The first, a custom AI chip developed in house, which marks a big beta break from Nvidia.
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This is a RAP1 chip. It's a multi chip module. In the middle is a Rivian design, custom silicon surrounded by memory on two sides. The decision to build an in house was based on a very rigorous analysis.
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Of the benefits we could come.
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And those benefits are velocity or ability.
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To get to market very quickly with.
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It, performance and cost.
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The second, a major change in how Rivian vehicles see the world. The Next generation Rivian R2 will have indented LIDAR sensors in it.
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It's not just about the compute, it's also about the sensors and it's about how they all come together.
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This is Rivian Mark 1. What the Gen 3 architecture does with compute levels that are dramatically expanded. So just to put some numbers to this, at the platform level, 1600 sparse tops, you can process 5 billion pixels per second. Beautifully integrated lidar that raises the ceiling to allow us to take your eyes off the road.
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This will cause some debate. Tesla vehicles only use cameras as sensors for their systems. And what Elon Musk's company has always argued is that other sensors like lidar or radar are too expensive to scale. Until now, Rivian didn't really have an autonomous system. It had advanced driver assistance tools powered by cameras and radar. And Rivian used Nvidia chips as the brain in the vehicle to interpret the world around it. Rivian says its new AI model will keep improving those older cars too, eventually adding capabilities like hands off, point to point driving. Rivian doing its own chip and ditching Nvidia is a surprise.
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On the Rivian processor side, this represents a significant cost savings to us. There is a lot of margin, of course, in the, in the semiconductor space. And working directly with tsmc, we have a great relationship with them.
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The new hardware is the unlock. It should allow Rivian to go from that driver assistance software in its existing lineup to true autonomy in the next gen R2.
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The next big step is personal level four. And what I mean is the vehicle can operate empty, it can operate without anyone in the driver's seat. It can pick your kids up from school. It can drop you at the airport. Airport. It's a complete shift in how we think about the vehicle experience.
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Looking back, this was the company that pulled off the sixth largest IPO in US history. And it was first to market with full size battery electric pickups and SUVs, beating out Tesla, Ford and General Motors. But today, Rivian's struggling with the basics. Production of its EVs hasn't really scaled. Rivian's sole plant in Illinois is capable of building 250,000 units a year. But in 2020, it probably won't hit 50,000. The truest representation of that struggle, the stock is at a fraction of its peak right now. In the world of tech, you have to have something to say about AI. And Rivian is diving deep into autonomy to appease its investors. An AI chip lidar and a large driving model. Right now it's a promise from Rivian that their next generation vehicles will have genuine autonomous capabilities.
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Extraordinary reporting. Deep dive and revision, as you said. Doing very well on the day, unlike the rest of the markets. Just check in what's happening to them. Nasdaq, we are down on the week. We are down on the day. NASDAQ 100 off by more than 2 percentage points. Tech in the line of fire today, even dragging Chinese names now into the red. They started the trade and our show in the green as we understood that the Chinese government was going to be going all in on funding its own domestic chip supply. Up to $70 billion worth of government incentives is the reporting coming out of Bloomberg News at the moment. But even China starts to dip at the moment. We see Broadcom in the red, video in the red. Palantir, Amazon, Micron, some key names currently on the downside as we have that bubble anxiety all over again.
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Right, Coming up, actually, Carrie, we're going to talk about the United Kingdom. We're going to be joined by British Business Bank CEO Louis Taylor for his take on the UK's tech sector. He's in town in San Francisco in Silicon Valley to think about how technology might work across the Atlantic that's next. This is Bloomberg Tech.
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The UK economy is at risk of its first costly contraction since labor returned to power after growth disappointed again by shrinking ahead of Chancellor the Exchequer Rachel Reeves his tax raising budget. Can the UK's tech sector come to the rescue? Louis Taylor, CEO of the British Business bank, joins us now and it's great to have you in town in San Francisco.
- [37:55]
G
Really great to be here and thank you very much indeed.
- [37:57]
D
You have an annual budget essentially to, to invest in and lend to and support the technology industry in the United Kingdom. Why are you in San Francisco then?
- [38:11]
G
What brings you in San Francisco? Well, look, we're here pitching to us VCs a really great new growth opportunity for them, which is based on three things. Firstly, as you say, the quality of the UK tech industry for the top 10 universities globally, producing great research with some really excellent entrepreneurs and the ability to scale businesses as well, although that's where they come in. Secondly, a new pool of capital coming on stream domestically in the UK from pension funds, hopefully. And then thirdly, the opportunity to partner with the bank which is the biggest LP in UK venture and growth equity connected and knowing the landscape pretty well.
- [38:47]
E
Louis, the landscape we know so well is fintech. I think of Revolut, I think a Monzo, the standouts. But where else is really thriving? Where else should VC come in as support in the uk?
- [38:58]
G
Well look, I think you're absolutely right. Fintech is very strong and just today Go Cardless was did a deal with Molly and that unicorn that we invested in 12 years ago. So you need a bit of patience on this. So fintech is very strong. AI in different place places is very strong. Not so much on the hardware hardware side, not so much on the large language models, but more broadly, if I think about companies like Synthesia or eleven Labs, all of Those companies coming out of the uk, so I think those tech areas are great. But also the application of AI into life sciences is incredibly strong as well. And the UK has an incredibly strong life sciences industry. So I think we see AI as being a theme across the sectors of the industrial strategy the government announced. And the UK being strong in this.
- [39:44]
D
To be fair, many of those, those companies you name, you know, they come on this program regularly, you know, and they are making advancements in their respective fields. Want to go back to what you said, a big pot of pool of money coming online a little bit more please.
- [39:58]
G
Yeah.
- [39:58]
D
How big? How certain is it? Yeah, and that's important, right? Because the lesson of AI in this country at least is the capital requirements are much bigger, much bigger.
- [40:10]
G
So the uk, we incubate companies incredibly well, we scale them less well and we haven't had the scale up capital we need. It's not that we don't have the money because we have the second largest funded pension scheme in the world at around £4 trillion, but we have an allocation issue with that pension, pension money, which is changing the government encouraging pension funds to invest more in the domestic economy and in the growth economy. Me, but I think what we're looking for is some of the expertise here in the VC industry in the US about scaling those companies. As I say, we incubate well, but it's that scaling stage and the expertise needed there where of course you need capital but you need other things as well. Networks, capabilities and other, many other things. Mentoring of leadership teams.
- [40:50]
E
Louis, what is the state of brain drain when you actually do get a really successful company? Now 11 labs are staying there since these years as well, but many up and leave and come to Silicon Valley or to the us. Is that something that's still happening?
- [41:04]
G
Well, look, I think it does happen to an extent. I think we really want to try and address that and try and stop it and actually capture some more of the value in the UK economy. As I say this is the companies have largely come over here because it's where the capital is. If you've got a new capital stream with some expertise based on it in the uk, we're going to hope to retain those companies in the UK longer. And actually the innovation ecosystem I think is quite self perpetuating. Success breeds success. We've got a lot of the right things in place, but it's just this top end that we need to really make sure that we realize more potential and keep the flywheel going.
- [41:36]
D
So your strategy here and one of the reasons you're in town is to go to the American VCs, the Valley VCs, and say, give us your capital, come to the UK, we have something to offer. But that strategy then carries risk with what you just talking to Caroline about, Right?
- [41:50]
G
Yeah, we're not quite saying that. We're saying bring us your expertise, we'll help you raise capital locally.
- [41:55]
D
This is a growth opportunity for capital locally. That's a key distinction.
- [41:58]
G
Absolutely. And the connections that we have with all the GPS LPs but also the pension funds, I mean, we actually are raising our own fund at the moment for a co invest fund in the UK from UK pension funds. And we'll do the first close end of January, early February. And this is, is a thing. It's a real thing.
- [42:17]
E
It's a real thing. And we'll let you go out and have real conversations with those VCs in the Valley. Louis Taylor, thanks for stopping by. CEO of the British Business Bank. Coming up, White House AI and crypto czar David Sachs joins us to talk about the President Trump executive order on regulation. This is really big tech.
- [42:48]
D
Welcome to our global radio and TV audiences. President Trump signed an executive order aimed at limiting state level regulation of AI. The move is supported by tech leaders who have argued local rules could stifle innovation. We're joined by David Sachs, the White House AI and crypto czar or senior adviser. David, I think is a really good place to start in your work with the President in consulting and advising on the formulation of this executive order. What was the problem that you were trying to solve for and what is it that you said to the President about why this EO was the right approach to focus on state level laws?
- [43:31]
A
Well, thanks for having me. The problem that we see is that you've got a thousand different bills going through state legislatures right now to regulate AI and over 100 measures already passed. Some of these bills are contradictory and you've got 50 different states running in 50 different directions. That type of compliance regime is going to be very hard for small companies and startups, especially innovators, to comply with. And so what we need is a single federal or national framework framework for AI regulation. And that's what the President has supported. And by the way, he supported this for a long time. If you go back to his July speech on AI, he called for a single national framework then. And what we've done with this EO now is to make clear that that is the administration's policy and to task members of the administration to work with Congress to try and enact that framework through legislation, because ultimately this needs to be a law. And in the meantime create tools that the administration can use to push back on examples of the most onerous and excessive state regulations.
- [44:32]
D
David, There is, of course, some pushback on the executive order from the states themselves, from other Republicans. You know, as you know, like I studied the July speech and strategy closely, a big part of it was infrastructure related and about deregulation regulation. The concern about this latest executive order is that while it addresses your concerns about many different pieces of state regulation, it does not provide for a single federal framework.
- [45:05]
A
Well, at the end of the day, that single federal framework has to be enacted through law, and we need Congress to do that. And so the President has asked Congress to do that, and he's tasked members of administration to work with Congress to produce that framework. In the meantime, what we've done here is articulate a set of principles. We've said what values are important to us. We said that we want to protect child safety. That's important. We want to respect copyright. We want to preserve the ability of local communities to choose what infrastructure is in their communities. We're not seeking to preempt the states in any of those areas. So this is an important set of principles that we have put put forth. And at the same time, the EO provides for a number of tools that can be used to push back on excessive state regulation and just add. Let me just illustrate why I think this is so necessary. Let's just, because we're really talking about here is regulation of AI models and algorithms. Well, think about how an AI model is developed. You can have developers in one state or multiple states writing the code. It can then be trained, trained in a data center in another state. You then can have inference happen in another state. And the entire service is provided over the Internet using national telecommunications infrastructure. So you're dealing there with at least four different states. And all of them can lay claim to regulating those AI models. And those regulations can be in contradiction with each other. Even Democrat governors have admitted this is a problem. So just the other day, Kathy Hochul, the governor of New York, it basically said that she might prefer to enact California's SB53, which is a regulation that they just passed in California, rather than the bill that her own assembly gave her, the Raise act, because she sees that, wait, do we really want to create this patchwork of different regulations? So even Democrat governors are realizing this is a problem. And if they all run in different directions, then we're going to end up with a patchwork or a mishmash of regulations that are impossible for companies to comply with. What the President is calling for here is just common sense. We want to get to a single national framework of compliance as opposed to 50 states running in different directions.
- [47:11]
E
Meanwhile, Kathy Hochul actually is getting a bit of criticism perhaps for narrowing and what some are saying is bowing down to business. David, I'm really interested in how you oppose that view because there is anxiety in the population, AI versus jobs, AI versus energy bills. How are you giving them the sense that we haven't seen federal government and indeed now state governments just handing over the reins to big tech billionaires, as people call them?
- [47:37]
D
Right.
- [47:38]
A
No, I understand there's a lot of fear out there about AI and job loss specifically, and a lot of those fears have been, have been drummed up. Let me just say on the job loss question, because I think this is really important, that Yale just released a study and it showed that in the 33 months after the launch of ChatGPT, there was no discernible disruption to the US job market. None, they said. No discernible disruption. And in fact, if you look right now, more jobs are being created than being lost. So this whole idea of job losses just isn't true. There was an article in the Wall Street Journal just last week talking about the construction boom that's happening that's benefiting construction workers, like electricians, like plumbers, like workers who pour concrete or hang drywall. Their wages are up 30% because of this infrastructure boom that's happening right now. And there's actually a job shortage in many of those trades, meaning we need more workers going into those trades. So what we're seeing right now is an overall boom that's benefiting the economy. You know, the, the, the GDP growth rate was tracking about 4%, and half of that, up to half of it's been attributed to AI. So I just think that this, this narrative about job loss has been blown out of proportion. Certainly there could be job displacement in the future, but we haven't seen any of that so far. It's been quite the opposite. It's been job gains.
- [48:53]
D
David, final one on the eo, if I may. You know what this EO allows for? Is it the sort of hope that, that it will lead to the DOJ suing states like New York and California? And if that's the case, you know, the President and the administration's confidence that you'd win the them?
- [49:13]
A
Well, that is one of the tools that is in The EO is that the DOJ has been tasked to form a litigation task force that would have the ability to push back on excessively burdensome state laws, laws that may be unconstitutional, violate the First Amendment, things like that. By the way, the DOJ already had that power. So this is not a novel power. But what's being done here in the CEO is we're marshaling all of the resources, the federal government, government behind this strategy of the president to create a national framework now in terms of what laws we go after, that's the decision that has been made. You know, we haven't decided whether California and New York should be targets in that way. The one that I think is probably the most excessive is this Colorado law that seeks to prohibit algorithmic discrimination.
- [49:57]
E
Right.
- [49:58]
A
What that basically says is that if an AI model has a disparate impact on a protected group, then that model is violating the law. Model developers, by the way, have no idea how to comply with this because they're not aware of all the downstream uses of their model. I mean, if a business decides to use an AI model in a hiring decision, for example, right. That business is already on the hook for discrimination. So how would the model developer know that it was being used in that way? But what Colorado is trying to do there is get their ideology inserted into the model. That's very concerning to us. We think there's a First Amendment issued there. But look, we haven't made any decisions in terms of how that litigation task force to be used.
- [50:34]
E
David, briefly, all of this is set in the context of US versus China and a deemed to run forward on AI development. Meanwhile, it's been a busy week and two hundreds might indeed be able to get to China. How many do you think you'll do in volumes? And what do you think the appetite is of China to buy Nvidia's more sophisticated chips?
- [50:53]
A
Well, it's interesting. I just saw an article that said that China was rejecting the H200. So apparently they don't want them. And I think the reason for that is they want semiconductor independence. The same way that the United States wanted to be energy independent, they want to be semiconductor independent. So they're rejecting our chips. And that's part of the calculation that goes into the decision of what we authorized to be sold to China. The US policy has always been that we don't allow the leading edge chips, and we're not. This is this H200 chip. It was state of the art a couple of years ago, but now it's been superseded by the newer Blackwell architecture and the Rubin architecture that's coming out next year. So this is now a lagging chip, not a leading chip. But what you see is China is not taking them because they want to prop up and subsidize Huawei. They want to create a national champion. And that was part of our calculation of selling not the best but lagging chips to China as you can take market share away from Huawei. But I think the Chinese government's figured that out and that's why they're not allowing them.
- [51:49]
E
David Sachs we always wish we had more time. White House AI and Cryptoza. We thank you for joining us today on the executive order and indeed on Nvidia's H200. That does it for this edition of Bloomberg Tech. The market is in sell off mode as we wrap up this week. We're down by more than 2% on the Nasdaq more broadly and indeed for the week. But really all eyes on, well, Broadcom and its numbers.
- [52:09]
D
Yeah, Broadcom in the earnings context. Investors wanted more, but Bloomberg reporting on Oracle is what moved the needle. Believe it or not, this is my last show of 2025, an astonishing year and a lot of the themes in today's show are what we've been talking about all year long. Recap on the podcast. You can find it on the terminal and online. You know where to Caro. I'll see you in 2026.
- [52:33]
E
Have a great break.
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A
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