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Luckily, Adobe Acrobat Studio uses AI to take all your documents and generate a presentation with a single click, building slides faster than ever before. So if you need a last minute pitch deck, do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that with Acrobat. Learn more at adobe.com/do that with Acrobat. Bloomberg Audio Studios Podcasts Radio News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, President Trump picks Kevin Walsh to be the next chair of the Federal Reserve Reserve. We discuss how tech markets are reacting. Plus Apple delivers record quarterly sales, but the looming threat of rising memory prices. It was worrying investors and Space X is considering a merger with Tesla or with Xi. We'll discuss what we know so far, some extraordinary reporting from you and the team, and let's dig into what the macro picture is today because it is a macro story that dictates these moves. The next Fed chair, is he going to be hawkish? That's the way the market currently thinks. A little bit more we're seeing the NASDAQ 100 off by 6. 10%. Look, we're up on the month and in fact we're having the best month since October for the NASDAQ 100 and the S&P 500. But on the day we temper some of our risk on sentiment, we're certainly seeing Bitcoin. Still not feeling any love. We're now at just 82,000 level at the moment, ed off by 1.9%. We are down for four straight months, the longest losing streak for this asset class since 2019 and gold and silver today. Well, you've seen the volatility and it is all about the macro picture. Yeah, a little underperformance in tech. Let's get to it with Bloomberg International Economics and policy editor Mike McKee. What is the Kevin Walsh School of Monetary Policy and Economics that the world of technology needs to know about? Well, Wash is going to be someone who upsets the Apple cart, which is perhaps a little bit of his training out in Silicon Valley. He graduated from Stanford and is still a visiting lecturer there and a fellow at the Hoover Institution. He believes that inflation is the Fed's only job and that's why he gets this hawkish reputation. And he also is concerned with some of what happened with Silicon Valley bank and the way the Fed regulates banks. So look for some changes there. The big question though is how low should interest rates go? And the President obviously wants very low rates. How do you get there? AI is what Kevin says. He says that AI, along with the big heavy tech investments we've seen and the President's deregulatory agenda will move things forward. I will be a significant disinflationary force increasing productivity and bolstering American competitiveness. Productivity improvements should drive significant increases in real take home wages. A 1% point increase in annual productivity growth would double standards of living within a single generation. So he's putting a lot of his forecast on what Silicon Valley can accomplish in terms of AI and the tech world. What's interesting is what he thinks about labor and how that will be impacted. We heard Fed Chair Powell, the current Fed chair, just speak on Wednesday about how they see AI making significant impact on labor and indeed more broadly the economy as well. Mike McKee, I wish you could ask more questions. We so appreciate you being here. But let's talk about how tech is currently underperforming the dollar, pushing higher. Here to discuss how Trump's Fed pick Kevin Walsh could impact the tech markets. Maggie Patel all Spring Global Investment Senior Portfolio Manager and Head of Capital Allocation Maggie, how do you think the market should interpret this announcement? Well, I think the market maybe is focusing too much on his his interest rate policy and not enough of the other positive aspects that he's that he's indicated, for example, better regulation of the banks. And also you can see in the past one of the things a bank that the Fed did, which I don't think he'll do, was be extremely activist and pro cyclical, really causing a lot of the up and downs in the economy and the financial markets. Silicon Valley is a great bank is a great example. The Fed tightening so quickly that the bank simply didn't have time to adjust its investments to get in line with those much higher short rates. So I think that less activist Fed looking at better regulation will actually be very positive for the market and for the economy. Do you align yourself with the deflationary impact of AI in that respect? Do you agree with, with Kevin Walsh in that perspective? I think the jury is out on how much deflation we're seeing because really when you look around in the real world it really looks as if we are on a track for inflation being higher for longer. Your last segment was about the price of antique cars skyrocketing, gold and silver skyrocketing, even industrial metals, real estate, fine art, all those things look more, more what you would think if we were in an inflationary backdrop. So that's really what I think we are. I think interest rates at 3 and a half, 3 quarters on the funds rate is really quite, quite easy when you look at the financial markets and these other tangible asset markets. Good to see you. It's Ed here in sf. Later in the program we're going to hear from an interview that I did with the PG&E CEO Patty Poppy, California's largest utility. And like Mr. Walsh, she argues that all the data centers that are being built will drive down electricity prices. Right. And therefore inflation. Just like Mr. Walsh has kind of just been the argument outlined by, by Mike McKay. I don't understand that and I don't have a degree in economics, but as someone in the markets, would you just give me your interpretation of how that would work? I don't really follow that, that line of reasoning either. Clearly we have a demand for baseload electric generation cap capacity and that suggests to me that the price of electricity will gradually go up, even notwithstanding the data centers. So if the data centers carve out arrangements with their provider so that it doesn't feed over into the retail market, the, the industrial market, I think that would be a neutral. But really I think the real price of electricity is going to go up simply because the cost of building, strengthening the grid, the cost of even building new gas fired plants is really going be on the upswing. So it's pretty hard for me to see how the price of electricity could come down. And I don't think it's closely related to the data centers which are a big Source. You know, 10, 15% increase in demand over the next few years is really going to be a deflationary factor when you're dealing with real assets like a generator. I don't know, Maggie. You seem to have a pretty good command of it and the data. I appreciate the response. We should probably get to earnings, right? You know, in the context of Apple, which we're going to discuss with an analyst in a moment, the consideration there is tight supply of memory chips but just so far in aggregate from the MAG7 and other companies have reported. What is your main takeaway, please? Well, I think that's a trend that's going to continue for a while. We think of memory chips as being commodity chips that when demand is good, they overbuild and the prices come down. And this time it's been very different because the demand for memory chips is so extremely high and there are only a handful of producers of memory chips and even they are being very, very slow cautious to add capacity. So I think it's just going to be a feature that the price of memory chips is going to be higher than we're used to and we aren't going to see that extreme cyclical up and down in that sector that we've seen. Margaret Patel of all spring Global investments back on Bloomberg Tech, thank you very much. Talked about earnings. We've got to talk about Apple shares down a percentage point. Look, they've been higher in after hours after the print and during the call they kind of chopped around one point in today's session were higher now lower. The company delivered record quarterly sales and a better than anticipated forecast. But the looming threat of rising memory prices is worrying investors. CEO Tim Cook saying he expects, quote more of an impact to gross margins and continues to see memory prices rising significantly, particularly in this current period fiscal second quarter. Richard Kramer, a Reddit Research founder and senior analyst joins us now. You serve a buy and a $305 price target on this name. You know, we've said throughout my career at least Apple is the master of managing the bottom line. But in this environment with tight supply and pricing of memory chips such as it is, there's a limit, it seems to what Apple can do. What was your interpretation of that? So I think this fixation on memory costs is the wrong question for Apple because it just go back to your basic economics, you know, theory of comparative advantage. Apple has had the best supply chain in the world for for years. They have $200 billion of product cogs this quarter gross margins went up year on year and sequentially and they're guiding to an excellent product gross margin and implied product gross margin next Quarter. Now, when we get later into the year, if they face significant increases in memory cost, they have one lever that they can pull, which is they can raise prices on the devices or they can raise prices when you get the higher memory spec variant of the product and offset some of those higher supply chain prices. One other thing that I think people should pay attention to is the way that Apple has vendor non trade receivables. They funded production equipment at their suppliers so that they have that superior supply chain. And I think that puts them in a comparatively much better position than everyone else in the tech hardware space. Let's go to the product. IPhone sales were about $4 billion above consensus, 9% beyond consensus. Even the top end of the range that I saw was about $81 billion. This iPhone 17 generation has been a success, has it not? Yeah, well, I think there's two things about that you need to appreciate. One is the company is saying they are still considerably supply constrained. And the day that that supply demand balance kicks in, they can rebuild channel inventories and four weeks of channel inventory is another $15 billion of iPhone sales just to get back to normal distribution and to have warehouses. So they have a long Runway to realize what is now obviously this last quarter, 23% growth in iPhone implied in the, in the guidance we were at 14%, the street was at 8. There are 13 to 16. 16 implies another 20% growth quarter for iPhone. And they're telling you there's still supply constraint. Yeah. So that to me tells you that you have again a much longer Runway with this product cycle than that than otherwise. And obviously demand is off the charts and really it's a concern for everyone else in the smartphone space just how much market share Apple is poised to take. Richard, demand was off the charts in China, 38% growth. What happened? Well, I mean some of that if you look back, was a relatively easy comp and. But equally if you go back to last April or May, you know, we had to, we had to, we had, we had a buy on the stock and we had to battle all the people saying, oh, Apple is going to get kicked out of China. They're dead there. They'll never sell any more phones. You've got Huawei and Honor and show me and opavivo and. And there was this huge negativity about their China position largely because of geopolitical elements as well. But Apple has shown that they have a huge installed base there. When they come out with a highly attractive product portfolio, consumers flock to it. Yeah. And they're also Seeing good growth in some of the other products there max iPads, wearables and those tend to be to first time Apple Apple customers now they under index in the China market in services because there's some services that aren't available there. But you know clearly those who were writing Apple's obituary in China was a little bit premature. Apple intelligence isn't available there. I mean for what it's worth, no one's really raised about it of course Richard but what does this actually tell us about the need for a consumer to buy generative AI products? Apple is still owned this particular season even though Android, the Google phones, Samsung phones were far ahead in terms of the generative AI offerings. Absolutely. And look people are not going to rush out and say I want the new device because it has gen capabilities. They're going to say I'm locked into the Apple ecosystem For the last 10 years, all of my other products are Apple and I'm going to keep buying Apple. The question I asked on the call which I think is the key one is why has Apple been a fast follower in AI? Because they knew it would take time for people to get used to the services and right now they only have about 450 or 500 million of their 1.3 billion installed base of iPhones with a capable devices. So the 15 Pro or later and Apple is now reaching that point where half or more of their base can be the addressable market for a new Siri or AI services. And I think over time they'll monetize it by getting people to buy better devices but also adding five bucks to the Apple one bundle for some advanced Siri features. Richard Kramer, fascinating. Thanks for being with us today. I read research. Let's talk about J.P. morgan. It's among the banks that have begun selling down a highly anticipated $20 billion debt financing backing the acquisition of Electronic Arts now the biggest leverage buyer on record. Remember sources are saying Middle Eastern, Asian, smaller European banks are piling into a term loan a of as much as $3 billion dollars for the video game maker that okay, coming up Space X is considering a merger with Tesla or with Xi. We have the Bloomberg reporting next. This is Bloomberg Tech. Space X is considering a potential merger with Tesla or an alternative combination with AI firm X. AI. That's all according to sources. Bloomberg's Lauren Grosch who covers space Kyle Porter who's on the transportation be and both of you involved in the breaking this story last night, join us now. I'm going to come to you what we know two distinct proposed ideas, scenarios, transactions. My understanding from sources is that Space X investors are particularly pushing this idea of a combination with Tesla. Tesla. Either way, highly unusual because we thought that Space X was on track for an IPO mid year. What do we need to know? Well, they still may IPO this year. It's, you know, this seems to be a lot of ideas kicking around at the corporate table. It's certainly faster to do a combination between an existing public company than it is to an ipo. It's cheaper. You don't have to have a bank come in and underwrite, you don't have to do a roadshow. But you also have real drawbacks to this. You know, you don't get to roll the pitch. You could have a sudden share sell off. If you don't like what they see, you're building a conglomerate which historically people have not enjoyed investing in you. People don't feel that they can get enough visibility on the existing businesses. So there's a real debate to be had even within the companies on whether this is a good idea or not. Lauren, talk to why for example, it might be a good idea for Space X and Tesla to grow closer in their interaction because they already have a relationship, a strong one. Yes, there's plenty of cross pollination that already happens between Space X and Tesla and you know, all of Elon Musk's empire. And if you've noticed, you know, he's talked a lot lately about ways in which that cross pollination could become more intense. Right. He's spoken about Starship taking Optimus to the moon and Mars and things of that nature. There's also the option of using energy storage capabilities for these data centers in space that SpaceX or that Elon's been talking about. So there is some sense to be made in combining the companies as they already work so closely together already. What we know is again two distinct scenarios are being discussed and that's the new bit, right? They're being discussed, discuss. Because you have people like Chamath Palihapati, Bill Ackman who have hypothesized about this. Anyway, Kyle, we know that Tesla has confirmed an investment in XI just this week, $2 billion. And that space X participated in an earlier round in XI as well. Elon Inc. And a conglomerate is a bit of a regulatory headache, is it not? Oh, it could be a massive regulatory headache if you're looking to come into this size. Three companies of this size, presuming everyone keeps their valuations, you're looking at trillions of dollars. That kind of market capitalization is going to attract the scrutiny of government and regulators. It can't not. Okay. Regulatory hurdles abound. And actually, just to remind viewers and have you all have written in this story at length, things can change. None of this is set in stone. This is still work in progress. But Lauren was also work in progress. Is everyone talking about wanting to put, put these data centers into space. And you just mentioned why. There might be some sense to Tesla and Space X combining, but how? What would the hurdles to even that hypothesis? That view. Right. So obviously a lot of this is being driven by Elon's latest grand vision of putting AI data centers into space. There's obviously a lot of pros that have been talked about in terms of doing so. There's depending on where you put them, there's constant, constant access to solar energy because of where you put them in orbit. You know, there's also a lot of space in space and a lot of, you know, these data centers do take up quite a lot of real estate here on Earth. And that can also come with a regulatory burden in order to get the right permits and things to do so. So there's a lot of benefits to moving to space, but there's also massive engineering challenges in order to make it work. For instance, that solar power we're talking about, we're going to need massive solar panels in order to run the kinds of data center sizes that Elon's been talking about. So that is going to be a challenge that they're going to have to work through. You're going to have to put radiators on these, these vehicles in order to cool them down. A lot of the infrastructure around data centers here on Earth, they need massive cooling requirements. And that doesn't change for space because you're in a vacuum and you have to use those radiators. So there's a lot of work to be done. And it all relies on starship, which is SpaceX's next generation vehicle. And that vehicle isn't quite ready for primetime yet either. So there's a lot to keep an eye on in order for this grand vision to play out. And obviously we will be keeping an eye on it ourselves. Carrie, just one last thing. You know, I wrote to Elon Musk, I wrote to the board, we haven't heard back from any of the parties involved. But when Lauren broke the story about SpaceX's tender being settled and the internal comms about why Space X was going to pursue an ipo, the CFO also said this is about dramatically ramping up capacity on those existing business lines. But our reporting was that they would need tens of billions of dollars to buy the GPUs to put into space based data center team. Awesome car, big scoop with some very big numbers and hypotheses. It was brilliant to have you all on nongrush. Calporter thank you Ed as always Scoop machine what we've got coming up. Yeah, Amazon could be making save new bet on AI with talks underway to deepen ties with Open Air. We have the Bloomberg Report next. This is Bloomberg Tech. Every day millions of customers engage with AI agents like me. We work round the clock and have the facts at our fingertips. We're fast and effective but incredibly patient. And we're built on Sierra, the leading AI powered customer experience platform. No hold music, just answers and action. Visit Sierra AI to learn more. That's Sierra AI. 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Plus wise runs over 7 million daily checks to catch and prevent fraud. 15 million people already trust WISE to manage their money internationally. Be smart, get Wise, download the Wise app today or visit wise.com Terms and conditions apply. Nvidia provided technical support that helped Deep Seek improve its breakthrough AI model. That's according to the Republican head of the House China committee who says Nvidia's technical support allowed DeepSeek seek to achieve cutting edge performance with its R1 model using Nvidia's H800 processors, undermining the goal of US export controls that were designed to restrict access to higher end American chips. CAR let's talk about Amazon now because it's reportedly in talks said to invest up to $50 billion in OpenAI now. Person familiar with the matter says the potential deal would build on an existing relationship with Amazon already of course supplying computing power to the Chachi beat maker. For more let's bring in Bloomberg's Matt Day. You cover Amazon. There've been reports back in December that they might be up for about 10 billion. But this just seems to be scaling at the same point as the funding need is scaling. Yeah, absolutely. I mean it seems like Amazon's going have to pay a lot to get a seat at the table. We've already got some open air business, but I think it's clear they'd like some more. Definitely their commitments so far trail what their rivals like Oracle and Microsoft are getting from open air. Maybe this is a way to get them more business. So you know Amazon was super aligned with Anthropic. Anthropic has looked elsewhere beyond Amazon. Something's happening here. Matt, could you kind of unpick the web a little bit? Yeah. So if you, if you roll the clock way Back to when OpenAI launches hand in hand with partner Microsoft models were kind of exclusive things, at least the cutting edge ones or some of them for a long time. Anthropics, you know, first and best place was on Amazon servers. I think a lot of folks expect that to fall down and it has broken down over time. Models can be run from other cases. This exclusivity that we saw early in the age, you know, a lot of folks think that's just going to, going to fall by the wayside as you know, more people want more ways to access these models and some of the business arrangements change. It's almost the inevitable commoditization. Briefly, Matt, when do you think we'll start to hear more significant data points as the amount that they commit? You know, I'm not sure what we were told that this disopening fundraising is a nice to have, not an immediate need to have. So it could be some time yet before this stuff all gets signed and sealed. Bloomberg's Matt Day with the reporting on Amazon looking at investing in OpenAI. Thank you. Now coming up, rising memory prices are fueling investor concerns, particularly for Apple down 7, 10, 8, 10 of a percent even after strong sales and yeah, a significant earnings beat. We're going to go back to that story. Halftime. This is Bloomberg Tech. Welcome back to bloomb Tech. This Friday, the markets digest President Trump's Fed chair nomination, Kevin Walsh. Bloomberg TV Markets correspondent Nora Melinda joins us with the breakdown. You talk tech but you also talk what other risk assets are up to today. Absolutely. So we really are seeing a reaction in the market today, Caroline, especially as people are really trying to digest what's going on after we are seeing that Kevin Walsh will potentially be the Fed chair. Of course, Trump talking about this on social. So we are seeing a reaction across the markets. I'm looking at the S&P 500 down for eight its third straight day. We see it currently sliding by about 0.5%. But what's also interesting is that I'm seeing consumer staples and consumer discretionary as some of the best performing areas in the S&P 500. But what's on the downside right now is materials and information technology. So as we continue to keep our eyes on this tech space, we are seeing them taking a bit of a beating today, of course, for various reasons that are also outside of that. That's what I'm hearing from my sources. But of course we're really keeping our eye on to our treasury yields, Caroline. I've got my eyes on the policy sense of two year. Of course we're seeing this sitting around 3.5% when we look at that treasury yield there, but the 10 year sitting around 4.2%. So we are seeing a bit of a reaction as we look at bond, the bond market and as we're seeing a bit of a mixed picture there. But crypto, that's really an area that I've been keeping my eye on because it tends to be a speculative space right now. If we look at Bitcoin, of course we've been seeing a bit of a breather there. But as we look at some of the action that we've been seeing in this space more broadly. I mean we see that Bitcoin is trading near a two month low especially we continue to see the slide. A lot of outflows coming out of the ETFs that we see in the Bitcoin space. And that's only adding to the deepening exposure that we're seeing today as people are really trading off of that speculative area as we're really digesting what's going on with this new Fed chair. Bloomberg's Nora Melinda with the big take on the the markets. Post that Fed news, start your stopwatches. I've got to do all the other tech earnings and news that we haven't got to yet. I'm going to start with Verizon. Big gain in the wireless business subscriber count. That stock is actually on track for its best day since 2008. But they threw in a $25 billion share buyback which is a sweetener the markets like so far interesting like it met estimates easily and gave a forecast revenue for the year that again was completely in line with expectations and had been higher. Then Truist comes out with a note basically saying that full year revenue guidance is a very high bar to clear and they don't think they'll do it. And now the stock's down 5%. Let's go to the world of hardware. Sandisk has taken its rally now to 1,780%. It is up 13% after earnings which absolutely smashed it. Memory prices. This is a key name in nand. Although it's kind of the runt of the litter in the memory names that are out there. It was spun out from Western Digital of course but you know we know the story. Scarcity of memory. This is a fabulous name. Coaxial. Is that, is that their fab in out of Japan, right. The, the Toshiba spinoff. And how is that impacting Apple? Well Apple is down 610 of a percent. Absolutely smashed it. IPhone smashed it. Outlook smashed it. We're worried about memory prices. Over to you. One minute eight seconds and stop. Watch. That was too long. Sorry. It was, was lovely. Nebula perfume could go even deeper on Apple. IDC senior research director and Nobila, they did smash it. Extraordinary growth, particularly in China. But their anxiety overrules should it. You know it's interesting like to me that even after such an amazing quarter and such, you know, fantastic beats, I mean I have analysts like calling me our clients like just pretty much scratching their head right because it's. We had even the street analysts like they had already baked in a great quarter in their estimates and Apple still blew them out of the park. So despite all that, you would think everyone would just be celebrating. But you know, of course, I mean, everyone's concerned about the road ahead, right? They did great now. But what's going to happen, especially with the memory crisis and crunch and all firms and analysts estimating that market is going to go down. So everyone really wants to know, is Apple prepared for the year ahead? So just an IDC data, we are forecasting in November. We had forecasted a 1% drop in 26. But now because of this memory crisis becoming worse, we're looking at down to 5% as a smartphone market. So I think it's a valid question, right? The anxiety that how is Apple preparing? And they also didn't address their strategy. They even though now I think they're in a much better position to do so. So with a recent partnership with Google. So I understand, I can play both sides. I can play both sides. In terms of the stock has run up 3.3% this week. So maybe there's just a little bit of profit taking as well. Nabila. But our guest at the top of the hour, Richard Kramer over was sort of outlining that if anyone's going to win in this scenario or have an outsized advantage, it's Apple because of the control it has over its supply chain. Is that true? In this day and age of AI where TSMC suddenly isn't totally reliant on Apple for its revenue flow, it is getting so much more demand put on it from the likes of Nvidia. It is, you know, that's what we've been saying too. That's a fair assessment with your earlier guests. And if you look at the smartphone market, right, especially during this crisis and always whether it was even in the pandemic, Apple's, I don't say control, but leverage over the supply, supply chain and their scale. You know, there's certainly getting longer contracts and better pricing, so they're able to navigate the situation and they're in better position because they are premium player. And also on top of, you know, having larger leverage in terms of the supply chain and their scale, they're also focusing on the premium segment and therefore their phones have larger margins. So that's what we've been saying, that premium players such as Apple and Samsung are more insulated from the crisis because they have larger margins and greater scale and therefore they can hopefully get better memory and at better prices. So it's really the low end Android segment of the market, players such as, you know, chow mew, etc. And especially transient that are going to feel the crunch the most so. Absolutely I would agree with that assessment. I actually you misspoke a little bit earlier. I'm going to correct myself. I said that the iPhone revenues came in about $4 billion above consensus. They didn't. They came in almost $7 billion above consensus but 4 billion above the absolute highest estimates. And of course we don't get units anymore. Right. Handset units. But you know what our previous guest also said is their supply constrained. Right. They left money on the table. A lack of handsets. Have you been able to to model the success of this iPhone 17 and how well it sort of flew out the store and online? Absolutely. I mean the number of units as you've seen from our most recent data and you know that was still preliminary. Preliminary so we're still working on updating it. We're looking at the largest, you know, record breaking year in terms of units as well for Apple and even as ship even, especially when you focus in on China. Right. They have. I kept going back in the data to see when I could find a quarter that they did. You know that this didn't, that this didn't beat or that beat this past quarter but I couldn't. I went all the way back up to 2021 and this was the largest quarter in terms of units and share in greater in China as well. We're looking at about 21%, 22% share and that's the largest they've had as far as I've gone back in my system in 2020. So it's. This is phenomenal and again I think I've heard everyone ask or talk about what has really driven this sale. Was it really something as simple as the orange color. But you know it's going back to basic. The design element is pays a huge part in consumers deciding to upgrade. Everyone was expecting Apple intelligence to drive the super cycle but it was really something as simple as design upgrade that you know make consumers fly into stores and and buy the same device. So and of course on top of that a very heavy installed base and refresh cycle of 2021 we had looked at a peak growth for Apple a strong jump and that's really the users you know, at the prime five year or four year cycle Nabila if the market's going to fall 5% this year, shipments will fall 5% this year because of the memory issue. What is the Kind of wild card that gives us a different result. Result right in the PC market. IDC has this forecast that says we're worried about memory, but actually IPC could give us a bit of an uplift. Is the same not applicable to the smartphone category quickly? No, because you know, it's really not been driving the uptake. And even in the PC factor where we are, we're working on revising those. We're looking at almost a 9% decline in PCs from our earlier forecast because of this memory crunch. So it's going to hit essentially the whole market. But the top players are more insulated from the impact. That was a bit of a headline. We should have you back soon and talk about that. Nabila Pop out of idc. Thank you so much. There's been growing concerns around costs linked to AI data centers. But PG&E CEO Patty Poppy is not worried. She says datacenter power demand will help fund the company's infrastructure upgrades through higher sales. Listen to this. As we grow demand on the on the grid, we can actually lower the unit cost for every customer. So more, more kilowatts share the use of the grid every kilowatt. You see the hyperscaler. A data center owner taking the burden is that. And that's all about pricing. Someone's going to pay for it. Somebody has to pay for it. They have to pay for it. But their utilization of the grid actually makes it more affordable for everyone else. I do think this problem is quite simple people. There's a lot of talk about does building out data center infrastructure raise costs for everyone? Not when you number one, price it right. And two, we haven't grown load on our grid in decades. This new demand actually will fund the rebuilding of an aged infrastructure. We actually need these data centers and their new revenue. The part that people don't talk about, they talk about the cost to build the infrastructure, they forget about the revenue. So that comes with that infrastructure. And that revenue then funds the rebuilding of the grid not only for that location, but more broadly this deflationary argument. Fascinating. PG&E CEO Patty Poppy. Great interview. Now coming up, investors, they continue to back US startups focused on reshoring manufacturing. We're talking to the CEO of metal parts maker Vulcan Forms about its latest $220 million Series D. That's next. This is Bloomberg Tech. Support for the show comes from public on public. 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Plus wise runs over 7 million daily checks to catch and prevent fraud. 15 million people already trust WISE to manage their money internationally. Be Smart Get Wise Download the Wise app today or visit wise.com Terms and Conditions apply. You need to make a huge presentation in an hour. Luckily, Adobe Acrobat Studio uses AI to take all your documents and generate a presentation with a single click, building slides faster than ever before. So if you need a last minute pitch deck, do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that with Acrobat. Learn more@adobe.com do that with Acrobat. Metal parts maker Vulcan Forms has closed a $220 million funding round ledger by Eclipse and 1789 Capital. The company, which uses additive manufacturing or 3D printing, is part of a growing wave of startups that we Talk about a lot on this show. Aiming to use advances in technology to bring manufacturing back to the United States. Vulcan Form CEO Kevin Cass joins us now. Kevin, it's great to have you here on Bloomberg Tech. You know, many ways, a simple story, but, you know, it's a big raise. You can talk about what you need the funding for, but also just explain Volken Forms. Is this just you being a factory? It is. It is indeed. Yeah. Vulcan Forms is an advanced metal product manufacturing company. And what we've done over the course of our years is we've developed the highest power 3D printing additive system in the world. And then we've coupled that from a supply chain perspective and kind of minimize the distance metal atoms need to travel in order to become a finished product. And so the, the most efficient way to make a product is to make only the product that needs to be made. And an additive manufacturing allows for that. And so we've centered our technology platform and our manufacturing ecosystem around that technology. We've developed and innovated in that space to bring the highest powered, most productive platform to the market. And then we couple that upstream and downstream and consolidate that supply chain, innovate within those process steps, simplify where we can, minimizing process steps, and then bring massive scale across large market segments. So this is completely in line with some of the central tenets of this administration's plan across a number of domains. Right. What is your relationship like with the Trump administration? With commerce? Right. Commerce has been a big part of driving some of this activity. Yeah, yeah. Our General North Star is we're an American advanced manufacturing company and we're very proud of that. So we partner with anyone who has interest in advancing exactly that cause. And so that's, you know, parts of the administration, that's private equity, that's venture capital, that's that's bankers, that's others. But anyone who's really interested in driving American manufacturing forward and making us globally competitive again, we work with and we're, we're very excited about our growth. Donald Trump Jr. Is a partner at 1789 Capital, which is now one of the key investors in this particular round. I'm interested in what this money is going to be used for. That for. Kevin, you've given us the what you do. What is 220 million Add to the vision for you? Yeah. So what that money is allowing us to do is finish the build out of Vulcan 1, where I am today, to build out Vulcan 2, which is up in Newburyport, Massachusetts. So both factory locations are outside of Boston. And then we are actively building on a third factory location that we'd be starting production in July of this year. And then we're in design on a much larger campus type location that will be somewhere in the US we can geek out on this show. Luckily, production grade metal products by bringing the atoms closer. How are you achieving this, Kevin? What is it that you've done as a breakthrough that makes this 3D print printing so unique and so quick to be able to provide for local domestic manufacturing? Yeah, this is a lot leveraging a lot of the learning that I had for my semiconductor days and my time at Tesla and my time at Redwood Materials. If you think about the product delivery in terms of global supply chain. Right. There's not much we can do about where metal atoms are deposited in the world, but they're in circulation all over. And so what we're doing is we're identifying that supply chain and minimizing the distance metal atoms need to travel. We have some customers, their metal supply chain is over 20,000 miles. It goes through nine different countries. And half of the cost of that product is just in moving metal. It actually doesn't have any value to product. So what we're doing is we're consolidating where it makes sense and then where we see opportunities to innovate and design new technologies. We're doing that such as in our additive manufacturing. But then that alone doesn't solve the problem. Kevin, Materials. Yeah. Well, what's the reality here on your exposure to China then? You know, we just have 60 seconds or less, but you're on shore in the manufacturing. You can't get it to zero, right. When it comes to China. That's correct, yeah. Not, not immediately. There are titanium deposits in the US and there are folks working on that. But there's also a lot of material in circulation and our technology will allow for refining and recycling of that and putting that back into certain circular supply chain. And that's why that red one redwood expertise really comes into play. Kevin Casca, great to have you on CEO of Vulcan Forms. Congratulations on the round. Now let's turn a little bit more to politics. California Governor Gavin Newsom spoke with Bloomberg about regulating AI and addressing the wealth gap that some see as being intertwined with tech. California, as you know, is the first state to lead in terms of doing regulations for frontier models, large language models. We worked through that over a two year process. It's become, we think, I don't want to overstate it, but Kathy Hochul mirrored a lot of what we did. She made it her own in New York. In some ways it may have the tenets of becoming a national model. We take it very seriously. Truth, trust, peril, promise. But I don't see it in binary terms. I'm not an accelerist or nor am I doomer in this respect. And maybe it's because I spend too much time with all of the flavors of perspectives on this. So I can see the contours. But I also know this. We don't know what we don't know. But I do see the need for us to address the issue of anxiety in a deep and profound way. And that's why we've been leading an effort which we hope to unveil very shortly on ubc. Not universal Basic Income mincum the old construct, but this notion of universal basic capital. A lot of folks talking about sovereign wealth funds more challenging than it appears to do that. I've been working to try to figure a version of that out. But universally basic capital is important pre distribution strategies, not just redistribution strategies tenants and aspects for the California economy. Your question that we're trying to shape more on that we hope in May and June of this year as we lay out some tracks for resolving some of that anxiety. That was California Governor Gavin Newsom. And you can check out the full Bloomberg newsmakers interview on bloomberg.com or on YouTube now. Coming up, U.S. law enforcement has been investigating allegations that matter staff can access WhatsApp messages. More on that next. This is Bloomberg Tech. US Law enforcement has been investigating allegations that matter staff can access WhatsApp messages. According to interviews and an agent's report, those claims made by former contractors run counter to the company's statements that the chat service is private and it's encrypted. Now a Meta spokesperson called those claims, quote, impossible. Let's bring in Bloomberg's Jake Ryback. He's been reporting this story. So where do these impossible claims exactly come from and the data that would show people are reading them? Thank you for having me. The claims come from people who did contract work for Metta and were employed by the big management consulting firm Accenture. Now what these people did was what Medical's content moderation work. If there's a problem with communications over WhatsApp or Messenger or another platform that gets flagged to these folks. And two of these people told these really explosive claims to law enforcement. They claimed that they and Meta staff had unfettered access to the content of what are supposed to be or what Meta says are encrypted messages. Jake, this issue, you know, reading that you're reporting has come up before in 2020 for a whistleblower. These are essentially whistleblowers. Right, But a whistleblower went to the SEC with very similar information. Just explain that part, please. Yeah, that's exactly right. What we know is there's this law enforcement investigation and there's also an SEC whistleblower complaint. So some people with knowledge of this or knowledge of these claims brought them to the sec, and that's essentially telling the SEC, we see something wrong here. We think you should investigate. We know the law enforcement agent who worked for the Department of Commerce also obtained some of that material from the whistleblower complaint. But we don't know exactly what the relationship between those two things is. The investigator's report was dated July 2025. It's been as active as recently as January as your reporting says. Why has matter been able thus far to say we can't see WhatsApp messages? What is the technology behind it that makes it encrypted? Yeah, so Metta describes its WhatsApp chats as protected by the signal protocol, which is a sort of encryption that is supposed to be on both ends to ensure that communications can't be intercepted in transit. It they can exist on your phone and on the phone of someone you're communicating with, but the keys to sort of open that up and to decrypt them only live on those devices. And what MATTER says is we can't see anything in between because we don't have the keys. Bloomberg's Jake Lieberg. This is a story on the Bloomberg terminal and on bloomberg.com that you really want to read. The US has investigated claims WhatsApp chats aren't private. Terrific reporting that does it carry for this edition of Bloomberg Tech. It's been a week where we've had earnings Fed news, a lot of breaking news from the Bloomberg team, but we kind of still early in this cycle when it comes to earnings. Just think of what we've got next week. We all brace for the alphabets to come. We're still, of course, excited about what Amazon is going to deliver. Don't forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify and Iheart. Go back to Ed's reporting on Space X on Tesla on X. It's been an extraordinary week. Have a wonderful weekend. This is Bloomberg Tech. These days, it seems like AI agents are just about everywhere. You turn every field and every function, but without identity you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. 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