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- [00:01]
Caroline Hyde
Resilience isn't just about bouncing back, it's about being ready and when the threat 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 at public.com disclosures 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. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent Secure any agent. Okta secures AI introducing the all new.
- [01:57]
Ed Ludlow
Adobe Acrobat Studio, now with AI powered PDF spaces. Do more with PDFs than you ever thought possible.
- [02:04]
Caroline Hyde
Need AI to turn 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.
- [02:13]
Ed Ludlow
Do that with Acrobat.
- [02:14]
Caroline Hyde
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 at adobe.com/do that with Acrobat.
- [02:29]
Ed Ludlow
Bloomberg Audio Studios Podcasts Radio News.
- [02:39]
Caroline Hyde
Bloomberg Tech is live from coast to.
- [02:41]
Ed Ludlow
Coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg tech. Coming up, ServiceNow agrees to buy cybersecurity startup AMIS for 7.75 billion, its largest acquisition to date. Plus Nvidia's biggest Southeast Asia buyer faces a chip smuggling probe despite the tech giants insistence that chip diversion doesn't exist. And crypto's big year, that wasn't a win for all the billionaires hit hardest by recent price drops. First we check in on those markets and Bitcoin continues to be on the downside. We're off by a percentage point.87,361. So once again another annual loss for the OG in the crypto space. But we're seeing risk on perpetuate a little bit in the NASDAQ 100. We're higher on the day, we're higher on the month and boy are we higher on the year, up more than 20%. And of course today's figures, the US economy expanding at 4.3% annualized pace, maybe just easing back a little bit of risk on feeling if indeed the Fed doesn't cut as much as that have been anticipated because this economy looks like it's doing fine. Let's talk about some of the animal spirits in the market right now, particularly when it comes to M and A. And let's look at ServiceNow. We're currently trading lower on that particular stock. We're off by two and a half percent because well, they're going to use cash, they're going to use debt. For its biggest acquisition so far, it's all about the world of cyber. And it's actually a story that Bloomberg broke well ahead of the formal announcement. Let's get to it. Bloomberg's Andrew Martin. And it was last week that you made clear to the market that ServiceNow was looking at this particular acquisition. Why is it building up in cyber?
- [04:14]
Caroline Hyde
Well, I think they're sort of following a path that Microsoft and Google have already followed which is, you know, combining a enterprise software product and offering cyber is sort of a bonus. And, and so you know, Microsoft sort of perfected this idea of, of, of, of having a package of their software offerings in the cloud and bringing in cyber. Google bought Whiz to do something very similar. And now ServiceNow, you know, is basically saying as we automate, you know, they basically automate IT and personnel and now they're offering cyber as sort of a broader package to entice customers.
- [04:54]
Ed Ludlow
So the safety of agent is crucial. Why is ARM is the right holding? Tell us about the founding team and other Armis is an interesting company that.
- [05:03]
Caroline Hyde
Like a lot of cyber startups, it was started by Israeli military veterans who had worked in one of their elite cyber units. And what these guys do is they, they call it cyber exposure management. It's basically looking across your whole digital footprint and finding in real time flaws and vulnerabilities and fixing them quickly. And it's something that's really lends itself to AI. You could see that being automated and you know, the company's grown incredibly fast. And you know, for, for a company that, that, that automates processes, automating cyber just makes sense as part of that.
- [05:43]
Ed Ludlow
What's interesting is as you said, this is part of a theme. The fact that the megadeal of the year was whiz with Alphabet. Are we expecting yet more and more these platforms looking to bolt on cyber acquisition?
- [05:53]
Caroline Hyde
It just makes sense, right? I mean it just makes sense to, to offer cyber as part of a broader package. And you know, among the big cyber players, Microsoft being the biggest Google crowdstrike Palo Alto, they're all trying to build a bundle that can attract users with was sort of one stop shopping in cyber.
- [06:14]
Ed Ludlow
That word platformization, which palo. Horrible word, horrible word. But they love it. Bloomberg's Andrew Martin, we so appreciate you coming on about the latest steel. Let's turn our attention to another huge piece of reporting by Bloomberg. Nvidia's largest buyer in Southeast Asia. It's under investigation by the US government over whether it smuggled advanced chips into China. Now Singapore based Mega Speed imported at least $4.6 billion worth of Nvidia hardware through November since its founding back in 2023. The company wasn't. Its obscure spin off of a Chinese gaming enterprise could become a prime example of Washington's fears of Beijing gaining access to advanced chips for commercial and military uses. Mega Speed denies any wrongdoing, says it abides by all regulations from the US and elsewhere relevant to its operations. Let's get the details on what was a very long running investigation. Bloomberg's chips reporter Ian King and the deep dive that reporters have done to understand whether we really understand how many GPUs are going to make a speed speed and where they're ending up in talk us through it.
- [07:19]
Caroline Hyde
Yeah, I mean there's a lot of evidence. It's important to point out, as you already did, that Nvidia says there's nothing going on here. Mega Speed itself says there's nothing going on here. But you know, our colleagues reporting here, Caroline, is that there is an investigation going on and you know, Southeast Asian governments and also Washington are looking at this and still trying to find out whether there has been anything significant going on.
- [07:47]
Ed Ludlow
Go Ahead, from what we know, it's a Singapore based company, Mega Speed, operating fully in compliance, as they say, with applicable laws. But what ultimately has had to spring up ever since the Biden administration back in 2022 was a restriction on sophisticated chips coming from Nvidia to China. So suddenly you saw other Asian countries become real areas of focus for importing chips so that Chinese companies could actually do the workload, could do the compute outside of their own country. Correct?
- [08:16]
Caroline Hyde
Yeah, no, that's absolutely right. There's nothing illegal with setting up a data center and serving Chinese customers, providing those customers don't have links with a banned entity in the US Whether that's the military or some company which the US government has decided serves China's military. However, there is suspicion about these links, about who's in control of what. There is a, you know, and this is the problem that Nvidia has to face. And Video, you know, say, look, there's nothing to see here, there's nothing to worry about. But as you'll see from our story, there's a lot of links between individuals in China. There are, you know, there's a lot of a lack of clarity in the relationships which I think everybody is trying to work through to make sure that there is nothing untoward going on.
- [09:09]
Ed Ludlow
Because Bloomberg didn't find evidence of any Mega Speed Nvidia chips actually being diverted to China. But there's all these inconsistencies, as you say, in Mega Speed, Southeast Asia demand and chip inventory and where overall they all end up in. What's so interesting is this is a moment where maybe actually Nvidia will get more access to China. H2 hundreds have in theory, or at least according to a truth social post, been allowed back into China. The question is whether China wants them, but also whether Mega Speed will actually have Chinese demand going forward if indeed we start to see access once again to mainland.
- [09:43]
Caroline Hyde
Yeah, I mean, again, we're in a kind of a transition period where we're trying to find out exactly how this will all play out. Nvidia wants to do business directly in China. That's absolutely true. At the moment it cannot do that because of these restrictions. What we're trying to find out is whether the Chinese want to do business directly within video and if that's the case, what level of demand that there will be there. Nvidia has really kind of had a good year in Washington. It's gone from really restrictive rules to a freeing up of some of them. But again, that has to translate into shipments into that Chinese market and we haven't seen that yet and we don't know that that will actually happen. Clearly, stories like this, that there are suspicions about smuggling that we, you know, perhaps should be more secure and more kind of careful in how we deal with China and Chinese entities don't help that case. So again, there's a lot at stake here and we really need a lot more clarity about the details of how this is all going to work out.
- [10:44]
Ed Ludlow
It's a very thorough, incredibly complex story and you broke it down perfectly for us. Bloomberg. Zane King, thank you very much indeed. Go read more about about the Nvidia supplier on your terminal online. But let's talk more now about chip and trade news because the US Is actually accused today China of engaging in unfair trade practices in the semiconductor sector. But Washington won't place additional tariffs on chip imports till at least mid-2027. Chinese embassy in Washington did not immediately respond to the request for comment. Let's get the details of Bloomberg's Jordan Fabian. And so we understand that the US tr, that's the office of US Trade representative saying look, what they're doing isn't fair.
- [11:25]
Caroline Hyde
Exactly. It's an interesting development. This investigation actually started under the administration of former President Joe Biden with the expectation that Donald Trump, who talked tough on China during the campaign, would follow up on it when he became president. But in the interim, he started a trade war with China. He, he then struck a deal with Xi Jinping to take off those tariffs. And so the US Right now, if you listen to what Jameson Greer, the trade representative has said, other senior administration officials, they want a stable relationship with China on trade. And so they're not going to look to hike tariffs at the current moment, which is why you have this odd outcome of an investigation saying the obvious really, which is that China is using non market practices to dominate the chip industry. But at the same time, the US Isn't really going to do anything about it, at least not for the foreseeable future.
- [12:19]
Ed Ludlow
So the SCI was legally required to publish the outcome of the investigation, the 301 investigation. But what actually is being thought of that China is up to in terms of unfairly supporting its industry? They say China is targeting the semiconductor to industry for dominance, is unreasonable and burdens or restricts US Commerce and thus is actionable. Jordan, what are they being told or accused of?
- [12:45]
Caroline Hyde
You know, they're being accused of using non market practices to bolster their domestic industry. You'll sell those chips at perhaps below market rates into various countries to get them hooked on the Chinese technology stack and thereby increasing the market share of their chip industry. The irony is that the US Is pretty much trying to do the same thing, which is basically doing a take it or leave it deal with countries around the world saying that you need to use the US Tech stack. We want to make sure that countries are not on the Chinese tech stack and had been for a while trying to limit exports to China to other countries that are deemed unfriendly and also crack down on the Chinese market. So they're saying essentially, you know, you know, China can't try to dominate the market. We're going to try and dominate the market. But right now they're again going to sort of stand off our hold back on increasing tariffs further on Chinese chips to address that problem.
- [13:52]
Ed Ludlow
Complex Trade Web Jordan Fabian, thanks so much talking us through it. We really appreciate you. Meanwhile, coming up, Larry Ellison, his big bet on Paramount that could alter his vast Oracle fortune. More on that next. This is Bloomberg Tech.
- [14:16]
Caroline Hyde
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 a person who trusts you and every password is a door you're responsible for locking. And when the threat comes, and it 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 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. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent Secure any agent Okta secures AI the Chase Inc. Business Premier card is made for business owners who make things happen. Designed for high spend and limitless cash back ink, Business Premier is a painful card with built in flexibility. Get the buying power you need to make large purchases, cover unexpected expenses and help your business grow. 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 invest cash back into your business. From innovation and technology to everyday expenses.
- [16:58]
Ed Ludlow
Inc. Business Premier is the only business.
- [17:00]
Caroline Hyde
Credit card with 2.5% cash back on every purchase of $5,000 or more and 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 business card 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.
- [17:30]
Ed Ludlow
Larry Ellison no stranger to bold bets, but his biggest one yet, maybe in media a potential personal guarantee, more than $40 billion to backstop Paramount's all cash bid for Warner Brothers Discovery. It could dramatically reshape the Oracle founders fortune. Bloomberg's Dylan Sloan joins us for more as we're picking apart how Larry Ellison is basically helping his son David Ellison potentially buy Warner Brothers Discovery. What's so extraordinary about your reporting on the billionaire is that he has sold very little of Oracle stock over the years.
- [17:58]
Caroline Hyde
He has, yeah. And even amongst the the billionaires that we're looking at on the Bloomberg Billionaires Index, he really stands out. He sold about seven and a half billion dollars worth of stock lifetime, no more than $1 billion in a single year since 2010. So that that really pales in comparison in looking at some other founders. You know, he still owns about 40% of the company, which is, you know, multiples higher than a lot of comparable tech founder peers. So his strategy in terms of his wealth management has been to stick really closely to holding his Oracle stock, not cashing out at any point, which has been very successful for him as the stock has done well. But it does raise some questions about the cash that he has on hand and whether or not he would be able to immediately meet those equity financing commitments should he be called on to do so.
- [18:40]
Ed Ludlow
Yeah, because like 40 billion in the grand scheme of things is actually not that much compared to his $252 billion of net worth. But how liquid is any of that? Where has money gone? What could he sell to help out?
- [18:51]
Caroline Hyde
Yeah, and you raise a good point, which is it's important to say that he can afford this, of course, many times over. Third richest man in the world. He has got more than enough assets to be able to cover this. But historically Ellison's has relied on debt to finance many of his investments, his lifestyle purchases. Currently about 30% of his Oracle stake is pledged to secure loans which he uses to raise cash and fund his many lifestyle purchases. He has a really extensive real estate portfolio, you may remember even earlier this year, it feels like a lifetime ago, but he put up a big chunk of the equity for, for his son David's acquisition of National Amusements, the acquisition of Paramount. So should he need to raise cash down the line, of course selling shares would be one option if he's called on to backstop A Steel, which again would constitute a pretty significant change from his, his strategy over the past few decades or potentially increasing the size of those loans, which is something that the Oracle board would need to go through a review process of to be able to.
- [19:43]
Ed Ludlow
Just like Tesla learnt when Elon Musk now X was Twitter. Dylan Sloan, it's great reporting, go and check it out on all things billionaires. But let's talk a little bit more about the potential bid or deal of Paramount fighting Warner Brothers Discovery and indeed Netflix to the legal stakes of the mega media mergers. Fiona Scott Morton, professor of Economics over at the Yale University School of Management and Adjunct professor of Yale Law School is with us now. Fiona. So let's just go back to whether or not any of these will get through regulatory approval. Let's start with Paramount buying Warner Brothers Discovery. Does it cut legal mustard, you think? Well, all three of the bidders, remember there was Comcast in there to begin with, have overlaps with Warner Brothers. If you think about three buckets of say, content production, streaming and then channels or networks, they all overlap. And Paramount in particular has a lot of production studio kinds of assets, particularly because of course Paramount merged with Skydance first, so that's a big issue for them and they have a significant share of streaming as well. You served as Deputy Assistant Attorney General for Economic Analysis, Chief economist. You basically helped with antitrust Division in your time, when ultimately it comes down to it, the courts are going to say who's the competitor here? Do you think it's right that they bulk in YouTube and new ways of consuming content, even TikTok versus us will be on linear and certainly on cable. Yes, I think this is the tricky thing for the Paramount bid. I mean we all understand what producing content is and I think we have a pretty good grip on who does that and why it's different and what sort of market there is there. Streaming, however, is much trickier because we have user produced funny cat videos. We have user produced videos that actually sustain those users in terms of income. We have professionally produced short things, professionally produced long things. And so we're getting a kind of a continuum of content and that includes YouTube as you, as you point out, which has a big chunk of that continuum. And it's going to be very difficult to draw the line on what is what we call the relevant market, which in antitrust is what matters because that's where you get head to head competitors. It feels as though Netflix for its part, which thus far is meant to be the front runner for buying Warner Brothers, or at least the streaming and the studio side of it, they've tried to front run this sort of argument by making clear they think the market competitors are YouTube and they are TikTok and they are just where our eyeballs are at. Who do they need to convinced in this? Because many would say, oh, the Ellison's got the year of the administration, but really it's the courts.
- [22:28]
Caroline Hyde
That's right.
- [22:28]
Ed Ludlow
The president can say he wants the Ellisons to have it and he can say that about his friends or the people who give him money or silence the voices that he doesn't want to hear. But ultimately we have a law in the United States that can be enforced not only by the public, the federal public authorities, but the states and actually by private plaintiffs as well. And so if there's some harm to competition and that can be shown by a state or a private plaintiff, then they can go to court and try to block the transaction just like the federal government can. And indeed we have seen states, coalitions of states being very active in antitrust lately when they have felt that the federal government is not doing a good job. Fiona Scott Morton I have a feeling this story is going to run, so it'd be good to have you back.
- [23:13]
Caroline Hyde
Back.
- [23:13]
Ed Ludlow
Yale University School of Management. We appreciate your expertise. It's been a wild year in crypto, despite big regulatory wins, hasn't been kind to everyone. Even as prices and interest surged early on, billionaires tied to the space they're charting very different paths heading into 2026. Let's take the Winklevoss twins. They saw their fortunes pressured as Gemini Space Station continues to face losses after the Exchange's shares fallen 60% following September IPO. On the other side, Jeremy Allaire's circle benefited from growing adoption of its USDC Stablecoin, helped by clearer regulation. And the shares have almost tripled since listing in June, although you can see they're well off their previous highs. Meanwhile, let's talk Mike Novogratz Galaxy Digital has actually seen some sort of a rebound alongside Bitcoin coins gains earlier in the year, but it has had a tough stretch. Then there's Michael Saylor's wild ride as to as the strategy founder doubled down on his high conviction, Bitcoin bet further tying his wealth to the token's price swings, his net worth has collapsed almost 40% this year. So what next for crypto in 2026? Not just the billionaires. Nice Killeen. Still, Mark managing partner, says she's going to see momentum. She writes, we expect continued progress through increased M and A activity, expanded entrepreneurial innovation and a deeper, more robust base of both retail and institutional users. She joins us now for you, Elise, reflecting on 2025, what was the biggest landmark move? Was it institutional adoption? Well, 2025 was one of the most consequential years in Bitcoin's history, not because of price appreciation, but because of structural progress. And that includes policy, product and institutional adoption. Across all of these fronts, Bitcoin moved meaningfully into the mainstream as an embedded part of the financial system. And 2026 will be able to take advantage of that foundation. What does advantage look like? Well, what it looks like is recent regulatory clarity and an effort by regulators and policymakers to acknowledge Bitcoin as part of the financial system and to lay the foundational groundwork in terms of policy so that the US can continue to lead both in terms of innovation, distribution as well as institutional adoption that can provide efficiencies and gains for US Based institutions from Bitcoin, the asset and Bitcoin technologies. At least remind that quickly. Just remember, remind us where we are on policy because Genius act tick that helps stablecoins and pass through Congress. But the Clarity act, what will that give us if indeed it does get through the Senate? So in addition to the Genius act passing this year, we've seen advancement of the click what the Clarity act attempts.
- [26:09]
Caroline Hyde
To do or aims to do I.
- [26:11]
Ed Ludlow
Should say is to create a framework for Bitcoin and other digital assets. Assets can create clarity as well as consumer protection and can offer definitions of what these digital assets are. So for example, we expect that Bitcoin will be defined as a commodity along with other decentralized assets under the purview of the cftc. And that will help drive institutional adoption both in terms of institutional institutions own interaction with Bitcoin, but also institutions comfort with distribution of Bitcoin to their own clients. We've got about a minute left but your portfolio is so interesting because it's all around the Bitcoin ecosystem. None of us energy focused. How is that playing into also this need for energy and power in the air as well? That's right. So we began the year talking about Bitcoin and the intersection of Bitcoin with other critical trends and that included AI and energy infrastructure. What we've seen as the year comes to an end is an acknowledgment or recognition of the opportunity at the intersection of Bitcoin and energy. We've seen this with large transactions such as those advanced by major AI stakeholders seeking energy development and looking for a way to drive efficiency currencies and especially in terms of pace of development, including through partnership with Bitcoin miners and Bitcoin mining development institutions. And it's been great as always getting your take throughout the year of 2025 and very much looking forward to checking in with you in 2026 as well. And apologies for a technical glitch we had throughout that interview. At least clean. We thank you so much of Stillmark. Welcome back to Bloomberg Tech. Let's check in on these markets for you as we head towards what is a very shortened week. We're up 2. 10 of a percent on the NASDAQ 100 at the moment. Stocks actually driving near all time. Highs very close in the S&P 500 as well. Four straight session of gains. We got some renewed appetite for tech in particular these days even as the U.S. economy expanded. Fastest we've seen in two years. 4.3% annualized pace. But does that mean the Fed won't cut as much? Maybe that's why Bitcoin's under pressure. We're off by 5.10percent on crypto 87828. It's expected to have a down year. Tell you what's also had a down month and also a down on the day. The last quarter has been pretty painful for some of these NIO clouds. Core weave off by 3% but off by almost 40% in the last trading quarter. Nebulous is another NIO cloud. Basically these new types of companies that come out to offer compute for the ever necessary need for AI were up by 2.8% on nebulous Alphabet though up 1.2% as it's actually really thinking about the energy side of this equation. And it bought of course a power company we saw yesterday intersect power to be able to offer more climate friendly energy for its needs. And that's been a big theme of the year. And data centers energy demands is one that we keep on intersecting with Bloomberg's Josh Seoul who covers energy been highlighting the strain that it's all been putting on the power grid. So I'm interested as to if you reflect on 2020 25, how energy markets were disrupted by the gold rush that we saw.
- [29:26]
Caroline Hyde
It absolutely changed so much. We've never seen so much money rushing into the power sector. The numbers are just wild. I mean the four biggest tech companies spending $344 billion this year. The power sector expects to invest 1.1 trillion over the next five years on the power grid in order to both work on decaying infrastructure but also to connect all these new data centers.
- [29:57]
Ed Ludlow
And they will get the financing from the end net need. Or are they having to turn to the consumer as well to help finance all this infrastructure? Is the government who pays for the one point whatever trillion dollars it is of improvement?
- [30:10]
Caroline Hyde
Tech companies kicking a lot of money and utilities especially have been good about setting up contracts where they get paid whether or not the tech companies use that much power over time. So there's some built in protection for customers there. But when tech drives up the wholesale cost of electricity, that cost is then passed on to consumers. So they do see some upward pressure on bills from that many anticipating that.
- [30:35]
Ed Ludlow
2026 midterms is going to come a lot about the that you saw issues in New Jersey, we've got it in Virginia, those areas of datacenter build up. Are you seeing the utilities and power companies also trying to get an easy regulatory environment? I mean we've talked a lot about fast tracking of these big projects. If they've got a lot to put money into.
- [30:56]
Caroline Hyde
It's hard because utilities for sure want to hook up the data centers. That's a huge new customer for them. That's like 700,000 people just moving to their turret territory. Who, who wouldn't want that business? But it can be tough for them because if it makes prices go up, that gets consumers mad. That gets regulators and politicians focused on the issue. And you can have like what we saw in Georgia where regulators are voted out and new regulators, Democratic regulators who are expected to be less friendly to the power company are voted in.
- [31:26]
Ed Ludlow
Josh, so can have a busy 2026. Thanks for breaking down what has been a Wild ride for 2025. Let's talk more about the impact of energy demand on the tech industry. Jason Oxman is with us. He's president CEO of the Information Technology Industry Council. You represent some of the biggest players in the AI domain. I'm thinking in video open air, a lot of the demand for compute, or indeed this applies to compute. Jason, what are you seeing in terms of the regulatory equation changing to help speed up some of this infrastructure investment?
- [31:54]
Caroline Hyde
Well, great to be back with you, Caroline. And you're absolutely, absolutely right. Policymakers are paying a lot of attention to this issue. And the demand created by the construction of new data centers demands new access to energy sources. Look, we've seen over the last few decades underinvestment in the energy grid, underinvestment in alternative forms of energy. And there are a lot of moves afoot here in Washington to address those issues. The biggest one that I've seen in recent weeks and that we're supporting is something called the SPEED act, which Congress moved through the House on its last day here last week. The Speed act would invoke regulatory reforms to speed up the permitting process for construction of new energy projects. It would reduce some regulatory burden on those construction projects. It takes years and years to put new energy on the grid. Those grid modernization efforts take a lot of time and effort and financial resource. The one piece that Washington is trying to address is reducing the regulatory burden to make sure we can make those investments that we need to make. Data centers are not new. You mentioned Northern Virginia. They've been a data center center hub for decades. Two thirds of the world's Internet traffic passes through Northern Virginia because it's been a traditional hub. But we're seeing the new construction of Datacenter place, new energy demands. And as you noted, policymakers are trying to take action and make it move more quickly.
- [33:04]
Ed Ludlow
But what about the checks and balances that are needed? Because I think very much we've been reporting a lot about new players coming on the scene, companies that have never built data centers before. I mean, boy, Oracle itself, I mean, one of the biggest data center infrastructure investors out there at the moment has never actually, actually formally built a data center of its own. So how do we.
- [33:26]
Caroline Hyde
Yeah, a lot of partnerships are happening you'll recall in January, on day two of the Trump administration, project Stargate, which Oracle was involved in, also involved SoftBank, OpenAI other companies that are more traditional investors in these kind of projects. Data centers have been around for a long time, but a lot of new companies are getting into it. As your graphic in your conversation with Josh showed, only about 18% of the current demand for data centers is from the tech industry. Financial services, other related industries are also building data centers. And I think, as you noted, there's a lot of attention being paid by consumers to this issue. They don't want to see their power bills go up as a result of these investments in data centers. And that's why we're pursuing these alternative projects. You've seen tech companies like Microsoft invest in nuclear power. We're trying to move forward with small module reactors that can power these data centers. And I do think it's important for consumers to understand the value to the US economy, the value to job growth. There was this great report that Vanguard put out last week that said that job growth in AI affected industries is 1.7%. Job growth in non affected industries is 0.8%. So twice the job growth in affected industries. This has an enormous economic benefit. So we need to make sure these data centers are constructed that I can continue to power the US economy, power, wage growth and the like. But there are some things that policymakers like the Speed act can do to help move these projects forward.
- [34:47]
Ed Ludlow
Well, many would say that actually that jobs growth is short term in nature. You need a lot of engineers, a lot of builders to build them, but actually don't mean that many people to manage a data center once it's up and running. And there's that short term, long term perspective as well. When you think about the climate impact, how much are the big tech companies really realizing the responsibility when they're having to bring up all this compute and power? They're also seeing their emissions go up and to the right.
- [35:11]
Caroline Hyde
Well, I think you're right about the long term versus the short term. It does create a lot of construction jobs, a lot of jobs to build these data sets centers. And there are also jobs created in the data centers themselves. But I think the long term effect is really what does AI mean for improving productivity and creating not only the job growth but also the wage growth. That Vanguard report that came out last week that I mentioned also noted that wage growth in AI related industries was 3.8% versus 0.7% in non AI related industries. That wage growth is enormously important. It's what's made possible by the data center. So you're right, the data centers themselves create a lot of construction jobs. We're going to see that continue to move forward. But it's what the data centers do, their buildings that contain the future of technology for the country and the AI servers that are in there and the services that are powered for consumers and for productivity for businesses is really what we need to be focused on going forward. And that's the real benefit of all of this.
- [36:08]
Ed Ludlow
It's a global theme and we're seeing servers and the GPUs that go inside them being put up everywhere. Now there's a story, a really deeply reported story out today from Bloomberg around in video and the potential that we are seeing chips, GPUs from Nvidia get into China's hands maybe through middle parties. And there's some concerns that mega speed in particular, it's a Singapore based company, might have been making that able. Jason, how much are your companies thinking about diversion of chips? How much much are they clamping down on it?
- [36:41]
Caroline Hyde
Well, I think it's important to remember that in the reporting that you're talking about that Nvidia didn't do anything wrong, that there was no actual evidence that any chips were diverted. But it's an investigation of one of Nvidia's customers which I think will play out by by government. But the broader question that you ask is an important one. This is the question of national security and economic security and where they overlap. The Biden administration took a very clear approach to this, which I think was the wrong approach, quite frankly. And that was to cut off access to the world to US Technology. What the Trump administration has done has recognized that there are enforcement matters that will occasionally arise that they need to look into and they will do that. But as a general matter, the U.S. economy benefits and U.S. consumers benefit if the world can buy American technology. This is a race against China. And cutting off China and denying China access to technology really just provides an incentive for China to bypass the US Market and build its own technology for the world. Denying US Companies the access to the global market is the wrong approach. There are certainly national security questions that need to be answered. There are enforcement matters that need to be addressed on occasion. But as a broader matter, the idea, as the Biden administration did, and I think did wrong, of cutting off the world's access to American technology, not just China, but the rest of the world, that was what the Biden administration did. That's the Wrong approach. We need to make sure that we recognize that the success of American economic activity, the success of American technology is dependent on America having access to the rest of the world.
- [38:10]
Ed Ludlow
Very briefly, what about the approach being taken from federal versus state regulation of AI, the actual large language models, new act here in New York and in California. But we ever going to get any clarity from federal level?
- [38:23]
Caroline Hyde
Yeah, there were more than 100 laws adopted at the state level this year and there are more than a thousand bills pending heading into 2026. Look, technology is best deployed not with 50 different regulatory regimes applicable, but one common regime. And this is another thing that's on our 2026 roadmap. President Trump just signed an executive order tasking the administration with proposing legislation to Congress that will replace those 50 potential separate regimes with one federal regime. We think that's the right way to go because technology doesn't necessarily need to stop at state borders. We want to have one uniform national regime rather than a patchwork of 50 regimes that will be better for the technology, will be better for consumers and businesses that want to make use of that technology. That's something we're really hoping happens in 2026.
- [39:12]
Ed Ludlow
Jason Oxman, come join us again in 2026. Until then, have a very happy holiday. CEO of Information Technology Industry Council, we thank you. One of the biggest questions facing investors in 2026 and beyond is whether the billionaire billions being spent on infrastructure will pay off. Bank of America CEO Brian Moynihan spoke yesterday with my colleague David Westin and said we're starting to see the impact kick in.
- [39:40]
Caroline Hyde
The investment's been building during the year and is probably a bigger contributor next year in the years beyond. And so if you look at the data center build out, which is one of the ways that evidence itself, that's a big deal. If you look at customer client spending, like US spending on AI that's higher than it was last year, but frankly overall spending levels are shifting towards that, not necessarily growing at a mid single digit rate type of number. So I think that's part why the reason we feel constructive for next year, we think spending continues. We think there's benefits to the American taxpayer from tax rebates, lower taxes due to the tax bill going through and being effective for next year. And we think the expense expensing and other bonuses for businesses are good. So all that leads to our confidence that we go from basically a 2% type of growth level this year, plus or minus up to 2.4%, which is all due to that. And as Kicking in more and more. And so it's not all attributable, but that's having a marginal impact is pretty strong. So much of the American economy is supported by the consumer. And you at bank of America have a really powerful viewpoint into the American consumer. How's the American consumer doing? Because it has been very strong.
- [40:49]
Ed Ludlow
Wrong.
- [40:49]
Caroline Hyde
There have been some people saying it's starting to slow down, you have to step back. We look at American consumers, 70 million consumers, putting four and a half trillion dollars plus into the American economy every year. And we've tracked the way that goes in the American economy for many years. And so in the third quarter it was up about 5% over last year. As we look at the fourth quarter here so far in October, November, I'd say it in a four, four and a half percent, which is very consistent with a very solid growing economy. You know, in the end of day it's going to work against wage growth. And we see in the underlying consumers we have wage growth, that is their paychecks are going up. And so the labor markets flattened out a little bit in terms of job growth and things like that. It's normalizing in terms of unemployment, but you still see underlying wage growth. So the American consumer spending it 4% more November this year versus November last year is a very solid backdrop. The credit quality, American consumers strong. And then you hear a lot about this discussion about different rates of growth among different income terciles or third. So we look at the bottom third, middle third and top third American income people in the bank of America customer base, we do see differences. That is the higher income and middle income are growing faster. But, but even a lower income third is, is still growing. And that's all good. And that means why is that true? Companies are employing people, they're paying people. Now the labor market's got a little soft. As we look forward to, you know, 4.5, 4.6 unemployment, you know, that is gotten worse, so to speak, than it was the beginning year. But frankly, this goes back to normalization question. If you look at the 10 year average unemployment, the 20 year to 30 or 40 year, it's 5 and 6%, you know, as you go back through time. And so a 4 1/2 to 4.6 unemployment rate is, is, you know, a very strong relative unemployment rate. It's just a lot of the years it's been below four and a half percent has actually been in the last 10 years. So people are very used to numbers now which were part of the tightness in labor in the 2017, 18, 1919 era. Then you had the pandemic and it retightened and so it's normalizing. But we feel good about all that in the Consumers in pretty good shape.
- [42:53]
Ed Ludlow
Bank of America CEO Brian Moynihan speaking to Bloomberg's David Westin. And coming up, new details and the decisions behind Tesla's door design. Those Alexander Electric doors are now in a spotlight following at least 15 fatalities. More on that next. This is Bloomberg Tech. Vrbo's Last Minute deals make chasing fresh mountain powder incredibly easy. With thousands of homes close to the slopes, you can get epic pow freshies first tracks and more. Find last minute deals with the last minute filter on the app.
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Caroline Hyde
Book a private vacation rental now@vrbo.com 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 backtest 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 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. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent Secure any agent. Okta secures AI when you own your.
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Ed Ludlow
Own business, you own every decision. Now own the car that rewards you for it.
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Caroline Hyde
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- [46:28]
Ed Ludlow
A decision made by Tesla executives a decade ago is being linked to fatalities in car crashes and the incidents have prompted increased scrutiny of Tesla's electric doors, triggering lawsuits over whether the design can leave passengers trapped. Take a look. Tesla for years has built its reputation on being a cool, safe, good looking carmaker. Tesla is engineered to be the safest car in the world and to be.
- [46:56]
Caroline Hyde
Fair to them, they have done very.
- [46:58]
Ed Ludlow
Well on US crash tests.
- [47:01]
Caroline Hyde
They often get five star ratings. Flush door handles were very much part.
- [47:05]
Ed Ludlow
Of the aesthetic and the engineering. You know, it looks very cool for so many years. People who drive Teslas love their Teslas. They think their cars are safe. But these accidents reveal that there's actually something bigger going on.
- [47:23]
Caroline Hyde
When you push this button sends a signal to the 12 volt battery to say, okay, pop the door open. Now if you have no 12 volt power, the first thing you're going to do is push this button over and over again. You're going to start freaking out and realize this thing isn't working. In my opinion, this is terribly obvious that this opens the door. This is not a physical lever. This does not pull a cable. The actual way that you open a Tesla is you use this unmarked square right here. That's how you open it. Is that the same on every model of Tesla? It is not the same. What if you're in the backseat? Now the back seat is the scary part.
- [48:02]
Ed Ludlow
So in the front seat they're by the handle. In the back seat they might be under the rug or behind a speaker grill or behind the trim on the door or I actually found one in a Model Y, it was in the door pocket under a plastic flap. A lot of Tesla owners themselves don't know that these manual releases exist. You can design the best vehicle in.
- [48:27]
Caroline Hyde
The world, but you have to also.
- [48:29]
Ed Ludlow
Think about what happens to a human.
- [48:31]
Caroline Hyde
Being after a crash. You are panicking and you're going to go to that muscle memory.
- [48:38]
Ed Ludlow
And for most of us muscle memory is like an old car where you.
- [48:41]
Caroline Hyde
Just open the door.
- [48:50]
Ed Ludlow
And we now have more reporting on that decision making process behind the dual design. According to multiple accounts from sources, the electric door handle was demanded by Tesla CEO Elon Musk despite safety warnings. Let's get more on this. Bloomberg Businessweek columnist Max Chaff can goes back a decade and it really goes back to almost this era of very sleek design where less is more.
- [49:14]
Caroline Hyde
Yeah. And this is a design esthetic that comes from Elon Musk. So in certain ways it's, it's very interesting that he was involved in, in these conversations because this looks like a mistake in retrospect. We're seeing these deaths. You know, Tesla has said it's working on redesigns, there are inquiries and so on. It's not surprising that Musk was involved in this because he's involved in sort of all aspects of the car's design. On the other hand, it's interesting because you do, because again, this is, this kind of undercuts some of the claims that the company has made about the safety of its vehicles.
- [49:50]
Ed Ludlow
There's this line in the story that basically what you must said is the best part is no part.
- [49:56]
Caroline Hyde
Right.
- [49:56]
Ed Ludlow
And so this desire for something that was good looking and sophisticated and sci fi. But it's not just Teslas that have them. Everyone else adopted this design aesthetic as well.
- [50:07]
Caroline Hyde
Yeah, this has spread to the entire auto industry. You see in a lot of higher end cars, many EVs as well as some gas cars. It's not only, you know, sort of attractive from a design point of view, although I think people have different points of view. It's also less expensive because fewer parts, you know, means, you know, less cost. And that's one of the things that Tesla has been very successful at making cars with much fewer parts. They have this famously vertically integrated, you know, manufacturing system. It's, it's allowed them to cut costs. Obviously you see their, their, their potential problems when you diverge from the way the auto industry has done things for a really long time now.
- [50:42]
Ed Ludlow
Chief designer has been on Bloomberg and said that they're looking to change things up. How quickly will that get into new models? And what about the old models that usually we see an update through software upgrades.
- [50:54]
Caroline Hyde
Right. Well, so Tesla has said, you know, unlike other menu, unlike other automakers, they're continuously updating their car. So in theory, I suppose they could get this done pretty quickly. Though, again, this is, this is not as simple as a software update. This is going to require tooling. It's going to require factories, retrofits, potentially in cars. The story Bloomberg ran earlier today, you know, mentions a similar example around the shifter in, I believe it was the Model X or the Model Y, where they took away the column that you used and replaced it with a button that didn't work out. They had to retrofit that so you could see something similar here. Although this is not something that can be taken care of overnight.
- [51:35]
Ed Ludlow
Meanwhile, shares no record highs as it seemed more of a robo taxi, humanoid robot kind of a company right now. Max, great to get your take on what has been a theme throughout 2025, this deep investigation into Tesla door handles by Bloomberg. Now that does it for this edition of Bloomberg Tech. Don't forget to check out our podcast. Find it on the terminal as well as online on Apple, Spotify and Iheartra. From New York, this is Bloomberg. Did you know Tide has been upgraded.
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Caroline Hyde
To provide an even better clean in cold water.
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Ed Ludlow
Tide is specifically designed to fight any stain you throw at it.
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Caroline Hyde
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Yep. Chocolate ice cream.
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Ed Ludlow
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Caroline Hyde
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Ed Ludlow
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Caroline Hyde
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