NetFlix Streams to Record; Trump Widens Tariff Threats to China and Europe
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, let's start with Netflix here, surging to an all-time high. Right now, they're up more than 14%. The streaming giant added 18.9 million customers in the fourth quarter. That's its biggest quarterly subscriber gain in history. It was fueled by the return of Squid Game and having its first major live sporting events.

Ted Sarandos is the co-chief executive officer of Netflix. We are constantly trying to broaden our programming, and live events is one of those things, and sports is part of those live events.

So when I look at this and say, that's a really fantastic thing, but it doesn't really change the underlying economics of full season, big league sports being extremely challenging. So if there was a path where we could actually make the economics work for both us and the league, we certainly would explore it.

That's Netflix co-CEO Ted Sarandos. He says the company's raising prices. The most popular U.S. plan is going to $17.99 a month. That's an increase of $2.50. Netflix is also increasing the cost of its cheaper advertising-supported plan.

While John Netflix is helping to give a boost to futures this morning, so is Donald Trump's plan to boost the U.S.'s plans for artificial intelligence. The president has announced a U.S. joint venture with SoftBank, OpenAI, and Oracle to fund the expansion of AI infrastructure. Dubbed Stargate, the project will deploy $100 billion immediately, with plans to increase that to at least $500 billion. OpenAI CEO Sam Altman announced the venture next to the president.

I'm thrilled we get to do this in the United States of America. I think this will be the most important project of this era. And as Masa said, for AGI to get built here, to create hundreds of thousands of jobs, to create a new industry centered here, we wouldn't be able to do this without you, Mr. President. And I'm thrilled that we get to. I think it'll be an exciting project. I think we'll be able to do all of the wonderful things that these guys talked about. But the fact that we get to do this in the United States is, I think, wonderful.

Allman's company OpenAI will oversee operations. Arm Holdings, Microsoft and NVIDIA will provide technology along with Oracle and OpenAI. The announcement comes after Trump rescinded Biden's sweeping executive order on AI. Stocks are moving on this new venture. Shares of Oracle are up 8%, NVIDIA more than 2.6% and Microsoft 1.5%. SoftBank shares surged 10% in Asia.

Well, the president also said he'd be open to Oracle chairman Larry Ellison or Elon Musk purchasing TikTok as part of a venture with the U.S. government. The deal, I think, is this, and I've met with owners of TikTok, the big owners. It's worthless if it doesn't get a permit. It's not like, oh, you can take the U.S. The whole thing is worthless. With a permit, it's worth like a trillion dollars. So what I'm thinking about saying to somebody is buy it and

Give half to the United States of America, half, and we'll give you the permit. And they'll have a great partner, the United States. Well, TikTok temporarily went offline over the weekend. Trump signed an executive order on his first day in office to extend the deadline for a sale by 75 days. Billionaire Frank McCourt and Shark Tank investor Kevin O'Leary made a formal offer to buy TikTok earlier this month.

Meanwhile, John, in Davos, Switzerland, business leaders at the World Economic Forum breathed a sigh of relief when President Trump's first day of his second term ended with talk of tariffs rather than any implementation. But they're still concerned about the global impact of Trump's plans. IBM Vice Chairman and former top Trump advisor Gary Cohn spoke to Bloomberg at the World Economic Forum, saying there will be a lot of deliberation before tariffs are put into place.

Even when I was there eight years ago, there was always a heavy debate on tariffs, on the positives and the negatives of tariffs, on the intended consequences and the unintended consequences. You know, look, it's day one of a four-year administration. You don't have to put tariffs on day one.

And IBM Vice Chairman Gary Cohn also told Bloomberg that the corporate community remains optimistic a second Trump term will be positive for business. And Trump has widened his tariff threats to include China and the European Union a day after he saw Canada and Mexico in his sights. We're talking about a tariff of 10% on China based on the fact that they're sending fentanyl to Mexico and Canada.

The threats echo comments made throughout Trump's campaign, but the only actual action taken so far is a call for a review of trade practices. That's due April 1st, potentially giving China and others almost 10 weeks to avert new levies or address his demands.

Well, John Trump is also taking steps to cut funding for diversity, equity and inclusion. The White House says those roles will be placed on paid leave and their offices related to those programs are being ordered to shut down. In a separate order, the administration moved to limit diversity preferences in federal contracting. That revokes a civil rights era order that sought to reduce racial or gender disparities among government contractors.

And, Cameron, we're finding out more about some of the people that Trump pardoned on day one of his term. One is Ross Ulbricht, the founder of the Silk Road Marketplace. That fulfills a campaign promise he made

to court the cryptocurrency community. Ulbricht was sentenced to life in prison in 2015 for running a dark web marketplace where illegal drugs and hacker tools were sold using virtual currencies. And John, federal workers, they're not the only ones being ordered to return to the office full time. Sources say Major League Baseball has ordered its employees to return to the office five days a week. The league had been on a hybrid policy since the pandemic.

Getting back to markets, Karen, Indonesia says it's close to a deal with Apple over an investment plan that would lift a ban on iPhone 16 sales in the country. Southeast Asia's largest country banned the sale of the new device back in October, saying Apple had failed to comply with domestic manufacturing requirements for smartphones and tablets.

Well, we're watching shares of United Airlines take off. They're up almost 3% in early trading, John. The carrier expects a first quarter profit well ahead of Wall Street's estimates as it capitalizes on unusually strong demand for premium and international travel. It's been a good time for United investors. The stock climbed 135% last year compared with a 23% gain for the S&P 500 index.

Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. 22 states, including New York, New Jersey, and Connecticut, are filing a lawsuit against President Trump's executive order that would end birthright citizenship. It's a right stated in the 14th Amendment. New Jersey Attorney General Matt Plotkin says Trump's order is unconstitutional and that presidents don't have the power to change it.

They are not kings. They do not have the power to unilaterally rewrite the Constitution. They do not have the power to unilaterally disregard our laws. That's true for Donald Trump. That's true for every president that came before him and every president who will come after him. AG Plattkin says he is confident this order is never going to take effect.

New York City Mayor Eric Adams has some sharp words for the Democratic Party and reiterated his claim that he was targeted by federal prosecutors because he criticized then-President Joe Biden's handling of the migrant influx. Mayor Adams spoke with Tucker Carlson.

So people often say, well, you know, you don't sound like a Democrat and, you know, you seem to have left the party. No, the party left me and it left working class people. And our conversations that we should be talking about are not the issues that everyday people that are in power are talking about. The interview was recorded from Gracie Mansion. Earlier at his news briefing, Adams was asked about cooperating with ICE agents if they come to New York City to enforce deportations.

We want to bring down the anxiety. We want our immigrants to know that this is a city of immigrants. This is a country of immigrants. It's imperative that you go to school, use the hospital service, use the police services. I went over this over and over again, and I'm just not going to keep having the same conversation over and over again.

The Trump administration announced it would allow federal immigration agencies to make arrests at schools, churches, and hospitals. A winter storm that dropped record-breaking snow in New Orleans has spread into Florida and the Carolinas. Meanwhile, a blast of Arctic air has also plunged much of the Midwest and the eastern U.S. into a deep freeze. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. All right, Michael Barr, thank you.

I'm Alpine skier Michaela Schifrin. I've won the most World Cup ski races in history. But what does success mean to me? Success means discipline. It's teamwork. It's the drive and passion inside of us that comes before all recognition. And it's why Stiefel is one of the fastest growing global wealth management firms in the country. If you're looking for success, surround yourself with the people who will get you there.

At Stiefel, we invest everything into our advisors so they can invest everything into their clients. That means direct access to one of the industry's largest equity research franchises and a leading middle market investment bank. And it's why Stiefel has won the J.D. Power Award for Employee Advisor Satisfaction two years in a row.

If you're an advisor or investor, choose Stiefel. Where success meets success. Stiefel Nicholas & Company, Inc. Member SIPC and NYSE. For J.D. Power 2024 award information, visit jdpower.com slash awards. Compensation provided for using, not obtaining the award.

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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. The Knicks had been exchanging wins and losses throughout January. No two-game winning or losing streaks until now. The night after a win over Atlanta at the Garden, they went to Brooklyn, got by the Nets 99-95. Carl Anthony Towns, 25 points, 16 rebounds. Nets have lost 9 of 10 at 9 straight versus the Knicks. Lakers beat the Wizards by 23. The Nuggets beat the Sixers by 7.

by 35. The Rangers an easy win at the Garden. 5-0 over Ottawa. Five different goal scores including power play tallies less than a minute apart in the third period. First are Timmy Panarin then Will Cooley. Capitals fifth straight win 3-2 at Edmonton. Seton Hall lost to Marquette. Pirates fell to 1-7 in the Big East. Three new men

First year on the ballot and on the MLB Network talked about what he was proud to do on the mound.

That was something that was important to me was to be able to be available, you know, and take the ball as many times as possible during the season. And, you know, I wanted my guys in the clubhouse or in the locker room to feel like every time I went out there, every fifth day that we had a chance to win and win.

You know, if I was available, I was going to take the ball. CeCe got 87% of the vote. His one-time Yankee teammate, Ichiro Suzuki, got 99, all but one vote. So Mariano Rivera is still the only one to go in unanimously. Ichiro, of course, a hit machine both in Japan and the majors, mostly with Seattle. Reliever Billy Wagner got in in his 10th and final year on the ballot. His best seasons were in Houston, but he also spent three years with the Mets.

As Aaron Glenn yesterday had his second interview for the Jets coaching job, there was an ESPN report that he was about to get hired. Didn't happen, and Glenn is now said to be heading to New Orleans for a second interview with the Saints. John Stachauer, Bloomberg Sports, Karen John.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. And we continue our coverage of the World Economic Forum from Davos this morning in a conversation with Bank of America CEO Brian Moynihan. He sat down with our Jonathan Farrow and Lisa Bramowitz on Bloomberg Surveillance discussing how AI is impacting business. A succession plan at the bank.

And they start with the outlook for deals in a second Trump term. Let's listen in.

What you're hearing is enthusiasm for, in the investment banking side particularly, transactions, right? For the last couple of years, it's been hard to get a transaction through. And what stops a seller from selling or a buyer from buying is, if this thing is delayed, I'm exposed. And so what they'll do is they'll push it through. So there's a lot of enthusiasm that there'll be better growth in the United States, a lot of enthusiasm by the bankers saying these deals can get done so I can go have this strategic conversation. It's just not another idea that goes through the system. Everybody says that's a great idea, but...

It's not going to be a great idea. Let's go do it. Or a great idea, I don't want to do it, but it's more of a substance base than it is more of a worry about the environment around us. Are you basically saying that there's more enthusiasm, that there is conviction and will to actually get stuff done? Yeah, I think you saw some deals getting announced and you'll see more deals getting announced. In our sector, in banking, especially in the United States, the consolidation is still far away from being...

done. There will always be big banks, there will always be small banks, but you don't let people make a decision what they want to do and there haven't been a lot of bank deals done, bank to bank deals. We can't do them. It's not legal, but as investment banking, we can help other people do them and there hasn't been a lot done because just the uncertainty of getting caught in a transaction and having issues. So the belief that

they should promote the banks consolidating, getting more efficient, passing that through to customers, passing it through to small businesses, et cetera, is a different, will be a change. Well, there's the banking sector specifically and some of the deregulation and whether some of these mergers and consolidation will be allowed. And then there's the broader corporate sector and some of the enthusiasm we've seen and we've heard from the city's head of banking, from J.P. Morgan,

How much do you see that being maybe a little premature? Well, I think you have to divorce a little bit some of the fiscal issues.

work that has to be done. And the incoming Treasury Secretary and others have to take very seriously this question of how do we manage the revenue stream, the expense stream, and the amount of debt and get it all to work out. One of the ways that that becomes easier is if you have more activity and more things going on. So I think the enthusiasm you're hearing from the bankers is more structurally that belief is that even starting yesterday, you don't have the constraint that you have so you can go. If there's

that enables more, that's good stuff. But right now, it'll stop it going in the wrong direction. And look, our medium and small-sized businesses, their biggest complaint was, you're in my pocket, you're slowing me down, I can't get things done, I want to permit to do something that takes forever, I want your labor rules, all this stuff is going on, and they're figuring it out on their own. The same person who's running the business had nights sitting there saying, so what does this new taxation strategy on Social Security mean? They're just saying, if you just stop,

Things will get better. We keep hearing about succession plans in different places. What's your succession plan? What, are you trying to throw me out? No, not at all. I'm just wondering, because this is something that we keep hearing about. We're going to wait until the very end. There's still three minutes on the clock. No, I want to know.

The fascination with all this is interesting and one is just means we're all getting older so the reality is we run we run a process in our company through the top three layers including for the CEO succession every six months we go through everything who the media successors for every one of our teammates jobs and and we have a slate and we go from a slate because if you run a big company people

leave for a whole, they retire, they get another job, whatever, and you're always filling jobs. And so the way, the board will make a choice at some point. I'm not going anywhere unless they throw me out. They know that. But my job, and one of the biggest jobs I have is preparing people

for the what it would be like to run this company out there and and and and and that's important so we do a lot with our team to get them used to experiences and get them learn more about the trade-offs you have to make at the top of the house because if you come through a business or come through a function you haven't made those trails that's part of our general strategy and so we talked our board but you you never hear us discuss a is in and b is not that that to me is the worst thing you can do i went through that process in the end of 2009 where there was day-to-day speculation that's not the way to do it well

Thank you for that very good question. You'll be the first person to tell. Okay, thank you. I appreciate that. We only have about 30 seconds. You said something to us when we were at Bank of America, that AI would basically keep the staff the same size but increase the footprint of business. Do you stand by that? Yeah. There are two facts I'll give you. One is we run the company on a nominal amount of dollars of expenses. We did 10%.

10 years ago almost now. Nominal not, not inflation adjusted. And we run it on 30,000 less people. That is all digitization. And AI is an extension of automation, digitization models, et cetera, automating work, taking out work and automate, therefore you don't need. And I think AI keeps going. The idea is if we're good, we'll keep adjusting where the teammates end up. So it might not be the same 212,000 people

213,000 people doing the same thing 10 years from now. Yeah. But my guess is that our employment levels will stay relatively static. There's going to be more towards stuff that can't be replicated near term by air. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg.com,

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I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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