Bumpy Week for Nvidia and Tesla, The Crypto Fortune Building a Space Station
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From the heart of where innovation, money, and power collide in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde and Ed Ludlow. ♪♪

Live from San Francisco, I'm Tim Stenevek and this is Bloomberg Technology. Coming up on the program today, Elon tries to alleviate Tesla concerns, telling staffers to hold on to their stock after plunging 50% in three months. Plus, Micron under pressure, disappointing margins, overshadowing an otherwise impressive set of quarterly results.

And Nvidia bets on America, announcing new plans to invest billions of dollars on U.S. manufacturing. All that and more coming up over the next hour on Bloomberg Technology. First up, shares of Tesla over the last five days down about 3.5%. Elon Musk yesterday trying to reassure Tesla employees during what he referred to as, quote, a little bit of stormy weather. Check out what he had to say. He urged employees to hang on to their stock. He called ARK Invest Cathie Wood as an example of someone still believing in the stock.

He said, "Some people, like Cathie Wood at ARK Invest, do see the future. So what I'm saying is, hang on to your stock." Let's talk a little bit more about Tesla and head things over to Europe where we're joined by Bloomberg's Craig Trudell. Craig, what did you make of what we heard from Elon late yesterday? What was the tone that he was trying to communicate to his employees?

It was highly unusual. And, you know, I know that we've, of course, you know, over the years, you know, heard from from Musk via, you know, memos that he's sent out to staff that, you know, tend to leak, you know, soon after. But this was, you know, in the middle of a quarter, you know, not not a product event or anything like that.

a sort of spur of the moment all hands and to sort of stream it publicly. It seemed to be a sort of, you know, reassure the employees and in the course of doing so reassure the market that, you know, yes, Tesla's in his words are on fire and they, you know, that keeps getting shown on TV. But, you know, essentially, don't worry, everything's going to be fine. You know, the future is going to be bright.

Okay, well, speaking of the future, he did bring up the idea once again that self-driving cars, autonomous driving for Tesla on a wide scale is right around the corner. This is something he's been talking about for close to 10 years. How close is he, though, this time, Craig?

I think that is the key question for Tesla and its stock. This is something that Musk has been talking about since 2016. And he himself has referred to the idea that he's sort of a boy who cried wolf at this point. He's made this prediction that at some point they'll have a software update where your Tesla will be able to drive itself. And it'll be useful even when you're not in it. And perhaps go fetch people. And it essentially worked the way an Uber would.

That has not happened, and I think there are a lot of reasons to be skeptical that that future will arrive with the hardware set that he's put in his vehicles.

You can both be impressed by the fact that his systems are quite capable for assisting drivers, but they still need the human in the loop. And until and unless that changes, I think you're going to have this real reason to sort of second guess why this company is valued as richly as it is.

Tesla shares getting hit over the last three months, higher today by 2% down on the week still, though. Bloomberg's Craig Trudell joining us from London. Good to see you, Craig. Have a good weekend. Well, let's talk about another company that has had quite a week, and that's NVIDIA. Mandeep Singh of Bloomberg Intelligence joins us now. Mandeep, as we reflect on the week that was NVIDIA GTC, why did this week...

fail to really capture the attention and the excitement of investors like previous GTC events have? Yeah, I mean, look, I think from a product roadmap perspective, they did everything they could have, you know, in terms of showing the next three years what it would mean for NVIDIA. And even on the supply side, it seems, you know, it will remain inelastic around the accelerated computing chips.

The demand side is where there are still question marks because, you know, he talked about inferencing using 100 times more compute than prior sort of inferencing. So reasoning and the deep-seek type approach is what's driving the additional compute approach.

But it remains to be seen whether it can fully offset the plateauing of pre-training, which everyone seems to agree on at this point of time. And there is always that lurking competition from your hyperscalers developing their own ASICs, even though he downplayed the competition. And really, for him, it's about the next version, which is the Blackwell ASIC.

and Rubin and look I think if you're a customer of Nvidia you're asking yourself if Blackwell is 40 times better do I really appreciate all the hopper chips that I have right now within two years and I think that will come up at some point in terms of the depreciation expenses. So it raises the question about the next catalyst here Mandeep if this didn't excite investors then what are they looking toward to get more information about what could move the stock higher?

I think the single biggest thing right now is how would NVIDIA's gross margin look like in the second half? Because there is that concern that, you know, given NVIDIA is packaging two GPU chips now in their Blackwell series, how does that impact the gross margin? And gross margins have already been trending down with the Blackwells.

Well, they were mid 75 percent and now it's closer to 70 percent. So clearly that gross margin ramp is critical in terms of the next series that NVIDIA is going to produce. And that for me is the key determinant of where the stock is headed next.

mandeep singh of bloomberg intelligence mandy always good to see you thanks for joining us well let's break down the weekend markets nancy curtain is alti teedman a global chief investment officer and she joins us now nancy we're still talking about a correction especially when it comes to tech stocks the nasdaq 100 could close down for a fifth week in a row the longest losing streak going back to may of 2022

Is this correction a sign of more weakness to come? Or do you think we're at the bottom?

Look, I think near-term forecasting is pretty nay on impossible. But one of the things to keep in mind is we have a pretty big D-Day deadline ahead, which is April 2nd. And until we know what these tariffs are, the magnitude, reciprocal, etc., I think markets are going to be pretty volatile here. But look, we think this is a correction and not the beginnings of a bear market because we don't see a recession. And I think that's an important thing to keep in mind.

You know, we were overdue a correction. Corrections normally resolve themselves as the markets move higher. Huge levels of pessimism, which I find very encouraging. But we could have some volatility here, as you mentioned, for at least another 11 days.

What makes you so sure that we're not going to see a recession? The consumer, we know, powers this economy. We've gotten some mixed consumer data, especially in the early part of last week when it comes to airlines. What makes you so sure we're not headed toward a recession?

Well, first of all, I think it's the dichotomy between the hard and the soft data. So the soft data has been weaker. Consumer sentiment, inflation expectations one year have risen. And we do think that the economy is slowing, certainly going to be negative probably in the first quarter because we had all that

buying imports proactively by companies which is meaning that net trade is going to be a negative so expect the first quarter to be lower expect GDP overall for 2025 to be weaker than expectations but you know let's get back to the hard data

jobs, personal incomes. The household balance sheet, which was announced by the Fed two weeks ago, still remains pretty strong. And we haven't talked about the fact it could well be that investment surprises. Look, you saw NVIDIA committing to $500 billion over the next four years. That comes on top of Apple. That comes on top of TSMC. Add those three companies together, and you're looking at

close to 1.4 trillion of expenditure over the next four years back into the United States, not to manage, not to mention, you know, the funding bill making its way through Congress, which might have some capex goodies like, you know, 100 percent expensing of R&D and depreciation, etc. So, you know, there are some things here. Our data is still solid.

those slowing. And we think there are some things that will come in what I call the goody side of Trump that are still to come.

Let's zero in a little bit on tech, specifically the Mag 7. Meta platforms is actually higher for the year as of now, but for the first time this year, it did dip into negative territory for the year. Other than that, six of the seven Mag 7 are negative on the year. Do you see a turnaround with the Mag 7?

Well, we don't buy stocks, we buy managers. But our managers have been underweight. Our active managers are underweight, the MAG7. So that's been a good positioning for us this year. Meta's done a much better job, I think, of communicating how they expect all this AI spend to result in better metrics, advertising metrics, engagement, etc. The other companies have been a little bit more vague.

And that's why investors are concerned, at least for the four horsemen that are spending, what, 320 billion plus on various forms of AI infrastructure, how that's going to result in returns.

Let's go to the spending beneficiaries. So we like digital infrastructure. We like infrastructure generally because that's where all the spending is going. We like power. We like energy. We like onshore and production. We think infrastructure is something that's less correlated to equity markets, very, very good counterparties, but also is profitable.

part of what I call this huge spending surge that's likely to continue. So Mag7 underweight, we think that's the right positioning, but we want to be with the spending beneficiaries. What's your view on how Gen-AI adoption moves to other parts of the market? So far, the beneficiaries have largely been the hyperscalers, the chip manufacturers, the companies that we talk about each and every day. When does that move beyond these companies?

So our theme has been a broadening in market participation. And by the way, we're seeing that this year. You know, it feels horrible. But, you know, 97 percent of the decline is coming from the Mag7. There are a bunch of sectors that are in positive territory. But, you know, looking forward and, of course, European markets, the Chinese markets in positive territory as well. So, you know, as we look forward, we think that broadening theme will be operative, that we think Gen AI is possible.

early innings, early innings, right? Compute power is going to come down. These large language models are going to come down, the cost of that. And of course, that's Japan's paradox that leads to greater adoption. And that's not been priced in. The profitability and productivity enhancements across large sections of the global economy from Gen AI is still to come. And that's really not priced in. And so, again, that's not a tomorrow thing, but we think that is possible.

positive, really from a kind of a medium term perspective. And again, our clients are longer term investors. We don't try to play the markets with a day to day trading mentality. Nancy Curtin, Evaldi Tiedemann, thanks so much for joining us. Have a great weekend. Hey, coming up, Micron disappoints investors with a weak margin outlook. We're going to have more on the chip maker right after this. Shares down by 8% right now. This is Bloomberg.

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Well, shares of Micron are falling today after the memory chip maker said margins will miss analysts' estimates this quarter. Look at that. Shares down 8.2% as we speak. It's ours, investor sentiment, despite posting a strong sales and profit. For more, Pierre Faragu joins us, Newstreet Research Head of Tech Infrastructure. Pierre, good to see you today. I'm wondering about this margin miss. Why did analysts get it so wrong and why did Micron miss there? What happened?

Well, you have to put that into the context of the perspective of analysts, financial analysts and the perspective of management. So if you look at it from the perspective of analysts, the stock had like a fantastic run. Like if you look at all stocks exposed to AI, really Micron is the one who behaved the best in the last few weeks and even in the last year to date.

And that kind of situation always calls for like, you know, taking profits, a bit of a pause in the outperformance. And we do think memory is going to outperform AI, the AI world, because that's really the part of the AI chip, the part of the build of material of the chip that is growing the fastest.

And so when you get more demand, memory margin should expand. And if you don't get that immediately, the stock ran into the numbers expecting that, so there is a profit taking. Does that mean there is a change in trend, something weird happening? No.

If you look at it from the perspective of management, the situation is interesting. As a CEO of Micron, you don't want to warm up investors too much on margins for two reasons. The first one is that you don't want to set expectations too high to avoid situations like today. And the second one is your clients are listening to the call as well. And you don't want to brag too much about margin expanding because for your clients, it means your pricing is going up.

Okay, so let's talk big picture a little bit. How would you characterize Micron's really stacking up to competition when it comes to this high bandwidth memory? Yes, so high bandwidth memory is going to be the largest segment of memory at the end of this year, and it barely existed three years ago. And at the moment, from a technological standpoint,

Micron and Hynix are in the lead position for high bandwidth memory. They are coming up in the market the earliest with the latest generation of these chips. And Samsung is like running a bit behind, like struggling a bit with their production. But I think they will eventually catch up. And at the end of the day, what you have to keep in mind is that this market is going to remain a triopoly. Only these three companies...

have the technology, have the decades of experience required to be able to manufacture these chips. And what really matters is that if you look at the H100, the GPU that is largely deployed today from Nvidia, it has 90 gigabytes of HBM. The Robin Ultra that will roll out in 2027 is going to have one terabyte of HBM, 10 times more. That's really what the opportunities these guys are facing.

Pierre, what would you say when you look out across this year and even into next year, the cycle looks like, the trend looks like when it comes to PCs and smartphones? Is there concern there still about weakness? Yeah, that's a great question. I am actually very cautious, very bearish on PCs and smartphones. I think consumer demand is

is not there and I think AI is not going to trigger a hardware refresh cycle. So people are not going to buy a new phone or buy a new laptop to use AI. They are going to start using AI first and then AI is going to push up the specification requirements of your device over time. So I'm definitely not too bullish on that front. At the same time, we are at a point in the cycle which is a low point.

So when I say I'm not bullish, it means I expect the recovery from today's level of demand to be very, very sluggish, very slow. But it's still a recovery. So the story for Micron is these businesses are at a low. They're going to recover very, very little. But the data center business is really going through the roof.

Hey, Pierre, we only have just 20 seconds left for this answer, but a little bit of a pivot because we're just learning that Tencent has launched upgrades of a deep-seek style reasoning AI model. 20 seconds on your reaction to what China's doing when it comes to reasoning. Yes, AI is just joining the pack. Everybody's doing the same. Every time you create a great model, you have a lot of innovation happening to try and make the model more efficient.

And like the US and the West has been doing that like for a decade, even like a couple of decades. And China is joining the group. And there is nothing really new in DeepSeek or what Tencent or Alibaba are doing.

All right. Pierre Faragu of New Street Research. Pierre, good to see you. Thanks for joining us. Have a wonderful weekend. Well, we do have some breaking news. Boeing has won a contract to design and build the U.S.'s next generation fighter jet, beating out Lockheed Martin. The contract is part of the Next Generation Air Dominance Program. It aims to develop a new fighter jet that will operate with drones and replace the F-22 Raptor.

The new fighter jet is expected to enter service in the 2030s. And the Air Force plans to spend up to $20 billion on research and development through 2029. You see shares of Lockheed Martin down. You see shares of Boeing up.

Well, a billionaire who made his fortune in cryptocurrency is turning his attention to space. Jed McCaleb is the sole financial backer of Vast Space. It's a startup aiming to build the world's first commercial space station. Bloomberg's Kyle Porter has the details of this story. Kyle, this is a very quickly growing startup. They're hiring people every single day. This guy has put pretty much half of his fortune behind this company. Can he pull it off?

Well, that's a really good open question. I was very skeptical before I visited in December. I came away thinking, they've got a decent shot at this. They might revolutionize how you go about these type of projects. How are they doing it? How are they revolutionizing it?

Well, most people in the space industry or any big industrial company tend to think of you build a product, you get investors, you grow, it happens over time, you reach benchmarks. And a lot of these projects tend not to reach the finish line because something goes wrong during the process. An investor pulls out, you sell what's left of the company. Vast have decided time is money, but money is time. So why not spend $500 million a year, get a product to market, and then have your revenue come back in?

Kyle, as I was reading your story and as I watched the really good Bloomberg Originals documentary that accompanies it, I was thinking to myself, talk about putting all your eggs in one basket. If they do not get this contract from NASA, is that it? Well, they've sort of hinted there might be a Middle Eastern investor that might take it if they don't manage it. But they're very upfront that, yeah, this is the big swing. And if it doesn't happen, it could be lights out for the company. Who's the talent that they've brought in to help run the company?

They bought a company called Launcher, which was headed by Max Hote a couple of years ago now. Max also had never built a space station before, didn't have any real experience in space until he started Launcher. And neither of his rockets, I think, reached orbit. But now he's running the show for them. All right. Bloomberg's Kyle Porter. Thanks for joining us. It's The Big Take. Check it out on the Bloomberg terminal. Also, check out the documentary about it. Very, very cool.

Welcome back to Bloomberg Technology. I'm Tim Stenevek in San Francisco. I'm also watching shares of Apple today, down about three-tenths of one percent. The company is shaking up its executive ranks to get its AI efforts back on track after months of delays and stumbles. The change is aimed to rescue Siri, which has struggled to release new features. And Apple is betting on Rockwell's technical experience to solve this.

the problems. From on the personnel moves, we're joined by Bloomberg's Dana Woolman. Dana, what's going on at Apple when it comes to AI? Why are they so far behind? So Apple

really over-promised, promised a whole raft of upgrades to Apple Intelligence at its developer conference in June of last year. And behind the scenes, the engineering team has struggled to keep up with those promises and deliver on pace. And so the company just took control of Siri and took it away from the executive who had been

overseeing this ambitious upgrade and had moved it under the person who brought us the Vision Pro, which itself has not been a commercial hit, but if nothing else, has been well regarded for its technical innovations. So Apple, yes.

Well, people, I mean, I haven't actually tried the Vision Pro yet. People who talk about it just rave about it. But, you know, you don't see the sales numbers for it. And you don't by any means see it being one of Apple's blockbuster devices by any means, Dana. I think the question that I have is context here. It's really rare for Apple to make a big personnel move such as this.

It is rare for Apple to make a personnel move like this, as you said. And according to our own reporting, it was in the works even before some recent bombshells. Bloomberg reported that a different company executive called the delays ugly and embarrassing. According to Bloomberg's reporting, this move had been in the works for a while. But as you said, it doesn't usually happen. And I think a lot of industry observers were waiting for some sort of shoe to drop, whether it was someone being fired, really heads rolling,

or something of this nature, at least the project being reassigned to somebody else. All right, Dana, we are going to have to leave things there. I do want to head now to the Oval Office and the White House, where we're hearing from President Trump and Defense Secretary Pete Hegseth. It's going to be amazing. Should have been done years ago. They've been talking about doing it for many years, but nobody ever got it off. But we did, and...

There was great excitement and great acceptance of it by almost everybody, including a lot of Democrats, actually. I do want to say that I've decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, is a terrific person, will handle all of the student loan portfolio. We have a portfolio that's very large, lots of loans, tens of thousands of loans, pretty complicated deal.

And that's coming out of the Department of Education immediately and it's gonna be headed up by Kelly Loeffler, SBA and the rules set for it. They're waiting for it, it'll be serviced much better than it has in the past, it's been a mess.

And also Bobby Kennedy, the Health and Human Services will be handling special needs and all of the nutrition programs and everything else. Rather complex, but that's going to be headed by and handled by Health and Human Services. So I think that'll work out very well. Those two elements will be taken out of the

the Department of Education and then all we have to do is get the students to get guidance from the people that love them and cherish them, including their parents, by the way, who will be totally involved in their education along with the boards and the governors and the states. And it's gonna be a great situation. I guarantee that in a few years from now, I hope, I'm gonna be around to see it,

But I think we're going to see a lot of it. I think that you're going to have tremendous results. You're going to have results like Norway, Sweden, Denmark, a lot of the countries that do so well. I think you're going to have a lot of those results. If you look at Iowa and Indiana and Idaho, so many places that run so well, Florida, Texas, big ones, you're going to have great education, much better than it is now at half the cost.

And we're not even doing it as a cost item, although you will save probably half, maybe more than that. And you're not going to be at the bottom of the list. You're going to be much higher. And maybe you'll be, I will guarantee some of the states will be at the top of the list. They'll be comparable or better than these number one, two, three, four, five countries, the countries that are in the top five positions. So that's, to me, it's very exciting and it's been received very well. So I just wanted to tell you about the student loans and special needs.

But we're here for a reason today that is very exciting, and I'm thrilled to announce that at my direction, the United States Air Force is moving forward with the world's first sixth-generation fighter jet. Number six, sixth generation. Nothing in the world comes even close to it. And it'll be known as the F-47. The generals picked a title, and it's a beautiful number, F-47.

It's something the likes of which nobody has seen before in terms of all of the attributes of a fighter jet. There's never been anything even close to it from speed to maneuverability to what it can have to payload. And this has been in the works for a long period of time.

after a rigorous and thorough competition between some of America's top aerospace companies, the Air Force is going to be awarding the contract for the next generation air dominance platform to Boeing. As you know, it was highly competed for. There was a lot of competition, generals, and it's been going on for a long time. Very, very tough competition, but this plane is...

is produced numbers that nobody's ever seen before. The F-47 will be the most advanced, most capable, most lethal aircraft ever built. An experimental version of the plane has secretly been flying for almost five years, and we're confident that it massively overpowers the capabilities of any other nation. There's no other nation. We know every other plane. I've seen every one of them. And it's not even close. This is at next level.

You know, level five is good. This is level six, they say. The F-47 is equipped with state-of-the-art stealth technology. It's virtually unseeable and unprecedented power. It's got the most power of any jet of its kind ever made. Maneuverability, likewise, is the... There's never been anything like it, despite the power and speed. Its speed is top. It's...

over two, which is something that you don't hear very often. America's enemies will never see it coming. Hopefully we won't have to use it for that purpose, but you have to have it. And if it ever happens, they won't know what the hell hit them. A new fleet of these magnificent planes will be built in the and in the air during my administration for the next couple of years. It's ready to go. They've already built much of what has to be built in terms of production.

including the sheds will ensure that the USA continues to dominate the skies. We've given an order for a lot. We can't tell you the price because it would give

It would give way to some of the technology and some of the size of the planes, good-sized plane. This contract also represents a historic investment in our defense industrial base, helping to keep America at the cutting edge of aerospace and technology. Our allies are calling constantly. They want to buy them also, and certain allies will be selling them, perhaps toned-down versions. We like to tone them down about 10%.

Which probably makes sense because someday maybe they're not our allies, right? But I would like to ask Secretary Hegseth, who's doing a fantastic job. He's really been very inspiring in so many ways. And I must say that before he speaks, we have had record people wanting to join our military in the last two and a half months.

Literally since this, I think probably since the election, November 5th, but especially since we came to office and since I announced Pete, he's young, he's smart, he's strong, he loves it.

And they love him, but we've had record numbers of people wanting to join our military. Now, if you go back six months, it was the exact opposite. You had record numbers of people not wanting to join the military. Now you have record numbers of people wanting to be in our military. And that's a really, that's a great honor. That shows you we're really on the right track. So Pete, maybe say a few words. Sure.

Well, Mr. President, this is a big day. This is a big day for our warfighters. This is a big day for our country, a big day in the world. The name of this program is the Next Generation of Air Dominance. And Mr. President, because of your leadership, your clarity, we are going to, America is going to have generations in the future of air dominance because of this sixth generation fighter.

We've had the F-15, we had the F-16, the F-18, the F-22, the F-35. Now we have the F-47, which sends a very direct, clear message to our allies that we're not going anywhere and to our enemies that we will be able to project power around the globe unimpeded for generations to come. Mr. President, this is a gift.

to my kids and your kids, to my grandkids and your grandkids. This is a historic investment in the American military, in the American industrial base, in American industry that will

Revive the warrior ethos inside our military, which we're doing. Rebuild our military, which the previous administration did not do, by the way, Mr. President. They paused this program and were prepared to potentially scrap it. We know this is cheaper, longer range, and more stealthy. President Trump said we're reviving it and we're doing it. And then we are also going to reestablish deterrence. Under the previous administration, we looked like fools.

Not anymore. President Trump has reestablished American leadership. The F-47 is part of it. And Mr. President, thank you for having the courage to do it and leading the way for all our war fighters. Thank you very much, Pete. One of the things I will say, but the generals are going to speak in just a couple of seconds, but this plane flies with drones. It flies with...

Many, many drones, as many as you want. And it's a technology that's new, but it doesn't fly by itself. It flies with many drones, as many as we want. And that's something that no other plane can do. So I'd like to introduce, if I might, Air Force Chief of Staff General David Alvin and also General Dale White, two incredible people that I've known over the years, but I got to know really well over the last few months.

And would you say a few words, please, General? Thank you very much, Mr. President. Mr. President, Mr. Secretary, thank you so much for your unwavering commitment to our military. I will say that this is a big day. This is a big day for our United States Air Force as well. You know, air dominance is not a birthright, but it's become synonymous with American air power. But air dominance needs to be earned every single day. And since the earliest days of air warfare,

brave American airmen have jumped into their machines, taken to the air, and they've cleared the skies. And whether that be clearing the skies so we can rain down destruction on our enemies from above, or we can clear the path to the ground forces below, that's been our commitment to the fight, and that's really been our promise to America. And with this F-47 as the crown jewel in the next generation air dominance family of systems, we're going to be able to keep that promise well into the future.

I also want to thank everyone from industry and with the government, our engineers who have put work tirelessly on this program to bring it where we are right now today. This shows that American talent, American skill and American determination are second to none because this platform is second to none. So we believe that this provides more lethality. It provides more capability, more modernized capability in a way that is built to adapt

This, along with our collaborative combat aircraft the President talked about with drones, this is allowing us to look into the future and unlock the magic that is human machine teaming. And as we do that, we're going to write the next generation of modern aerial warfare with this. This enables us to do this. The manner in which we put this program together puts more control in the hands of the government so we can update and adapt at the speed of relevance, at the speed of technology, not at the speed of bureaucracy. This is more Air Force.

This is more options for the president. We say as our mission in the United States Air Force is to fly, fight and win air power anytime, anywhere. If you wanna go anywhere, you have to have a platform that gets you anywhere. This provides the president options from the very one end, which is a quick,

response and then we can get right back into fighting stance without having to deploy troops that are going to take maybe months and cost more lives. We can get back in fighting stance and maybe restore that deterrence. All the way to decisive victory as part of a joint force that is the most lethal and capable military ever in history. That's what we provide now and this allows us to provide it into the future. It's more deterrence, more capability,

It's what peace through strength looks like in the future, Mr. President. And so we're very proud to do that. And all we can say is, on behalf of the United States Air Force, let's deliver. Thank you very much. Thank you, General. Would you like to say something? No, sir. I'll just double-check with the Chiefs that this is... He knows what to do. He knows who the boss is. That's exactly right. There's priority to what's all about. There's questions. That's great. Thank you very much. Great job. We've worked together long and hard on this, and this was a...

A big secret, in fact, we don't show too much of the... Well, there you have it. President Trump along with Secretary of Defense Pete Hegseth. Also, we heard from David Alvin, Chief of Staff of the Air Force, getting quite a few headlines on this story. The Army, or President Trump, I should say, has said that the F-47 will be built during his administration. The U.S. Air Force has proceeded with the F-47 fighter jet. The U.S. Air Force will award that jet contract to Boeing. In response, we did see shares of Boeing...

higher on the news. Shares of Lockheed Martin are falling. He did also say that this experimental version of the F-47 has been flying for almost five years and that it will be built during his administration.

this next generation fighter jet he did also say will fly with drones and it's already experiencing interest from our allies. For more we bring in Bloomberg News' Tyler Kendall. She joins us this afternoon from Washington DC or this morning I should say. Tyler good to see you. What do we know about this F-47 and the technology that allows it to fly with drones?

Well, Tim, Bloomberg News reporting that the Air Force has allocated at least $20 billion around the research and development for this effort. You said it there, Boeing beating out Lockheed Martin for this contract that could be worth multi-billions of dollars. And this was a two-year bidding process for these companies to try to put forward that full-scale proposal for the Air Force.

this new generation of fighter jets that will work in tandem with drones. You heard President Trump emphasizing there that that's how critically important that is as they try to move to this next generation. Now, not a lot about this program is known. It's classified. Our reporting indicating that it's meant to replace the Lockheed Martin's F-22 Raptor

stealth jets that are currently in the sky and flying. The goal is to have this operational by 2030. Now, you mentioned our allies there. That was something important that President Trump mentioned because we know a lot of this is gearing up in our competition with China. Like many of the proposals that we've seen from the Trump administration, particularly in recent weeks, try to bulk up, particularly when it comes militarily against China. I also would like to flag one other headline that we were seeing today. Elon Musk at the Pentagon are reporting, indicating that a

this program in particular there might have been some budget constraints there as Elon Musk looks forward to his doge cost-cutting efforts just yesterday Secretary of Defense Pete Hegseth announced that 580 million dollars worth of programs will be cut at the Department of Defense of course that pales

in comparison to the numbers that we're talking about for this program here, but it does bring the DoD's cost-cutting measures to $800 million since Pete Hegseth was sworn in as Defense Secretary. Tyler, you've done a lot of reporting on the weapons of the future. These companies Palantir, SpaceX. Boeing is a traditional old school defense contractor. Where does this fit in with the modernization of the armed forces?

Well, Tim, the defense industrial base has actually shrunk by 40% over the last decade. That's according to the Department of Defense, which says that they want to try to get in those smaller contractors to compete with the big defense primes. You're referencing some reporting that I did a few months ago where I had the chance to sit down with...

the chief of staff of the army general randy george he's the highest ranking military official in the in the army and he is trying to put forward this path that would make the acquisition process easier it would instead look to these short-term contracts instead of these multi-decade contracts in order to get these more nimble companies in particularly when it comes to drone makes it easier for them to do business because oftentimes he's told me that they will

put in these purchase orders, but then at the end of the day, by the time those weapons get on the battlefield, they end up being obsolete. That appears to run counter with this. Of course, this is going to be a decades-long, multi-billion-dollar project that the defense primes had been competing for.

All right. Bloomberg's Tyler Kendall joining us from Washington, D.C. Tyler, thanks. Do appreciate that. The world is built on code from the apps we use every day to the systems powering industries. Developers like you are the architects of tomorrow. But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further.

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Terms and conditions and other fees may apply. Product and services are provided by Moomoo Financial, Inc., members of FINRA and SIPC. Please visit Moomoo.com for full disclosures. Well, sticking with what's happening in Washington, D.C., earlier this week, President Trump fired two Democratic members of the FTC. Questions had already been raised about how much influence the White House might expect or exert over the agency and its actions toward big tech. Joining us now is William Kovacic. He's professor at the George Washington School of Law.

Bill, good to have you with us. How did you look at these firings earlier this week? I know it alarmed certain folks who watch this agency closely. As far as the FTC goes, there

There was an inevitability that the Republicans were going to get control of the FTC. There is a nominee pending, Daniel Meador, who's likely to get a vote in the Congress relatively soon, so that in a short time there would be a working majority of three Republicans that would have the votes to do what they wanted. The larger message, though, for the regulatory process is that the White House has determined

to get more control over how these agencies operate and to bend their programs more in the direction that the president prefers.

The agency leadership has said, we do want to press ahead with the big tech cases that are running now. We want to have an active program involving mergers. But at the same time, they've said, we do want to create an environment that's going to be more favorable for dealmaking because we're going to tolerate settlements. We're going to establish a timeline that is more predictable and reliable. So this is part of a larger effort now.

across the government for the White House to achieve greater control over how the regulatory process operates, including for big tech and antitrust. Well, explain the nuance there, because what I heard is two different things. One is that, OK, we're going to continue with, you know, for lack of a better term, a crackdown on big tech or going hard on big tech.

I guess some observers would point that out. Some people might not agree with that statement. But the other part is we want a friendly or regulatory environment and we want to communicate a friendly regulatory environment that opens up more M&A. How do those things coexist?

Yeah, here's one way that you can reconcile them. The Biden administration adopted the position on mergers that was very skeptical about settlements as a way to resolve problems. Settlements that would involve divestitures or conduct related solutions. The leadership of the Federal Trade Commission and the incoming leadership of the Department of Justice Antitrust Division have said settlements belong in the solution set, that

where the parties can come forward with a divestiture package that we regard as acceptable, when they offer us conduct-related solutions to specific problems, we are going to be more willing to accept those. That opens up a wider path for dealmakers to come forward with solutions to problems that might otherwise have led the agencies to go directly into court. So there's a commitment to bear down on anti-competitive mergers, but

A greater willingness to accept solutions that the previous administration tried to slam the door on. It's interesting because we've heard in the past, even during the election, that Vice President J.D. Vance thought Lena Kahn was actually doing a great job. It raises the question of continuation of policy between...

FTC and Andrew Ferguson's. So do you expect that the FTC, and I guess also the DOJ, is going to continue to move forward with the cases against Google, Apple, Meta, and Amazon? I expect it will continue. And it's been interesting to watch how

Andrew Ferguson, the FTC chair, especially has emphasized that many of these initiatives began at the end of the first Trump presidency. The case involving Google search began at the end of President Trump's first term.

The FTC's case against Meta for monopolization began in 2020. The investigation of Apple began in 2020. So one message that's come from the leadership is that we're the ones who started this. We're the ones who brought this scrutiny to bear, and we're going to carry forward with those. In a way, it's an effort to claim credit for the development of the newer approach to competition law. At the same time...

Chair Ferguson makes a point of saying the Biden-Harris antitrust era at the FTC is over. The con chairmanship and policy is over. I think what they mean to be saying there is that we are going to be more willing to consider solutions to mergers that stop short of absolute prohibitions. We're going to provide more clarity and certainty about the duration of the merger review process.

We're not going to game the system of process to stretch out the timeline to give companies more pause in considering whether they want to go ahead. So it is a mixture of saying we're going to continue to be tough with respect to tech in particular, but at the same time saying that we aren't going to create an environment that is so demanding as it was before. So there are going to be possibilities for more mergers.

And I think both of the leaders face something that a Republican nominee to these agencies always face. A conventional story, and academics like me are part of creating that story, a conventional story is Republicans are going to open the gates. They want to say things at the beginning that say, not so fast.

William Kovacic, GW Law Professor. Bill, good to see you. Thanks for joining us. Do appreciate it. Hey, do you want to bring in Bloomberg's Ryan Bestelica to wrap up this week in markets? Certainly a big focus being news out of NVIDIA's GTC event. Ryan, it doesn't look like this was the catalyst that NVIDIA investors wanted to see and also that the greater tech industry wanted to see. What is the consequence of that?

Hey, thanks for having me on. So you're right. I think if you talk to a lot of analysts and investors at NVIDIA, there was a lot of optimism about their product pipeline, their roadmap going forward, but it wasn't really enough to avert some of the weaknesses we've seen in the stock. There continues to be a lot of uncertainty about policies. There continues to be a lot of uncertainty about tariffs, the outlook for the economy. All of this stuff has been weighing on tech in particular, although losses have been pretty widespread. But a couple of stats.

caught my attention earlier today. This is on track to be the fifth straight weekly drop for the NASDAQ 100. That's its longest since May 2022. Microsoft is on track for its eighth straight weekly drop. That's its longest since February 2008. So certainly a kind of, you know, level of historic selling there here that we're seeing today. We've seen the MAG7 index fall into a correction.

We've seen the NASDAQ 100 fall into a correction. There's been just a lot of broad-based weakness. However, I do think we might start to see some people start buying the dip here. Valuations have really come off of their highs and we might be building a sort of base.

All right, that's the question. Hey, Ryan, have a great weekend. That's Bloomberg's Ryan Vestelica. Thanks so much. That is going to do it for this edition of Bloomberg Technology. Do not forget to check out our podcast. You can find it on the terminal as well as online at Apple, Spotify, and iHeart. This is Bloomberg Technology.

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