Intel Appoints New CEO, FTC Moves Ahead With Microsoft Antitrust Probe
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Live from New York, I'm Caroline Hyde.

And I'm Jackie Davalos in Washington. This is Bloomberg Technology. Coming up, the FTC is charging ahead with the Biden antitrust probe of Microsoft. We'll discuss what this means for Trump's new FTC chair and his scrutiny of tech giants. Plus, Intel shares jumping following the news of a new CEO tasking LitButan with restoring the company's fortunes after a slump in earnings and market share. And

And a conversation with podcaster turned investor, Harry Stebbings from 20VC on how 120 tech founders are joining his project to boost European startups. But first to check in on these markets. And we erase yesterday's gains. The Nasdaq 100 currently off by about a percentage point after yesterday we got a bit of a reprieve and a push higher of more than a percentage point.

OVERALL, WE'RE ONCE AGAIN FILLED WITH ANXIETY ABOUT U.S. GROWTH AND ABOUT BASICALLY STILL SELLING SOME OF YOUR KEY WINNERS LARGELY WITHIN THE MAGNIFICENT SEVEN. GOING TO SOME OF THE INDIVIDUAL MOVERS, LOOK, THE EARNINGS FLOW STILL NOT LIVING UP TO EXPECTATIONS. I'M LOOKING AT ADOBE DOWN, CRUSHED ANOTHER 11%. THIS IS HOW THE FISCAL FIRST QUARTER DELIVERED 10% GROWTH IN REVENUE AND LIVED UP TO EXPECTATIONS, BUT THE CUT

the current quarter that we're operating in, the guidance, not good enough. The full year guidance remaining the same. Analysts wanted more. Many cut their price targets. Intel, though, soars on the back of a new CEO. Lippu Tan returns. He was on the board before, and of course he did that turnaround at Cadence. We'll dig into that in a moment. But Microsoft, just above about two-tenths of a percent, but is contributing to the points decline on the NASDAQ 100. But what does it mean that the FTC is looking into that anti-competition analysis? Microsoft Bloomberg,

Reporter Josh Sisco is with us. You look at Microsoft from an FTC and anti-competitive concern area here, Josh. What is it that the FTC is doing? Because we all thought a new Trump administration would mean maybe less scrutiny on tech giants. It doesn't seem to be the case.

Well, I mean, from the beginning, since before Trump took office, both himself and his allies have made it pretty clear that tech is going to be a key focus of their enforcement and regulatory efforts. We're still a little sort of uncertain about how exactly that will play out. But this is, the fact that they are picking up this investigation and carrying it forward from the end of the Biden administration is a major sign that they're going to keep

keep an aggressive stance against the tech sector. Josh, remind us what other cases this FTC commissioner is inheriting from the Biden administration, because this could potentially offer clues as to how those might result in as well.

Yeah, so he's got a bunch of stuff both on the competition antitrust and sort of the consumer protection side as well that the agency does both enforcement in both areas. They're going to trial next month against Meta in a case that was first filed in

actually in the initial Trump administration in December 2020 to break up Meta, and that's finally going to trial in April. That was sort of filed at the end of Trump's first term, and then FTC chair under Biden, Lena Kahn, she carried that forward.

They also have a lawsuit against Amazon that could potentially lead to major divestitures of Amazon's business. That's not going to trial for about a year and a half. There's another lawsuit challenging Amazon's Prime subscription business and how the FTC says it doesn't allow...

consumers to cancel easily. Those are just a few of the big ones. Yeah, and interesting that resources is an issue is why they delay the Amazon investigation, Josh, that you've been reporting on. But the context here is one where also the DOJ seems to still be going after that Google investigation and some of the really pretty tough remedies that they're eyeing to ensure that Google doesn't seem in some way a limitation on competition. For

the context of overall this administration, it looks as though big tech is not getting off the hook here, particularly when it comes to AI. Yeah, I think that's true. I mean, some of the regulatory stuff around AI safety and other guardrails, that's a little bit sort of up in the air, but I think they've made it clear so far that they want to see more than

two or three companies dominate the technology from Nvidia and chips to Microsoft and OpenAI and more end user applications, it is, I think, at least for now, going to be a major focus.

That's Bloomberg's Josh Sisco. Thanks so much for joining us. For more on Microsoft and the broader tech market, Rishi Jaluria, RBC Capital Markets Software Equity Research Managing Director, joins us now. Rishi, this isn't the first time that Microsoft is dealing with a more strict FTC. Is this latest development sparking you to kind of change the risk calculus that you were embedding in your modeling for the coming year, or are you mostly brushing it off?

Yeah, and thanks so much for having me. Look, I don't want to say I'm brushing it off, but I do feel like the potential impacts, we've been prepared for this. This is something that has been talked about for a while. And remember, I mean, Microsoft obviously historically under Bill Gates and later Steve Ballmer had gotten themselves in a little bit of hot water when it came to antitrust. But under Satya Nadella, it's definitely been a kinder, gentler Microsoft that has very much embraced interoperability, embraced coopetition. And I think we see that playing out here.

They obviously were very early to invest in OpenAI and they've really gone all in on GenAI becoming an AI-first company. But you actually notice over the past several years, or sorry, past several quarters, Microsoft has been

diversifying, right? They've been building relationships with other vendors. At the same time, OpenAI themselves has been diversifying where they have their own relationship with OCI, including with Stargate. They have their own relationship with CoreWeave per the reports out there. And so it really feels like Microsoft is doing the right things to show that they're not

abusing their position in terms of their relationship with OpenAI. And I think it becomes tougher to make an antitrust case against Microsoft with the OpenAI relationship when there is that level of interoperability and the other competitors have these sort of similar relationships. You think about Amazon with Anthropic, you think about Oracle with Cohere, even Google buying DeepMind a long time ago, and that's a foundation for their AI efforts. So I think it's going to be a tough argument to make against Microsoft on the antitrust given all of these moves.

Rashid, it is interesting though when you think back to the inauguration of the current president, how many technology leaders, CEOs, founders were there and many felt that we were coming into a different type of field for business. But will that be the case or any of these companies ever going to be able to do decent M&A again or any of these companies going to be able to dislodge the overall time investment that they have to make in proving they're not anti-competitive?

Yeah, look, I think we're probably going to be in a better environment for M&A. I think it'll be hard to get away with these sort of acquisitions that we saw maybe a decade ago or so of, you know, Facebook buying Instagram and then WhatsApp and, you know, Microsoft making some of these big blockbuster acquisitions.

But I still think we're going to be in a more favorable environment for M&A. And I think there's going to be scrutiny on there to prove that there's power, to prove that, to maybe try to keep the big tech companies in check and in line. But I still think that the idea of splitting up companies, divesting assets, that's going to be more unlikely under the new administration. To me, this is kind of just a continued show of wanting to keep them, again, in line.

Rishi, how do we reconcile the fact that President Trump has really almost anointed certain tech companies to be the shepherds of AI competitiveness here in the U.S.? You have Oracle, OpenAI as part of the Stargate deal. Could that shield the companies that have stakes in those particular companies a little bit more from some of the FTC scrutiny that we're seeing? Or will we see kind of this broader scrutiny across tech overall?

I think we're going to see broader scrutiny across tech, as opposed to at least over the past, or at least relative to the first Trump administration. But I think it'll be equivalent to what we saw during the Biden administration. And maybe taking that one step forward, I do think very much there is a relationship angle to all of this. So I think your instinct in the question is accurate, right? That companies that have maybe ties to the administration,

in some way or at least work constructively with them are going to be a little bit more protected. And so I think it's in a lot of these companies' interest to at least have a good working relationship with pieces of them. But remember, the FTC is its own independent entity, right? And even if the chair is appointed by the Trump administration, the way they act should be fully independent. Again, I think that the case comes down, especially for Microsoft, to prove that there's some sort of competitive harm, to prove that they are

are abusing their position that there are antitrust concerns. And the more work we do on that, the more we see the moves that both Microsoft and OpenAI are making independent of each other, the diversifying, the embracing of interoperability, the harder I think it is to make a case for antitrust here. So Rishi, we then return just more broadly to fundamentals. For the software companies that you cover at the moment, Microsoft being one of them, but you'll cover a whole host. I think of Box, I think of Salesforce, I think of Oracle. Software hasn't been as punished as hardware.

But we are reevaluating our previous winners, Rishi. And at this moment, do you think that we're hitting a bottom after the sell-off of this week? Yeah, look, I think this big sell-off that we've had over this week and really in software over the past month, you're right, hasn't been punished as much as the hardware names. But there's been a lot of names that I cover that are high-quality businesses down 30% over the past month on really no fundamental news. In our mind, it is creating some really great buying opportunities.

I think, yeah, some of the big guys like Salesforce and Intuit, I think are interesting here. Even going a little bit more down the cap spectrum, I think HubSpot, which is actually a competitor to Salesforce, super attractive name down 30%. It's one of our favorite names here. MongoDB, which I look at as a next-gen Oracle in the database space, really compelling with this 35% drawdown that we've seen over the past month. So I do think it is creating some buying opportunities because remember, software, let's see what happens with the broader market.

macro environment in the economy, but software is very much a tariff-proof sector. And I think that's an important point to keep in mind as you think about all the rhetoric around tariffs and trade wars.

That's Rishi Jaluria of RBC Capital Markets. Thank you so much for joining us. Still coming up, OpenAI shares its suggestions for AI policy with the Trump administration. We'll have all those details when we come back. Caroline? Well, we've got to keep an eye on what's happening with Intel. While the rest of the market falls once again, Intel outperforms by 15%. Why?

Libertan returns to the company. He was on the board until August 2024. Of course, he did the turnaround for Cadence and now his task to turn around Intel to improve its market capitalization. This is Bloomberg Technology.

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OpenAI has responded to a Trump administration request to share ways to boost US competitiveness in the global artificial intelligence race. Here to tell us what they came out with, the Meg's Seth Biegerman. Funnily enough, less regulation seems to be the vibes. It's shocking, isn't it? It's a real wish list of a deregulatory and heavy investment vibe here.

Basically, opening eyes saying we want laxer rules on copyright, we want more infrastructure investment. And perhaps the most surprising thing is they're asking for a little bit more protection and relief from the patchwork of hundreds of state AI bills out there. Saying the government should kind of weigh in here and say, "If we work with you in providing access to our models to review, then give us a little bit of leniency on the many AI bills out there in the country."

Seth, talk to us about what that patchwork currently looks like, because a lot of these are still underway. And it's interesting that they use the word preemption because it hasn't exactly happened yet, but it kind of alludes to the fact that they want that shield. How many bills out there are they afraid of? You know, there's hundreds. I believe the number was something like 780 currently, uh,

in discussion right now. These range from bills around deep fakes and bias in AI systems to something like the controversial legislation that we saw moving through California late last year that OpenAI was vehemently opposed to that said we might have civil liability here if you have critical harms from your AI models. It's clear OpenAI is not so happy with that despite having previously said they're in favor of regulation. They just want it to be from the federal government, which has done nothing much to date.

The minute you said copyright, it made me think of what's happening in Europe and the UK in particular. We've already seen JD Vance been put out to Europe to try and fight the good fight and say go away with your regulations. But ultimately, the US is one case. How much do they want the US government to do their bidding abroad as well? Yeah, it does sound like opening eyes basically saying we want you to go out there and advocate for the fair use regime that they have been betting on for the last couple of years, basically saying that we have a right to

to use training data that might be copyrighted because it's fair use. We're seeing that other markets outside the US are much more restrictive on that front and it faces lawsuits in numerous countries and it could be critical to how they develop this technology.

Seth, another thing that OpenAI added to their wish list is that they want to use government-held data like healthcare data to train their models. How do we think that's going to go over? It's going to go swimmingly, I'm sure. No, I mean, I think, again, the point is if copyright becomes too strict and they have a harder time getting the robust amount of data that they need to build new models, they're hoping the government can step in and provide a wealth or a resource of other data. I'm sure not everyone would be comfortable having their healthcare information be used to feed these models, though.

Bloomberg's Seth Figerman, thank you so much for joining us.

turning to shares of Adobe that are sinking today after the company gave a disappointing outlook for revenue growth. For more on that, Anurag Rana of Bloomberg Intelligence joins us now to discuss. Anurag, sales in the current quarter are expected to be between $5.77 billion to $5.82 billion. Analysts were projecting $5.8 billion. It's really not that far off. So help us understand what investors are worried about here. Is it the execution or the competition?

Yeah, I've been surprised about the reaction also because if you look at it, they reaffirmed their guidance for the full year. And frankly speaking, in the current environment, nobody knows how the economy shapes up. That's not bad at all. From our side, they did give out a lot more details about their AI initiative. The thing with Adobe is it is probably the most controversial stock in software right now.

The valuation, it has been the last, I would say, year and a half or so. I haven't seen that. I don't even know going back 15, 20 years. It was always trading at a premium to some of the marquee names. The big issue with Adobe is people are worried about their core creative business and what would the future of that business be

because of free AI tools, we can develop videos or pictures on the fly, then why would you need Adobe? Now, I think that's way simplified risk. They have a very, very strong moat around their products. But again, it's going to take a while before people get comfortable with this story.

I feel that was the story even in the hardware names that we saw of last week. Marvell got crushed even when ultimately it lived up to expectations. But if your forecast is in any way off, down you go in this market environment. Anurag, what else does Adobe need to be doing in terms of also fighting off the perception that it's really hard to get rid of subscriptions and ultimately that they're not getting bang for the buck for the customer?

Yeah, I think, frankly speaking, all they need to do is steady execution over the next 12 to 24 months and put this risk to rest that they will get disrupted because of AI. I think that is the single most important thing for them. They keep on giving more information about how AI is enhancing their business. I think that's going to be there. But one of the things I caught from the stock reaction today is that market still seems to be in a notion of

you know, accelerating growth for the entire software industry, which is actually not a good thing for the earnings season that's coming up. Because given where we are in the economic uncertainty, I don't think there's going to be that much seed growth going forward, or at least in the near term, which means a lot more volatility for the software names going into next quarter or next month. I love that you're pointing us towards the next earnings season when we're still wrapping up this one. It never ends. Anurag Rana of Bloomberg Intelligence. So good to have you. Thank you.

Let's talk about potential IPOs and what this market volatility means for them. Just think of CoreWeave. We've been talking about it a lot. Initial public offering, one of the most hotly anticipated stock launches this year. Will it go ahead? What does it mean for the investor base? Mark Klein, CEO of Suro Capital, joins us now. $25 million worth of shares all over the world.

Corweave, you are a publicly traded venture fund basically and you disclose the holdings that you have and ultimately your vision for these businesses. Corweave, will it go public do you think in this market?

Yeah. So, Soro Capital is a publicly traded fund that invests in venture-backed companies. We invested in Corweave about a year ago. We found that it's a pretty unique property, as you've been reporting and everybody's been reporting. I've never in the 40 years I've been in the business seen a supply-demand imbalance in any sort of anything. And the idea of

the need for compute and the supply of compute was so offset and Corby we've sat right in the place to take advantage of that. So we made an investment. It is the largest investment we've ever made at Cerro Capital in the 14 years that we've been investing. And we're really excited about the IPO. We think that obviously market volatility

isn't great for the IPO market. I'm sure you all have been speaking a lot about that. But I do think that their business model is so strong, their growth is so strong, that the market's going to appreciate it. And I think they will have the opportunity to go public in this market. I mean, the market was a little anxious about the fact that they're so dependent on a

couple of key clients, Microsoft being notably one of them. How do they prove that diversification? There aren't that many hyperscalers out there that need this sort of compute, but they need to show that they can serve more than just two key. Right. So I think you start with the point that Microsoft obviously is a risk factor in the fact that they're such a large customer and they do service some of the other larger customers.

technology type companies, but there aren't that many that actually need it. It's sort of like looking at the health insurance industry. There's a handful of health insurers that supply for everybody. In this case, CoreWeave supplies compute for the folks that need it, and as compute becomes less expensive, they'll be able to diversify their customer base, which I'm sure they'll be able to do.

Mark, how are you advising your portfolio companies, particularly those that haven't gone public yet? Are there certain sectors that should avoid the public markets and just stay private for now?

Well, I think one of the reasons we built this company 14 years ago is companies wanted to stay private longer. And that is certainly proved out when we first started Ciro. There was under 100 companies that were worth over a billion dollars. There was under 20 companies worth over a billion dollars. Now there's...

hundreds of them that are worth over a billion dollars. And being public is something that's not for everybody. And I think companies that want to go public have to understand the merits of going public. I think the advent of the secondary market as well as the tender market that is available now for these larger companies allows these larger companies to stay private longer

and allow them to make a determination when it's appropriate for them to go public if they at all need to go public. Look, you've invested before in the key winners of Facebook, Twitter, Snap, Spotify, Lyft.

But you're also in OpenAI. Would you ever envisage that OpenAI would do anything but stay private for the time being? They can access deep troves of capital, but they must be one of the most sought-after holdings for the retail community and indeed people who can't access private funds. Sure. OpenAI, which is widely reported, is in the process of going from a not-for-profit to for-profit. And you support that?

I think that's appropriate. I think if they want to continue to aggregate capital in the way that they need to do to continue on their mission to build out what is a phenomenal company, they're going to need a more normalized capital structure to do that. That's Mark Klein, CEO of Suro Capital. Thank you so much for joining us. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Jackie Davalos in Washington. Let's check in on these markets. Once again, the trade wars, the anxiety, this time between Europe and U.S., dialing back up. Resentiment is pushed back lower after yesterday. We got a reprieve with a lower than expected CPI reading. But once again, we're under pressure on the Nasdaq 100 off by 1.3 percent, completely erasing yesterday's gains. We move under the hood, though, of who is outperforming because most of the Magnificent Seven are on the downside, dragging lower on a points perspective. But look at Indy.

Intel to the rescue. It's from a points contributor, one of the best performers on the upside. We're up 15%. And why? Because Lipu Tang comes back, not as a board member, but actually as CEO starting next week. Bloomberg's Ian King has been following the trails and tribulations of Intel. Is he the right man to steer this company back to good fortune?

I mean, the reaction tells you that people are clearly happy about that, whether it's a case of them being happy that Intel have just got somebody in that crucial seat at a crucial time for the company, or whether it's because they're enthusiastic about his capabilities and his fit for the role. We'll see how that plays out over the long term, but certainly today people are very happy about that.

Ian, talk to us about what this has looked like in the past, because this is the fourth permanent CEO over the last seven years. Are investors going to look for something more other than just a new person on the job? Because the company also has some support from the Trump administration. But what other questions are still open about whether they can actually execute on this to stay relevant?

Yeah, I mean, that is the giant question here, and we don't have an answer in terms of what direction he's going to choose. It's whether Liputan has come in as a CEO who's going to try to make Intel what it once was, which was dominant in this industry, or whether he's a caretaker who's going to preside over it being broken up.

We didn't really get the answer to that in the things that he put out there publicly yesterday, and that's going to be something that people will be really focused on. And the chipsack money in. When is this $8.5 billion potentially going to come its way? What do you make of his interactions going forward with the current administration, do you think?

Yeah, I mean, that is a wild card for anybody in a CEO role in the semiconductor industry, whether it's trade, whether it's the CHIPS Act or anything like that. But all along, the CHIPS Act has been a very structured situation where you have to build these plants, you have to equip them, you have to start production. Otherwise, you don't get the money. You know, it's very much a milepost situation.

kind of triggered event. So they'll have to do what they said they were going to do or they won't get the money anyway, regardless of whether President Trump turns against the act or not. It's Bloomberg's Ian King. Thank you so much for joining us. Next, Janet Mui from RBC Bruin Dolphin, head of market analysis. Thank you so much for joining us. Let's talk about

Keep talking about the semiconductor space here. Intel is one big player, but I want to understand how you're thinking about the space coming off of a really busy week that got rattled by tariffs and other announcements, the Chip and Science Act as another. How are you thinking about the space and the catalyst going forward?

Thanks for having me. I think over the longer term, AI will remain a very relevant theme and a very key driver for the semiconductors industry and the whole ecosystem. So on that, we're still very confident on the secular outlook. There's still plenty of support for that. But unfortunately, we're in a very

complex and uncertain macroeconomic landscape at the moment where companies with the most complex supply chains are likely to be at risk, and that is including the semiconductor sector. So unfortunately, given the macro backdrop of

These are also not doing well at the moment. But I think that valuations have become more attractive for the sector as a whole. And I do believe that if you pick the leaders across the semiconductor ecosystem, you are likely to still do pretty well over the longer term. Is Intel a leader? I don't know whether it's an individual name perspective, but would you put that company alongside some of the winning formulas that we've seen of late with the NVIDIAs at the top of the list?

So for now, probably not. We have to await more strategic direction from the new CEO. I think Intel faces a bunch of challenges, regardless of who is in charge. Basically, on the design front, it's lagging competitors like NVIDIA,

and AMD, as a foundry business, its direction is not clear. And they really have to revive that foundry business in order to secure its position in the sector. So I guess we'll just have to wait and see. Apparently, the market is very enthusiastic about the new CEO.

Janet, let's talk about software for a moment because we had a guest earlier this morning kind of tell us that these software names are a little bit more insulated from a lot of the tariff woes that we're seeing other names really get battered by. Would you agree with that? How much more of that protection do some of those names get?

Yeah, I would tend to agree with that. I think in terms of the supply chain impact, I think obviously the hardware, the industrial sector would be more badly hit, whereas the software, it would be fundamentally less hit. So I would agree on that point, but obviously given the various macro uncertainties that we have, ultimately a lot of these software companies, I mean, if you look at the mega cap tech companies, they're still heavily impacted

exposed to domestic US economy in terms of, say, advertising, cloud revenues, etc. Ultimately, it's still dependent on the business cycle. I mean, arguably less cyclical, less sensitive, but it's still dependent. And obviously, the valuations have come off because of the sentiment here. So I guess in the near term, I think it is...

It's best to stay cautious because we still have potentially a range of uncertainty coming from the reciprocal tariff front that is going to hit the sentiment channel.

The reason I'm curious is because more recession fears have started to come to the fore. And when we think about the tech sector, you know, we don't really remember the fact that all of these software names, many of them, I'm thinking like the social media companies, are sensitive to that digital advertising. How much of that is vulnerable to the swings in the economy? Could there be more vulnerability there going forward if these recession fears do play out?

Yes, I think there is certainly some risk because what we are seeing now is basically the heat via the sentiment channel. We haven't really actually seen too much of the heat to actual earnings and the real economy. I mean, there is recession anxiety, but I wouldn't still put that as a central case.

But if that eventually did play out, I think that could be more to go in terms of the hit to the earnings outlook. So that would be quite bad to these companies because advertising, I think, is very cyclical. They're probably the first to be cut if a company wants to reduce its spending.

And if consumer confidence is falling, then consumers are going to tighten their belt and spend less. That's all going to hit all these companies eventually. But I think, as I said, it's currently still the sentiment that is playing out there. It's not really real hits to the earnings yet. We just have to wait and see.

And what about overseas? Because some of the woes here in the United States might be a gain for, let's say, Chinese stocks. It seems like every time a new model comes out of China, it sends US tech stocks really freaking out, especially those with exposure to AI. How are you thinking about positioning outside of the US? Yeah, I think there is certainly more enthusiasm on Chinese tech stocks. I think many

mainly is because sentiment has been way too depressed and basically a lot of overseas investors have written off Chinese tech for a while and there's suddenly a bunch of good news including some shift in the tone from the politician, a bit more welcoming tone, a bit more supportive to the private sector and of course the innovation in AI and broadening out of using AI in various sectors in China. So I would say

Yeah, in the near term, I think it's reasonable to feel more optimistic. I think there could still be more inflows going into that sector. But I think we have to be a bit more cautious because we understand Chinese stock market is very volatile and a lot of retail participation. I don't think this time would change. I think there would be still a lot of volatility and profit-taking activity if the index continues to go up from here. So I think we've got to be a bit more careful from here.

Seems like forever ago that the market was freaking out about deep seek and all of a sudden with some earnings that have come out, CapEx has been reaffirmed. Investors seem assured that maybe we're a little bit past this. Do you still see the deep seek fear showing up anywhere? If that's something that's going to drive the market going forward? Yeah, the thing is that I think

Fundamentally, we are of the view that DeepSeq's appearance shows that these models can be run in a more efficient way and thereby lowering the cost of running it and training. And thereby, eventually, it would stimulate demand if the cost goes down. So more people will be using it. So ultimately, that's going to be beneficial for the whole sector. But at the same time, the thing is,

We don't know yet. And if you look at the latest earnings results from, say, Nvidia, you won't be able to see that impact yet, actually. It's more distant in the future whether the hyperscalers are going to reduce their capital spending because of the more efficient models. There's a lot of questions that are yet to be answered. But I think

from our view, if you look back at history of the semiconductors, of how cost impacts demand, usually when costs are lower, then eventually demand actually grows exponentially. But of course, you have to also consider that the pie is going to be shared by potentially more players. So I think...

Just focusing on, say, one or two particular leaders is potentially more risky. That's why our strategy is always to get exposure to a whole range of the stocks in the semiconductor ecosystem. We don't have a crystal ball, do we, Janet? Janet Mui from RBC Bruin Dolphin, thank you so much for joining us. More coming up next. This is Bloomberg. ♪

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Time now for Talking Tech. First up, SpaceX has delayed its mission to bring back two stuck astronauts from the International Space Station due to an issue with ground equipment. And the mission would have launched a new crew to the ISS and brought back those two astronauts that have been marooned since last year. And the launch has been rescheduled.

to place no earlier than tomorrow evening. Plus, Alibaba has launched a new version of its Quark AI agent, incorporating chatbot, deep thinking and task execution features in one app. Now, Quark utilizes Alibaba's own reasoning models and is the latest attempt by the company to keep pace with China rivals.

and shares of Deliveroo are falling today as much as 10% in London trading. That's the most since all the way back in 2022. The food delivery company gave an earnings forecast that disappointed investors and comes just days after it announced it would exit the Hong Kong market. Jackie.

The head of Alibaba Group's original core business says the use of various AI applications are having a profound impact on the company. Earlier this week, Alibaba.com's president, Kuo Zhang, told Bloomberg exclusively its vendors are having an easier time finding new markets for their goods. Take a listen.

Take the buyer as an example. So if we think about the search volume for the information or for a product, I think the search volume for the information part is 10 times than the

products part. So think about it, if you want to start a business, you will not specifically go to a product or go to a kind of suppliers. You will come up with this idea like what's trending and what's a specific kind of textile you're going to use in your product. And then it comes off the business plan, then it comes to the products. So now using AI, I have this kind of multi-round, the dialogue kind of search.

A lot of people now, it's more easy to do business online. And for the sellers, we see current our kind of four agent, these tools, is already better than 60 or 70% of the seller if they are new on alibaba.com in terms of the conversion rate for the customer engagement and for the product management.

But how many businesses, I think there's around 200,000 SMEs that are on the platform, how many businesses are actually using AI today? So currently, the weekly active sellers are more than 100,000. So it's more than half of the sellers is already encrypted by this agent-based tools. And for the buyer side, actually, we launched the XU from last November.

Until now, there are accumulately more than 1 million users using Axio, using this AI-based powered search. How much do you feel the competitive pressure on AI given the amount of innovation that's coming from China? Okay. So first of all, we think there's a lot we can do so far. For example, we talk about the reasoning models, but both based on language. There's a lot on the multi-model stuff.

that we can do later on, like you can base on anything, an image, a video, or a file that you uploaded to fail that the reasoning model can help you to interpret and to execute upon. So all those kind of things, we still believe there's a huge space to grow and we can leverage the most

I mean the models from Meta, from DeepSeeker, from AliCloud, Tongyi Qianwen. So all these models actually can help us to boost the capability of the

applications that we believe application actually is a key here. And why we think we can do it here, we can do better than others, is not going to be a few tools that play for the people, answer the easy questions. It needs to be highly integrated into the big scenarios. Like global trade is a 30 trillion US dollar business. I don't think a

any other businesses larger than this so if we can apply ai in this business and helping a lot of smbs so who cannot participate in the global trade and now they can so i think this is a big success for us a lot of people are expecting industry consolidation or ai consolidation in china this coming year how many winners do you see in the ai space in china

So actually for that part, I can only speak of my opinion. So if you ask this question in January 2025, I think nobody can anticipate that there is a company called DeepSeek. I think you ask this question in March,

I don't think that anybody can anticipate what's going to happen in April as well. This industry is moving so fast and a lot of people doing a lot of innovations. We just need to focus on what are the right problems we need to tackle. As people in this technology domain, I don't think anybody can anticipate what's going on for this year. Alibaba.com's President Kuo Zhang speaking exclusively with Bloomberg's Annabel Drowlers.

Let's just take a quick check on Apple's shares. Year to date, their erosion in market capitalization is to the tune of about half a trillion dollars. A 15% wipeout is actually far worse than the Nasdaq 100, which is off about 8%. Why is it underperforming? There is a myriad of risks, which Ryan Vlastelica really writes about to our audience today, talking about the worries of tariffs, about the uncertainty in China, about the AI organization.

offerings really fizzling of course of late the Siri concerns and then there's that lucrative partnership with Google parent alphabet and whether or not those payments will still come for exclusive access to Google search within the iPhone well let's talk all about Apple and maybe the way in which is trying to offset some of these headwinds the affordable iPhone 16e how affordable actually is it Mark Gurman is beginning his hands on some of the products and Bloomberg writes about how it's kind of a tough sell at this price point mark

Yeah, to your point, it's not affordable enough. At $600, it puts it basically at the very high end of the budget range, right? But its specifications, one camera, its processing, its AI capabilities really puts it sort of at the bottom barrel of budget.

phones. You can get Android phones for a couple hundred dollars less, particularly overseas, where you're getting three or four cameras, where you're getting better AI features, where you're getting better displays, you're getting higher resolution panels with improved frame rates for scrolling, you're getting better gaming, et cetera, right? So they have a lot of competition there, and it continues to be mind-boggling that they abandoned that $300 to $400 price point. I really think something like that

well out of the typical Apple premium range, would have helped them tremendously with growth, particularly for services in places like India, Southeast Asia, Eastern Europe. To your point, when you first reported about this product coming out, the idea was actually it was very like an iPhone 16. There wasn't really much you were having to leave on the table by not going down to this particular phone. So will they ever bring anything out in that price range that you think could tempt more of an emerging market purchaser?

I would never say never, but my belief is that the plan is eventually to bring the price down of this particular model, right? Today it's $600, but maybe in a year and a half, two years from now, maybe it'll get it down to the $500 price range. At that point, it's going to be even more outdated specification-wise, but from a price point perspective, it'll actually be quite a bit more compelling. It would put it squarely in the same price range as the Google Pixel A series, right? They have the 8AM.

right now. They have the 9a coming. This is an annual thing they do, a lower-end Pixel phone, so better competition there. The concern is, right, for Google, no one's really buying the Pixel phones as great as they are. For Apple, they're at least getting some momentum because this is a phone that's not going to get switchers, but it's a phone that's going to be able to upgrade from older iPhones. So from that standpoint, it's compelling for some people, but they have the opportunity to do something even bolder, even bigger, even cheaper.

Well, for now, we still wonder what's happening in terms of the generative AI integration, Apple intelligence, Siri as well. There's a lot going on for this particular company. Mark Gurman, as always, you break it down for us. Thank you. Let's just return to what is a key mover on the day, though, because at last...

The relief floods the market that Intel has a single CEO for the long term. The interim CEOs go back to their day jobs as CFO and chief of product. We're up 14% as Lipu Tang comes back to the business. Can he be a turnaround king for Intel as he was for Cadence Designs? That does it for this edition of Bloomberg Technology. Do not forget to check out our podcast. You can find it online on the terminal as well as Apple, Spotify and iHeart. This is Bloomberg Technology.

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