Meta, Big Tech Make Political Shifts
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Good morning, I'm Tim Stenevek. And I'm Katie Greifeld. It is Friday. We're both in New York City. Welcome to Bloomberg Technology. Coming up, Meta's Nick Clegg steps down as president of global affairs and is replaced by a longtime exec with Republican ties ahead of Trump's second term. Plus, TikTok in focus with a looming ban

later this month. Will the Supreme Court save the day? And China flexes its lithium dominance by planning tougher scrutiny on exports of technology to make battery materials. All that and more over the next hour on Bloomberg Technology. First, though, a check on the markets. Make it cap tech.

Right now, driving stocks higher today. Look at that. The Nasdaq 100 up a full percentage point. 86 stocks higher, led by Nvidia, Tesla, Amazon, Microsoft. On the downside, we got Apple lower again. We're going to be speaking with Ryan Vestelica in just a few minutes on the company's longest losing streak since November, down more than 6% from that post-Christmas all-time high. As far as the index go, the big question, Katie, can today's gains hold? Because we saw the same thing play out yesterday.

when stocks started out a little higher than closed lower. Absolutely. Yesterday was actually the worst trading day of the year. Yeah, that's funny how that works on the first trading day. NASDAQ 100 and the S&P 500. Thank you for laughing. You got it. I got to check in on Bitcoin higher by half a percentage point right now. Rising for a fourth day in a row. Still, investors pulling money from that iBit ETF. $333 million yesterday. That's according to data compiled.

by Bloomberg. I will say that was its worst outflow ever, but for a $50 billion plus fund, it's amazing that only $300 million counts as a record outflow. But in any case, let's talk about some individual names here. And we have to talk about what's going on with NVIDIA shares. You talk about big tech driving the day. It's NVIDIA.

that is driving the indexes higher right now, up about 3.5%. Not a huge move in the grand scheme of life, but that is your biggest points contributor to the S&P 500's gain right now. Similar story if you take a look at the NASDAQ 100. So that's some good news.

news. Let's talk about Apple, though, because, of course, Tim, you mentioned that. And Apple, there's a lot of fears about China right now. And you can see that those fears, if you take a look at the five-day chart right now, down 6% over the last five days. That is its longest such streak since

April. So definitely a lot of concerns about Apple. Let's talk about them all now with Ryan Vlazteleka joining us. And Ryan, when it comes to Apple and these China fears, of course, remember Reuters reported on Thursday that the company is offering discounted smartphones in China. It feels like this has been the bear case for a while for this company.

Yeah, good morning. Thanks for having me. So yeah, China is a major market for Apple, no surprise about that. And the latest data on monthly sales and shipments of iPhones in the country have been sort of muted as sort of just sort of the overall takeaway. And given just the size of that market, given the importance of the iPhone 16, which is, of course, the first one to have AI features, the fact that that is being met with some weak sales data out of China, that's a little bit of a cause for concern, especially when you're looking at a backdrop that could have

elevated tariff risks, slower growth potential, and just a whole general list of concerns out there. So the fact that you're seeing weakness in China is certainly just a reason for people to start the year off on a little bit of a more cautious note, especially given how strong it performed going into the end of 2024. I feel like this is how we started last year, Ryan, with all these concerns about China. And then Apple just hit it out of the park, as it does seemingly all the time. What's going on here?

Well, you certainly have plenty of reason for people to be optimistic because you do have this sort of long-term story of AI entering the iPhone. More applications being released with AI features. That's something that's going to be playing out over the course of not only 2025, but 2026 and 2027. And it's likely we'll start to see more upgrades over time. So that's something for people to be optimistic about.

AI probably means higher services growth, maybe more cloud growth. There's all kinds of potential tailwinds associated with it. But just for the time being, given you have such a major market out there, they're seeing a little bit of a shakiness. It's probably not surprising as people continue to wonder about what is Apple's overall growth rate going to be? Is it going to be as strong as other names within big tech? How does the valuation look relative to other names within big tech? Just reasons maybe again for people maybe to be easing off a little bit in the first days of the year.

Bloomberg's Ryan Vestelica. Thanks so much. Appreciate it. For more on the broader tech market, Mark Mahaney, Evercore ISI Senior Managing Director, joins us now. Mark, good as always to see you. NASDAQ 100 last year up by close to 25 percent. In 2023, higher by more than 50 percent. The tech stocks that you follow, still room to run higher in 2025?

I think so. But look, the setup here is we're in two and a half years into a major bull market. It started in the middle of 2022 after we'd had this shock of this dramatic ramp in interest rates. And since then, tech stocks have done really nothing but go up.

At some point, that'll fade. I think it'll start fading this year. I don't think you'll have the outperformance going into this year as you had the last two years. Maybe that's an easy statement to make. I look at the fundamentals of the group I look at, the Internet names, and I look at online retail, online travel, cloud computing.

advertising and I think the growth rates there are relatively sustainable. All of the checks we had at the end of last year going in the beginning of this year have been relatively constructive. We also had record high margins and I think those margins are largely sustainable because I think the sector as a whole is just being more

more judicious about headcount ads than they were in the past. And then I do think the third factor here is this AI, Gen AI. I think it's a gift that keeps on, is going to keep on giving for quite some time. It just leads to more efficient processes, better revenue streams, et cetera. So there's a couple of reasons to stay fundamentally constructive. I just, there's very little dislocation. There's very little, very few of the major tech stocks that I look at really look dislocated. The one that I really like here that I think is, is Uber.

Well, talk to us about that because Uber, it's so dominant compared to Lyft. But the fact that it hasn't exactly kept up with some of the other internet large cap names that you cover that have seen the really dramatic multiple expansion. What is the bull case for Uber going forward? Can it catch up?

Well, let me start with the bear cases. You know, you did have a slowdown in mobility bookings. That's their ride share business in the back half of last year of 24. And then and then there's really the concern over robo taxis and whether they'll obviate the need to ever have ride sharing networks in the future.

I mean, it's possible that that happens. I'm taking the other side on that. But those are the two factors that have caused the stock to correct from like mid-80s down to $60. Pretty material correction. The stocks I look at is the only one that's really materially corrected. But I think that creates the opportunity because I think as the largest demand aggregator out there,

I think that robo taxis will find a place on Uber's network. We got two cities, Austin and Atlanta, where we're going to see Waymo robo taxis on Uber's network. And my guess is that, you know, I'm a big fan of robo taxis here and of Waymo here in San Francisco. And I think you're going to see more competition in that space in the future. And I think you'll see more of those cars on Uber's network and evidence that they will be on Uber's network as the catalyst on the shares. Well, I've

I've never been in a way, though, but I'll be in San Fran in about two weeks. You should do it. It's awesome. Yeah. It's so cool. I have a real fear of my own mortality, so we'll put a pin in that. But in any case, Mark, I'm taking a look at your notes. You mentioned, of course, those dislocated high-quality stocks. Uber is among them. So is Airbnb. So is Alphabet. And that caught my attention because Alphabet is in a bit of a different league than the Airbnbs and the Ubers of this market.

Well, Google, I would say that Google at 160 was dislocated, at 190, I'm not sure it is. But we've got some events coming up. There's two in particular. Now, this is all getting out of fundamentals. This is all regulatory. First is the DOJ's antitrust case against Google. Google lost this in terms of its search business. We're not going to get really great visibility into this until August, unless there's some sort of settlement. And I think the chances of a settlement went up.

when we had the U.S. electoral results. So, you know, that's a very hard thing to handicap, but that's one factor out there. And then the other one is the TikTok ban. And, you know, we're days away from this ban going into effect. Now, it's possible it gets stayed. There is a provision in the law for that. It's possible it gets stayed.

And it's possible that there's some sort of for sale or a sale of TikTok. But if there is a TikTok ban, and I think the market is really heavily discounting this by more than it probably should. If there is a banning of TikTok, I think the beneficiaries of this are going to be Google, YouTube, YouTube shorts and reels at Meta. Who's the bigger beneficiary if the ban goes into effect? Meta platforms because of because of what's going on with Instagram and reels?

Yeah, I think so. I mean, just, you know, users, if you really can't, if I can't really use TikTok, like you're going to, there's a wonderful, uh,

value proposition to TikTok. And so people will look for other short form video places. Reels is kind of at the top of the list. So is YouTube short. So just Meta by hair over Google. But they both are beneficiaries. And then advertisers have got these ad formats nailed. They've got them locked in. They can't put them on TikTok. They're going to have to find other places. And the two obvious places are Google and Meta. What's the percentage chance, Mark, that you think this ban actually goes through with TikTok?

I don't know. I guess it's still a minority chance. So, you know, I don't think it's a probability. It's less than 50 percent chance. Maybe it's 20, 25 percent. I'm just struck by talking with investors is the belief that there's single digit percent chance that it goes through. But it is the law of the land. And this is not a First Amendment issue. I know this First Amendment aspects to it. It's really national security. And this was this was a pretty broad bipartisan congressional law that went into effect. I mean, that was

pretty well voted on by both Democrats and Republicans. And so, you know, this is the law of the land that's going to go into effect. But who knows what happens in the next couple of weeks?

So I'm a little baffled by this. But anyway, that's the law of land. And if it does go into effect, there's a clear positive catalyst for both Google and Meta. Yeah, it'll be fascinating to see how that actually shakes out. But Mark, before we let you go, when it comes to TikTok and potential beneficiaries of a ban, we were actually talking about this in one of our morning meetings, that you take a look at the content on Reels, for example. A lot of it is recycled content from TikTok. So how

How urgent of a question is it for Meta to actually attract the creators onto their own platform? Oh, it's critical for them to do that. I mean, whether or not there's a TikTok ban, I just think if there's a TikTok ban, those creators are going to be forced to take their audiences and build them somewhere else. And I'd be surprised if a lot of TikTok creators, I think, are somewhat diversified anyway. I know there's some that aren't, but I think there's a good number that are.

So anyway, yeah, this has always been the drive of Meta is to attract more short-form video content and talent over to its network. I think they'll be able to do that. They've been pretty successful at doing it in a lot of different areas. Yeah, well, Mark, great point to leave it on. Really appreciate the time. That is Mark Bahaney of Evercore ISI. Are you going to be okay if TikTok gets banned? I'm going to be

I'm going to be pretty sad. I spend about three hours there a day. So, I mean, maybe it'll be good for me. All right. Katie to reals. That's what it'll be. That'll be huge.

Well, Matt, as Nick Clegg is stepping down from his role as president of global affairs and will be replaced by Joel Kaplan. He is a longtime executive with Republican ties. Now, this move marks a shift by the social media giant as it prepares for a second Trump presidency. For more, we're joined now by Bloomberg's Kurt Wagner. And of course, Clegg said of Kaplan that he was clearly the right person for the right job at the right time. Kurt, tell us why.

Yeah, well, as you mentioned, Katie, this is a transition into, you know, Trump's second term. And this is someone who is, you know, Joel Kaplan being someone with Republican ties, with a lot of history with the Republican Party, you know, worked for George W. Bush's administration way back in the day. So someone who I think can maybe speak that language better than Nick Clegg, who, you know, came over from the UK. I do think that this sort of signals, you know,

that Meta certainly sees the most important relationships right now being domestic, right? And not necessarily what's going on in Europe where there's a ton of regulatory issues, which is something I think Nick Clegg was very well positioned to handle. Kurt, Joel Kaplan may be somebody with Republican Party ties, but the Republican Party that he was part of, the George W. Bush administration, for example, is a far cry from Donald Trump's Republican Party. And in fact,

many of the folks in the Republican Party now criticize that administration. And I'm wondering if you think there's going to be any tension there, if there is any tension there, if it still represents a disconnect between meta platforms and the Republican Party of today. Yeah, possibly. But this is what every big tech company is going to be dealing with, right? Which is that the more traditional folks that they have in their policy divisions might not necessarily be the MAGA Trump candidate party that we're starting to see, you know, really emerge and take off.

Now it's closer, right? Joel Kaplan is going to be closer in alignment with those types of issues, I think, than maybe someone like Nick Clegg. So maybe that helps. But I think the key here is really Mark Zuckerberg's role, right? For the last four years, he has been saying, hey, I want to be hands off. This policy stuff is not for me. I want to focus on product. I want to focus on the business. But now we see him show up in Mar-a-Lago. We see him calling Donald Trump personally. And I think

that Mark Zuckerberg will likely handle the lion's share of the relationship with Donald Trump himself. And then you let Joel Kaplan sort of deal with all of the stuff on Capitol Hill, where he is very well connected, just given all the years that he's been working in this industry. Bloomberg's Kurt Wagner joining us this morning. Thanks so much, Kurt. Do appreciate it. Well, it's not just Meta that is preparing for Trump's second administration. Other big tech leaders have met with the president-elect, including the likes of Jeff Bezos, Sundar Pichai, and Tim Cook.

all ahead of his return to the White House. For more on the future of Silicon Valley's relationship with Trump, Adam Kovacovic is Chamber of Progress CEO, and he joins us now. Adam, how would you describe the relationship between technology and the incoming Trump administration? Because a lot has changed over the last four years, especially with the rhetoric out of Silicon Valley, more pro-Trump, I think, now than it ever has been.

Yeah, I think you have to factor in two things. One, there's a lot of unhappiness in the tech industry with how the Biden administration has targeted tech and seen tech more as an industry to trash rather than an industry to champion. And so, frankly, I think there's a lot of frustration from people in Silicon Valley who are not

necessarily Trump supporters or even right-leaning, but there's been a lot of frustration that the administration hasn't championed basically the country's biggest export. So that's number one. Number two, everyone has the benefit of having learned from the first Trump term

in terms of what worked and what didn't in terms of how to deal with the president and work with him. I think a lot of tech CEOs look to Tim Cook for this as the CEO who probably managed the first Trump administration the best. And a lot of that frankly came down to direct contact between the CEO and Trump himself. As you said, that's not something that can be easily designated to a deputy. Trump

really cares about meeting with the CEO. And in fact, that kind of meeting often works. It succeeds with him. So I think that's what a lot of companies are leading with. Let's go to what Trump himself has said. Of course, this is a post on social media online

in late December. Big tech has run wild for years, stifling competition in our most innovative sector, and as we all know, using its market power to crack down on the rights of so many Americans, as well as those of little tech, which is not a phrase that I've heard before. Maybe truth social is a little tech. That's true. Maybe he's talking his book there, but reading between the lines, it seems like that would suggest that this antitrust pressure that has been on these big tech names is going to continue. Oh, I

I don't think there's any doubt about that. The fact is, you know, the Biden administration has been prosecuting antitrust cases against all of the big tech companies. Some of those started under Trump's first term. I don't expect any of that to go away. But I will say, I don't think Trump particularly cares about antitrust as an issue. What I think he really cares about is are these companies nice to him? And I think he views antitrust lawsuits as leverage, um,

And so I don't think you'll see a lot of settlements, even though, you know, there'll be sort of right-leaning people may not agree with the substance of the suit. I think you will see the Trump administration enforcers keep these suits going because they are leveraged over the companies, over things like content moderation and speech. But I do think there's a real interesting question here, which is this little tech question you said, right? The Biden administration has had a chill over mergers and acquisitions, and that's been intentional. That's part of their policy.

approach to tech M&A. But little tech companies benefit when big tech companies are able to acquire them. In fact, many companies, startups want the ability to be acquired as an exit path.

And so this is gonna be a real test for the Trump administration. Does little tech, do they or do they not want big tech to be free to acquire small companies again? I think that's gonna be a big tension within their administration's antitrust enforcement. - Adam, very quickly, what has been your conversations with members of the incoming Trump administration thus far?

Well, you know, it's been very interesting because I do think they have people who really do want to get it right on things like AI and crypto, people like David Sachs. They are talking to people in the administration. I think there's frankly a lot of

optimism that on things like crypto, the Trump folks will reverse the hostility that the Biden administration has brought towards the crypto industry. I think there's a lot of optimism that things like the Biden executive order on artificial intelligence will be overturned. And there's a lot of optimism we can shift to a kind of a more of a mode of let's go beat China and other countries on technology. But

But there's a lot of debates that are going to be kind of up for grabs. There's a big debate about H-1Bs right now, where you have elements of the Republican coalition against each other. So we'll see how those unfold. All right, Adam, great to get some time with you. That is Adam Kovakovich of the Chamber of Progress. Now coming up, Turo's safety under scrutiny after it was revealed that the platform was used to procure vehicles in both the New Orleans and the Las Vegas attacks. More next.

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Well, Turo's safety team scrambled to return to work after the latest attacks in Las Vegas and New Orleans, where it was revealed that the attackers used the car rental platform to procure their vehicles. For more, Bloomberg's Dana Woolman joins us now. Dana, I think for a lot of people watching these attacks unfold over the last couple of days, this was the first time they heard about Turo.

I've been describing it as the kind of like Airbnb of vehicle rentals. That's how it works. That is the perfect way to describe it. It is people choosing to rent their own vehicles when and how and at what price they choose. And that makes it a little different from a car rental fleet where car rental services obviously own the vehicle. So it's really inherently a different level of liability. I also...

I also had not heard about Turo, but this is a company that has been an IPO candidate for a while. And it was interesting to see that in its paperwork to go public, it actually noted theft, vehicle damage and other safety and security issues could harm their reputation. And it feels like that's what we saw. Absolutely. I don't think these are the exact kind of incidents they had in mind. But yes, it is people...

renting each other's vehicles. And there's a similar risk, as Tim said, on Airbnb where someone could trash someone else's property, word could get out. And to the extent that the service might grow through word of mouth, the reputation could also sour through word of mouth. There are questions about background checks coming out now, given that these two vehicles were used by folks who ended up causing loss of life, whether it was their own or others.

The thing is, is they don't do background checks with a normal rental car company, I don't think. So I don't know if that's necessarily apples and oranges here, apples to apples. Right. What the company would say and has said publicly is that the suspects in both attacks did not have criminal records that would have shown up in any sort of checks. That said, our team is very interested and is continuing to report on exactly how the checks work at Turo.

Like so many algorithms out there in different services, the algorithm here seems pretty nebulous. It seems to be dozens of different data points that are checked very quickly, even by the company's own admission and regulatory filings. Most users are approved within seconds. How exactly and based on what criteria, we're trying to find that out as well. All right, Dana, look forward to more reporting from you and your team. That is Bloomberg's Dana Wollman.

Welcome back to Bloomberg Technology. I'm Katie Greifeld. And I'm Tim Stenevek, both here in New York City. Let's go to check on these markets. Of course, we have green on the screen, a nice turnaround from yesterday's close. You can see the NASDAQ 100 up by more than 1%, 1.2% right now. A lot of those gains being led by NVIDIA, of course, having a good day today, pulling its might, but pretty broad breath.

in the technology sector overall. You take a look at the risk appetite being expressed in Bitcoin right now. Bitcoin also higher to the tune of about nine tenths of a percent. Of course, we're still below $100,000 per coin, but never say never. Maybe we'll get back there, maybe even today, given how volatile Bitcoin is. But let's talk about Rivian. Of course, this was one of the big stories from this morning. Rivian out with its fourth quarter production numbers beating estimates. Production

came out with about 12,700 vehicles. The estimate had been for 11,400. So you're seeing, of course, Rivian shares being rewarded in a big way right now, up about 21.6%. Tesla getting involved.

on the action. Remember that disappointment that we saw with deliveries, fourth quarter deliveries for Tesla yesterday? A distant memory. Tesla shares also up by about 4.6% right now, Tim. CFRA actually reiterating its sell opinion on shares of Rivian, a price target of $8. Look at that. Yikes. Yeah, shares trading at $16 right now. We're talking to Garrett Nelson a little later on a

Bloomberg Businessweek. Hey, let's get on over to tech and rising global trade tensions with China planning tougher scrutiny on exports of technology to make battery materials. This as Beijing looks to protect its grip on the crucial supply chain. This is according to a notice seeking public opinion from the Ministry of Commerce on Thursday. Bloomberg's Mike Shepard joins us for more. Mike, when it comes to rising trade tensions, when it comes to tariffs and protectionism,

It certainly is a game that two can play. How much leverage does China have when it comes to exports of these critical materials? Well, it matters because these are the essential ingredients to a lot of things. And in this case, they're focusing on what goes into the batteries that will be essential and critical to powering this next generation of electric vehicles, not only here in the U.S., but elsewhere around the world. This is...

a field, an industry, a sector that China really has developed a strong advantage in developing the technology needed to refine the chemicals used in making a car battery, you know, the kind that you would see in the electric vehicles on our streets.

It's also been behind the rise of their electric vehicle makers, most notably BYD, which have emerged as global leaders. So this is an area where they can actually say, "Oh no, we're going to try to fence you off to protect our advantage."

And in turn, the U.S. has seen a risk coming from carmakers like BYD. Earlier this year, we saw the Biden administration impose steep tariffs on imports into the U.S. of Chinese electric wheels, really designed to keep them out of this market, to avoid undercutting the efforts to get domestic carmakers here to develop EVs of their own with advanced technology of their own.

And of course, we're talking just more than two weeks before Trump's inauguration for his second term. I mean, what is the mood music when it comes to the second Trump administration and China? Of course, being hawkish on China, that is sort of a bipartisan vibe that we have going on here. But what would you imagine the Trump administration's response would be to actions such as this?

Well, Katie, I think it's time to pull the lens back a little bit and see this in the broader context of the U.S.-China relationship on technology. The Biden administration has been imposing restrictions on a lot of sensitive technology, and that includes exports of advanced semiconductor-making equipment and also high-bandwidth memory chips. These are two of the most notable moves made by the U.S. in recent months.

And those are designed to undercut Beijing's ability to stoke a semiconductor manufacturing base of its own at an advanced level, and advanced enough to develop artificial intelligence that would help its military. And that's an advantage that the U.S. does not want to see happening.

developed by Beijing. And certainly the Trump administration will not alter course on that. And we will expect to see the Trump administration not only embrace certain types of export controls applied by the Biden administration, but perhaps try to expand them and look for ways to retaliate as well and try to maybe foster some domestic investment in these areas as well.

All right, Mike, great perspective as always. That is Bloomberg's Mike Shepard joining us from Washington. Let's keep the conversation going because another story we're keeping an eye on is the future of H-1B visas and America's tech industry under the new administration. Here's former U.S. Representative Denver Riggleman of Virginia weighing in on Elon Musk's influence on the matter. He spoke with Bloomberg's Balance of Power co-host Joe Matthew earlier this week.

Yeah, I'd have lunch with Elon and tell him what I thought. What's going on with Elon Musk here? We're already seeing a little bit of a breakdown over the H-1B situation. The MAGA versus Musk...

situation seems tenuous. Will a year or two from now, will he still have the presidency here? No. No. No. I mean, the thing about H-1B is what's interesting. You know, he's going against some really big PACs on the far right, like Numbers USA and things like that. But for me, I'm an H-1B, H-2A, an H-2B supporter based on our district's very rural. But we also have a lot of technology in Virginia and the Commonwealth.

Let's bring in now Erickson Immigration Group partner Hibba Anvert joining us now. Great to have you with us. And it's interesting because after you saw Elon Musk's comments on social media over the holiday period, you had Donald Trump kind of fall in line and voice his own support for H-1B visas. Of course, it'll be interesting to see if he sticks to that view as we get deeper into his administration. But give us some context here. We talk about H-1B visas in the context of the tech industry all the time.

What role do they play though? So H-1B visas actually play a very critical role. American companies are the most successful companies in the world in a variety of industries and sectors, and part of their success is attributed to their ability to hire the best and brightest from around the world. Now the H-1B visa is one of the ways in which companies are able to hire and retain talent from around the world and remain competitive and global leaders.

in industries ranging from technology to semiconductor to AI to the financial industry, a variety of industries. - We know we have the first Trump administration to look back to for data, for context. You were kind enough to share some numbers with our team ahead of this. And you noted that the denial rate for these H-1B visas before Trump took office was 6%. Then it increased to an all time high of 24% in 2018, then immediately dropped down to 4% during Biden's first year in office.

Can we look to that happening again? Or do you think this time will be different, given that Elon Musk has the ear of the president and he's so supportive of this type of visa? I think it remains to be seen whether or not the second Trump administration is in any way going to be different. Obviously, folks that are in the industry are watching the way in which the Trump administration and the immigration restrictionists reconcile with the fact that there are certain tech leaders that are close to President Trump. But if we have, you know, if...

Basically, what we have to go on is what happened during the first Trump administration. And to your point, the denial rates did increase to an all-time high. And then overall processing times increased. And it was just more inefficient and difficult to obtain the same visas for the foreign workers on the part of a lot of these companies. And so what a lot of us in the industry are watching is to see whether or not there's going to be a repeat of that the second time around. Do you believe that within a short period of time, say the next Trump administration,

the US will be able to put an infrastructure in place to actually train Americans to do this type of work or did that ship sail?

Actually, what I think a lot of people don't realize is that the H-1B visa program itself contains protections that are designed just for that. The H-1B visa program has numerous protections that are designed to ensure that if a company is going to hire a foreign worker, no harm is coming to a U.S. worker. There are also certain fees that need to be paid to the government to accompany the H-1B filing. The purpose of some of those fees is to be able to fund the training of American workers.

So I think that the investment and training in the U.S. workforce is ongoing, and I think most people would be surprised to learn that the H-1B visa petition actually plays a role in that.

I want to talk too about the fact that you have a lot of big tech leaders kind of coming to Mar-a-Lago and kind of kissing the ring when it comes to Donald Trump, of course. And he also is surrounded by the likes of Elon Musk and other big supporters of the H1B visa process. And we were talking about the fact that for now, Donald Trump does seem to support the initiative, despite what we saw in the first term. What's your outlook for whether that remains the case?

So what I'm going to be watching out for is a repeat of the first Trump administration. And what we're ensuring is that companies that we work with are properly prepared for some of the same things happening a second time around. Honestly, I think it remains to be seen the way that the tech leaders that are close to President Trump reconcile with the folks that have a little bit of a different stance when it comes to legal immigration. I, of course, am optimistic and hoping that it's not necessarily going to be an exact repeat, because if we take a step back,

I think folks will realize that this is actually an economic win-win on all sides. In order for our companies to continue to be global leaders, we need to be able to hire the best and brightest from around the world. And the H-1B visa is a really important way in which we do that. Ericsson Immigration Group partner, Heba Enver, thanks so much for joining us. Do appreciate it. Coming up, we're going to be joined by Cathy Gao from Sapphire Ventures to share some of the firm's predictions for AI in 2025. This is Bloomberg.

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Well, the race to AI-enhanced human productivity is on. The coming year will feature AI companies grappling with pushing out software that can do more with less help from humans and figuring out how to train the most powerful models. Bloomberg's Rachel Metz has more on AI predictions for 2025. Rachel, happy new year to you. What can we expect from the world of AI when it comes to the coming year?

I think we're going to see a couple of things. One is a lot of focus on so-called agents. This would be systems that use AI to accomplish tasks either with no help or with just a little bit of help from humans. AI software that can go out and do something like, say, help you plan a trip or help you to process certain kinds of information online.

more efficiently in a more complicated way than just like looking over a document. So we have been talking to people a lot about that. Um, one of the other things that we're probably going to be seeing more or hearing people talk more about is data, data, um,

very clearly became a issue for a lot of companies this year not having more data if they want to train even more powerful systems than what they've already built. So it'll be interesting to see how companies find new sources of data if they look at synthetic data, which would be in some cases data that's generated by AI systems themselves.

Bloomberg's Rachel Metz out there in San Francisco. Got to leave it there. Thanks, Rachel. Well, Gen AI has been a dominant force in tech in 2024, but also in VC, and it might remain that way in 2025. That's according to the venture capital firm Sapphire Ventures. Kathy Gao is partner at Sapphire Ventures, and she joins us now to share some of the firm's predictions. Kathy, I want to start with something that Rachel said, talking about this being the year where we see more and more AI agents. One of Sapphire Ventures' predictions is

is that agents will begin to deliver on hype. I gotta tell you, Katie Greifeld sitting right next to me, she's not impressed with AI agents right now. Is she going to be this year?

Well, that's a great question. I have to agree with Rachel. I think you're going to start to see agents come into the scene in a very, very big way. In many ways, the AI agent is a natural evolution of what we saw with AI co-pilots and AI chatbots. So another example would be whereas AI agents are able to autonomously execute actions or entire workflows,

chatbots and co-pilots were really more Q&A. And where I get really excited is the fact that if we can automate entire workflows, that frees up so much human capacity to do the more creative and more strategic work.

Now, that being said, I do also agree with Katie, right? A lot of the challenges with widespread adoption and implementation of agents will be in what I call kind of the last mile problems. This is the governance, the privacy, the protections, the devil's in the details, and that has yet to be seen. Okay, agents, one of your predictions. What about when it comes to AI-generated video? Because 2024 was the year

We saw a wider release of Sora from OpenAI. I think a lot of people were pretty impressed by that. How are we going to see AI-generated video this year? I think we're going to see a lot of multimodal in general, Tim, but we're going to see a lot more video and we're going to see a lot more voice. The models have been developing extremely rapidly. I don't know if you guys have seen some of the recent AI-generated videos from Sora and other video models, but they're incredible.

They are starting to feel a lot more lifelike. The latency is being reduced. The same goes with voice. So I think we're going to see much more widespread adoption as individual video and voice applications, as well as full multimodal applications, which means there will be voice, there will be text, there will be video and images combined into one. Yeah, I've seen some of those videos, and they're pretty creepy. They're very realistical.

- Like what? - So just if you go on Twitter or X right now, you can find a whole bunch of them. But Kathy, I wanna talk a little bit more about how companies might use AI in the year ahead because I speak to a lot of investors and they wanna stay in the hardware space, investing in the chip makers because they're not clear yet on how companies will actually use AI and maybe actually boost productivity. Do we get further along in that investment timeline in 2025?

That's such a great question, Katie. Well, let's talk about what happened in 2024 to set the stage for what we think might happen in 2025. In my view, 2024 is a year where AI really went mainstream. 92% of the Fortune 500 adopted AI.

Gen AI solutions internally and spent around $14 billion on these solutions. But what's even more importantly, a lot of major companies, so think Walmart, JPMorgan Chase, Microsoft, Google, all announced in their public earnings calls that they've had significant success and significant measurable ROI

using their Gen AI projects internally. So that gives me a lot of hope and confidence that A, budgets will continue to expand into 2025. Now, the big question is, can the hype turn into actual proof in a wide scale manner in 2025? And in order to see that, we're going to have to see more adoption amongst all the employees at a company, not just within certain functions or certain specific projects,

and we have to see more guidelines on how we actually measure ROI. All right, Kathy, great to speak with you. Looking forward to checking in as we get deeper into 2025. That is Kathy Gao. She is partner over at Sapphire Ventures.

Let's talk media deals because Paramount and Skydance responded to critics of their pending merger, arguing that the critics' filings are defective and lack merit. The company's claim critics failed to show how they will be harmed by the deal and that some of the proposed measures are unconstitutional. Paramount agreed to merge with Skydance back in July, and the deal would make Skydance's founder, David Ellison, the controlling shareholder and CEO of Paramount.

Now let's take a little wider look into the world of entertainment and the box office this coming year with Bloomberg's Chris Palmieri. Chris, I want to talk about the box office this year as well as what's happening with Paramount and Skydance because this is the deal that really, as you know, just never ends. What specifically do the critics have a problem with when it comes to this pending merger? Well, there was just sort of a smattering of opponents of...

I guess most notably is a group that is challenging them. It's supposedly a nonpartisan political group, but tends to side with conservatives and saying that the big media is biased and said that CBS News needs to speak to everybody in the country.

And that we actually got a conciliatory sort of statement from them today saying that they liked what they heard in Paramount's filing yesterday to the FCC. So, you know, that was one of the hurdles. We'll still likely hear more from the FCC. Brendan Carr, the incoming chairman, is really outspoken on this issue of fairness in the media. And that will be sort of the final hurdle probably for Paramount.

So TBD, what happens there? I will note that Paramount shares fell 29% last year. They actually haven't posted a positive year since 2016, Tim. So some good news is needed for that company. We'll see. I do want to talk about the box office, though, while we have you, Chris, because there's this frustration out there that I'm sure you're well acquainted with, is that there's nothing original anymore. It's just all sequels and it's reimaginations of old movies.

movies are we expecting more of the same in 2025.

Yes and no. There are certainly going to be a lot of sequels, you know, Mission Impossible, Captain America, Avatar. So there will be plenty of that. There are a bunch of movies coming out, F1, for example, ones that won't resonate until you start to see the ads, but original movies from auteur directors, you know, who may stand out. And that's why analysts are predicting that this year will be a little bit better than

than last year, still not back to the pre-pandemic levels, but potentially the best year for the box office since the pandemic. - You say still not back to, do we ever get back to pre-pandemic levels? What are analysts saying?

Well, I mean, if you look at the actual attendance numbers, it is way down. I mean, almost half the level of people going to the theaters that they used to. I mean, ticket prices are up, and that sort of helps some of it. More people are going to these big screen and higher-priced ticket formats.

So that's helping the overall box office number. But, you know, Americans are definitely not going to the movies like they used to. There's just so much alternatives online. And in many cases, those movies come online in just a matter of weeks. Right. Chris, got to leave it there. Really appreciate your time. That is Bloomberg's Chris Palmieri. Do you ever go to the movies? I went to the movies on Christmas Day. I saw Complete Unknown starring Timothee Chalamet. It was really good, actually. That's the Bob Dylan one. Yeah. And...

I guess that is new. I mean, Bob Dylan's been alive for a while, but it's new content. In any case, that does it for this edition of Bloomberg Technology. Next week, VTech is heading out to CES in Las Vegas. Tune in for conversations with some of the biggest names in AI, chips, and more. And don't forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify, and iHeart. This is Bloomberg.

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