Smartphone Tariff Exemptions, Meta's Antitrust Trial
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Live from San Francisco, this is Bloomberg Technology. Coming up, not off the hook. President Trump says tech tariffs are coming for electronics, saying the reprieve was only temporary. Plus, a potential breakup. Meta faces the FTC, which says the tech giant is a monopoly for owning Instagram and WhatsApp. And an all-female crew defying gravity. We bring you the details of Blue Origin's

historical space mission we also have some breaking news crossing the bloomberg terminal and it comes from the new york fed who have published and released their march survey of consumer expectations the main headline one year u.s inflation expectations rising to 3.6 percent from 3.1 in the month of march but there's also a feeling here

that unemployment expectations are also moving higher and that we could see unemployment move to a level jumping 4.6%, according to that survey, to early pandemic levels. A lot to pack into this show. Let's get out to Bloomberg's Ryan Vlastelica, who's across the technology sector for us. Okay, a lot of information over the weekend. Right now, those big, big tariff numbers don't apply to electronics, but tariffs are coming. What are you seeing in tech shares this morning?

Hey, good morning. So right now we are seeing a pretty broad-based rally. Companies like Apple, HP, the hardware side of things, the chip side of things, these are all doing pretty well so far today. It seems like people are interpreting this as maybe at least a step in the right direction, perhaps a softer stance after some of the hardline numbers that really sent stocks reeling previous couple of days.

What's interesting, we're just showing shares of Apple up 3.7%, not as high as they were in perhaps the pre-market, but one of the names we focused on. Wall Street is still treading water, Ryan. I'm thinking about profit expectations. And basically, we're kind of stuck. No one is adjusting their forecasts for how these companies are going to be impacted going forward. What do you see it?

Yeah, absolutely. So this is a major, major issue, especially as people start to consider maybe whether these stocks look attractive following how much they've come down. So far, we haven't seen analysts really cut their estimates too dramatically on Apple, Nvidia, or the other tech names or the tech sector in general. That suggests that even though these stocks have come down quite a bit, their P/Es may not be as attractive as they seem if it turns out the E in the P/E ratio is sort of artificially

high as it stands right now. So this is something we're going to be watching, especially as we get into earnings season. Any kind of commentary on what to expect over the remainder of the year, we haven't yet seen whether companies are going to be issuing forecasts at the rate they

have in the past. Some companies have pulled their forecast, just given the uncertain environment. So there's still a lot of questions out there about what we could expect that puts the idea of what fair value is into question. And that's why we're seeing a lot of people waiting to see what analysts are doing and what estimates look like after a month or so.

There's a lot of people that want technology companies to see steep revisions in their guidance to feel comfortable. There are lots of people who say they don't care. Bloomberg's Brian Veselica, busy couple of weeks for you and I coming up. Here's what President Trump had to say about tariffs yesterday. He was speaking on Air Force One. Well, that's going to be announced very soon and we'll be discussing it. But we'll also talk to companies, you know.

You have to show a certain flexibility. So some products might lose flexibility for some products? For some products, yeah, maybe.

We're joined now by IDC's Ryan Reif, Group Vice President for the company's worldwide device tracker suite, which of course includes phones, tablets, wearables, so much more. So the state of play is actually not clear, right? Friday night, we kind of believed it was a reprieve of consumer electronics in particular, not being subject to the 125% level tariff. By Sunday, you have the administration saying it is not a pause or a reprieve. It's just that we will have

uh, electronic specific tariffs to come. When you got to your desk this morning, where do you think that we stood? I think we said that personally, my opinion is, I think this was part of the master plan. Uh, it's hard to actually know if that will actually be the case or was the case, but I think, you know, I think, um,

Generally, at least on the tech aspect of these tariffs that we've all seen and announced on April 2nd, there was no way that the economy was going to sustain around these, really from the U.S. side, but really both sides, I think, if you really boil it down.

I think many were expecting this. That was just discussed on previous interviews that you guys have had today. But I think now it sort of comes back to actually the previous Ryan from your team that you just had on made a good point, right? I think we're not seeing supply chains move that much. There's been pull-in. We expect there's going to be a lot more just to get done what you can just in case it's a Q2 thing. But even from the analyst side on the street, it seems like everyone's kind of holding ground because of the uncertainty across the board.

You published some really interesting data from IDC this morning on the smartphone market in the first quarter. And this is the market share figures, right? And this is why we keep focusing on Apple in particular. You see that after Samsung, single biggest player after Samsung. But generally, the market grew 1.5% in the first three months of this year. I'm seeing a lot of evidence that there was some front running because people knew tariffs were coming. How much did that factor into your research?

There was definitely a play of it into the numbers being, you know, I guess growth in the first quarter and so forth. But I don't know that it was as drastic as what we sort of saw in some media headlines towards the end of March. What we're seeing is a lot of that activity works now. It's coming to fruition, especially with the pause on tech. So.

There's really two ways to think about this. The supply side understands what they're up against day to day, hour to hour, right? You know, there's either a tariff on or off. If it's off, you make a decision of, do you want to just speed up things to try to produce, build and ship?

The consumer side is not that straightforward because generally, I think what the industry is looking at, we're certainly looking at is, does all of this uncertainty that's consistent, like basically owning the news, does that just overall slow down economic demand? Not tech-related, but just in general. We believe it does. I think that's also a factor that these OEMs, Apple included, have to build in. You don't want to ship too much in and then have it sit there that people aren't willing to buy because they're concerned.

Brian, you just said the supply side does know what's going on. You really think that...

Well, you know, let's take Apple as a case study, right? The reporting from Mark Gurman is that the strategy right now in the case of the iPhone is prioritize iPhones built in India, move them to the United States. I think in India they do about 30 million handsets a year. That's nothing in the scheme of things of the overall production, given that most of those iPhones go to a big market in America. Do you really think that they have a plan to adjust and that they understand what the administration is doing with electronics tariffs?

I don't think that they are guesstimating the plan. I think that some companies, this is speculation, just to be very clear, would either have some discussions that have been ongoing since the election prior to that. That's just what big companies do every election year. But I would think that they were very focused on tariffs because that's what this administration ran on. And I don't think that they know every detail, but I would assume...

that some of these big companies were either forewarned or have some heads up. But maybe not. And I think that the India piece keeps coming up with iPhone, and I think it's very interesting. No question in my mind, prior to April 2nd and even this election, the plan was to ramp up more

towards the end of a set like you know more assembly and manufacturing in India that's been pretty well disclosed but whether or not this shifts things that quickly to be able to feed the US market I'm a little bit more on the skeptical side of that but I think that these these sort of pause or exemptions whatever you want to call them on China that's going to be the focus you'll try to build as much where it's okay most efficient in the product lines you need. Ryan Reif of IDC with some timely data.

After more than a decade since purchasing Instagram and WhatsApp, Meta is facing a landmark trial by the FTC, alleging it made, quote, killer acquisitions that stifle competition. For more, Bloomberg's Riley Griffin joins us on set. We're underway. What's the latest headlines out of D.C.? We have heard that introductory remarks have begun, and the FTC is laying out a case in which it's alleging that Meta engaged in a buy-or-miss

or burry strategy, squashing the competition and ultimately degrading the quality of the apps that Meta now owns. - I wanna point out on what you just said, the headlines emerging, this is a behind closed doors proceeding. - Yes. - So the counter argument from Meta

is pretty straightforward actually let's bring it up a quote from the chief legal counsel at uh meta that wrote over the weekend but basically they're pointing out that how can you have a monopoly in a market where other players have very similar numbers to their own citing tick tock and youtube in particular and arguing meta has a less than 30 market share in those markets

It's an amazing argument in part because the FTC has centered this around Snap. And Meta is saying anybody with a kid at home knows that TikTok is a great competitor to Instagram. What I find so interesting about this, Ed, is that one of Meta's reputational weaknesses over the years has been that it copies its competitors. And here in this case, Meta's legal team is actually using that to its advantage.

It's going to go on and on, and we will cover it throughout the week. Riley Griffin, thank you very much. Let's get more on Meta's historic trial. William Kovacic, George Washington University Law School, Global Competition Professor of Law and Policy, joins us now. And even before the proceedings got underway this morning, William, the chair of the FTC gave an interview to Fox Business and basically came out

strongly. We see Meta as a monopoly. What do you make of that, the timing of that comment and the timing of the interview? I think he's trying to underscore the commitment of the commission to carry this case forward.

There have been lots of questions raised about whether the interest of the White House in the case, the lobbying by meta of the White House, might lead to a settlement, some action that would sell the case out. And I think what the chair is trying to do in a variety of interviews, including this morning, is to say, in his words, we're keeping our foot to the gas. We're not going to back down.

I should point out for our audience, you're a former member of the FTC and you chaired the agency between March 2008, March 2009. You and I, I feel like over the years have discussed the threat of an antitrust action against Meta and others many times. And so I ask, how does this one, this trial compare and does it have teeth?

This does have teeth. There are formidable obstacles in the path of the FTC prevailing, obstacles that Judge Boesberg, who's trying the case, has mentioned before. But the requested relief is deadly serious, the divestiture of both Instagram and WhatsApp.

The FTC has marshaled a good body of evidence, it seems, that comes in many ways right out of the files of Meta itself, the words of its senior leadership. So it's going to try the case in many ways by showing that Meta itself believed that it had market power and it believed that the acquisitions would suppress competition. Now, Meta has some good responses to this, as Riley just mentioned.

This is a deadly, serious exercise for the company. And if the judge finds liability and takes the remedial path that is available to the FTC and to the judge, we could see a major divestiture that would affect the company dramatically. A major divestiture. I mean, what are the chances of that, the odds? How do you even model for that in a trial scenario? I suppose that if we were looking at a betting shop,

and we were trying to place odds, Meta would have an advantage. And the reason for the advantage is that it's going to be able to marshal arguments that we don't have market power in this market niche that the FTC has defined, that the FTC can't toss aside TikTok, YouTube, and X, and other social network providers. And that's going to be a hard hurdle to get over. So I give a modest advantage to Meta in handling the case.

But a lot of the FTC's evidence is going to come right out of its files. We're going to have senior executives on the stand giving us a really an unprecedented look at how the company operates. And that's what always makes trials risky and dangerous for defendants.

We're just showing again Jennifer Newsted, Meta's chief legal officer's argument over the weekend, which is exactly as you explained. Look at the traffic and audience size of TikTok and YouTube and their argument, Meta's argument, that they have a less than 30% market share. Could we just go back to where we started, which was the FTC chair on Fox Business this morning?

Ahead of the election of President Trump, a lot of people looked at JD Vance and his attitude towards big tech. It does seem in the early stages that President Trump listens to JD Vance about oversight of big tech in the antitrust context. What do you make of that?

I think he is listening, and perhaps there's a predisposition to listen and listen favorably, because notice the number of occasions on which the president has suggested that were it not for decisions made by Meta, by Google in 2020, that he would have gained reelection. So I don't think he's disposed in a general way to be fond of these companies.

And I think he has accepted many of the arguments that the vice president has offered to him. So he has, there are a lot of reasons for which he might be very wary about taking a settlement that would be good for Meta here. I suspect he'll listen, but he's not ordinarily disposed to think that they are a particularly good actor.

William Kovacic of the George Washington University Law School and, of course, former FTC chair himself. Thank you. 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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And with Azure AI Foundry, you can build your way. The future is yours to build. No strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com slash AI. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From

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Cryptocurrency platform Kraken is expanding beyond digital currencies by now offering U.S. equity and ETF trading. Joining us now, Kraken co-CEO Arjun Sethi, along with my mate, Bloomberg's Shonali Basak. Shonali, take it away. Arjun, thanks for joining us. Of course, this is a big move by Kraken to get into traditional stocks.

My question is how much is this a move to take on Robinhood, Coinbase in a much larger way in terms of providing a one-stop shop for clients?

And so if you take a step back on the market, I think a lot of people think of crypto and traditional equities and traditional finance differently. And we don't, which is our core customer base is professional traders. And they exist all over the world very similarly in the way in which they think, eat and trade.

And so Coinbase, we think, and Robinhood in terms of prosumers and people getting onboarded into crypto. And then you have other companies similar to Interactive Brokers that focus on professional trading and day trading. So for us, our goal has always been to be a leader in crypto assets, but also be a leader in the way in which our professional trading and customers and clients want to trade, may that be long term or short term.

And so this is a part of the path for us to continue to do that. In addition, we went to an agreement to acquire a company called Ninja Trader that focuses on professional trading strategies.

for retail derivatives. So what you see us doing is just go across a wider range of asset classes, including equities and commodities. - What does it mean for you financially? Because of course, when you think about Kraken, a lot of investors are awaiting a highly anticipated one day IPO. What can you tell us about that path and how this helps you get there?

So the most important thing for Kraken is its clients. And what our clients care about is transparency, security, and counterparty risk. And so as we continue to expand globally, not just here in the United States, but Europe, UK, Canada, Australia, and now into Asia,

The thing that our clients care about most is that counterparty risk and regulatory clarity. So what we're seeing is more regulatory clarity and eventually market stability in the crypto ecosystem. And so on behalf of our clients, we'll always want to be transparent with our financials, what we're doing, proof of reserves, etc. And if we do decide to go public, it'll be a journey along the way.

Timing is everything, Arjun. I found it so interesting to see your release because if you think about the business model, right, of Robinhood or Coinbase, they very much focus on volatility. Volatility drives volume for them and transaction. How much is that a factor for you in this initiative?

So it's – look, if you're thinking about your clients, then you are thinking about all the milestones along the way that is the most important. So as I mentioned before, being transparent with our financials, being transparent with our reserves and our deposits, being transparent about what the products are, making sure that our exchange –

It's fair, right? There's no rebates. There's no discounts to the way in which all of our customers and clients interact with our exchange. That's what's most important. Volatility in the market is volatility in the market. That's always going to be the case. I care more about the slope and the long-term growth for what access to capital markets and debt markets give our customers more than anything else.

Arjun, elsewhere in your portfolio or empire, you were an investor in XAI. And post XAI and X, you know, there's clearly a long term view to look at payments and look at other financial service offerings there. Could you see working with Linda and the team on something like that?

Yeah, I think what's really important is where our clients and customers are. So today you can think of us as trading, but there's also products for savings and yield depending on the type of customer. And then eventually you can think about payments and remittances in order to facilitate peer-to-peer commerce or business-to-peer commerce.

So again, those will be journeys along the way, which is we've created the platform and the infrastructure to be able to provide this, and we're already partnering with folks to do that today. So almost 10% of our transactions today aren't through our experiences. It's through people connecting through our APIs. Arjun, one question I have is,

As a former private investor in so many ways, you're very familiar with the XAI story. But what about the potential for tokenization to make assets like this more public? How quickly can you get there?

Technologically, we can get there tomorrow. It's more about regulatory clarity. What is the legal and client relationship? How do you think about which assets, real world assets that we talk about bringing on into crypto and making it programmable? So what I'd say is that what we're doing now, given that the future of trading is pretty much borderless, it's around the clock, it's 24/7 and crypto rails has allowed that, is that this lays the groundwork not just for myself, but the other exchanges worldwide

to be able to provide equities and digitize them to become more programmable. So tokenization of equities is a term you hear a lot about. I think when you think about global liquidity pools and global access to capital and then demand for these assets, no matter where they might be in the US or Europe, I actually think this lays a great groundwork for companies to start thinking about how they should list, who they should work with and where those global liquidity pools come from.

Kraken co-CEO Arjun Sethi, good to have you back on the program. And Bloomberg's Sonali Basu, thank you for bringing it to us. Now, coming up on the show, electronics expecting a temporary reprieve from tariffs. But President Trump says there are more tariffs on the way. We'll have more of that next.

Welcome back to Bloomberg Technology. Ed Ludlow here in San Francisco. Financial markets, the story is technology-focused indexes really hitting session lows. Look at the Nasdaq 100 or, for example, the Philadelphia Semiconductor Index. A temporary pause or reprieve from those high-level tariffs on China

making people think things might not be so bad for the electronic sectors. However, there is a pledge, particularly in the semis case, that a bucket of tariffs specific to semiconductors is coming. We also look at Apple as a case study, right? Apple has been so interesting to track over the last six days.

based on how it's trading on these headlines. So it's the biggest points driver to the upside on the NASDAQ 100 right now. But if there is a specific bucket coming for electronics, there's still the questions about what it will do. The administration wants onshoring of manufacturing,

Apple seems focused on shifting more to India. Let's get back to our top story. Companies like Apple and Nvidia appearing to score a major win only for the White House to then rain on their parade. President Trump posting on Truth Social saying, quote, there was no tariff exception, which was announced on Friday. These products are subject to the existing 20 percent fentanyl tariffs and they are just moving to a different tariff balance.

Bucket. Bloomberg's Kayleigh Lyons joins us from Washington, D.C. I mean, for me, the main learning of all of the last few days is that actually the White House is starting to think about how it defines semiconductors and defines electronics, and something very specific is coming.

Yeah, that's what the White House is saying. While the president pushed back on the idea that there's exemptions as being fake news, Ed, I would note that the White House statement literally said clarification of exemptions, which comply to hundreds of billion dollars in consumer electronics that the U.S. imports. But what the president and others, including the Commerce Secretary Howard Lutnick, are arguing is that this does not mean this is a free pass forever. This really is just about procedure. Yes, these goods for now will not be subject to the 10 percent global baseline tariff or the 125 percent

reciprocal tariff rate on all Chinese imports. But they are still subject to that 20% fentanyl tariff rate on everything that comes out of China. And they will be subject to semiconductor tariffs that President Trump has long been promising. That just will be done, he refers to in a different bucket under different authority. It would be section 232 realistically that they're looking at, which factors in national security parts of the equation. And the president on True Social over the weekend suggested it's not just semiconductors, but the whole electronic supply chain.

that they are looking at through this investigation. And while he has been talking about this for some time, he did indicate that this is coming sooner rather than later, suggesting to reporters on Air Force One that he could have a rate of the semiconductor tariff announced within the week and that the tariffs themselves will be applied in the not-so-distant future. One thing I would note here that does perfectly

potentially provide a window of opportunity or ability to maneuver for companies, if you will, like Apple is when the president was asked by a reporter yesterday if there would be exemptions for things like iPhones. He suggested that he can't be rigid with this, that there has to be some degree of flexibility. It's just not entirely clear how he's defining flexibility or where that so-called flexibility might apply, Ed.

Remember, it's Kaley Lyons in Washington, D.C. Thank you very much. Let's broaden the conversation to include financial markets with Citi Index Senior Analyst Fiona Sincotta. Okay, you got into your office this morning, you were at your desk, you looked at the commentary from the President, and then you looked at the documents from Friday night for exemptions. Where do you think tariff policy stands for technology? Good morning.

I would say about as clear as mud, to be honest. You know, this is just really highlighting the fact that there doesn't seem to be really much clarity at all over what the Trump administration is doing, where we're at, what might come tomorrow.

And this is just making it extremely difficult for our clients to trade. It's making it extremely difficult for businesses to really have any level of planning still over where they should be moving manufacturing to, from, etc.

at what rate, at what speed, when is this happening? I mean, it just feels like the further we move through these tariff announcements, the more uncertainty there actually is over what's happening, whether they'll be walked back, whether they'll be paused. And I think that's being reflected in the markets really quite...

dramatically. Obviously, we saw those big swings across last week. But even today, you know, we started off with the futures considerably higher for the U.S. tech stocks than what they've opened at. Obviously, we have seen some rebound, a strong rebound in Apple. But I think, you know, given the fact that that company has lost around a fifth of its value over the past few weeks and the rebound is still relatively small. And that, again, just highlights that uncertainty.

Fiona, this morning, Nvidia posted a blog explaining that they're going to, for the first time, build their AI supercomputer, basically a server rack unit, 100% in America. And that's a plan that's happening largely in Texas over the next four years. When you see a headline like that, how much do you think it is a direct response to the policy actions of this administration so far?

Oh, completely. I mean, I think this is absolutely a direct response. I mean, this is what Trump's sort of aiming for. And it's really interesting as well, because, I mean, it is moving that manufacturing back to the U.S., which is what Trump has, you know, pledged for across his campaign and since taking and moving into the White House. What I think is interesting here is what this will mean for costs.

Obviously, I think it's much more – there are greater costs manufacturing in the U.S. to perhaps other parts of the world, or there were indeed before these tariffs were being applied. So, I mean, this is what companies are doing in order to be able to keep those costs down as much as possible, but it won't.

will still result in an increase in costs. And I think when this does come to consumer electronics particularly, that's obviously when we're going to see that hitting the inflation. We're going to see costs going up. But even with these supercomputers, it's going to be affecting the costs involved.

So as of right this moment, and if you're a technology investor, how do you play it? Do you stay away from a name like Apple or others where there is more of a direct read-through for the pass-on of those costs at the consumer level? Yeah, you know, I think, you know, tech obviously has been very much under pressure since the Trump administration started announcing these tariffs. And that's obviously because of the fact that it's a growth stock. I think there is much more demand

potential, looking towards value rather than growth right now. So I think the tech sector is still quite a difficult sector to be focusing in on, given the level of uncertainty I think that still exists. Obviously, there's uncertainty across the board, but I think still more defensive areas

are going to be benefiting, such as healthcare, industrials. Those are areas that I would potentially be looking at rather than the tech sector, which I think still could potentially come under fire quite significantly from the Trump administration. Citi Index senior analyst Fiona Sincotta, thank you very much for your time on the show. Now, coming up on Bloomberg Technology, the first all-female flight to space has taken off aboard a Blue Origin rocket

and come safely back down to earth. We'll have the details of the launch and how it positions Jeff Bezos' rocket company that's coming up next. Also, take a look at some markets, okay? We know we're at session lows, particularly on tech-specific indices like NASDAQ 100. Interesting is the NASDAQ Golden Dragon China Index. That's a...

a list essentially of the US-listed ADRs of Chinese technology companies. And there is some respite for those names as well that have swung with a similar volatility to the rest of the tech sector. We'll dig into why throughout the week. Stay with us. We'll be right back. This is Bloomberg Technology.

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. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge.

But here's the best part. You can build with confidence, knowing that Microsoft security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft. And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place.

The future's in your hands. So learn more at developer.microsoft.com.ai. How can you free your team from time-consuming office tasks? Amazon Business empowers leaders to not only streamline purchasing, but better support their teams.

Smart business buying tools enable buyers to find and purchase items fast so they can focus on strategy and growth. It's time to free up your teams and focus on your future. Learn more about the technology, insights, and support available at AmazonBusiness.com. Two, one, ignition. Liftoff. New Shepard has cleared the tower.

That was Blue Origin's New Shepard rocket taking off earlier today with a star-studded crew of six women, including Lauren Sanchez, Jeff Bezos' fiancee, Gayle King, and Katy Perry. Bloomberg's Sana Pashankar is here to tell us more. And, you know, it was a notable sort of celebrity-themed flight. What happened and what's the big picture with this one, Sana?

Yeah, so it was an all-female crew, and that was the first one since 1963 when a female Soviet cosmonaut went to space herself. So it's really the first all-female crew with more than one member. And, yeah, so they went up to space. I think they felt a lot of camaraderie among, you know, being all women and, I think, being all, you know, becoming astronauts for the first time. And so I think it was, you

you know, a really successful flight. Everything went as planned, everything went smoothly. And many of them mentioned that it had really changed them coming back.

All right, Bloomberg's Sana Pashankar, great to have you here on Bloomberg Technology. Let's get more on why this flight matters for the space industry. Ezine Ozuokoro, senior fellow at the Harvard Belfer Center and former assistant director for space policy at the White House, back with us here on the show. I mean, there are a number of ways that we can take this conversation, right?

The way that I think about it is the data that prior to today's mission, I think I'm right in saying of all the people that have gone to space, only 15, 1.5% were female. So what is the significance from that standpoint to you, Esenay? This is greatly about American value creation and more innovation from the space sector through the launch business. I think that what we're seeing here is you're seeing Blue Origin cementing itself as

as a safe and dependable option to go to space, as an option for space tourism. The fact that in 11 minutes you can zoom past the Kármán line, 62 miles above sea level, in a fully reusable suborbital rocket,

that's built for humans and come back safely is, I think, a big American feat that we need to highlight. The big question is what this means for investors in space. Does this mean investors will...

move further into the launch business and support additional flights? Does it mean that we will see another one of these in another decade, making history again? Or will this continue to become a commonplace?

I get asked a lot about the gap between Blue Origin and SpaceX, but the other perspective of the investors I speak to is that it's good to have two private sector names that are able to have a launch system that's reusable and that are launching with greater cadence. How important though is it that Blue Origin starts to make progress in its other domains outside of New Shepard? I'm talking about New Glenn and also its engine business.

And you know, they're also in the space station business as well. They're a busy company. So I think that it's important that they are able to show successes because in the space business, safe successes are all that matters. It's important to show these results in all your businesses. And right now they are doing that. And that bodes well for the investment community that's watching what this does to grow the space asset class.

Those that are skeptical look at this and say, this is a shop window for Jeff Bezos and Blue in the sense that it's an all-celebrity, well, mostly celebrity crew. And to everyday people, this just isn't achievable. It's $150,000 for the deposit. We don't know how much the ticket costs because it depends on your relationship with Bezos. What's the counterargument? What's the argument on how this progresses and advances

people's everyday opportunity to go to space? Yeah, the counterargument is threefold, actually. The first is it helps the engineers with continuous repetition, which means that, again, they are doing this safely and they become more used to doing it. So the engines and the systems perform better

or it becomes more commonplace technically. The second is that if you think about the advent of air travel, you know, it wasn't affordable to everyone. And so with these repetitions, we...

hope that the intention is it helps to bring down the costs so that you have more people able to live space. And then thirdly, I think that what this does, and you alluded to this a bit with the two options, is it inspires others to start more rocket companies in America. It inspires others to see this as something that is, you know, something we do every day and not once in a decade.

Esne, lean on your experience in office. How do you think the White House and the pending Nasser administrator would view Blue's mission this morning? I believe that pending Nasser administrator also was on a similar flight. So one can't help but be excited that this

this is continuing, that there are more people given access to space. And I think that from the White House lens, when you see an American company continue to foster the innovation that we want to see coming from American ingenuity, that that's a plus.

And then thirdly, I think from the lens of NASA and even the White House too, you want to see American prominence, American leadership, and that's what you're seeing here.

Jeff Bezos has a very similar big picture view of the future of space. Like Elon Musk wants humankind to be multi-planetary species, I think Jeff Bezos talks about living and working in space. And you reference the future business model that Blue has of the future of international space stations, not the International Space Station. But with your experience, do you have line of sight to that future from a test, a launch like such we had today? Absolutely.

The International Space Station is set to retire in about six years. So by 2030, we expect that to start being retired. And there are a number of launch companies, a number of space companies, including Blue Origin, that are working to replace this space station.

And we're not going to see one station because the International Space Station is quite large and was built over a decade. So you're going to see multiple options. You might have one for pharmaceuticals. You might have a space station for scientific research and another for space tourism, a space hotel, if you will. So what you see is, again, this repetition of flying around.

gives a lot of, it adds a lot of experience and expertise to the teams that are building what could be a future space station hotel. Esenay Uzo Okoro from the Harvard Belfer Center, it's great to have you back on the program.

Okay, a news story from this morning. Intel will sell a 51 per stake in its programmable chips unit, Altera, to Silver Lake Management for $8.75 billion as it spins off its non-central businesses. The deal is expected to close in the second half of 2025. Intel bought Altera 10 years ago for $17 billion. It's all part of new Intel CEO Lip Bhutan's strategy to divest from non-core assets.

Okay, another chip name. NVIDIA is working to mass produce AI supercomputers that are built entirely in the US by late 2026. It's ramping up development of two manufacturing plants in Texas and says it will produce a half a trillion dollars worth of AI infrastructure in the United States over the next four years. Bloomberg's Brodie Ford.

joins me with some more details. I think it's really important to be honest with the audience about this story, because it's been a multi-week thing with Nvidia. What do they mean by produce half a trillion dollars worth of AI infrastructure, Brody? And what we're talking about, I think, is assembling this system that they call accelerated computing, not just the fabrication of key chips.

That's a very important point. Yeah, I mean, electronics, more than any other good, really come a bit from everywhere, right? You buy a component from Vietnam, from China, and NVIDIA's case, I'm not certain, but it's coming from all over the world. And likely what we're speaking about here is some of that kind of later stage manufacturing assembly. NVIDIA isn't 100% clear in this, but what we know is that

In recent weeks and recent months, there's been a lot of pressure for large companies, large tech companies to speak about how we are investing in the U.S. If tariffs come, supply chain disruptions come, we are ready. And so that's kind of what Nvidia is messaging today, that they are ramping up their production in the U.S., they will have capacity here, and they will make up to $500 billion worth of goods here in the U.S.

Just very quick, in Texas, who are the manufacturing partners? Yeah, they're pairing up with Foxconn, Hanhai there in Texas. And so, I mean, essentially they are, you know, it's kind of a who's who of the companies that are doing manufacturing. For Arizona, it's going to be TSMC and their big Phoenix campus we've heard a lot about. Right. Bloomberg's Brody Ford out of New York City. Really appreciate it.

that does it for this edition of bloomberg technology and what a start to the week it's been particularly in the market's reaction a lot of you are listening to us as a podcast so you know exactly where you can find it on the bloomberg terminal as well as online on apple spotify and on iheart a lot more to come throughout the week particularly when it comes to technology stocks from san francisco this is bloomberg technology

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