Tech Rebounds Amid Tariff Tensions, Tesla Investors on the Sidelines
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From the heart of where innovation, money, and power collide, in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde and Ed Ludlow. Live from New York, I'm Sonali Basik. And I'm Jackie DeVallos in Washington. This is Bloomberg Technology.

Coming up, stocks rebound after a positive inflation reading. The relief comes after some market turmoil this week on the back of President Trump's tariffs. Plus, we'll dive into what's behind the retreat from Musk's EV company, with Tesla being the biggest decliner in the S&P 500 index this year. And SpaceX's Crew 10 is launching this evening for a relief mission for NASA astronauts at the International Space Station.

Let's get into some of these Intel moves right away with Bloomberg's Mike Shepard. Mike, there's still a lot we don't know about some of this report coming from Reuters on Intel. Fill us in on what we do know. Well, one of the questions is really how much of this would ultimately bear fruit. And we had reported about a month ago now that the Trump administration had approached

TSMC to perhaps take over Intel's foundry business. That would be a big undertaking, of course, given all the malaise surrounding Intel and some of the business complications therein. But it also opened the door to perhaps working together with other companies. And this report would certainly fit into that.

However, more recent events suggest a different direction of travel. Intel announced this $100 billion additional investment in the US a little more than a week ago with President Donald Trump. And that's the kind of thing that doesn't seem to include or leave room for Intel.

Also, there are some thorny problems involved here. One of them is intellectual property. Would TSMC be willing to share some of its precious trade secrets with a company that could in other ways also be a rival when it comes to its business? Likewise, integrating some of Intel's operations into TSMC would also involve a lot of work. So there's a lot of skepticism surrounding this report. We'll have to see what actually develops.

I want to bring in your broader view here, of course, because you're seeing a market today that is reacting to some of the relief relative to where we were 24 hours ago in the tariff story. Yet you are seeing retaliatory tariffs coming in from around the world, looking at the EU and Canada. How are investors' markets digesting the latest coming out of Washington and what is still absolutely uncertain?

Well, there is a lot of uncertainty, as you put it earlier in the intro malaise. That really seems to be one of the operative words right now when it comes to investors and especially in the tech sector. When you look at the NASDAQ 100, it really has taken the brunt of this downdraft in markets.

Obviously, there was a lot of run-up ahead of time in the past year or so on enthusiasm about artificial intelligence. And what goes up is now coming down. But a lot of that is being fueled by uncertainty surrounding the president's tariff policy.

And last night during a meeting with top CEOs here in Washington, he signaled that they should be prepared for more. He sees tariffs as a tool for getting companies to invest in the U.S. And he has cited in the past Apple's decision to invest $500 billion here in the U.S. And we just talked about TSMC's plans, both of those he credited to his own tariff policies. Let's talk a little bit.

more about that meeting. There was a lot of anticipation. We saw chip stocks really take a beating last week, but now they're getting a little bit of relief. They're up by about 1.6%. What did we learn more from that meeting with tech CEOs earlier? Well, the tech CEOs meeting on Monday seemed to be less of a

fireworks event and then the business roundtable meeting last night seemed to be a little bit more of a more cordial give and take, you know, even given the circumstances that we're seeing in the market and the concerns that CEOs may have.

about where to take their business in light of the way tariffs could affect their supply chains. We heard Anthony Neri, the CEO of Hewlett Packard Enterprises, tell investors on a call last week, look, we don't know where this is going exactly. There may be some pricing changes. We're going to do the best we can through our supply chain to minimize the impact, but they really don't know where it's going. And that was also echoed by the head of Broadcom, Hock Tan,

on a call with investors as well, suggesting that, hey, this is really early and we don't know where this is going. Mike, we appreciate all your time and all your analysis. That is Bloomberg's Mike Shepard. Now, I quickly want to check in on shares of Tesla as well, because as Mike was talking about,

lot of malaise in the tech sector, but not today. And Tesla is the one that's really leading the Nasdaq 100 higher. It is still up more than 5%. But remember, it was down 15% on Monday. So between Tuesday and Wednesday's gain, we have not recouped all of those losses. Yet it sure helps that it's up today for the broader Nasdaq 100. And to Zoom

out now we're going to bring in Amanda Agati she is a CIO of PNC Asset Management Group you know you think about what's happening in the tech sector yes today is a day of relief but the mag7 the relative underperformance that you have seen at what point do you see that overhang start to disappear really the only member of the mag7 that is up year-to-date is meta

That's right. It's great to be with you. And I would say that overhang is going to stick around for a while here. The challenge is that we're still very much in a purple haze of fiscal policy uncertainty, and it's namely tariff and trade-related policy. And so it's not so much of a direct hit to the underlying fundamentals of the MAG-7. In fact,

I think for the most part, their business models tend to be somewhat insulated from it. But the challenge is that in this purple haze of uncertainty, there's pretty extreme valuation multiple compression. And the MAG-7 have been priced to near perfection. So we're not seeing fundamentals deteriorate. We're just seeing multiples come down materially. Until we start to get past some of this growth scare narrative that's been gripping markets, I think it's going to continue to be an overhang.

Amanda, you mentioned fundamentals. They look strong. There was so much reassurance from companies and appeased investors that a lot of the capex going in isn't going to stop. That spigot is going to keep going. But are we bracing for a more fragile tech sector now? What catalysts going forward do you see kind of providing more assurance to investors that they're not going to be that easy to break?

It's a really great question, and it's a really hard one to answer. And I think that's why tech investors in particular are struggling in this environment, because we are craving more catalysts. We're in a little bit of a lull in terms of innovation. And so the focus these last few years has really been on chips.

one stock in particular. But where are all these use cases? We need to see broader-based use cases, new business models really developing and broadening in terms of adoption across the market. I think that's really the critical catalyst or next step

to this next wave of innovation and perhaps even getting the market rally catalyzed again. So I think it's going to take a little bit of time given some of this policy uncertainty, but I think it absolutely could become a tailwind in the second half of this year and into 2026. It's just

We're in a little bit of a void at the moment, which is very frustrating, certainly. You know, one interesting part of the tech trade as well is just how much it has contributed to the weakness in the consumer discretionary sector. For the S&P 500, you think about Amazon, you think about Tesla. In reality, how levered are some of those giant tech names to the U.S. consumer and any potential further weakening?

Well, I always say that the U.S. consumers and the driver's seat, right? 70% of GDP or spending in this consumption is tied to the consumer in some way, shape or form. And so the path for the consumer and the health of the U.S. consumer is critical.

for all of us in terms of both the market and the economic cycle. But I think you're right to make a little bit of a distinction here in terms of how much influence directly hits some of those business models. I think the story and the concern is much more around do consumers start to get a bit more paralyzed by this policy uncertainty, and so they slow down or even stop spending, which sort of

into a more material slowdown than what we're seeing. The earnings growth backdrop is continuing to be strong. It's not so much about one quarter. The full year expectation still looks very strong. The economic cycle looks pretty strong. Consumer spending-related data looks solid. So, again, it's all about this sort of narrative and this sentiment concern. It's not so much translating into the underlying fundamentals breaking down yet.

Now when you think about the consumer also, we're thinking about the U.S. consumer so much and you have to wonder whether Europe, China is a bigger headwind or tailwind for this group. Do you see any risk there?

I'm most concerned, I think, about developed international exposure. And so Europe in particular, just given some of the continued geopolitical tensions and conflict, you know, are we going to get a resolution out of Russia and Ukraine or not? That's a really critical question.

thing that I think needs to happen to see signs of life improve in a more material way across the Eurozone. I think it is possible to see a bit of a relief rally. We started to get it at the beginning of the year, and then we've seemingly seen it falter a bit here. So, you know, I am most concerned about that area. I think in terms of emerging markets more broadly, there's a really attractive valuation opportunity there. So for investors who can be patient,

I think this is a very attractive entry point, even in the midst of additional tariff policy aimed specifically at China. I think there is a real opportunity set there for investors to be focused on in terms of allocating capital early this year.

Amanda, on that emerging market story, China is a huge competitor here in the tech space. Are you seeing any interesting opportunities with some of those up and coming companies unveiling new features and AI models every week that could give investors perhaps another choice outside of the traditional US-based tech players?

Well, I'm never going to bet against our U.S. tech industry. Just as a general rule, I have a very home country bias here. But of course, I mean, I think innovation shows up in all different shapes and forms. And so, you know, even just what seemingly is old news now, but the deep sea story that sort of came out of nowhere recently, I think is phenomenal.

fascinating in terms of this innovation story being born out of anywhere and sort of this natural comparative or competitive advantage that we have as it relates to AI, automation, robotics, et cetera. The story continues. And so I think it's really healthy. And I think it's important for investors to think much bigger and more holistically than just one or two names.

This cycle is very early innings. We have a long, long runway here. And so we are absolutely believers in the secular tailwinds here. And so from a multi-asset investor perspective, I think you really do have to look beyond U.S. equities in this environment. Even in private markets, I think there's a tremendous amount of opportunity in VC land.

We'll have you down as not betting against the U.S. Amanda Agati from PNC Asset Management, thank you so much for joining us. Coming up, Google DeepMind launches a new branch of its AI model to help robots navigate the physical world. We'll get the details after the break. This is Bloomberg.

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Google DeepMind has unveiled a new Gemini model that it says helps robots understand the physical world around them. Bloomberg's Mark Gurman joins us now. Mark, it seems like every big tech company has been unveiling some kind of new robotics venture. As of late, how does Google stack up?

Yeah, I've been trying to tell everyone on here, robotics, consumer robotics is the next big thing in the industry, right? We had autonomous cars. We had mixed reality, AR glasses. We have voice, right? But artificial intelligence is going to be at the core of everything and really the ultimate hardware expression of AI.

is robotics, right? Being able to understand how a human acts, right? Artificially learn from data, right? And mimic a human. And that is what a robot is, right? And so you've seen Tesla play in this space. Now you're seeing Meta make a big investment in that space. And now today, Google is announcing new Gemini models and infrastructure specific to powering robots. So all of these companies want to play in this space.

Meta announced versions of Llama, right, in a big investment to build consumer robots and to be at the center of everything. Meta wants to be the future operating system to power these robots. But they're going to have a big competitor here with Google, right, who has experience building operating systems for first-party and third-party hardware. And obviously, Gemini is right up there with Llama and ChatGPT and the other AI systems. So this is a big deal not only for Google but the industry at large.

Mark, how convincing is this push? Because we have seen Google try or Alphabet try to get into the robot world before. My understanding is that they shut down a spin-off company that was associated with this. So this time around, what's the difference and how big is the push?

I think the difference this time is Gemini, right? The underlying AI technology is much different. It's much more advanced. It's more reputable, right? And now appears to be the time where companies are willing to put in the proper investment, the necessary infrastructure to make robotics happen, right? Waymo has been pretty successful comparatively in the industry. And so what you're seeing is a lot of data collection there, a lot of experience in autonomy and cameras.

And that's technology that Google could ultimately use if it wanted to build its own humanoid. But don't count out Apple. Apple has Skunkworks teams working on humanoid robots as well. The big difference is they're not going to publicly release an underlying robotic model in order to support third-party robots.

and other consumer hardware. They're going to go all in-house. They're going to follow the Tesla method that you've seen from the Tesla bot over the past couple of years. So at some point in the next five to 10 years, you're going to see real competition between Google, Meta, Apple, Tesla, the Chinese companies, and others in consumer robots. So stay tuned. This is going to be a really big deal. And some of those movies we've seen over the last several decades, they're starting to come to reality.

Mark, we thank you so much for your time today breaking it all down for us. That is Bloomberg's Mark Gurman. And as you know, I'm excited about having a robot at home. And we're going to talk more about robots here. Not as pleasant of a story, shares of consumer robotics company iRobot, they're sliding today after it warned of, quote, substantial doubt over its ability to continue to operate. You might remember that the company was once sought after by Amazon for more than a billion dollars.

And it has begun a formal strategic review to evaluate options. For more, Bloomberg's Irene Garcia Perez joins us now on set. Was this warning a surprise, especially given the kind of unicorn standing that it once had?

Not totally. The company has been losing money and burning cash for the past at least three years. And then when the Amazon deal failed basically last year, the company lost a big option. It started a strategic review last year. It has cut losses, but it's still loss making. And it has cut expenses, but it's still struggling.

- Idan, what does this tell us about the state of consumer demand in this space? As we were hearing, it seems like the time horizon for some of these technologies to really get in the hands of consumers takes time, especially for those to get used to them. What does this tell us? - So in the case of this company, I guess it's another example of consumers cutting on discretionary spending. We've seen it in other names like

Casual dining companies like Hooters considering bankruptcy filing. We've seen it in a broad range of retailers also struggling. So this is another example. And the company mentioned in the going concern warning that consumer spending could be one of the reasons why, like weaker consumer spending could be one of the reasons

why it doesn't manage to survive. And tariffs was another one that they mentioned as a potential threat to the company's viability. Tariffs weighing in here as well. Bloomberg's Irene Garcia Perez, thank you so much for joining us.

Now, some long-term Tesla investors are backing away from the stock after falling as much as 42% so far this year. And this is as questions arise about the company's future. For more, Bloomberg's Max Chafkin joins us today.

I want to point out also, of course, today people are buying the dip. People are believing the story today. You have the president himself looking to defend Musk in many ways. What is the trouble in paradise? I mean, more than defend, you know, holding a sales event on the White House lawn.

The trouble is that Tesla's customer base is not especially Trumpy, and that's probably an understatement. You think of a typical Tesla owner, this is like an upper-middle-class, suburban, progressive, or at least a centrist, somebody who cares about the environment. You know, these are not...

Trump voters. These are very much the constituency that backed Barack Obama, Joe Biden, and to a large extent Kamala Harris. And those people, which include a lot of Tesla customers, are very mad at Elon Musk right now. We've seen protests all across the country and the world, including some acts of vandalism and just this kind of tone of mockery and

of seeing Elon Musk as kind of a lightning rod for the worst, for what these people, these Tesla customers see as the worst excesses of the Trump administration so far.

Max, and it's not just about the political leanings of who's buying some of those cars, but they've recently gotten some pretty good support, especially under the Biden administration, for EV credits. And I'm having trouble reconciling how Elon Musk can really back Trump in some ways, but his company is somewhat dependent on the government also supporting him.

the transition to electric vehicles. How is that working out? Yeah, you know, Trump kind of ran to some extent as an opponent of electric vehicles, talking constantly about ending the quote-unquote electric vehicle mandate, you know, and in fact signed an executive order early on stating an intention to pull back some of these regulations. He even brought this up during the event yesterday, offering it as an example of how selfless Musk is.

I think from the kind of bull perspective, like why Tesla investors could be potentially okay with this, is the fact that Tesla has a leading market position. So if you remove these subsidies, subsidies from electric cars, it arguably hurts GM and Ford and Tesla's other competitors more than it hurts Tesla. Tesla has wider margins on EVs, it's able to better absorb this. Now that said, those companies are bringing out new models and they're stealing customers away from Tesla.

Right. That's Bloomberg's Max Chafkin. Thanks so much for joining us. And welcome back to Bloomberg Technology. I'm Shinali Basik in New York. And I'm Jackie DeVallis in Washington. Just got to check on these markets because you do have a NASDAQ 100 that has been fluctuating. We are well off of session lows for the morning, but only up now about six-tenths of one percent. And it's trying to fight for dominance. You have the NASDAQ 100 with

only roughly half of its component parts up on the day. The other half, of course, down. The Philadelphia Semiconductor Index maintaining its lead after a brutal stretch the last couple of weeks. It is now up about 2.3% heading into midday. And for a check on other movers this morning, we're going to bring in Bloomberg's Isabel Lee, who joins us now on set.

Hey, Shinali. So there's really a ton of uncertainty in the markets right now. A gauge by Citi shifted from risk-off to risk-on, risk-on to risk-off, rather, in just six weeks. And really, just a slew of headlines crossing the wire this morning, from Canada firing back on tariffs to inflation, is really causing some more angst. So back to inflation, that's the big data today. It showed some signs of easing, but even so, economists are anticipating that the

escalating trade war will really just drive up prices and you see waves of selling even in tech high flyers so tesla super micro and palantir for instance have wiped out more than a quarter of their value in the last 14 trading sessions since they peaked so their losses are more than triple the decline of the snp so really a tough market right now and of course the nasdaq 100 tumbled into correction territory last week

Isabel, talk to us about what we're seeing in some of those MAG7 names. You mentioned Tesla seeing some relief. What else are we seeing when it comes to the big tech giants that absolutely got battered earlier this week? They're still really battered. Tesla is leading the losses in the Magnificent 7 Index. And you see the rally broadening out. And there are the losers right now. In fact, a note earlier this morning says Maleficent 7. And you see that

People are now questioning whether the U.S. exceptionalism has cracks. We have Citigroup and HSBC downgrading their views on U.S. equities this week. I talked to a bank yesterday, and they said that they're underweight, the Magnificent Seven, which is really a stark contrast to when everyone was just piling in, because if you don't pile in, then you underperform the benchmark.

But we have JPMorgan David Lebowitz, which I talked to yesterday, said that, you know, risk premiums have jumped, credit market has yet to crack, economic data, at least for now, points to expansion. So bullish overall in the long term. That's Bloomberg's Isabelle Lee. Thank you so much for joining us.

Two astronauts stranded at the International Space Station since arriving aboard Boeing's Starliner in June could finally be heading home. That's part of the goal for the SpaceX Crew-10 mission scheduled to launch later today. Joining us to talk about this is Clayton Swope. He's deputy director of the Aerospace Security Project and a senior fellow at the Center for Strategic and International Studies.

Clayton, this is a really big moment. Everyone has really become so endeared to Sonny and Butch. What did this tell us about what went wrong and will this ever happen again? Well, Jackie, it's funny. I was thinking too, the one thing that I have as a takeaway is just, it's about Sonny and Butch and just their endurance and their patience and their grace. And it's something that I think back on. I think I admire that. I'm sure a lot of Americans admire that and people around the world. And

Probably you, like me, I get upset when I'm three hours delayed at the airport and they've been there since June. So it's a very different thing to think how long that they've been up there and everything that they've been through. But they've had that poise throughout. I think what we've learned too is that space really can still throw us curve balls, but that we have gotten to the point where we have flexibility,

and adaptability, that we can still do human space flight safely and do that at scale. And that's a lot of credit to NASA on the approach that they've taken to get us here, and then also to SpaceX on whose technology we really relied on to make this happen. How do you think about the next steps moving forward when it comes to the Starliner? What do you think is the future from here?

Well, there's still a lot of things that we don't know. We do know that Boeing has said they want to stay in the space game. It's less clear on what happens next for Starliner specifically. That will depend a lot on what NASA decides with Boeing about certifying that capsule to fly astronauts again into space.

So we don't really know how long that would take. But if we look to the horizon, just with the International Space Station, we're planning for it to de-orbit in 2030. So that's less than five years away. So there's really only a few more opportunities, really, in the grand scheme to bring astronauts to that station, and that window is quickly closing.

There's been a lot going on in the space field as of late, and I think it has many people wondering, are we in a new space race of some kind? How does the US stack up with what we're doing in the field versus other countries?

It's really hard to not think about China and all their achievements in space. Right now, there's seven astronauts and cosmonauts on the International Space Station. Hold that thought for a moment here, because we want to bring our audience some live images of President Trump, who is greeting the prime minister of Ireland. The two men are about to take part in a bilateral mission.

meeting at the Oval Office. Now we will bring you those headlines as they come in. You could also check for updates on Live Go on your Bloomberg terminal. Now Jackie, back to you.

Talk to us more about how China is really getting to the space race. Yeah, there's three Chinese astronauts on their space station, Tiangong-3, right now as we speak. So they've really made space look routine in a lot of ways that America has also been able to do. They're also eyeing the moon. They want to land Chinese astronauts on the moon by 2030. So is NASA.

I think it's hard to avoid the notion that this is a space race, maybe a moon race 2.0. The United States is still the undeniable lead space power in the world, but China is definitely nipping at our heels. Let's talk about who's making us the space power. We hear a lot about SpaceX, but over in Silicon Valley, there's a lot of contenders really coming into the fore as well. What are you seeing in terms of concentration of who's taking us to the next level?

SpaceX is the main player right now when it comes to launch, when it comes to broadband from low-Earth orbit, when it comes to a lot of the things that we rely on to get people and cargo to the space station. But there are a lot of other companies that are innovating in Silicon Valley and around the country. You have companies in Pittsburgh, in Texas, in Florida. They're trying to catch up and come up with new ways to do space, to do it cheaper, to do it more efficiently, to mine asteroids even. So there are a lot of uptrends.

that really will challenge SpaceX's dominance, and it will be their game to lose, though, over time because there's a lot of smart people, though, right behind them. Let's talk a little bit about who's behind SpaceX because Elon Musk has been making waves here in Washington for other reasons, but one of the areas that he's poised to potentially benefit from are his relationships in Washington, SpaceX potentially getting more contracts,

Does his politics detract in any way from the progress that SpaceX can make, or does it really operate independently of that?

SpaceX has led the way for what we call commercial space today. And it has taken a number of years for them to get to where they are. This isn't something that just happened with President Trump's inauguration in January. This has been a long trend where NASA, the Department of Defense, and other customers, both commercially and internationally, have really grown to depend on SpaceX for launch.

and then now for broadband from space. So these are areas that have been trending in that direction for a long time. Those business opportunities that exist in space, SpaceX built over the last few years, probably starting around 2008. So it's not something new, and they're just really taking advantage of all of that time and effort that they put into this for almost seven to eight years at this point.

Clayton, we thank you for joining us. Of course, fascinating establishments in that space race. That is Clayton Swope from the Center for Strategic and International Studies.

Startup Celestial AI has raised $250 million in its latest Series C round, valuing the company at $2.5 billion. Its photonic fabric technology aims to improve speed and efficiency in AI computing. For more on this, Dave Lazofsky joins us now. Dave, help our viewers understand how your technology is actually making this part of AI computing that much more efficient.

Thanks so much for having me. Celestial AI is the creators of the Photonic Fabric, as you'd mentioned, which is the optical interconnectivity technology platform for accelerated computing. Said another way, we're interconnecting AI processors with light.

What's happening in AI right now is that artificial intelligence workloads are growing exponentially. They're now so large, trillions of parameters, that they need to be partitioned over hundreds of processors, which puts more and more demands on the network as the processor doing the work needs to move across the network to fetch information from another processor's memory, moving it back to where the work gets done. And there's no more efficient way to move information than photonically.

Dave, you managed to snag $250 million from some institutional investors by the likes of Fidelity, Tiger, BlackRock, Maverick Capital. How do you plan to put this money to use?

Yeah, we're focused right now on scaling. So we have multiple deep collaborative development engagements with the largest hyperscale data center companies on Earth. Right now, we're collaborating with them to integrate our photonic fabric technology into their next generation AI accelerators. These are programs that are

are on the order of 18 months. So through the balance of 2025 and into the first half of next year, we're working together to get this technology scaled and qualified. So right now the focus is on our volume manufacturing supply chain because our customers are immense scale. They require hundreds of thousands of units to serve their demand.

You know, Dave, back to the fundraising question as well. Not only do you have kind of like the blue chip of finance involved in this round fidelity, BlackRock, but the Mavericks and Tiger part of this, it's interesting when you have those traditional hedge funds getting in, they have been cautious in the world of startups, especially with a dearth of public market exits. So bring us behind the conversation. What is it about you and them that served as a good match?

Yeah, so we took a hard look at the types of investors that we wanted to have involved at this stage in the company's lifecycle. So just as you develop a technology for successful qualification and implementation in a large market like artificial intelligence, we are

developing and optimizing our cap table for having the right investors involved, not just at this phase in the company's lifecycle, but through an IPO. Should we make the decision to take the company public over the course of the next few years and to have the right investors that can invest with us over the course of the next decade or more?

So on their end, the decision I think was made based on the fact that we are the only company in existence that has the ability to provide optical interconnectivity that meets the requirements of what are called scale-up networks. This is a processor-to-processor interconnect. The gold standard today is NVIDIA with NVLink and NVSwitch. All of that

is run over copper. So data communication today between processors at NVIDIA and elsewhere throughout the industry today is entirely electronically over copper. With the photonic fabric, we are changing that. We're moving information optically at a fraction of the energy and at much higher bandwidths and lower latency. You know, an interesting part of your cap table also that I've noticed, and this is an existing investor, is Porsche.

With all that's going on in the world, worries about the consumer, worries about international trade, auto parts also facing risk of tariffs, I'm wondering what role you play in the automobile story. Have they led to meaningful work with you as an investor?

So there's two different branches of Porsche. There's Porsche AG, which is the automotive group, which we all know and love. That's my favorite brand, by the way. And there's Porsche SE, which is the mothership that's the holding company for all of the Porsche's family money, as well as they control about 50% of the assets of the Volkswagen group.

So this is the financial arm of Porsche. Now Porsche can and certainly we anticipate will be a strategic partner for us as well on the automotive group side as their requirements for artificial intelligence training and inference will be similar to that of Tesla who has played kind of a leading role early on in building out AI infrastructure in support of autonomous vehicles.

Dave, how do you think about diversifying your customer base? You noted that your target clientele, those effectively control more than 90% of the trillion-dollar end market. Do you get to expand past that as the company grows, or are you more dependent on those select few?

Well, like you just said, those select few represent, you know, there's eight companies that represent roughly 90% of this trillion dollar market. And we'd be fine with just those.

If you think about it, that's a good problem for us to have. You've got four major hyperscalers. I think the world knows who they are. That represent roughly 70% of the addressable in market. And then you have the ecosystem around them, right? The GPU manufacturers, which include NVIDIA and AMD. AMD, by the way, being one of our strategic investors as well. And then there are a couple of other

a couple of design services companies which include Broadcom. All right, so Broadcom is playing a larger role. I think you heard from their earnings announcement over the last week and a half that they're gaining traction in building custom silicon for the hyperscalers.

Dave, we thank you so much for your time today. Congratulations on that fundraise. We are looking forward to seeing where it all goes. That is Dave Lozowski of Celestial AI. Now, another AI story that we're watching, Alibaba is accelerating its efforts to lead in the AI space, and they're pushing out an AI model.

that can read emotions. For more, Bloomberg's Peter Ahlstrom joins us now. I think just back to a couple of days ago, I tried so hard to read the story that Sam Altman posted online about the creative writing exercise that you saw through OpenAI.

And that does go down to the ability to read beyond the objective and into the subjective, right? And so when you think about Alibaba, how successful are they in emotional intelligence?

We're seeing this very rapid innovation of AI models really around the world, but China now particularly has gained a lot of attention because of the breakthrough of DeepSeek a few weeks ago. Alibaba is, of course, best known for its e-commerce business. It competes with Amazon in that market. But of late, the past couple of months, they've come out with a number of AI models that are quite innovative.

They have one called Gwen that it compared with DeepSeek and said that it was ahead on certain metrics. They're also striking an alliance with Apple to be able to provide some of the AI features for the iPhones within China. And now we see this. The model is called R1 Omni. They're saying it's able to detect emotions within the people who are asking questions and give better answers because of that. They can customize in certain ways. Now, this fair...

follows very rapidly on the heels of OpenAI, which has tried something like this with their GPT 4.5. Now, OpenAI is charging $200 a month for that service. And here, Alibaba is putting this out there for free. It doesn't have all the bells and whistles that you would see in some other models, but it's a pretty aggressive move into this space. And the China market is not one where you're going to see the American companies play. So it's a pretty far step ahead for Alibaba.

Peter, we have about 30 seconds left, but talk to us about how this now stacks Alibaba up against some of the players here in the U.S. Is it really going to depend on things like emotional intelligence?

Well, it's important to understand how bifurcated these markets are. The Western companies can't get into China. These Chinese companies are largely not competing outside their own market at this point. So they're pretty separate at this point. But I think what's been surprising to a lot of observers is how quickly some of these Chinese companies have been able to evolve their AI models.

especially because they're cut off from the most advanced chips. You were talking before about the NVIDIA chips that are used to train these AI models. Most of the Chinese companies can no longer buy those from the Western world. So they're doing this with some pretty hardcore engineering. DeepSeek in particular showed that they could make some advances that would be very difficult in the Western world. That's partly because of the constraints they have on the chip side.

Peter, we thank you so much for all of your reporting. That is Bloomberg's Peter Ahlstrom. And Jackie, something I've been thinking about that is interesting about this emotional intelligence aspect of things is if you believe that leadership needs EQ, maybe AI can be your next boss. Let's hope not. I don't know about you, but I wouldn't want AI giving me my eval, if you know what I mean.

a raise. Anyways, coming up next, remember, speaking of big companies, we are coming out with Adobe earnings after the closing bell. It has held up relatively well in the tech malaise we've seen through the broader market. We're going to take a look at what to expect next. This is Bloomberg.

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Adobe earnings are out after the closing bell, and we're going to bring in now Anurag Rana of Bloomberg Intelligence for a look at what to expect. It's interesting because Adobe has held up relatively well relative to a lot of those magnificent seven names. Relative to what you've seen in a lot of the Philadelphia semiconductor index, is there a story, something to buy right now, or are there real risks after the market today?

So, Shurnali, when you look at it, Adobe is probably the cheapest large-cap software stock right now, much cheaper than any of its peers. And there is a reason behind it, because it is also the most controversial one right now. They have a huge segment, one of the most profitable businesses in the world, their Photoshop creative business, which is under threat or perceived threat by a lot of

open source models out there. Now, the company has guided to their annual recurring revenue for their digital media segment to go up by 11%. That's the only number we are looking for when they report because any kind of disturbance in that number on the downside really is not going to be good for the stock. But meanwhile, if they are able to hold on to it or even raise it, I think that's going to be perceived very well. So that is really something different that's happening from a macro side right now.

Anurag, thank you so very much for your time. That is Anurag Rana of Bloomberg Intelligence. We are looking forward to your readout after they report to your point. Very controversial at the moment, and we are hitting that tail end of earnings season. And of course, as we hit that tail end, we are also keeping an eye on these markets for you before we let you go, because we are looking at that NASDAQ 100, trying to maintain those gains for the day. It has been a volatile morning, but we are back.

up to 1% worth of gains on that NASDAQ 100. Really, the leaderboard here, the Russell 2000 losing its gains, though, on the day, and the S&P 500 up, but less than you're seeing in big tech. The semiconductor is getting some relief, a nearly 3% rise, now at 2.8%. And you're looking at that bid come back into the market. The dip buyers are on

on the sidelines and hopping back in. That does it for Bloomberg Technology, though, today. Don't forget to check out our podcast. You can find it on the Terminal and on Apple, Spotify, and iHeart. This is Bloomberg.

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