The Nasdaq’s Worst Quarter, Rivian Spins off “Micromobility” Startup
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Live from New York, I'm Caroline Hyde and this is Bloomberg Technology. Coming up, a volatile Nasdaq that's after posting its worst quarter in nearly three years. Plus, grants from the US Chips Act in limbo as the Commerce Secretary pushes semi-companies to expand their US projects. And amid trade anxiety and weaker Tesla sales, we sit down with the CEO of EV giant Rivian.

But first, we check in on these markets that actually are trying to push back into the green after what was a pretty horrific quarter. The first quarter for the Nasdaq 100 was the worst since the second quarter of 2022. You are seeing the sell-offs in the terms of more than 20% for many of those magnificent seven names. Nvidia down almost 20%. You see Broadcom having its worst quarter in its history.

Let's break down the moves and what it signals for this quarter now. Isabelle Lee is with us for more. And it was the most loved names for 23, 24 that got punished the hardest. Exactly. And altogether, they shed some $2 trillion in market cap. Lots of superlatives out there. We won't really lose track. Microsoft, Amazon, Meta.

down 20% from their peak. Broadcom, down 33% since December. And it's just interesting how these tech behemoths are now dragging the markets lower. And for more than two years, they've been the darlings of AI. They're the ones that powered the markets to really its bull run. And now questions about AI are coming at a time when there's just really a lot of macroeconomic uncertainty

all around, and thorough and deep seek. I read this and it really struck me with Alibaba's co-founder saying they're rushing to build new facilities to get ahead of AI services. And in contrast, you have an analyst report about Microsoft saying they're walking away from new projects. Microsoft who've committed almost

80 billion for data centers. They've earmarked that and altogether these big spenders earmarked 300 billion. So what's next? It's really an interesting time. And you're basically pointing to a very messy narrative for AI right now. Joe Tsai clearly trying to

dash the hopes of AI saying there's a bubble here in the United States. But at the same time, as you say, Alibaba is busy investing more than 50 billion itself in AI infrastructure in the future of artificial intelligence. And then we have TD Cowen, which continues on this narrative of Microsoft. Are people feeling that at these valuations with more than a bear market, ultimately, and a lot of these names down more than 20%, as you say, is now the time to start buying in? Do we feel that factors in that prices in moving out of the bubble?

It depends on who you ask, but I interviewed a mutual fund manager, and he says that tech is still expensive. It's still volatile. I mean, yes, it's come down. It's fallen to 24 times estimated profits from 27 last month, but the historical average is still around 20. So it's still expensive, but they still own it. He said he has a little because he calls it, quote, risk management. So you really see that they still have a foothold on the market. But it's really interesting because the IPO market, you expect it to be hot.

but it wasn't you look at core weave it was a dud although newsmax maybe that's the exception that was exciting it's cert it's surged around 800 percent yesterday i mean still 100 today retail name yeah and a very different business model that's fair core weave but it's notable that core is actually up more than 10 today okay so maybe we're getting a little bit of buying around the edges on what had been a pretty beaten up name it's it's now just above its ipo listing price but it

It does just seem so murky for public market investors when they're looking at private markets and they're looking at a $40 billion round for OpenAI. Sam Altman saying that there's basically insatiable demand and his GPUs are melting because everyone's using his product.

Is there still, though, the tariff overhang that perhaps lends to the downside for these names? Absolutely. Before, the narrative was just like tech valuations, AI, but now it's like Liberation Day tomorrow. I was just talking in Sixth Floor upstairs with Anne Milady of Allspring, and she said...

we will get some information tomorrow, but not the clarity that everyone is hoping for. It's Liberation Day, but I mean, what does that mean? So she was saying that we're still on the defensive. We're still on the wait and see because what will happen? I mean, everyone's hoping that we will have a magical list tomorrow per country, per tariff, but we won't see that. So she's still very concerned. If you look at Bitcoin, which is really the risk proxy, it's down around 10% this year, but from its peak, it's down 20%. And I know that Bitcoin has a lot of

fans but also skeptics, but one can't deny that it's a broad gauge of rich sentiment. And for now, the gloom is palpable.

It is. Well said, Isabel Lee. We thank you for that breakdown. Let's just get into the weeds on chips specifically now. Commerce Secretary Howard Lutnick may withhold Chips Act grants to push companies to expand their U.S. projects. That's according to sources. His goal is to generate tens of billions of dollars in additional semiconductor investment commitments without actually increasing federal grants. Bloomberg's Peter Elstrom joins us on this now.

We've all known that President Trump was not a fan of the Biden-Harris administration's CHIPS Act, even though it was bipartisan in nature. But it looks as though they're looking in a different way to orchestrate it.

Yeah, that's exactly right. So just to back up a step, the CHIPS Act, of course, was passed with bipartisan support. The whole idea is getting these CHIPS companies to invest more in the United States. It's $52 billion in grants and then tax credits, which are very, very important here, too. So the Biden administration scrambled in their last days to try to finalize the agreements with a bunch of the most important CHIPS companies in the world, including TSMC and Samsung and Intel and Micron. They finalized the terms of these accords, but

they didn't disperse all the money. The whole idea was that these companies would hit benchmarks and then the money would go out. So what Ludnick has decided to do is he's decided to use those disbursements as leverage with these companies to try to get them to commit even more money to the United States. So the CHIPS awards are not going to go up in terms of value, but before he actually writes those checks, he wants companies to come forward and to pledge more money. The example for this is TSMC. TSMC originally was going to invest about $65 billion in chip capacity in the United States.

It came forward and they said they're going to put in another $100 billion. The Trump administration loves to be able to have those kinds of announcements, especially TSMC is the most important chip maker in the world right now. So for them to say we'll put another $100 billion in the market is very important.

The administration would say that was the effect of tariffs. TSMC has said they just like the American market and want to invest there. But what's also interesting is the nuance on the tax credit, Peter, because in many ways that's more important than the grants.

Right. For many of these companies, including TSMC and probably Samsung and Intel also, the tax credit is very, very important. It could be a lot more money. And so there are discussions about maybe increasing that tax credit. It has been 25%. It could be even more in the future. And that's important for companies that actually have the money right now.

If you can put in $100 billion, it's easy to do the math on that. That's $25 billion in tax credits for you. That can save you a lot of money down the line. And you're right. TSMC sees a lot of opportunities in the United States market to be able to make investments, build some of those cutting-edge chips here, and then sell them to domestic customers. You also have companies like Samsung and Intel that could do things like this, are embarking on these kinds of projects. But Ludnick is exerting a lot of leverage right now in these companies to try to get bigger numbers, more customers.

eye-popping numbers into the headlines so that they can take credit for bringing some of this production back to the United States. At a time when with a lot of uncertainty, particularly with tariffs hanging over the semiconductor industry, it must be a difficult time to commit to more spending from these CEOs.

Right. You're just talking about the tariff uncertainty out there. I guess we'll find out some things tomorrow, but a lot of this we just don't know at this point. And you're right. Lutnick and the Trump administration have pointed to tariffs as part of the reason that some of these companies are investing more in the United States. In the tech sector, the chip sector in particular, it's unclear. We don't

really know what the tariffs are going to look like. There's been talk about putting tariffs on the chips themselves, maybe the products, the end products the chips go into. It's not clear exactly how that's going to play out. So I think they need more information. And of course, the timeframes are totally different. They're changing these policies almost by the week, as we've seen. And when you invest in a chip company, you have to plan for decades at a time. So the timeframes really don't match up here. They're going to have to resolve some of those conflicts going down the line.

Peter Ahlstrom, brilliant to have you. Thank you very much indeed. Thank you. Let's stick on chips and chip makers, Global Foundries. Well, it's exploring a potential merger with the Taiwanese chip maker United Microelectronics as a way to create a more resilient manufacturer of older generation semiconductors. It's all according to sources. Now, a deal would face multiple hurdles, including financing potential opposition from Taiwan's government and regulatory approval from China.

And another chip name that, of course, is affected by potential chips at grants, but also the new change of CEO is Intel off by 2.4%. And that's after Lip Bhutan took to the stage yesterday. We heard him for the first real time articulating the future of this business under his leadership. Analysts saying they liked his reality check. They like his focus on the future.

on talent key and client secondary, but maybe lacking a little bit of detail on what next product innovation will be coming. We're off by 2.3%. But coming up, Tesla, it's slumping again in Europe when it comes to sales. The shares are interestingly on the higher side. The latest numbers in terms of sales from France, dismal. We'll discuss that next. This is Bloomberg Technology.

Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? A combination of financial services and generosity programs. Thrivent offers advice, investments, insurance, banking, and generosity, as well as resources to fund service projects or direct dollars to causes you care about. With more than 120 years serving clients, you can plan your finances with confidence. Visit Thrivent.com to learn more. Thrivent.

where money means more. When your company has a position to fill, are you really seeing the best professional candidates? Sure, you get plenty of resumes, but you may be missing an untapped resource. Ideal candidates not currently job searching. People not actively looking, but who may be open to the right opportunity. It can be the difference between a good hire and a great hire.

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com and see how the recruiters, with a deep understanding of the experience and expertise you need, can find the right fit for your business. After all, you deserve to see the best candidates, both active and passive. Whether you're looking for a long-term or project-based professional,

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com right now to get started. That's srgpros.com. Specialized Recruiting Group, a tailored approach to professional hiring. Switch to Verizon Business and get more from your internet without paying more for your internet. Get LTE Business Internet starting at $39 a month when paired with a Business Unlimited smartphone plan. That's unlimited data, and with it, unlimited

unlimited possibilities. Start saving today with Verizon Business. Ranked number one in small business internet customer satisfaction by J.D. Power. Starting price for 25 megabits per second internet plan with savings, plus taxes, fees, and economic adjustment charge. Terms apply. For J.D. Power 2024 award information, visit jdpower.com slash awards. ♪

let's just check in on the shares of tesla now they're actually rebounding this day up more than five percent after what of course was a pretty horrific quarter previous down 35 in q1 we're at five percent even though sales in france fell 37 they actually fell further in countries like denmark and that's as we expect tesla's global auto deliveries for the first quarter to come out tomorrow blue megs david welch joins us for more

Tesla's woes when it comes to real fundamentals, when it comes to sales, looking ugly worldwide right now. That's right. They've got a few different pressure points here. Clearly in Europe...

given what's going on politically and Elon Musk's involvement with the Trump administration. Some buyers are shying away, to say the least. But there are some other factors here. There's a lot more competition in the EV space now, in Europe, in the U.S. especially. And in China, BYD is coming on strong and taking a lot of market share. And we do have a Model Y change over here, and they make that vehicle in every Tesla plant, which means you're going to be losing a certain amount of production. It's hard to quantify how much that's biting into sales. I

I think that's very real, so let's not get too carried away with buyers don't like Elon Musk's politics. There are some who don't. I think that's real. But there are some just regular business factors here with Tesla and their product changeover that are affecting it. And also, he's got a lot of competition in BYD with record sales. They just keep growing and growing, doubling sales since last year. They're a real force, and Tesla has a real business in China. So add those together, and sales are done. We'll see what happens tomorrow when the numbers come out.

I think that's really important to note the competition, the element there. It's interesting Wells Fargo putting out a note today saying Tesla just needs some magic at this particular point because they do say, yes, you've got this turnover in terms of production, but are people really going to be rushing out for a new iteration of the Model Y? They worry about cannibalization of any cheaper product. And there's also the fundamentals of the U.S. in terms of that $7,500 buyer credit that's likely to come away, right? Yeah.

That's right. Look, you could see a little bit of a bounce for Tesla, particularly in the U.S., because Tesla is least affected by tariffs among the car companies, but they still would get hit with some. And some buyers may say, hey, Tesla has parts that are imported, so I don't want to have to pay more for a Tesla in three or four months because of tariffs. And then some people may. We've seen this so far with numbers that are out.

Buyers are going out there thinking that if Donald Trump is going to make good on his tariff threats, he will probably make good on his threats to get rid of the $7,500 EV tax credits. So we've seen a jump. We saw it in the fourth quarter. We're seeing it again so far with the companies who've reported in the first quarter. Ford and Honda both had big jumps in their EV sales so far, and so did Hyundai.

People are going out, Americans I should say, going out and buying EVs before the credits go away. And Tesla will probably take advantage of that and get a bounce from it as well.

We'll see how those deliveries shake out when they are published later in the week. David Welch, thanks for the latest on all things Tesla. Let's dig in further. Zheng Heng Li is with us, founder and CEO of JL Warren Capital. You're an independent equity research firm focusing on Chinese companies, but also listed multinationals in China. You bring such expertise when it comes to Tesla, its history in China, and the fact that it's kind of losing its edge over there. How much are we seeing it lose out to competition right now, Zheng Heng?

It's very interesting. Tesla has a not so long history in China. GF3, which is the largest factory in Shanghai, now accounts for about 55% of the global shipment was only started to make cars back in 2020. That's five years ago. So

SINCE 2020, THE EV ADOPTION IN CHINA ACCELERATED INITIALLY AT 160% YEAR OVER YEAR, THEN GRADUALLY COMES DOWN TO 90%, 70% AND 50% YEAR OVER YEAR LAST YEAR. SO IN THE

process, Tesla has been losing market share in a market that it has created and helped to accelerate. So 2020, Tesla's market share in China was double digits, about 11%, 12%. And today, it's only 4%. So it's really interesting. Even though China remains to be the only major market that grows its sales for the brand, it's trading the overall growth of

of the trial abroad EV market. Yeah, give us the competition. Is it all about BYD? There's also Xiaomi, which has flipped from a phone manufacturer to a car manufacturer. Now there's current headlines about Xiaomi and a fatal accident that occurred, many worrying about FSD and ultimately AV issues with that particular model. Is that something to be keeping an eye on?

Yeah, I think it's in the case of the deep seek. If anything, that story tells you how fast the Chinese can commoditize software. Same is the case with the hardware. So it's not just BYD, it's everybody. It created a market, Tesla helped to create a market that introduced a lot of

competition. So over the course of five years, Xiaomi is the latest competition. But meanwhile, there's the three large independent EV makers that are listed in the U.S. Not saying like everyone is as profitable as Tesla, but incrementally on the

On an incremental scale, Tesla's been losing market share because it's just not able to keep up with the product and new launches that the market uniques, China market uniquely demands. So, and Xiaomi report this morning is very eye-catching in a sense that now

EV is no longer just a vehicle, right? I mean, it has elevated to a technologically, like a new height. So FSD, autonomous driving, it really invites a lot of new issues such as who is responsible in case there's a bug.

in the software that causes accidents that develops, that becomes a tragedy or like a death. So is it the software maker, the driver, or the battery maker, or any components maker of the car? So, I mean, those really, those issues need to be addressed before commercial adoption of the FSD can be seen anywhere in the world.

Zheng Heng, what we haven't discussed is politics. Many would say if you look at Apple, for example, there was an erosion of market share. Some people felt that it was because Chinese purchasers wanted to buy domestically made products. Is that happening in the EV space at all? Or is it more that the competition is fierce and the price point is better?

I don't think Tesla has the same issue Apple has just yet. I think the brand is strong. China's issue is really product issue, competition issue. I mean, it's very different from what we see in the Western markets where Elon Musk's polarizing political politics cannibalizes the buyer's demographics. In China, no.

The price is still in the upper middle sector, and the brand is strong. It's just very slow in launching new products, and there's a product fatigue. And then the competition is really offering a lot more attractive, exciting newness that the consumers in China demand.

Zheng Hang, it's so good to get your expertise on China and the demand there. Zheng Hang Li from Wuhan Capital, we appreciate it. Time now for Talking Tech. And first up, SpaceX. Well, it's launched the first ever human spaceflight over the Earth's polar regions. The Fram 2 mission took off a Falcon 9 rocket Monday evening, carrying four passengers. The trip is expected to take three to five days and will be used to conduct research on the impact of spaceflight on human health.

Plus, the ECB president, Christine Lagarde, says that the use of AI could upend Europe's social model. Speaking at an ECB conference, Lagarde recognised the productivity gains that could be achieved with AI, but warns that the technology also has the potential to increase labour market inequality across the region.

Meanwhile, SoftBank is seeking a loan of as much as $16.5 billion to help fund its AI investments in the United States. It's all according to sources. The bridge loan would help to finance that $500 billion AI infrastructure project, as well as the $40 billion funding round, of which it's committing $30 billion to, which

which it leads on OpenAI. Talks with banks are in early stages and details may change over the coming weeks. But we're going to stick with SoftBank's funding of OpenAI now. The company behind ChachiBT, of course, says it has finalized that funding round of a record $40 billion. It was led by SoftBank and it's putting the company now at a $300 billion valuation. For more Bloomberg, Seth Thigerman joins us.

It's interestingly structured, but SoftBank basically is giving $30 billion and then there's other investors, KOTU and the like, that are chipping in the other $10 billion. Yeah, I mean, this is an incredibly complex deal. SoftBank is basically creating a syndicate of investors to help them finance this, but the round is not happening all at once. There's $10 billion now, $30 billion later, but also maybe not $30 billion later. It depends on whether this company, OpenAI, can restructure as a for-profit or not. So as far as these rounds go, unprecedented in size.

but also kind of unprecedented in complexity. And also a new relationship being formed between Microsoft and OpenAI because before they were the biggest backer really. For sure. I mean, I think we've all felt that there's been a slow motion split happening for the last year and change between these two companies.

Microsoft is still part of the syndicate of investors here, that relationship still stands, but if this deal goes through, by the end of it, SoftBank will presumably be the largest financial backer of OpenAI displacing Microsoft, and at the same time, SoftBank is key and integral to helping OpenAI diversify away from Microsoft on the data center side.

The revenue numbers, though, that we're starting to get a glimpse into, they're good. We're seeing spectacular growth for open AI. And meanwhile, Sam Altman continues to worry about whether we can deliver. The products are so successful, those GPUs are melting. How are they going in terms of an internal growth model? Yeah, I mean, again, you're seeing revenue triple or more than triple from the last year, potentially, from the projections that we've seen to $12.7 billion, I think, for this year is the estimate. At the same time...

where's profitability here? We have seen that cash flow positive not projected to come until the end of this decade and that's why they need to raise tens of billions of dollars to prop up this business. That compute, it ain't cheap. Seth Fiegemann, running the pun, we thank him.

Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York, and we have a slight bounce back. After the worst quarter for the Nasdaq 100 since almost three years, we're up 6.5%. In fact, technology is on the higher side when you looked at Nova in China, up almost a percentage point on the Golden Dragon. We're also looking at the stock 600 in Europe, which now is closing up more than 1.1% on that tech index.

But this is all amid the worries about tariffs, about Liberation Day. Let's just go there because the EU says it's ready to fight back against President Trump's global tariffs, stating that they have, quote, strong plan to retaliate if necessary. Let's get more from Kayleigh Lyons over in Washington. And Ursula von der Leyen trying to ready a response here.

Yeah, we've already seen the EU promise a response to the 25% steel and aluminum tariffs that have already been announced and put into place by the Trump administration. That will affect about 26 billion euros in goods from Harley-Davidson's to things like bourbon and whiskey. But what the EU is promising here is potentially greater retaliation after tomorrow, which is assumed to be the implementation of 25% tariffs on auto imports, which obviously affects European auto manufacturers, as well as whatever reciprocal tariffs

for EU nations the president ultimately decides on. As for what that retaliation could look like, the big question here is going to be whether or not the European Union decides that anti-coercion instruments are going to be justified here, which is essentially a set of tools that are designed to be in response to countries using trade or other economic policies to try to coerce the European Union.

have specific implications for big tech companies in particular, keeping in mind that one of the anti-coercionist instruments could affect intellectual property as well as digital services trade, things that technology companies obviously are involved in. The irony is, Caroline, if ultimately that is how things end up in terms of European retaliation, it is one of the things that President Trump is most upset about in terms of what he sees as unfair trade.

practices by Europe. It's not just about tariffs but so-called non-tariff barriers which he sees as not just the value-added tax but also some of the regulatory policies around technology. I want to go there in a minute, Kayleigh, a little bit deeper but for now we're seeing some European response. Mercedes, of course, big automaker in Germany saying it's weighing, pulling its US entry-level cars because of Trump tariffs. Of course, the cheaper Mercedes

they're going to be hit the most in terms of ultimate profitability when shipped to the United States and tariffs upon them. So Mercedes is weighing pulling its US entry-level cars over the Trump tariffs. But then go to the digital services side of the equation. As you said, the irony is that was what really annoys big US tech. In particular, Mark Zuckerberg seems to be his eyes on the digital service tax. And how would that be rectified? Or how would that go deeper if the EU responds in this way?

Well, it's not just Mark Zuckerberg, Caroline. President Trump doesn't like this either. He is repeatedly in his remarks to reporters talking about the justification for imposing tariffs on trading partners like the European Union as them being unfair to U.S. technology companies. He has said this on multiple occasions.

That looks like it could obviously manifest in a number of different ways, including overall just the tightening of regulation around big technology companies, as the European Union obviously is a big importer of services, which gives them a little bit of leeway as to how exactly those services businesses are able to conduct themselves. As I mentioned, intellectual property rights, also one way in which anti-coercion instruments could come into the picture.

there could potentially be some serious retaliation for that retaliation from President Trump, as we have already seen in response to the threat of retaliating against those tariffs on Harley-Davidson's and alcohol products. He suggested a 200 percent tariff on things like European wine and champagne. So this could go back and forth in a lot of different rounds, Caroline.

Retaliation on retaliation. Kayleigh Lyons, thanks so much. Now, amid, of course, this U.S.-EU trade tension and the brace for tariffs, we need to bring you an expert voice. Tom Wheeler, he's the former FCC chairman, current visiting fellow at Brookings Institution. You are putting so much thought into the impact of this tit-for-tat, let's call it. But what ultimately do you think the U.S. can achieve here for its U.S. big tech companies with the threat of tariffs? Anything?

Well, I think Kayleigh did a terrific job of explaining what the issues are here, Caroline. But at the root,

There is a sea change in what tariffs are all about that could be forthcoming. We don't know what's going to happen exactly tomorrow, but if this discussion of responding to regulation comes through. Traditionally, tariffs were imposed to protect production.

But on February 21st, the president issued instructions to his tariff enforcers instructing them to deal with the how can they protect big tech profits. So the move from protecting production to protecting profits, as I said, is a sea change.

And if we see that tomorrow, undoubtedly the EU is going to respond. And this won't be the first step. There will be next steps. And we're entering a world that we really have not experienced before. Can you go into how you've thought about this might even work?

Because there's one thing about tariffing a product, but tariffing data flows, how does one do that?

Exactly. There is a huge difference between cars and champagne and zeros and ones, right? Shame, but yes. And so it's, you know how to tear off a bottle of champagne that's coming in. How do I respond to zeros and ones? And particularly, I think there's two parts to that. One, how do you respond when those digital services are going out of the country and

into Europe where they're being regulated rather than being brought in from Europe like a bottle of champagne. And sure, you can go after European companies like bookings.com and those, but that's the tip of the iceberg. That's small potatoes. How do you deal with data flows? You then have to get down to the question of, okay, let's just think about this.

Where are the data flows in and out of the EU? Well, they're financial transactions even more than digital services activities.

So do you put some kind of a tariff on those flows? Do you put some kind of a tariff on when information is accessed in American databases? I mean, there's a whole new world that we're entering here. You know, the United States dominates the cloud services market. When you access a cloud service database,

provided by an American company. Is there a tariff on that? Right. I mean, this move from hard goods to soft goods is revolutionary. And as I said before,

What happens tomorrow is just the first step, not the last step. So take us through a few more steps and whether ultimately the desire to retaliate to protect profits could actually backfire, could end up making us more bifurcated with Europe. So the fascinating question here, Caroline, is will Donald Trump make European tech great again?

because of the fact that he is creating reasons to sever relationships with American tech companies. You know, the underlying theme of the relationship between the U.S. and Europe has been around security. The European countries have all recognized they have to step up to their own security.

What is security today? Sure, you can switch from making cars to making tanks, but that doesn't reflect, for instance, what's been going on in Ukraine, where it is not expensive, heavy weapons systems like tanks that are decisive, but inexpensive software-based systems like drones.

And so we've seen a change in the battlefield where it used to be that software supported hardware, kinetic hardware systems. Now you have software instructing that hardware what to do. Right. And you've got to believe that the Europeans

as they go to increase their defense capabilities, aren't going to ignore the fact that it's not just hardware anymore, it's software. And can we rely on United States software service providers? For instance,

When Donald Trump shut down Starlink's access to the Ukraine army as a part of leverage with Zelensky, what kind of message did that send? Tom Wheeler, we must leave it there. From the Brookings, we thank you.

Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? A combination of financial services and generosity programs. Thrivent offers advice, investments, insurance, banking, and generosity, as well as resources to fund service projects or direct dollars to causes you care about. With more than 120 years serving clients, you can plan your finances with confidence. Visit Thrivent.com to learn more. Thrivent.

where money means more. When your company has a position to fill, are you really seeing the best professional candidates? Sure, you get plenty of resumes, but you may be missing an untapped resource. Ideal candidates not currently job searching. People not actively looking, but who may be open to the right opportunity. It can be the difference between a good hire and a great hire.

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com and see how the recruiters, with a deep understanding of the experience and expertise you need, can find the right fit for your business. After all, you deserve to see the best candidates, both active and passive. Whether you're looking for a long-term or project-based professional,

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com right now to get started. That's srgpros.com. Specialized Recruiting Group, a tailored approach to professional hiring. Switch to Verizon Business and get more from your internet without paying more for your internet. Get LTE Business Internet starting at $39 a month when paired with a Business Unlimited smartphone plan. That's unlimited data, and with it,

unlimited possibilities. Start saving today with Verizon Business. Ranked number one in small business internet customer satisfaction by J.D. Power. Starting price for 25 megabits per second internet plan with savings, plus taxes, fees, and economic adjustment charge. Terms apply. For J.D. Power 2024 award information, visit jdpower.com slash awards. ♪♪♪

We welcome our global radio and TV audiences now. EV maker Rivian recently announcing it will be spinning out a new company called Also with the aim to develop EVs for short trips. $105 million funding from Rivian and VC firm Eclipse. For more, I'm very pleased to say we're welcoming Eclipse partner Jatin Bell and Rivian CEO RJ Scarange. Great to have you both here. And RJ, I start with you. The spin-out of Also Now.

Why is it better now to let it thrive in a solo manner? Well, thanks for having us on. We think about overall transportation space and what needs to happen. Of course, there's electrification of vehicles and the infrastructure that we know of today, and that's what Rivian's been focused on, of course, first the United States and with our R2 program, soon Europe.

But there's a lot of trips and a lot of miles that are much shorter distance and actually work better with something that's a much smaller form factor. And so we kicked off a Skunk Works team a few years ago to look at how we could take our core technology stack and apply it in a very low cost, much smaller form factor. And as that played out, we realized that the idea really had a lot of legs.

a powerful idea and we decided that this this idea was big enough to deserve being its own business and so we took the decision to spin it out uh eclipse led the financing of that with 105 million dollar investment as as you said and we're really excited about what's to come we haven't shown any of the products yet but they're absolutely incredible let's therefore ask gt how is how is this relationship going to evolve what's the sort of closeness you're going to be doing because rj is going to be on the board

Yes, I think it's exciting because I spent many years at Rivian working closely with RJ and now in this new role at Eclipse, you know, really excited to invest in this opportunity and really disrupt the micromobility space. Yeah, I'm really excited to partner again with RJ and the Rivian team as well as the also team to bring this vision to life.

Jiten, I ask you the consumer issues here though. We're a little bit worried to say the least about the economy here in the US. Do you think that the consumer is going to be there to back this more than $100 million that you're putting behind this offering that starts to get into our hands in 2026? Yeah, absolutely. I think if you look at the transportation ecosystem around the world, it's under so much of stress when it comes to infrastructure limitations, when it comes to congestion, when it comes to pollution.

And micro mobility is a very important piece of that puzzle. More cars, more buses, more trains is not going to be the answer. You need something smaller, something more flexible to complement those other modalities.

And we believe that micromobility is a perfect solution to that. It's a large market already. It's growing very rapidly around the world. But if you look at the solutions, they're very weak technically, very poor user experience, they lack reliability. And this is where the opportunity is. And I think the consumer is waiting for something more compelling to hit the market.

RJ, it's a global opportunity on micromobility and you just talked about how it's a global opportunity for you right now with Rivian and the R2 rollout. This is a difficult time to be a global business. How are you preparing yourself to access the European market when we're worrying about tariffs and you've already set aside hundreds of millions of dollars in potential policy impacts? Yes, I mean, it's a very complex environment. As Rivian, we're spending a lot of time

interpreting and understanding what the tariff implications are for us, of course, here in the United States, but I think importantly recognizing that, you know, in particular, Europe may respond. And so how the

Ultimately, the tariff structure sets out and lays out is going to have a big impact on some of the decisions we make over the next year. We're staying very, very close to it, but it's, as you've called out, it's a very dynamic situation. And I think some of the uncertainty is what makes it the most challenging to navigate. RJ, are you in close discussions with the administration itself? Have you been getting a glean on what they're thinking of for the future?

Well, I think one of the things that's important, just if we take a big step back from all the noise of what's happening, what's going to happen tomorrow with some of the tariffs that have been talked about and will be rolled out, I think a big step back is there's a clear directive to drive technology and manufacturing into the United States.

And for Rivian, we're a US company. We have just under 17,000 employees here in the US. We have a plant in Chicago, just south of Chicago in normal Illinois. We're building another plant in Georgia. So we're growing rapidly here in the United States. 100% of our vehicles today are produced here and all of our technology is here. So in terms of the administration's objectives, we're very aligned with what's being asked and what I think the overall

policy framework is trying to drive towards. But in terms of how that translates to our expansion in Europe and elsewhere, we do have to recognize that it's a very dynamic environment. Our production footprint may be different than we'll be originally planning. But I think all of us across all the different auto manufacturers are waiting to see how things look once the dust settles.

And that uncertainty, Jiten, I'm sure is affecting you as a team of operators, investors. How are your other founders coping with this moment?

Yeah, I think uncertainty is the key word here. I feel that what is in our control is to focus on two things. Making sure that founders building in the physical industries have the maximum control on the stack, you know, on what they design, what they engineer. If you have control over it, then you're able to make decisions to optimize around different environments. And the second thing is to build that relationship

resilience and flexibility in the supply chain so that it is able to navigate again short-term, medium-term and long-term changes in the policy environment. So I think the key word there for our founders is control the controllables. There are things that are going to change, things are going to change back. I think what is most important is to build a resilient strategy and a supply chain

within the company that can navigate all these different environments. RJ, a quick 30-second one for you. Do you think you've benefited from people moving away from Tesla for political reasons? Well, one of the things that I think is often missed as we think about electrification is

Today, only about 8% of new vehicle sales are electric here in the United States. And so when we think about competition and growing our market share, the biggest opportunity is bringing people into our new technology vehicles and introducing people into what it feels like to be in a connected, smart, of course, electric vehicle. And so we really believe there needs to be a lot of choice in order for us to go from 8% to 50% to eventually 100%.

We need lots of successful companies. We need Tesla to be successful. We continue to be very successful. We need Rivian to be successful. We need the existing legacy manufacturers to be successful. And so with our R2 program, it's a much lower price vehicle. It's really cool. It's an incredible product. But what that'll do is it'll give customers another choice. And so we think the presence of another choice is going to be important from a brand and product attributes point of view.

Thank you both so much for your clarity of thought today when there is not much clarity in the economy. Jaten Bell of Eclipse, RJ Scarange of Rivian, great to have you both on the show. Thank you.

Elon Musk is looking to notch another political win by using the same tactic during the Trump campaign, spending millions of his own dollars to influence an outcome. This time it's for the Wisconsin Supreme Court race that could tip the balance in favor of the conservatives on the court. For more, Bloomberg's Mike Sheppard joins us now. Shepp, I mean, this is a playbook that seems to be repeated even with the big checks.

Oh, very much so. He's putting $17 million of his money through two groups toward this race. And you would think, why do we care about Wisconsin Supreme Court? But remember, it's a swing state. And Musk has taken a deep interest in this, not only because of abortion rights and labor laws that the court could decide, but also questions about congressional redistricting. And that could help tip the balance back toward Republicans with whom Musk has aligned, along with Donald Trump.

$82 million being spent. This is more millions than we've ever seen on such a race, right?

Well, that's right. And Musk has also helped supercharge spending in a lot of other areas. And we saw it during the presidential race and in congressional races. And he is promising to stay on the stage politically going through the midterm elections in 2026. So this is creating for many in Congress and many down the ballot to this election.

notion that they will have to reckon with Musk as a factor. And it's also been an issue for some Republicans here and wondering, do I challenge Donald Trump on something? Because if they do, they run the risk of perhaps facing a primary challenge funded by Musk and backed by Donald Trump.

And it's tomorrow, the results, Mike? Well, we may be hearing as soon as tonight, but it will depend, Carol, on how close this contest is. And we're also watching other contests elsewhere in Florida where Musk has also put some money. These are two special congressional races. They're not expected to be perhaps quite as tight. But all of them also are going to be a little bit of a referendum on what the public views of Elon Musk and his new political role.

Mike Sheppard, all the inside track, we thank you. Now that does it for this edition of Bloomberg Technology. Do not forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify and iHeart. From New York, from SF, this is Bloomberg Technology.