ASML's Record Surge, Microsoft Investigates DeepSeek Code
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Live from New York, I'm Caroline Hyde. And I'm Mike Shepard in San Francisco. This is Bloomberg Technology. Coming up, ASML fights back DeepSeek concerns and surges the most since 2020 as stronger chip equipment orders impress. Plus, did DeepSeek improperly use OpenAI data? Microsoft and OpenAI investigate. We have the latest. And we sit down with T-Mobile's CEO on the heels of the company's standout fourth quarter. But first, we

We check in on these markets. Remember, folks, it is Fed Day. Will we get a pause? That comes later today, but we're off by 0.4%. NASDAQ on the downside. We're being dragged down by the likes of NVIDIA, Microsoft in the red. Let's move on and see what earnings we have coming up after the bell because it is thick and fast. Not only are we reeling from deep seek, but we've got to digest the real numbers. Microsoft, Meta, Tesla, Apple a little bit later, but

Tonight, we keep an eye on these front three. And then we think about what we've already had out of the bell in Europe, and it's ASML. The chip equipment maker managing to fight back some of those anxieties around deep seek. Cheap AA models, ultimately, does it matter for chips, for chip equipment? ASML surging currently, we see up 5% in US trading. It was up the most since 2020 earlier, Mike. And this is on the back of very strong orders.

And we're staying on ASML and their big earnings beat. Joining us to discuss this is Bloomberg's Chan Koch in Amsterdam. Chan, there were a surge in orders in the last quarter for ASML, far more than expected. But all of that was before the deep-seek revelations. How did the CEO of ASML message this to investors today?

Hi, Christophe Fouquet, ASML CEO, doubled down on AI basically. He thinks DeepSeq will be good news for ASML. And his thinking is that anyone that lowers cost lowers barriers to entry. So lower cost means AI can be used in more applications. More applications mean more chips.

And more chips would mean ASML can sell more machines to chip makers. And they think deep sea can lead to democratization of AI, which will then create more customers for them. John, when we talk about chips, we can't get away from geopolitics. How did some of the U.S. restrictions on sales of sensitive equipment to China play in the results that we saw today?

Well, China accounted for 27% of ASML sales in the fourth quarter, which was down from nearly half of its sales in the third quarter. The company expects China sales to fall about one-fifth of its total revenue this year. And they think that their sales in China are taking a hit from the prospect of more U.S. restrictions under Donald Trump's administration, as well as a broader weakness in the chip sector.

Bloomberg's John Koch, thank you so much. Caro? We've got plenty more earnings than other stocks we're watching this morning. Apple, T-Mobile, in particular, two companies that have been working secretly together, we understand, to add support for SpaceX's Starlink network. In a surprise release, the tech is now being supported with an installation of the iPhone's latest software update on Monday. But more

on T-Mobile because the company of course is out with its fourth quarter results, beating analyst expectations. The telecom provider saw continued growth in wireless subscribers and home internet customers. Get this, adding 903,000 monthly phone customers and guiding some continued strong growth. Joining us now, Mike Sievert, his T-Mobile CEO. And what's interesting is December, you said, be cautious about our fourth quarter. What changed?

Well, the only thing I was pointing out back then, which maybe was misunderstood, is that it's a seasonal quarter and the last couple of weeks are important. But we just are firing on all cylinders. We just finished our strongest growth year ever, and we finished it strong with a monster Q4 that exceeded a lot of people's expectations. And you're guiding for postpaid net customers to be adding up to 6 million in 2025. That's a big ramp. Where

Where are those customers coming from? You know, this is the strongest beginning of year guide on new subscribers we've ever given. And it's really simple. Our consumer business is firing on all cylinders in the top 100 markets, also smaller markets in rural areas. But now our business sector is starting to rise as well. And so you look across all the segments, people are flocking to T-Mobile. Governments too, New York, one of them that you've added. But I'm interested that the other competitors out there...

AT&T, Verizon, they added two. Where are these customers coming from? Look, this is, I like to think about this, you know, we're the best house in a great neighborhood. I don't need for our competitors to fail in order for us to succeed. We are taking share.

But also the market is vibrant and growing and people are getting more value out of rate plans. They're buying up our rate card. Our average revenues per customer per month are rising, not because of rising prices, but because they're self-selecting up our rate card. And that allows revenues to rise where nobody else is the loser. People need more data. They're going to need more data for generative AI.

that become a choke point for you in some way? It's going to be a way for us to showcase our differentiation. Both Ookla and OpenSignal have once again said we ran the gamut in terms of network awards, and we have the most capacity by far. And so as the demand for our network on AI-based applications starts to grow, it'll only showcase T-Mobile's differentiation. I think consumers will really be able to see the difference.

Will consumers care about when they're out without any signal and now they're able potentially to tap in to Starlink using T-Mobile? When we first announced this partnership in 2022, it was the single most covered thing we've ever talked about. And that's saying something because...

Our un-carrier moves are big deals. This is the biggest one because it speaks to a universal pain point in this industry. This is a big country and there are 500,000 square miles that none of the carriers cover.

And so now, our vision is so simple. If you can see the sky, you're connected. - And you don't have to point your phone at it anymore, which is what you had to do with an Apple previously. Why did you sort of roll it out so secretly? Why did it feel like suddenly we woke up and quietly you could get onto your T-Mobile iPhone device when we wouldn't have thought it already? - Honestly, we've been a little self-conscious in that we announced this a long time ago.

And so it's been a couple of years and we didn't want to keep crowing about something until it was ready. So we made a big deal out of it when we struck the partnership and we said, look, let's just stay quiet until it's time to hand people this service. About two weeks ago, we quietly started letting people into our beta program. We now have thousands of users and we're about to throw the doors wide open on our beta. It's going to be a big moment. And then commercial service this year. So it's performing well in beta?

Absolutely. And right now, the launches are happening really rapidly. So there's well over 400 satellites. They're low Earth orbit satellites, so they're very performant. You mentioned some of the differences versus higher level satellites. And people are getting a great experience. Our goal is to start with text messaging so that you can get your texts out regardless of where you are. But it will very quickly move to picture messaging, MMS, data,

I hate to try and find any clouds when you're pointing to silver linings throughout, but when you signaled that caution in December, yes, about sort of the cyclicality, but ultimately you've had stellar growth after stellar growth. How much can you keep on ramping, keep on bringing on more consumers? How strong is the consumer sentiment out there?

It's steady and consistent. I think that's what you want from us. One of the things that differentiates us is we set out a set of outlooks, and then we consistently meet or beat them. And what we put out today was a strong guide, but it wasn't expecting much from our business that we haven't done in the past. And so you can rely on...

the things that we say because we look at the trends underneath it. And you know, the bottom line is we offer a stronger network value proposition and we offer it at a lower price. And at the end of the day, that's going to cause people across segments to continue choosing T-Mobile.

What is it that investors in particular are needing at this moment to hear from you? I mean, you've got 22 buys, only nine holds, and only two sells. But where are you hearing the questions of caution coming from an investor base right now? Well, they want to know what our next act is. And so that's a big piece of what we focused on in our Capital Markets Day last fall, is to talk about what comes beyond the next couple of years. And AI is a big piece of it. We're transforming our business operations to be able to think about

how do we serve customers in the era of AI in new ways? And this industry has always treated everybody exactly the same, and it's so analog. You go in and spend a Saturday of your life in one of our retail stores trying to upgrade your family to new phones. We know we can do better.

And our T-Life app that's now in the hands of 50 million people can give you an experience of T-Mobile that's different than somebody else in terms of the offers you may see, the prioritization, the upgrades, etc. And so it's an exciting moment for us to rethink how we serve customers and give each customer a fantastic journey with T-Mobile.

What could the phone makers be doing better at the moment? Because ultimately we see Apple getting another downgrade, mainly worries about China, but we aren't upgrading our phones as much as we used to. Do you have to capitalize on giving the add-ons in this moment because Samsung and Apple just, they're not presenting as newer devices

use cases as they used to. Well, it works for our business model. I mean, I can't speak for them. One thing that's happening is upgrade rates have slowed down, but they're pretty steady. Prices have risen, so the OEMs have made up for it that way. Customers are keeping their phones longer. But what you saw with T-Mobile this time is our upgrade rates did tick up a little bit. We have the lowest upgrade rates in the industry. That's good for our financials.

But they started to normalize. So they ticked up. I signaled earlier in the quarter that our iPhone sales were very strong. And they were. And you saw it in our numbers. Mike, so great to have you. Great to see you again. In the back of your earnings. Come back soon. Mike Steven is the T-Mobile CEO.

Microsoft and OpenAI are investigating whether DeepSeek used data output from OpenAI's technology. If it was obtained in an unauthorized manner by a group linked to the Chinese AI startup, it's all according to sources. Now, DeepSeek and the Hive Flyer hedge fund where DeepSeek was started have not commented on this so far. But let's discuss it and the data privacy concerns around DeepSeek with Alex Deimos, his chief information security officer at SentinelOne and former chief security officer at Facebook. Look,

Alex, is OpenAI and indeed other AI labs at the moment, are they right to be concerned about their IP here? I think they are. There's a lot of people who doubt the claim that DeepSeq was able to build such an incredibly capable model with such little compute and such as little cost as they claim. Now, there are some great breakthroughs here. DeepSeq published a paper

that demonstrated great breakthroughs in both training cost and inference cost. So inference is what you do when you're actually running the model for people to use later. And they have some legitimate breakthroughs. Those are breakthroughs that, to their credit, they have documented that other people are going to be able to use now. But there's a lot of people who believe that they utilized both OpenAI's model probably running up in Microsoft's Azure service, as well as Meta's open source models to build upon

to build DeepSeek, and that's what's being investigated right now. Alex, is there anything that Microsoft and other open and open AI and other providers can do to perhaps prevent this from happening again? If not DeepSeek, then perhaps another competitor from China?

Well, this is the challenge that they're going to have. Microsoft's business model is that you can go to Microsoft Azure and you can throw down a credit card, you can open up an account, and you can ask them to create a private copy of OpenAI's models for you that you can use for your own purposes. This is how Microsoft plans on monetizing their multi-billion dollar investment in OpenAI.

That is a great thing for them. That's a great thing in theory for both OpenAI and the customers that you can have a version of OpenAI that in theory does not expose their model weights to the customer and does not expose the customer's private enterprise data to OpenAI.

But what has happened is that people have figured out ways that you can ask a model many, many millions or billions of questions to suck all the data out of it. So imagine you have an ancient wise professor and you're able to ask that wise professor many, many, many questions and then effectively become a copy of that professor. That's exactly what can happen here, except at machine speed, you can do that over days, weeks, or months. And that is the

business model that Microsoft is operating here. So detecting that kind of behavior might be theoretically possible, but that's also exactly what they're selling.

And so I think, yes, they're going to look into what DeepSeek did here, but it will only be a cat and mouse game to try to determine whether somebody is actually utilizing the models in the way Microsoft wants them to and wants to get paid for, and whether or not they're trying to actually copy those models. What's interesting is we want to ask you a little bit more about the detail of concerns, anxieties, privacy. Teresa Payton joined us. She's a former CIO for the White House. Here's what she had to say about worries on using DeepSeek.

This is an untested app. I would caution people not to put too much proprietary company information into it until there's been an opportunity to actually do something called ethical hacking or red teaming pen testing of the actual app and learning more about how is your data treated, where is it stored effectively,

how do the algorithms work? It is open source, but things do still need to be put through their paces. Of course, DeepSeek was the number one app downloaded on Apple. We've also now got Alibaba announcing its latest powerful AI model. Should similar reticence be used by U.S. companies, by U.S. people, Alex? Okay, so this is where it gets complicated, and we've got to be really careful here to separate out two different things. There is the DeepSeek app that people are downloading on their phones. That app...

that data goes straight to China. So if you're downloading DeepSeek on your phone or if you're going to DeepSeek's website and you're typing in a query, that data goes straight to China, that's available to that Chinese company, that is probably available to the Chinese government without any problem. So yes, absolutely, companies should not be allowing their employees to download the DeepSeek app onto their phone.

If you're a company and you download the open source model weights, that data does not go back to China. Now there are some potential risks. Right now those risks are pretty much theoretical. The DeepSeek model weights do have an ideological

twist towards the CCP. So if you ask about Tiananmen Square, it won't answer. It will not create, for example, a Winnie the Pooh story about Xi Jinping. So it corresponds to the rules the Chinese government has created about the ideological consistency of AI. But that is not a security risk.

Now, that being said, there are some interesting theoretical ideas people have come up with about backdooring AI when it's used for security sensitive uses. But right now that is not as big of a deal. I think a more interesting question for enterprises that are looking to use the DeepSeq model wakes is the legal issues. If it turns out that DeepSeq was trained off of Meta's and OpenAI's models,

What does that mean for the legality of using DeepSeq's models? DeepSeq has open source errors, but they do not have the ability to get rid of any legal issues that are caused by OpenAI. Of course, OpenAI is being sued for their use of training data that's open AI.

This is one of the issues with AI. The intellectual property issues have not been solved. We're dealing with 18th, 19th, and early 20th century copyright ideas, and we're trying to apply it to these 21st century problems. And it's a real legal mess that the legal system is years behind with the cutting edges in technology.

Alex Stamos, SentinelOne Chief Information Security Officer. Thank you. Coming up, we'll cover DeepSeek's impact on the chip world with Andrew Feldman from Cerebras. This is Bloomberg. 89% of business leaders say AI is a top priority, according to research by Boston Consulting Group. But with AI tools popping up everywhere, how do you separate the helpful from the hype? The right choice is crucial, which is why teams at Fortune 500 companies use Grammarly.

With over 15 years of experience building responsible, secure AI, Grammarly isn't just another AI communication assistant. It's how companies like yours increase productivity while keeping data protected and private.

Designed to fit the needs of business, Grammarly is backed by a user-first privacy policy and industry-leading security credentials. This means you won't have to worry about the safety of your company information. Grammarly also emphasizes responsible AI so your company can avoid harmful bias. See why 70,000 teams and 30 million people trust Grammarly at grammarly.com slash enterprise. That's Grammarly at grammarly.com slash enterprise.

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Not all hardware providers are worried about DeepSeek. Advantis, the partner of Nvidia that sells chip testing equipment, just lifted its full-year forecast almost 40% in anticipation of elevated spending around AI. And it downplayed the impact of DeepSeek's big debut.

Now, let's bring in someone else in the field, Andrew Feldman, CEO of Cerebrus, a company building computer systems for complex AI deep learning applications. Andrew, your company is trying to go toe-to-toe with a big competitor, and that is NVIDIA. What do you draw in terms of an underdog story from what we saw the other day with DeepSeq?

Look, I think this is an enormously exciting moment for the community. I think it just sends multiple powerful messages. Clearly, they used less compute, they used fewer people, and produced something quite impressive. Now, I think that's a reminder that those of us who are underdogs and are competing against the

the 800 pound gorillas in the industry, small teams of hardworking people with big ideas can produce industry changing results. And that's what we do at Cerebrus. Yeah. Andrew, they used you. They used Cerebrus inference offering. What did you see? What have you taken on in terms of the amount of sheer necessity they need in this moment?

Sure. So we are now in beta with our DeepSeq offering. And as your last guest said, there are two ways to use DeepSeq. You can use it through their app. And I think he's absolutely correct that that data, you can assume, goes right to China. Or you can use it through a company like us or Perplexity or a collection of others that are offering the model directly.

And we, of course, have all sorts of protections for your data such that you can be assured it will go nowhere. There is tremendous demand for this type of model. One of the things that separated this model from previous models was its ability to reason and to do logic. And those type of models in particular outperform the other forms of models. And they do that by using more compute during inference.

And this is something that the whole industry has been grappling with, and we are today the fastest at this. And what that means for you, the user, is a better user experience, quicker answers, less waiting. And that's what's really moving the customers right now. Andrew, Cerebrus had been planning an IPO. Do you have an update on that? And we also understand that an interagency panel in Washington known as CFIUS has been reviewing all of this. Do you have an update there?

I don't. But I think the deep-seek model was put out right around Trump's inauguration. I don't think that was an accident. I think this was an effort to communicate at the geopolitical level that--to the U.S. that the previous administration's regulations hadn't worked, that the Chinese

engineer was capable of doing extraordinary things, even in the face of the regulations imposed by the previous administration's commerce team. What's so interesting about this? You talk about the geopolitics and perhaps all that sort of timing used with Huawei and its innovations, but briefly, many are perhaps worried, Sifius, maybe have anxiety around your relationship with G42 and its ultimate relationship with China, about your overseas locations. How do you tackle that in this environment?

Look, I think we have a strategic partnership with G42. They are the national champion AI company for United Arab Emirates. And they are one of the U.S.'s staunchest allies in the Middle East.

and have a long track record of supporting U.S. interests and being good allies. I think one of the things that DeepSeek has taught us is that we will need the community and we will need our allies. That we thought perhaps that the U.S. could run this alone, that we had the computer companies like Cerebras, like Nvidia and AMD, and we had the open AIs of the world

I think what we're learning here is that we will need the entire U.S. ecosystem in this AI battle. Andrew Feldman, thanks so much for joining us. CEO Cerebrus, come back when you do have a bit more news on the IPO potentially coming up. Activist investor Kristen Hull joins us to discuss what she'll be looking for when Tesla releases its results later today. Remember, an activist investor, what she makes of Elon Musk's involvement in government, in the German government. This is Bloomberg Technology.

Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Mike Shepard in San Francisco. Quick check on these markets, Mike, because we've got some anxiety ahead of the Fed, of course, and indeed ahead of earnings. We've got Microsoft, Meta, Tesla after the bell, Nasdaq off by 0.4%. Bitcoin, though, is getting a bit of a risk on trade. We're at 1.5%, maybe because of what Trump media has just announced, a pairing into financial services. They're launching a fintech brand named TruthFi in collaborations with Charles Schwab. We're up 8.5%. Sally Bakewell here to discuss...

Were we expecting this sort of a move from an entity related to the president? I think we could have expected it. I mean, Trump has just launched his Trump coin. He has already declared himself a huge supporter of cryptocurrencies. He's the crypto president. So I don't think it's a huge surprise that Trump media is delving into the financial services world with this investment. Now, it's notable, though, that...

Donald Trump, he actually transferred his shares in Trump Media last month to a trust which is controlled by his eldest son. So he no longer directly owns any of Trump Media, but he is the sole beneficiary of that trust. So I think this is just an example of how the Trump empire is deepening its push into crypto and fintech.

Interestingly timed because just last week, Trump made comments about traditional banks and how he said that they were effectively debanking the conservatives. He sort of made a bar, but Bank of America CEO Brian Moynihan, as well as JP Morgan chief Jamie Dimon. So he's a big fan of the crypto, the fintech world, I think it's fair to say. Sally, in effect, is the Trump media...

group trying to create something that Elon Musk has dreamed about for all these years. That is a one-stop social platform with everything, messaging, finance, you name it?

Well, so far, what do we know? We know that Trump Media is investing $250 million in this effort, and that money actually is going to be custodied by Charles Schwab, which is also going to advise it on its investments and its strategy. It's going to offer separately managed accounts, ETFs, and other crypto and Bitcoin-related products.

Now, getting into the financial services space is something that a lot of companies have done. Just yesterday, social media platform X announced that it was partnering with Visa on its digital wallet in order to be this everything app that Musk has long talked about. And we've seen the likes of Amazon creep slowly into financial services, as has Apple with the wallet. So it's a difficult

world to enter in many ways. There are a lot of incumbents such as Zelle and Venmo, which hold substantial portions of the market. But equally, a lot of these companies also want to diversify their revenue. And this is one place that they can do that. Bloomberg, Sally, Bigwell, thank you so much.

Tesla releases its fourth quarter earnings later today, and investors are going to be closely watching for information on new products and sales volume. And they also want to know how CEO Elon Musk's new role in the Trump administration is impacting the electric vehicle maker. Let's bring in Kristen Hull. She's the founder and chief investment officer at NIA Impact Capital and somebody who follows Tesla very closely.

Nia, this is a real moment for you. Somebody watches this company very closely. Tough sales numbers earlier this month from the company. We see the new president pulling away the EV subsidies and the CEO of Tesla himself quite distracted by politics. These are choppy waters for any company. How is Tesla going to navigate them?

Hi Mike, thanks for having me today. This is a tricky company and all investors are going to be watching for these earnings today. We want to see that there's a commitment to growth and that there's an ability for execution. And of course we have questions. Can the CEO execute on these and do we have a board that's going to support all of the growth that we need to see from this company?

What are you looking for in particular when it comes to the business, including self-driving and perhaps some of the other businesses that have emerged for Tesla, including AI and robotics?

Yeah, so that's a good question, right? Because as investors, we want to see growth and we want to see a plan and we want to see guidance. And what we know from these earnings reports from the past is consistently there will be surprises. So we can expect that. We want to see that there are sales growth in their main revenue source, which is automobiles, right? And yet Europe dropping in popularity. Actually, worldwide, Tesla has been dropping popularity. And so we have...

competition coming up in the market, both with regular automobile makers as well as some of the Chinese that are coming in. And so it's a complicated terrain for Tesla right now to navigate. And so we're going to want to see that there's a CEO in control with a plan.

You are so important in terms of a voice because you're an activist investor. And ultimately, you're questioning often the role of Elon Musk, the way of policies he invokes, the way he acts. But notably, at the moment, Tesla doesn't seem to be particularly related to fundamentals. We point out that their shares have nearly doubled since the last time we got earnings. And the numbers haven't been that great since then, if you think about the deliveries numbers. Instead, this is a proxy on Elon's closeness to politics.

How do you distinguish that for yourself as an investor?

So Caroline, thanks for the question. This is a complicated company, particularly when the CEO is as involved with the federal government as he is. Oftentimes you would see if there's a role granted from the federal government that you would drop your current day job, and yet we're not seeing that happening. So we do believe that every company deserves a full-time CEO, and so we have lots of questions there. We also have questions about human capital management and how

How is Tesla going to be able to attract, retain, promote top talent? Because as we know, this is an innovation company and innovation does derive itself from really loyal client base, both on the client side and then also on the employee base. And so we're looking to see how is the company going to manage this.

For years, though, since you first bought into Tesla, you've been trying to communicate with the company and pushing against some of the activities that we've seen, whether it be concerns around anti-DEI, whether it be certain perceived anti-Semitic comments coming from Elon Musk in the past that I know you've written about. There's also, though, of course, the latest, where we come to the concerns around gestures recently made around the inauguration of Trump, made by Elon Musk, and indeed his support of IFD, which is deemed a right-wing group in Germany.

Nothing seems to matter when you're putting this to ultimately a share price that goes up and to the right.

So you bring up some really interesting points. This company does seem to stand alone as far as its meanness and that it's continued to grow. Other companies would not get the same reactions with that type of CEO and those types of behaviors. We as investors are really looking for the long-term possibilities here. And when you have such a controversial CEO, we are seeing, as you point out, sales are dropping.

Popularity is dropping, the brand has been damaged. And so how is the board and the rest of Tesla going to step in and see how are we going to see sales growing when we are having a lot of controversial issues? As I pointed out earlier, we're also seeing not only to clients where I live in California, many, many are switching to Rivian and other EEV brands specifically based on the brand and some of the issues that they see that they don't want to be associated with.

And we're also seeing now for employees, who's going to want to work for Tesla in such a volatile environment? These are questions that investors have. Kristen, it's been a year since Tesla dropped diversity and inclusion language from its 10K. And we've seen since then other companies and even the federal government following suit in some fashion or another. Do you see this tide changing at all? And what sort of pressure will you be able to apply to Tesla at upcoming meetings?

Yeah. So for all of our companies, we really want to see strong human capital management. And so whether you call it DEI or whether you call it supporting your employee base, we really want to see Tesla and other companies hold their employees on the asset side of the balance sheet as opposed to on the expense side. We want to see that Tesla is showing that they will invest in their employee base because we know that, again, to execute on all of the innovation that they promised, they're going to need

to have strong, loyal employees. And that's going to mean strong programs. And so again, whether it's called diversity, equity, inclusion, whether it's merit-based hiring, we want to see that investment. And we need to see the transparency around that. So with Tesla, we at Nia have been asking them to remove forced arbitration from employee contracts because that does conceal a lot of what's going on, both for managers and for investors, as well as for other employees.

Kristen Howe, Chief Investment Officer for Nia Impact Capital. Thanks so much for joining us today. And do not forget to check out the Elon Inc. podcast's bingo card.

For this round of Tesla's earnings, you can find it on the terminal online. Work out what words are used how many times and if they're in line with that card. Coming up, TikTok still needs a US buyer to avoid a ban in the States. 75-day extension signed by President Trump runs out in April. We'll talk to Jesse Tinsley about the all-cash bid he's put together with none other than Mr Beast. This is Bloomberg Technology.

89% of business leaders say AI is a top priority, according to research by Boston Consulting Group. But with AI tools popping up everywhere, how do you separate the helpful from the hype? The right choice is crucial, which is why teams at Fortune 500 companies use Grammarly.

With over 15 years of experience building responsible, secure AI, Grammarly isn't just another AI communication assistant. It's how companies like yours increase productivity while keeping data protected and private.

Designed to fit the needs of business, Grammarly is backed by a user-first privacy policy and industry-leading security credentials. This means you won't have to worry about the safety of your company information. Grammarly also emphasizes responsible AI so your company can avoid harmful bias. See why 70,000 teams and 30 million people trust Grammarly at grammarly.com slash enterprise. That's Grammarly at grammarly.com slash enterprise.

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Could a widely popular influencer become an owner in a hugely popular social media platform? Mr. Beast is reported to be speaking with multiple groups of investors about buying TikTok. One of those groups is led by Jesse Tinsley, the CEO of Employer.com. Jesse Tinsley joins us now. Jesse, thank you for being here. Let's get right to it. How involved is Mr. Beast with your group's bid? Has he fully committed to joining your team here?

I think Mr. Beast, as we said last week, I think we hope that he joins as many bids as possible. He's a positive influence for young people and people everywhere globally. And so we're excited to have him in his group backing our bid, among others as well. So he's not formally signed on to your bid. He's just seeing whoever wins.

I think there's some articles that came out last week and Mr. Beast and his group are definitely signed on with our group, but it's not exclusive. So we hope he can work with as many groups as possible.

And what about your bid? Who else is involved other than yourself and potentially Mr. Beast? Yeah, yeah, it's a great question. I think we were not obviously a very large bid by any means, right? We're a bunch of technologists and founders and there's folks like David Bazzucchi from the CEO and co-founder of Roblox, as well as Nathan Coley, co-founder and CEO of Anchorage, among a bunch of other technologists and folks that I think can stabilize

TikTok can put in a really good place for users and data integrity across the US-based population. We're excited with the group we have. It's almost a grassroots effort as opposed to some of these larger bids, and I think we have folks that can come in and make a huge impact. We're really excited with the group that we have.

Jesse, what have you heard back from ByteDance? And who at the company are you dealing with specifically? Yeah, that's a good question. We haven't heard back from ByteDance directly. It's been a bit of radio silence on their side, but we're looking forward to chatting with them in the next couple of weeks. It sounds like there's some movement with different conversations we've been having across a bunch of different parties. And I think that right now we're excited with the way things are trending. And yeah, so no direct contact with ByteDance though. That's for sure.

Really fascinating about who's alongside you. Roblox, I totally get the idea that you want to therefore be aligned with social media and with discussion and groups and interaction of young people. But Jesse, you have made your name in human capital. Why are you interested in this asset? What change do you want to make?

Yeah, fantastic question. I think obviously David's background in Roblox directly speaks the lines a lot with the same values that I share. It's one of the reasons we added him directly is I have two young daughters who will soon be on social media and hopefully my goal and whoever wins Roblox, whether it's myself or another group, I hope that it's safe enough for where I feel comfortable with my young daughters going.

on TikTok in the next six to 12 months. And I think right now, the way the algorithm is set and where the data is, how the data is being used, I would not feel that comfortable doing that thus far. So I think that's kind of my goal.

the values that I see behind it for us going after this bid directly. Jesse, President Donald Trump has made selling TikTok to U.S. buyers or reaching a deal a priority. What kind of contact have you had with the White House? And what sort of support are you getting from Trump administration officials on your bid? Yeah, we've had ongoing dialogue with the Trump administration, and we feel very comfortable with our bid in terms of

we've actually set it up. We have a bunch of, we've already preset a lot of the team in terms of

board of directors and board subcommittees around finance, technology, and everything else. So we feel really, really good. We have an all-US backed team with all of the data and servers and technology moving here. So definitely going to be a challenge to move TikTok, but over from ByteDance and their Chinese servers and move it here, but we feel really comfortable with our bid directly. Ultimately, it sounds like you're making one

Just for the good of humanity, for the good of your kids. I mean, you said, I think you accidentally said you were making whoever wins out on Roblox. You meant to say whoever wins out on TikTok. Help us take this really seriously. You've already named some really significant people who are in this with you. Yourself are a significant entrepreneur and founder. But help us understand how serious the nature of it is of this bid and how much money you've got behind it, Jesse. Yeah, so definitely a big...

Definitely a very large bid, I think, by all measures. We basically have, I think, the other public number that's been floated is 20 billion by another group. And essentially, ours is significantly higher than that offer today. Got the money behind it, Jesse Tinsley. He tells us, ceofemployer.com. Thanks so much for joining us.

Microsoft and Meta are reporting after market closed today. All this admits concerns around artificial intelligence spending. Let's bring in Bloomberg's Ryan Vlastelica. Ryan, Meta and Microsoft are two very different stories when it comes to CapEx. Meta seems to be getting a little bit more of a pass. Why is that? Hey, thanks for having me on. Yeah, it's a great question. So last week they came out, gave a new CapEx target that was significantly above what people were expecting. And while

a lot of AI spending has come under scrutiny lately. The stock actually rallied. It seems like the overall takeaway was people view them as investing from a place of strength. And then earlier this week, amid all the sell-off and volatility related to DeepSeek out of China, Meta also rose again. That was sort of seen as a validation of its own AI model, Lama, which is open source, getting a little bit of a bid from DeepSeek, which is another open source model. So it's sort of a validation of their strategy there.

Meanwhile, Microsoft expecting 11% increase in revenue, but they've got to vindicate their spending and indeed whether OpenAI is as valuable since the DeepSeek news. Yeah, absolutely. So that's this company. They've disappointed the past couple of quarters just based on their share price reaction, some concerns about the strength of their cloud business. Is it growing fast enough for people to justify paying the high multiple that Microsoft has, especially relative to meta? That's going to be a real focus here. And obviously, that was the name that...

Saw a lot of weakness earlier this week on the DeepSeek news. A lot of implications for how much money is being plowed into AI, at least based on the traditional sort of architecture. Now if DeepSeek is able to do this in a more efficient and cost-effective manner, that really kind of changes the economics behind some of the spinning that they've been doing. I'm Lestellica. Got to be busy. Thank you. Moving on to two other companies also reporting after the bell. ServiceNow and IBM. Let's get to it. Bloomberg's Brody Ford. And software is having its moment because of DeepSeek.

What do we expect from IBM? Absolutely. So with IBM, their method of AI monetization thus far has already been in their consulting business. Everyone's watching their bookings around AI as it relates to consulting because that's kind of a good place to be in with the picks and shovels question because you know no matter what happens, even if the customers don't actually end up buying it, IBM will help you set it up, right? So that's a good setup for Gen AI at this moment. So yeah, folks are watching for that as well as their own software business largely.

And Brody, on ServiceNow, generative AI is also a big part of their story. Tell us what you're looking for this afternoon when they drop.

The application software vendors were struggling a little while as it relates to AI, but right now with the agent moment, there's a lot more optimism. Especially with DeepSeek, people say, hey, our model's getting cheaper. Maybe that's scary if you're NVIDIA, but if you're a company that's going to buy those models and then deliver them to your customers, that's actually very good. We see that the service now is at about an all-time high right now, and folks are, well, it's down a little bit today, but yesterday they closed at an all-time high.

So investors are excited about the potential for the application layer to really kind of start having its moment with GenAI.

Both of these stocks had their moment in 2024 though. Yes. IBM up 30% more than best since 2009, ServiceNow and its best year up 50%. So is it all about just talking up the AI narrative as much as they can? That's a huge part of it. IBM had such a great year last year because they were one of the rare reacceleration stories with software. I mean, you could poke at their growth rates and say, oh man, it's only 2%, this and that. But

Their software business is accelerating. I mean the idea that IBM would become a serious software contender, you know, five, six years ago wasn't the most popular take, but today we've seen that it really has played out.

Brody, is there any weak spot in either of these companies as they're heading into this afternoon that investors are going to be concerned about in particular? One X factor is that they are both pretty big government vendors. And obviously, what, Doge, right? I mean, if the whole promise is that we're going to cut off spending on unnecessary things, right? Elon famously...

doesn't love to pay software bills at his own companies, right? And so some investors have said, man, is this going to be a concern when it comes time to, you know, a company like ServiceNow, it sells so much into the federal government.

I correct myself. Service now up 50% in 2024. It was actually up 81% in 2023. We'll see what it delivers tonight. Brodie Ford, great to have him across both of the earnings. And that does it for this edition of Bloomberg Technology. Don't forget to check in on all of the earnings after the bell, but also check out our podcast. You can find it on the terminal as well as online on Apple, Spotify and iHeart. From New York, from San Francisco, this is Bloomberg Technology.

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