David Sacks On a US Bitcoin Reserve, HPE's Weaker Year
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Live from New York, I'm Caroline Hyde.

And I'm Jackie Davalos in Washington. This is Bloomberg Technology. Coming up, crypto leaders flock to D.C. for the White House's crypto summit. This is Trump signs his Bitcoin reserve executive order. White House AI and crypto czar David Sachs joins us to discuss. Plus, AI spending still going strong. Broadcom shares rise after the company gave an upbeat forecast with AI demand a key driver in its first quarter.

And HPE also out with earnings, but they send shares tumbling as profits erode, in part due to tariffs. We speak with the CEO, Antonio Neri. But first, breaking news, but moments ago, Russia is willing to discuss a potential truce with Ukraine, but it is with conditions. Willing to discuss a temporary truce if there is progress towards a final peace settlement. Let's get straight out to Kayleigh Lyons. What's the nuance here?

Well, Caroline, Bloomberg did just break this story. Sighting sources familiar with the matter. But I would point out that this is something that Russia apparently presented to the U.S. It talks in Saudi Arabia that happened last month. A suggestion that, yes, they are willing to agree to a temporary truce, provided that there is an effort toward a peace deal that Russia wants.

Like specifically what Russia has asked the United States is clear guidance on what the parameters of peace would look like, specifically what a peacekeeping mission in Ukraine would constitute as Russia has rejected the presence of NATO troops on Ukrainian soil. That would be complicating for the idea that France and UK, for example, would be providing troops for that peacekeeping mission. The so-called coalition of the willing we have heard European leaders talking about

in recent weeks. Russia does not like that idea. They would, though, be open to a country like China providing a peacekeeping force, though it's unclear whether or not that is something Ukraine would agree to. We should keep in mind that this news is breaking, as we are expecting next week senior U.S. officials, including the secretary of state Marco Rubio, the national security adviser Mike Walz, as well as Special Envoy Steve Witkoff, to be meeting with their Ukrainian counterparts in Saudi Arabia for additional talks toward peace, as the U.S. is still continuing to push for a deal.

Kayleigh Lyons with a wrap. We thank you. Let's just take a quick look at the markets and reaction to this. They do bounce off of their lows. Nevertheless, we are having a torrid time in the Nasdaq 100, at one point hitting correction territory. We are down more than 10% from previous highs. This is, we see,

Three straight weeks of declines for the tech benchmark. The longest losing streak since August. We're off by more than 4% over the last five trading days. And this is anxiety grows regarding Chinese AI models, what that means for compute demand, what it means overall for selling your winners into a economy

economy that could potentially be slowing on the back of tariffs. Move on to what's happening in the world of crypto, though, because so much to delve into when it comes to the latest executive order. We're off by 1.8% on the day. We're at $88,000. But remember, we're still well higher than the $67,000 level we were at when the presidential election occurred. All of this, as many anticipate, that's such

Regulations will become more pro-crypto and we see that executive order signed last night with a reserve for Bitcoin. We're now pleased to be welcoming to our TV and radio audiences around the world someone who can dive into this exact executive order. We bring in the White House AI and crypto czar, David Sachs. It's busy. You're about to expect yet more people coming to the White House from the crypto sphere. Remind the American public and investors why you need a Bitcoin reserve at all.

Well, good to be here. I mean, the reason why we need a Bitcoin reserve is that the federal government already owns some. In fact, it obtained around 400,000 Bitcoin over the past decade through criminal and civil forfeitures and seizures. And so the government has to have a strategy for how it deals with this. In the past, the strategy has been simply to sell it in an ad hoc way, almost willy-nilly.

And that cost American taxpayers something like $17 billion in lost value. So we want to have a long-term strategy to maximize the value of these holdings. And we've decided that Bitcoin is scarce, it's valuable, and that it's strategic for the United States to hold on to this as a long-term reserve asset. So that's the plan with the 200,000 Bitcoin that we believe are in the pitfalls.

possession of the federal government. I say we believe because no one really knows for sure because we never had a proper audit. So that's one of the first things that this executive order provides that we're going to do a full government-wide audit to find out what digital assets we actually have so they can be safeguarded and moved into a strategy that maximizes their long-term value. Right, and then there's the stockpile. Talk to us about the nuance there and why you need a stockpile for altcoins and how you're treating them differently.

Right. Well, the idea there is, again, we're going to figure out what we actually have on the federal balance sheet. And we're going to move those, like you said, all coins or digital assets other than Bitcoin into a stockpile for safekeeping. The difference there is that

The Secretary of the Treasury will exercise responsible stewardship over those assets, and he has the discretion to rebalance the portfolio or to sell items in that portfolio. But that's not true for Bitcoin. The Bitcoin we want to keep long term. So there's a difference there in objective. With the reserve, the goal is long term preservation. With the stockpile, the goal is responsible stewardship, portfolio management in essence.

David, the executive order also tasks Secretary Lutnick and Besant with finding budget-neutral ways that won't cost the taxpayer to add to that reserve. What qualifies as budget-neutral? Can you give us some examples of how that would actually work?

Well, budget unusual just means it won't cost the taxpayer anything. It won't increase the deficit. It won't increase the debt. So that's basically the constraints on what they can do. If they can figure out creative ways to add to the stock, to the reserve of Bitcoin, they're allowed to accumulate more Bitcoin. But again, it cannot impose any burden on the federal deficit, debt, or the taxpayer. So that's the rule. Now, you can ask the question, well, how are they going to do that? And I think that's sort of up to them. If they can figure out

creative strategies that they believe are in the long-term interests of the country, they now have the authorization to develop those strategies. Do you think using savings that come from Doge, for example, qualify as something that would be budget neutral?

That's a good question. I don't know the answer to that question. I think that that's something that has to be assessed by probably the Office of Management and Budget. I think that since Doge is cutting the deficit, and we'd want to seek a way to rescind those appropriations, it probably would not count, but you'd probably have to ask the OMB that. When you talk about the stewardship, particularly the stockpile, could you be seeing things like staking, lending? Is there going to be other ways to maximize the volume there?

I mean, it's a good question. I mean, you know, I think that the idea of this executive order is to create the mandate, right? So first of all, we're going to move these digital assets from wherever they are all over the government. We're going to find out what they are. First of all, we're going to do the accounting. We're going to do the audit. Then we're going to move them into a separate account for safekeeping. And then the Secretary of the Treasury and his team will be able to exercise portfolio management and long-term security.

and responsible stewardship. And yes, that could include staking. It could include rebalancing. It could include sales. These are all options that they can pursue if the Secretary of the Treasury believes that these are in the long-term interests of the American people.

Just going into what's in the holding of the US government, going back to what President Trump mentioned over the weekend, talking of Ripple, Solana, other alternative coins, people are wondering whether they're going to be included in this stockpile. Will they? Does the US own them? Why mention them by the President?

well the president just mentioned the top five cryptocurrencies by market cap so i think people are just reading into this a little bit too much he just mentioned the top five uh in terms of what we'll actually have again we have to do the accounting we're not sure that sitting here today whether the federal government owns any of these alternative cryptocurrencies we know it owns bitcoin i believe it owns some ethereum i'm not sure about the other ones this is why we have to do the accounting is that to be honest no one's been able to give us a straight answer yet in terms of what the federal government owns

And this is part of the problem is that we've never really had a digital asset strategy before. And this is why we've missed out on accumulating a lot of value for the American people.

David, you mentioned earlier that you don't have any additional cryptocurrency assets anywhere. You've divested from your interests there. However, Secretary Lutnick in July mentioned that he had, quote, a shedload of Bitcoin. Do you think it's important for these stewards of the reserve and the stockpile to divest from their cryptocurrency interests? Do you know if they've done so already?

I can't speak to his situation. Every member of the administration has to go through the same ethics process and the same conflict of interest process that I've gone through. So I'll let him speak to his own situation. I can just say that in my case, I divested or sold all the cryptocurrency that I owned prior to the start of the administration. So there's no conflict in my case. I just want to have the right innovation policies for the United States. Do you think it's important, though, to just not have that appearance of a conflict of interest?

Sure. I mean, look, we're all subject to 18 U.S.C. 208. These are the conflict of interest provisions. Every member of the administration is subject to that. But I'm not going to speak to anyone's situation. So we all are governed by the same conflict of interest rules. In my case, I chose to divest everything to make it really simple. You should ask every other member of the administration what their situation is.

How about the president? Because I think herein lies some of the issues for those who are on the outside of crypto looking in and suddenly feel that the US president has an exposure to meme coins or Solana. How do you give the confidence to the US investor base and indeed US population that this is totally legit?

Well, honestly, I think you're kind of making something up there. I mean, how do you know that he has exposure to Solana? Is that something you just came up with? Well, ultimately, when we think about the meme coin exposure in particular, and people trying to understand for what reason we have a Trump coin or Melania coin, is there a clearer way that the US president can disassociate himself from any of any upside when it comes to cryptocurrencies?

Well, I think he's already spoke to the Trump coin. And I think that that is a collectible. The SEC said it's a collectible. Collectibles have no intrinsic value. They're not securities. They're in a different category. And I think as long as you issue a meme coin and disclaim that there's no intrinsic value, it can just be a collectible. So that is a different category, I think, than what we're talking about here with cryptocurrencies.

What do you make of some of the market reaction? I mean, clearly Bitcoin down later, earlier today on the back of just not really getting what they were hoping for. You know, if the government is not going to buy additional crypto, then what's really the benefit? But can you say for sure that the administration is not open to using taxpayer dollars in the future? Is that completely off the table?

According to the CEO, it is. We've said that this will not cost taxpayers a dime. So we've been very clear in this executive order that we will not use taxpayer funds to basically accumulate more crypto unless it can be done in a completely budget neutral way. No increase in the deficit, no increase in the debt, no use of taxpayer funds, no burden on the taxpayer. We've been very clear in this executive order about that.

David, let's move on to artificial intelligence, where you're also weighing in on policy there. The Biden executive order was repealed in January. What is in the works currently that you can share about how that's looking and who's involved?

So the president in his week one executive order on AI that rescinded the Biden EO. By the way, that was a very burdensome executive order that Biden had passed. It was over 100 pages of burdensome regulations on AI companies. The whole industry hated it. He rescinded that and he tasked three people to basically evaluate a new and create a

a new AI action plan and those people are the head of the Office of Science Technology Policy, the National Security Advisor and myself. And so we're currently working on that plan. And we'll have more information for you about that once we're ready to present.

David, how confident are you at this moment around AI leadership here in the United States? That thick and fast, the news coming out of China, for example, of the latest models that are incredibly powerful with less data and ultimately more efficient. How are you exercising the view that AI can be still a leader for the United States and not losing its leadership versus China?

Well, I'm confident in American leadership, but we can't be complacent about it. I mean, it's very clear that China is going to be very, very competitive. Something like roughly half of the AI researchers in the world are from China. They are very good at math and science. And you've seen with the launch of DeepSeek that they're very good. They're very good AI software companies. So this is going to be a very competitive race. And we have to win that race. But we can't be complacent about that in any way. It's going to be a very tough competition here.

There's actually reporting from other news sources that maybe DeepSeek would be banned from apps here in the United States. Do you think that's appropriate? It's premature for me to comment on something like that. If the administration announces a policy on that, then I'll comment on it then. Let's talk about some of the other voices inside the White House as of late that could potentially chime in on AI policy. Elon Musk, is he involved in any capacity?

Not in what we're doing. So, you know, again, we have an office within the White House and we deal with crypto and AI policy. Elon's doing Doge, and these are two totally separate initiatives. But let's talk a little bit more about what the contours of the AI policy could look like. I realize you can't share too much at the moment, but what will be your priority areas? A lot of the talk has been around AI competitiveness and what we've seen coming out of Trump's, President Trump's comments around the chips ad,

and then National Science Foundation layoffs. There is some concern that this could undermine competitiveness if there's not enough federal funding going to research. What are your thoughts on that?

Well, I think there are some items that are policy items that are coming up very quickly. So, for example, there was this 11th hour policy that was announced by a rule that was now called the diffusion rule that was announced by the Biden administration. And that governs the sale of advanced AI chips or GPUs to countries all across the world. They're basically an international version of the export controls. There's 120 day clock on that in order for the Trump administration to weigh in.

and make whatever modifications we want to make. So, for example, I think that's probably going to be one of the first policy items on our plate that we have to address because there's a clock on it. So I think that export controls are a big area. Diffusion is a big area. Just how we govern the licensing of the most sophisticated chips and semiconductor manufacturing equipment is sort of at the heart of the policy discussion right now.

Would you ultimately be supporting an end to the CHIPS Act?

I don't think that anyone in the administration has said we want to end it, but the president has been very critical of it, and I think with good reason. I mean, I think the intent of the CHIPS Act was good. We were trying to get semiconductor manufacturing to occur in the United States because it's so strategic. The problem is that the money went to, frankly, a lot of companies who are losing in that very competitive market, and some of those companies haven't even used the money they were granted because they're not doing very well.

So the CHIPS Act has had, I think, mixed results at a high cost. And the question is just whether we can do something much better. And I think what the president has said is that he would like to use tariffs as an incentive to get companies to onshore their semiconductor manufacturing here. And the advantage of that approach is that the best companies have to do it too. They can't kind of drag their feet or they're going to be hit with tariffs. So I think the president has figured out a very powerful weapon, a very powerful incentive.

to get the best companies to want to onshore their manufacturing, including for semiconductors, and that is very strategic for the United States.

TSMC putting money where its mouth is and potentially in response to tariff concerns. But you're saying that... Right, well, you saw that. Sorry, you mentioned TSMC. I think that's a very good point. We did a press conference with them just earlier in the week, and they announced over $100 billion investment in the U.S. And a big part of the reason why is because of the president's tariffs policies, giving them a strong incentive to want to move some manufacturing here, because they know that if they don't do that, they're going to be hit with the tariff.

With 45 seconds, David, I've got to ask you, therefore, should Intel not be getting the money? Is that the company you're hinting at? I'm not saying they shouldn't get it, but I think that everyone knows that Intel is a very challenged company right now. And I think that it's unfortunate. We want Intel to do well. We want domestic chip manufacturing. And Intel is a legendary company. And it is one of the few companies in the United States that's capable of doing advanced chip manufacturing. So we want them to do well. And I think we will try to do whatever we can to help them do well.

Well, you're going to be speaking with lots of leaders from other companies today, of course, over at the White House, leaders of crypto exchanges across the board. We thank you so much. The White House AI and cryptos are David Sachs ahead of that all-important White House crypto meeting. Coming up first, though, Broadcom shares. They jump following its earnings, an upbeat forecast fueled by AI demand. Details next. This is Bloomberg Technology.

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Let's take a look at Broadcom shares. This after the company gave an upbeat forecast driven by strong spending on AI computing. Shares are down by about 3%. Joanne Feeney, partner at Advisors Capital Management, joins us now for more. What a roller coaster it's been so far for the chip makers this week, other infrastructure players as well. Is the market telling us something more about

the fundamentals. Is it a short-term blip or are fundamentals okay at this point? Yeah, hey Jackie. You know, the surge in Broadcom shares after they reported in December, right, obviously really boosted the stock. It's come down year-to-date about 25 or so percent. But last night's report was very impressive. Not only did they beat the numbers, they came in with better guidance than expected and more importantly, not in their guidance are

are two new partners for the development of custom AI solutions, including chips and networking solutions. And so their $60 to $90 billion outlook for fiscal 27 for the AI business, and by the way, it's only at a pace of about $20 million this year, so it's a really startling opportunity that the company has ahead of it.

And remember that they see the roadmaps of their partners and their customers. So they have an awful lot of visibility. I think it did reassure investors somewhat. And that's why the stock is up today. Is it therefore still enough to shake off the overall anxiety surrounding generative AI, the opportunity that these companies have and ultimately how profitable it will be for them?

Yeah, it's unclear what's causing the pullback here. I think there are a lot of moving parts in investors' minds right now. One of them is just the general level of policy uncertainty, whether it's tariffs or government shutdown or geopolitical, that is causing a little bit of a risk-off trade across the board. The deep-seek information announcement back at the beginning of the year certainly caused some to question

how much we needed the most advanced chips. But what Hoctan, CEO, said last night was really informative. He said that customers are demanding more and more powerful solutions. They're clearly not running away from having the best hardware to run their AI models, both training, pre-training, post-training, and inference.

And again, he sees the roadmaps for years out. So I think that investors are unfortunately taking the wrong idea out of the deep-seek situation and inferring that for some reason hyperscalers and others that want to use AI models are somehow going to say, oh, we don't need all that computing power. They clearly want that, according to what Broadcom is saying.

The 20% sell-off that we've seen in Broadcom shares since the start of the year, though, ultimately what shakes that off? Is this the right time to be buying a Broadcom if it's ultimately going to be a winner?

Yeah, Caroline, you know, a lot of times market sentiment, again, a risk off trade. People pull back from their winners. They diversify. And that's a good thing. People, you know, investors should be diversified. What will probably turn this around is more and more of these kinds of reports and not just from Broadcom, from other companies. You know, we've owned Broadcom for clients since it was called Avago 10 years ago.

And we've ridden through some of these pullbacks before. But ultimately, a company like this, you want to have a long-term view. You want to be able to ride it out during the times when it does pull back because you just don't know when sentiment is going to change. To your question, we don't know when investors might decide, you know what?

We want to own companies that are going to provide really long-term, solid, year-after-year growth. And those are hard to find, particularly in an environment where policy uncertainty that may affect other sectors of the economy could be so confounding. Here's one area where we think the growth is solid and will be relatively impervious to a lot of the politics that we're seeing out there.

That's incredible you say that Joanne because so much of the market jitters that we've seen this week have directly been correlated to some of the trade tensions that are really escalating as of late. Tariffs being mentioned in HPE's earnings as a potential detractor for their outlook going forward. Why is Broadcom more insulated perhaps from that volatility and what other players in the space could perhaps kind of see themselves a little bit more protected from that volatility?

Yeah, Jackie. So Broadcom certainly is vulnerable to tariffs on imports of chips. They don't manufacture many of the chips themselves. Their most advanced chips are manufactured abroad. But in Taiwan, and obviously there's some question about the Taiwan situation, and so any political news there could disturb the shares. It's good to see that Taiwan Semi is bringing more manufacturing here to the U.S. That will help buffer that kind of risk.

Other companies that are more reliant in their sales on just chips are going to be more impacted by the tariff talk. Notice, though, that Broadcom is more diversified. They have a software business, which is substantial and is improving in its reach into customers and its margins, et cetera. And they have other areas of the business. Hewlett-Packard Enterprise is being hurt particularly because they have built their systems in China. So they're going to be particularly vulnerable there.

And also there seem to have been some execution problems over there. So, you know, that's a very different, much more narrow company relative to a Broadcom. So an investor that owns Broadcom owns something that's diversified and that helps them ride out, you know, some of these other political risk that companies will be more hurt by. It's Joanne Feeney from Advisors Capital Management. Thanks so much for joining us. Welcome back to Blue Med Technology. I'm Caroline Hyde in New York.

And I'm Jackie Duvallis in Washington. Quick check on these markets because at one point we had a technical correction on the Nasdaq 100. We're off by more than 5% as you see over the course of the five trading days. And in fact, we've had our longest weekly losing streak in this particular benchmark going back to August of last year. What drags us lower? Anxieties around China and its performance with generative AI, anxieties around tariffs, anxieties around just selling your winners because maybe we have an economic slowdown at this point. We're seeing a

On the higher side, on a daily perspective, from the points perspective, is Apple and, of course, Broadcom with its numbers doing better than anticipated. But on the downside, basically all the key magnificent seven names at the moment, Jackie. So keep an eye on what's happening more broadly with the Nasdaq 100.

Let's talk about how those markets are reacting to this week's news. We're joined by Marta Norton, Chief Investment Strategist for Empower. As Caroline just teed up there, there's a lot here that markets are grappling with. What would you say is really driving this negativity we're seeing in tech stocks?

I mean, the key word that jumps out to me in Caroline's comments is just anxiety. We're seeing so much anxiety, of course, around the tech narrative and that began with DeepSeek and has continued as we continue to see competition coming out of China. But it's also related to the tariff question. And I think when we're thinking about tariffs,

We have to acknowledge the fact that this is an area, you know, AI generally, where there's a lot of emphasis on U.S. becoming a superpower. And so that should have some insulation when we think about how the Trump administration is going to approach this.

the semiconductor space and the technology space broadly. At the same time, there's a lot of rumblings around the types of tariffs that we could see on semiconductors, real pressure to build here in the U.S. And I think when we think about all of these different anxieties, from questions on global competition to questions around tariffs, we have to remember the context that we're in and the valuations that we saw at the start of the year. There was just no room

for disappointment or uncertainty. And I think it's that setup that creates the sell-off that we're seeing today.

In many ways, investors have gotten what they wanted. Hyperscalers still plan to invest in more infrastructure. President Trump has been supportive, bringing in more commitments. And you also have demand holding up. But with respect to China as a competitor, we're not going to stop seeing new models coming out of there. What is it going to take for tech stocks to really get the boost that they were getting before? Or are those days pretty much over?

Well, my inclination right now, you know, as we think about the CapEx story and we think about the spending from hyperscalers, that expectation of the hyperscaler demand is in the prices right now. You know, the kind of the infrastructure build is in the prices. And I think what we'll have to see when it comes to technology and a renewed strength and performance

is really that pivot from building the infrastructure to seeing the demand. And we see that dichotomy so far in market movement thus far in 2025. So for example, Meta has had a very different run than some of these other players. And one of the explanations could be the way that they've been able to integrate AI and

you know, take advantage of AI on the revenue side. And so I think it's that revenue narrative that's really the act two of this AI play. And we really need to move to that act two, in my estimation, for us to see prices move higher from here. Act two, we had...

other investors or indeed market participants come on and think Act 2 really gets reignited as and when Nvidia's GPUs and the latest Blackwell chipsets are flying off the shelves. We really see the proof in them being sold and used and ultimately that'll kickstart once again the growth in this industry. Are you anticipating it being a second half kind of a pivot point?

It seems like there's room for the narrative to shift in the second half. I think the timing, though, is particularly tricky. We have some sense of that from kind of expectations around Blackwell. But in terms of broad use case of AI, corporate spending on AI,

I think that timing is especially tricky in this environment in particular. As we think about an environment where there may be a hesitancy on corporations to really extend into long-term investment opportunities, that could potentially pull back demand

for some of the AI applications that we'd really like to see be part of that Act 2. And that makes the timing maybe a little bit more in question than we would otherwise like. And perhaps it's that uncertainty that is also helping drive prices lower. In this uncertainty then, should people sit on their hands?

Well, I'm looking at this, you know, as I am looking at valuations and expecting the sell-off to really show up in valuations. But if I'm looking at technology broadly, the sector still looks on a historical basis to be in one of the more expensive deciles from a price to expected earnings standpoint. So though we've had this sell-off, we haven't seen valuations move that much. I wouldn't consider it now to be a time to be selling technology, but to me it's more of a hold environment. If it's sized appropriately, you know,

portfolio to hang on to it. But it's not necessarily a buying opportunity now. I think we'll really have to see a little bit more froth come out of those valuations to make a really justifiable argument to move in. Marta, one of the other things that we're seeing now is perhaps more discernment among investors for companies that aren't as diversified. Do you see that's going to be a longer lasting trend?

Well, I think that's a possibility. I mean, a related topic that is, of course, top of mind for people is moving from the picks and shovels to those who are putting AI to use in their businesses, the softwares and the like. I think in this environment, that uncertainty is going to cast kind of a shadow over that play as well. But to the extent that valuations are more approachable, I don't know if that's a bad decision to have some of that exposure in the portfolios as well.

We want to thank you, as always, for joining the show. I'm Power's chief investment strategist, Marta Norton. Great to catch up. Happy weekend. Let's return to the world of crypto and prices ahead of the White House summit on digital assets. Currently off by 2.6% on the day for Bitcoin. There's a bit of sort of buy the rumor, sell the news when it comes to a Bitcoin reserve, perhaps. Many wondering whether potentially instead of just holding on to U.S. assets and not selling them, it could have been more buying. And that doesn't seem to be the case for now, at least.

Let's dig into all of this, what we can anticipate more broadly across the industry. And we're pleased to welcome Liz Yang, head of growth at Azuki. And many a crypto leader, thought leader, CEO is going to the White House today to talk about what regulations could look like in the future, but also to opine on the latest executive order. What did you make of it? So I think it's important to consider the political zeitgeist of the moment.

Crypto has come a really long way. And over the last 15 years, there's been growing demand both for crypto as a digital asset and also as a technology. So it's no longer a question of is crypto something legitimate or is it something real? Crypto is definitively here to stay. And with today's White House summit, it shows that we have a voice and a seat at the table. So we're expecting big things to come from the summit.

Was the Bitcoin reserve and the stockpile of other alternative assets in the digital space a big enough deal for you today? So there was a lot of commentary around the strategic Bitcoin reserve and I think what the White House has been able to do is to come up with an equitable solution. So the way I see it personally, we already have this Bitcoin but there were no policies in place to steward it and there was no accountability within government.

David Sachs earlier mentioned that there was a loss of $17 billion by not having policies on when to sell Bitcoin. So if we already have this Bitcoin from criminal and civil asset forfeitures, I think it's important that we have a framework in place to manage this Bitcoin for the American people. Liz, what do you want to see coming out of this crypto summit that will give the market some of that clarity that we're looking for?

I think what the United States lacks today is a clear framework around digital assets. So in this sense, we lag a lot of different regions, mainly the European Union. So what I'm hoping for personally is I hope to see us take steps to lay groundwork to have regulatory clarity in the United States. And the reason why this is important is because it really sets the stage for American crypto companies to flourish. And this

brings jobs, it attracts entrepreneurship, it attracts investment, and it ensures America's dominance on the global stage in technology. One of the things that David Sachs really emphasizes is that taxpayer dollars will not be used to bolster this reserve and stockpile. How can the crypto community really gain if the government is not buying crypto?

So I think that even taking steps to establish a strategic Bitcoin reserve has already been a huge step for the industry. As for the specific details around its implementation, I think we'll have to see what comes of the working group and what comes from the crypto summit. But I am very optimistic on what this means for the crypto industry.

So what next? We've got the reserve that was a promise made and promise kept, as David Sachs would say, and indeed just a stockpile. But now more clarity is needed, ultimately still about what

is a digital asset, the way in which it's viewed as regulators and indeed stablecoin future. What do you want to hear out of today for future regulation? So I think something that's interesting to consider with crypto is that a lot of the mainstream discussion centers around crypto as a digital asset with a financial use case. But it's important to remember that crypto is also an underlying technology upon which applications can be built, which span a variety of different sectors ranging from

identity solutions to life sciences to media entertainment and everything in between. So what I hope is for this to really lay the groundwork for crypto to flourish in the United States. Do you think that

founders are changing their mind about building in the United States. Oh, absolutely. I personally know of entrepreneurs that have left the United States due to regulatory uncertainty. And I know that those of us who have chosen to stay in the United States are feeling quite validated in that decision. You stayed.

Thanks, Liz Young, head of growth at Azuki. We appreciate it for joining us. Quick check on some breaking news. This one regarding NVIDIA. Look, we just told you that the NASDAQ 100 was in correction territory. Now NVIDIA has been shed $1 trillion in market value from its record high. Remember, it was as high as more than $3 trillion, and it has come down significantly from that market capitalization. We're off 1.5% on the day on NVIDIA.

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Shares of HPE are plunging today after the company said profits in the coming year would be hurt by tariffs, weak margins on server sales and execution issues. HPE also saying it will look to eliminate 3,000 jobs. Antonio Neri, HPE CEO, joins us now for more. Antonio, I know it's a tough day, but give us a little bit of clarity in terms of what you're seeing as the turnaround plan here.

Yes, good morning. Thanks for having me today. Obviously, it's a disappointing day for me and for us as a company. We had a solid quarter. We delivered on our commitments. We grew our revenue double digits, up 17%. We had double-digit growth in our bookings. But we disappointed on one specific metric, which was the server operating margins.

And that server operating margin was impacted by three specific issues. Two in the traditional server business, call it the x86. One was a very aggressive market, meaning high discounting. And second was a specific issue with the valuation of our inventory, which caused us not to have the exact right cost in our pricing in the end of the quarter.

And those issues have been already fixed and we have taken very aggressive action. On the AI side, we have a higher than normal inventory related to the GPU transition from the proper or H100s and 200s into Blackwell. And in the quarter, we booked $1.6 billion of new AI system orders, which was doubled the orders that we had in Q4.

But 70% of that is on the black hole side. So the working capital aspect of that had a negative impact on our operating margins for the servers. The rest of the business was very, very strong.

and inclusive of the networking business which had again another recovery on sequential revenue double digit year-over-year revenue growth our hybrid cloud was up 11 year-over-year and we had a very strong performance in our storage bookings so

It was all in the server margin. But I have to tell you, because of the demand we saw, it reinforces our strategy is right. We just need to execute better on a couple of things and return to that normal operating profit, which we are committed to do.

in the second half. And then what we guided was inclusive of that and the net impact of tariffs because now it's available. Go there on tariffs, Antonio. How much of a pain to the bottom line are tariffs going to be? Do you have a clear guidance of number?

Yes, we did, Caroline. We guided that there will be seven pennies net of the mitigation impacts that we have now put in place and will continue to execute throughout fiscal year 2025. And what worst case scenario do you build in there, though, Antonio? Because at the moment, every day we get a different tariff headline. Well, we decided to go all in based on the 25% tariff in Mexico.

the 25% in Canada, which we don't produce in Canada today, and the incremental 10%, meaning the 20% on China. So we factor all that in, and obviously we have a mitigation strategy from a global supply chain and also the pricing. So we decided to put it all in at this point in time, and if some of that doesn't get done, then obviously we'll get the benefit of it. But right now, what happened here is that because we did not guide the full year,

waiting for the Juniper deal to close at the end of Q1, we decided to put a flagpole out there for an investor so they have it all out there. Can you give us an update there, Antonia, as where the Department of Justice's case stands?

Yes, of course. First of all, we are incredibly disappointed that DOJ decided to file a lawsuit to try to block the transaction. Their market analysis is completely flawed. They narrowed the market to one sliver of the market called the wireless LAN, and they felt there would be only three vendors to play in the market. The reality is there are at least eight vendors, and many of them have the exact same share as Juniper today.

In addition, you know, they don't consider that this is a great opportunity for the United States to strengthen our U.S. national security outside the country. So now the judge has been selected. The judge has established July 9th as the trial date, and we will defend this in court. So we expect to prevail because we have a very compelling case. And therefore, we expect to close the transaction in 2025, obviously delayed from the original time.

We have about 30 seconds left, but are you prepared for the worst case scenario? Meaning the deal doesn't close? We always have multiple options on the table. Our fiduciary duty together with McBorne is to drive the best return for our shareholders. We felt that the Juniper transaction is the best long-term return that will shift the portfolio and create more returns.

earnings and free cash flow because we committed at least $450 million of synergies. And so that's what we're focused. However, there are different ways to create shareholder value and all those options are on the table. But right now we want to see this through. Antonio Neri, HPE CEO, thanks so much for joining us today. Jackie? Coming up, we take a look at tech entrepreneur Peter Thiel's many links inside the Trump's new administration.

you

Tech billionaire Peter Thiel used his Silicon Valley wealth and influence to help Donald Trump win his second presidency. That could give him authority within the administration itself. For more, Bloomberg's Jamie Tarabay joins us. Now, actually, the nuance to this is that he certainly leaned into Trump before the first administration. In the second administration, he took a step back in terms of committing financially, it would seem, although he did say he was going to vote for Trump, and J.D. Vance is a close ally. How does his network sprawl within this new administration?

Well, I mean, as you said, like pretty early on, Peter Thiel had donated to conservative candidates. He very sort of famously surprised Silicon Valley when he voted for and supported Donald Trump in the 2016 presidential election. He spoke at the Republican National Convention and gave over a million dollars to Trump's campaigns. And when Trump won the first time around,

Thiel was a member of the Executive Transition Committee and two people who worked for him at Thiel Capital went on to have senior positions both at the National Security Council and also at the White House. This time around, people who are connected to Peter Thiel, including Vice President J.D. Vance, who had worked at Mithril, a venture capital fund that Thiel co-founded, have senior positions across the administration. Along with Vance, a former Thiel associate is number two at the Department of Health and Human Services.

Another is assistant to the president for science and technology. One is the ambassador to Denmark. And there are at least two who now hold senior positions at the Defense Department, which is a place where he and Elon Musk have several critical contracts with the government.

Let's just talk a little bit more about the going forward and whether there's going to be proof in the pudding as to whether or not he is benefiting personally because we already know a lot of the companies he helped co-found or indeed fund have started to win some pretty big contracts.

That's right. I mean, Thiel is an investor in several of Musk's companies, including SpaceX, Neuralink and Boring. And I'm going to read off my paper for a moment because once Trump was elected, Palantir stock, Palantir is Thiel's company, the stock soared more than 90% in February. Andro Industries, a defense tech startup which is backed by Thiel's Founders Fund, landed an expanded role.

So with the US Army that was valued at more than 20 billion. And then Scale AI, another founders fund company, just signed a major deal with the Defense Department.

Jamie Tarabay, it's an amazing read. It's succinct to the point. I urge people to go and find it on the terminal or online. Thanks so much. Meanwhile, we want to check in on the markets once again. Look, we've seen a sell-off that's seen the Nasdaq 100 in a correction territory. Nvidia's wiped off $1 trillion of its market cap, and now Tesla has erased all of its election rally. We're down 48% from its record high. We're down another 4% on the day.

plenty to be digesting as we go into this weekend people again not wanting to be long tech or indeed the market more generally but that does it for this edition of bluebeg technology you don't want to forget to check out our podcast you can find it on the terminal as well as online on apple spotify and iheart this is blue meg technology

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