Meta, Big Tech Make Political Shifts | Bloomberg Technology

Market Overview

• The Nasdaq 100 is up 1% with 86 stocks higher, led by NVIDIA and Microsoft, while Apple is lower again, marking its longest losing streak since November, down from its post-Christmas all-time high 1m15s.
• Bitcoin is rising for a fourth day in a row, with investors pulling $330 million from the ETF, according to yesterday's data, which is considered a record outflow for a $50 billion fund 1m51s.
• NVIDIA shares are driving the indexes higher, up 3.5%, making it the biggest points contributor to the S&P 500, and a similar story is seen with the Nasdaq 2m17s.
• Apple's five-day chart shows a 6% decline, its longest such streak since April, due to fears about China, where the company is offering discounted smartphones 2m32s.

Apple's Performance and Outlook

• China is a major market for Apple, and the latest data on monthly sales and shipments of iPhones in the country have been muted, causing concern given the size of the market and the importance of the iPhone 16 3m13s.
• Despite concerns, there are reasons for people to be optimistic about Apple, including the release of more applications with AI features on the iPhone, which could lead to higher service growth with cloud growth and other tailwinds 4m13s.
• The valuation of Apple is being questioned, with people wondering about its overall growth rate and whether it will be as strong as other big tech names, leading to a cautious start to the year 4m49s.

Tech Market Trends and Predictions

• The NASDAQ 100 was up by 25% in 2023 and more than 50% in 2024, and there is still room for tech stocks to run higher in 2025, but the setup is different now that the market is 2.5 years into a major bull market that started in mid-2022 5m22s.
• The dramatic ramp-up in interest rates in 2022 led to a significant increase in tech stocks, but this outperformance is expected to fade in 2025 5m42s.
• Growth rates in online retail, online travel, cloud computing, and advertising are relatively sustainable, and the sector as a whole is being more judicious than in the past 6m0s.
• The emergence of generative AI (GenAI) is expected to lead to more efficient processes and better revenue streams, making it a positive factor for the tech sector 6m19s.

Uber and Alphabet Analysis

• Uber is a stock that is liked due to its dominant position in the market, and despite concerns over robotaxis, it is expected that they will find a place in the Uber network 6m37s.
• Uber has partnered with Waymo to offer robotaxis in two cities, Austin and Atlanta, and this is expected to increase competition in the space 7m40s.
• Alphabet (Google) is also a stock that is liked, but its price is highly dependent on regulatory factors, including the DOJ antitrust case against Google 8m18s.
• The outcome of the DOJ antitrust case against Google is uncertain, but a settlement is possible, and this could impact the stock price 8m40s.

Potential TikTok Ban and its Impact

• The TikTok ban is also a regulatory factor that could impact the stock price of Alphabet (Google), as well as other companies such as Meta, and a ban could benefit these companies 9m3s.
• If a TikTok ban is implemented, Meta is expected to be the bigger beneficiary, as users will look for alternative short-form video platforms such as YouTube Shorts and Reels 9m35s.
• Advertisers have already adapted to these alternative formats, and a TikTok ban could lead to increased advertising revenue for companies such as Meta and Alphabet (Google) 9m59s.
• The potential ban of TikTok in the US could have a positive impact on Google and Meta, as creators would need to find alternative platforms to build their audiences 10m8s.
• The likelihood of the ban going through is considered low, with some investors believing it has a single-digit chance of happening 10m28s.

Meta's Strategy and Leadership Change

• The ban is based on a bipartisan congressional law that was voted on by both Democrats and Republicans, and it has First Amendment aspects, but it is not solely a First Amendment issue 10m30s.
• Meta's goal is to attract more short-form video content and talent to their network, and they have been successful in doing so in various areas 11m51s.
• The urgency for Meta to attract creators onto their own platform is critical, regardless of whether a TikTok ban happens or not 11m22s.
• Nick Clegg is stepping down as President of Global Affairs at Meta and will be replaced by Joel Kaplan, a longtime executive with Republican ties 12m47s.
• The shift in leadership at Meta is seen as a big change for the tech giant, and Kaplan's appointment may signal that Meta sees their most important relationships as domestic rather than European 12m57s.
• Kaplan's Republican ties may help Meta navigate relationships with the Republican Party, but there may be tension between Kaplan's more traditional views and the current Trump-led Republican Party 13m59s.
• The key to Kaplan's success in his new role may be his ability to work with Mark Zuckerberg, and his appointment may help Meta align with the emerging MAGA Trump candidate party 14m43s.
• Mark Zuckerberg has shifted his stance on being hands-off with policy, as he was recently at Mar-a-Lago and called Trump personally, indicating he will likely handle the relationship with Trump himself, while Kaplan deals with Capitol Hill matters 15m1s.

Big Tech and the Incoming Trump Administration

• Other big tech leaders have also met with the President-elect ahead of his return to the White House, preparing for the second Trump administration 15m26s.
• The relationship between Silicon Valley and the incoming Trump administration has changed, with more pro-Trump rhetoric from the tech industry, partly due to frustration with the Biden administration's approach to tech 15m49s.
• Many in Silicon Valley are frustrated that the Biden administration hasn't championed the country's biggest export, leading to a shift in support towards the Trump administration 16m21s.
• Tech CEOs are looking to Tim Cook as an example of how to deal with Trump, as Cook managed the first Trump administration well through direct contact with the President 16m44s.
• Trump values meeting with CEOs and often responds positively to direct contact, which is a strategy many companies are adopting 16m56s.
• Trump has expressed concerns about big tech stifling competition and using market power to crack down on Americans' rights, indicating that antitrust pressure on big tech names will continue 17m15s.
• The Trump administration is likely to continue antitrust lawsuits against big tech companies, not because of a genuine concern for antitrust issues, but as leverage over the companies regarding content operation and speech 17m59s.
• The Trump administration's approach to tech mergers and acquisitions will be a test, as little tech companies benefit from big tech companies being able to acquire them, and many startups want the ability to be acquired as an exit path 18m35s.
• There is optimism that the Trump administration will reverse the hostility towards the crypto industry brought by the Biden administration, and overturn the Artificial Intelligence executive order to focus on beating China and other countries in technology 19m28s.
• The Trump administration's stance on H-1B visas and other elements of the Republican coalition are still up for debate 19m46s.

Turo Security Concerns and Business Model

• Turo, a car rental platform, has been in the news after attackers used the platform to procure vehicles, with some comparing it to Airbnb due to its peer-to-peer rental model 20m46s.
• Turo's business model is different from traditional car rental services, as it does not own the vehicles, which may lead to a different level of liability 21m2s.
• The company had noted in its public paperwork that theft, vehicle damage, and other safety and security issues could harm its reputation 21m15s.
• Questions are being raised about Turo's background check process, as the attackers did not have records that would show up in the checks, and the company's algorithm for approving users is not well understood 22m10s.
• The company's algorithm uses dozens of data points to quickly approve most users within seconds, but the exact criteria are unclear 22m28s.

Market Update and Rivian Production

• The state of immigration and H-1B visas under the new administration is still to be determined, with the Erickson Group to provide more information 22m46s.
• The markets are currently showing a turnaround, with the Nasdaq 100 up by 1.2% and gains led by Nvidia, and Bitcoin is also showing increased risk appetite 23m26s.
• Rivian has reported strong fourth-quarter production numbers, beating estimates with a production of 12,700 vehicles 23m57s.
• Tesla's shares are up 4.6% after a disappointing fourth-quarter delivery report, with other tech companies like Rivian also seeing gains, trading at $16 24m27s.

China's Tech Export Scrutiny and Global Trade Tensions

• China is planning to increase scrutiny on exports of technology to make battery materials, aiming to protect its grip on the crucial supply chain, according to a notice from the Ministry of Commerce 24m41s.
• The move is part of rising global trade tensions, with China having developed a strong advantage in the field of electric vehicle battery technology, particularly in refining chemicals used in car batteries 25m32s.
• The US has imposed tariffs on imports of Chinese electric vehicles, including those from BYD, a global leader in the industry, in an effort to protect domestic carmakers and avoid undercutting their efforts to develop electric vehicles 26m13s.
• The Biden administration has been imposing restrictions on sensitive technology, including exports of advanced semiconductor making equipment and high-bandwidth memory chips, to undercut China's ability to develop a semiconductor manufacturing base 27m7s.
• The Trump administration is expected to continue and expand these export controls, as well as look for ways to retaliate and foster domestic investment in these areas 27m46s.

H-1B Visa Debate and Tech Industry's Stance

• The future of H-1B visas under the new administration is also being closely watched, with former Representative Denver Riggleman weighing in on the Elon Musk influence on the matter 28m18s.
• The discussion revolves around Donald Trump's stance on H-1B visas, with him seemingly supporting the initiative despite his previous actions during his first term in office 29m17s.
• H-1B visas play a critical role in allowing American companies to hire and retain the best and brightest talent from around the world, helping them remain competitive and global leaders in various industries 29m34s.
• During Trump's first administration, the denial rate for H-1B visas increased to an all-time high of 24% in 2018, before dropping down to 6% in the Biden administration 30m22s.
• It remains to be seen whether Trump's second administration will be different in its approach to H-1B visas, with industry leaders watching to see how immigration restriction leaders and the Trump administration reconcile their views 30m47s.
• The H-1B visa program contains protections designed to ensure that hiring foreign workers does not harm U.S. workers, including fees paid to the government to fund the training of American workers 31m45s.
• The investment in training the U.S. workforce is ongoing, with the H-1B visa petition playing a role in funding this training 32m4s.
• Big tech leaders, including Elon Musk, are supportive of the H-1B visa process and have been meeting with Trump, who seems to be supporting the initiative for now 32m21s.
• The outlook for whether Trump's support for H-1B visas remains the case is uncertain, with industry leaders preparing for a potential repeat of the first Trump administration's actions 32m44s.
• The tech industry's stance on immigration may cause tension among leaders with differing views, but it is an economic win-win for companies to hire globally, and the relevant visa is crucial for this process 33m4s.

AI Predictions and Trends for 2025

• The coming year will see AI companies focusing on developing software that can accomplish tasks with minimal human help, particularly with AI agents that can perform tasks autonomously 34m1s.
• AI agents are expected to become more prominent, allowing for the automation of entire workflows and freeing up human capacity for more creative and strategic work 36m7s.
• However, widespread adoption of AI agents will face challenges such as governance, privacy, and protections, which need to be addressed 36m49s.
• AI-generated video is expected to improve, with more multimodal models being developed, featuring more video and voice, and becoming increasingly lifelike 37m25s.
• The development of AI-generated video is rapid, with recent examples showing reduced latency and more realistic results 37m37s.
• Kathy Cao from Sapphire Ventures predicts that AI agents will begin to deliver on their promise, but acknowledges that there are still challenges to be overcome 35m51s.
• The use of synthetic data, generated by AI systems themselves, may become more prevalent as companies seek new sources of data to train more powerful systems 35m16s.
• GenAI has been a dominant force in 2024, and Sapphire Ventures expects this trend to continue 35m31s.
• Multimodal applications combining voice, text, video, and images are expected to see widespread adoption, with companies potentially using them to boost productivity in the year ahead 37m40s.
• In 2024, AI went mainstream, with 92% of Fortune 500 companies adopting GenAI solutions internally and spending around $14 billion on these solutions 38m36s.
• Major companies such as Walmart, JPMorgan Chase, Microsoft, and Google announced significant success and measurable ROI using GenAI projects internally, giving hope for continued expansion in 2025 38m57s.
• For the hype around AI to turn into actual proof in 2025, more adoption amongst employees at companies and clearer guidelines on measuring ROI will be necessary 39m14s.

Paramount-Skydance Merger and Media Landscape

• Paramount and Cy Vance responded to critics of their pending merger, arguing that the critical filings are defective and lack merit, and that some proposed measures are unconstitutional 40m10s.
• Paramount agreed to merge with Sky Dance in July, which would make David Ellison the controlling shareholder and CEO of Paramount 40m27s.
• Critics of the Paramount-Sky Dance merger, including partisan political groups, have expressed concerns about media bias and the need for CBS News to speak to everybody in the country 41m0s.
• The FCC, under incoming chairman Brendan McCarty, will likely play a role in the final hurdle for Paramount's merger 41m33s.
• Paramount shares fell 29% last year and haven't posted a positive year since 2016, making good news necessary for the company 41m49s.
• The box office in 2025 is expected to see a mix of sequels, such as Mission Impossible and Captain America, and original movies from new directors 42m20s.
• The box office is having a potentially good year since the pandemic, but it's still not back to pre-pandemic levels 42m45s.
• Actual attendance numbers are significantly down, with half the number of people going to theaters as they used to 43m6s.
• Ticket prices are up, which helps the overall box office number, with more people opting for big screens and higher-priced ticket formats 43m12s.
• Americans are not going to the movies as frequently as they used to, due to the abundance of alternative online options and the quick release of movies online 43m23s.

Podcast Outro and Promotion

• The discussion is concluded, and the hosts mention their upcoming coverage of the Consumer Electronics Show (CES) in Las Vegas, featuring conversations with prominent figures in AI, chips, and more 43m55s.
• The hosts promote their podcast, "The Terminal," available on Apple, Spotify, and iHeart Radio 44m8s.