Musk's Trump Role, Trump 2.0 Safety and Defense | Bloomberg Technology

Market Performance and Election Impact

• The Nasdaq 100 has reached a new record high, driven by the "Magnificent Seven" tech stocks, with Lyft up 27% due to a strong outlook and finding its niche despite competition from its "big brother" 1m19s.
• Qualcomm's performance has been choppy, while ARM is up 5.5% as consumers in China are buying higher-priced handsets 1m39s.
• China is a key focus for the macro going forward after the election results, with big tech leading the benchmarks 1m53s.
• The biggest player, NVIDIA, is coming up on November 20, following earnings from Meta, Microsoft, Alphabet, and Amazon, which had data centers and fixed assets of around $59 billion in the third quarter alone 2m8s.
• There are questions about what the election results could mean for Biden's Chip Act, particularly with Apple and China, and Biden trying to prohibit them from using Western technology 2m42s.
• NVIDIA is a winner in a lackluster season, and the usual playbook in an election year is a year-end rally after the results 2m53s.
• The tech sector is looking at what Trump 2.0 could mean, with a focus on AI, and government initiatives through the DOD and agencies that could benefit companies like Microsoft, Amazon, and Palantir 4m42s.
• Elon Musk's association with Trump could give Tesla an advantage, particularly if Trump repeals some or all consumer and manufacturer support, making the playing field more even and allowing Tesla to cut prices further 5m11s.
• Trump is expected to fast-track autonomous driving, which would be bullish for Tesla, and could unlock a $1 trillion valuation 6m7s.
• The tech sector is not ready for autonomous driving and FSD, but it could be a major growth area, with initiatives potentially getting fast-tracked in 2027 6m41s.
• Tesla and Musk are seen as big winners in the Trump sweepstakes, along with big tech, and Khan is likely to be out of the FTC, which would be bullish across big tech 6m53s.
• The infrastructure for AI is a concern, particularly with the growing chip sector in the US dependent on the Chips Act, which may be revised or blown out of the water 7m16s.
• Intel is seen as a potential loser due to revisions to the Inflation Reduction Act, which would put gasoline on the fire in terms of the IRA being a huge opportunity for Intel 7m23s.
• The U.S. will see a focus on chips and AI buildout with the IRA, and there will be carveouts in tariffs with China, which is not expected to negatively impact companies like NVIDIA, Tesla, and Apple 7m51s.

Trump's Potential Influence on Tech

• Elon Musk is expected to have an informal role in the Trump administration, serving as a "whisperer" in the White House, which will give him significant influence 9m23s.
• Musk's role in the administration is expected to be beneficial for his companies, particularly Tesla, and is seen as a strategic bet on Trump 9m31s.
• The semiconductor index has had a positive couple of days, with most companies in the green, including Qualcomm, which beat analyst expectations and had a bullish sales forecast 10m19s.
• ARM, a chipmaker, initially disappointed with a sluggish outlook but has since seen a positive change, with record licensing royalties and a 40% increase in royalties, driven by the premium segment and higher royalty rates for version 9 11m56s.
• The CEO of ARM, Rene Haas, believes the company is not pricing-dependent and has tailwinds driving growth, including the need for more compute capacity, particularly in AI workloads 12m56s.
• Haas is not concerned about the tension between the U.S. and China in the compute and AI space, and believes the U.S. election result is good for business, but notes that the company will have to see how things develop going forward 14m1s.
• The replacement of phones with more expensive phones is expected to make ARM's numbers resilient going forward, offsetting the fact that people are buying fewer phones 14m43s.

ARM's Performance and Outlook

• The increasing use of AI agents on phones is expected to drive demand for more compute capacity, benefiting ARM 15m4s.
• The next generation of phones will require more compute to run language models, interface with the cloud, and ensure security, which is beneficial for ARM as it provides the necessary technology 15m30s.
• ARM was reportedly interested in buying Intel, but this information cannot be confirmed 15m42s.
• A licensed dispute with Qualcomm, a long-time customer of ARM, is ongoing due to the lack of consent for a company acquisition that involves ARM's technology 15m57s.
• Consent is required for any company acquisition involving ARM's technology, and in the past 35 years, 130 assignments have been made with consent granted every time, except in this case with Qualcomm 16m17s.
• ARM is confident in their position and believes the dispute is about fairness and equity in the ecosystem 16m38s.
• Doing business with a key customer like Qualcomm, which is becoming a "frenemy," is a challenging situation, but ARM has taken a bearish position on the outlook and made assumptions that they will not prevail in the case 17m18s.
• The next phase for ARM at the product level involves compute subsystems, providing a full solution by stitching together pieces of IP, which will save engineering time and time to market for partners 17m46s.
• ARM is experiencing amazing traction, with lots of wins in the design data center space and mobile, and this will allow them to get great benefits to customers and drive higher royalties 18m1s.
• In 10 years, ARM will be involved in computing in a large way, with a focus on AI, and the company has a lot of optionality in terms of how horizontal or vertical they can go 19m24s.

Biden's Concession and Transition

• Autonomous vehicles (AVs) will bring new products that people will like, and some will prefer being driven by a human, while others will prefer a robot, leading to a hybrid future 20m4s.
• President Biden addressed the public from the Rose Garden, discussing the peaceful transition of power and the importance of democracy, where the will of the people prevails 20m43s.
• President Biden congratulated President-elect Trump on his victory and assured him that his administration would work with Trump's team to ensure a peaceful and orderly transition 21m33s.
• Vice President Harris is a partner and public servant who ran an inspiring campaign, and she and her team should be proud of their efforts 21m46s.
• The struggle for the soul of America has been an ongoing debate since the country's founding and is still vital today 22m13s.
• Campaigns are contests with competing visions, and the country chooses one of the other, and the choice should be accepted 22m39s.
• It is essential to love the country and neighbors regardless of winning or losing, and to see each other as fellow Americans rather than adversaries 22m50s.
• The American electoral system is honest, fair, and transparent, and its integrity should be respected 23m16s.
• Election workers who staffed voting sites, counted votes, and protected the integrity of the election should be thanked for their efforts 23m31s.
• As President, the duty is to fulfill the oath and honor the Constitution, and a peaceful transition of power will take place on January 20 23m56s.
• The past four years have been a historic presidency, with accomplishments that will be felt by the people, including over $1 trillion worth of infrastructure changing lives in rural communities 24m38s.
• The road ahead is clear, and there is much that can be done, with a strong economy being left behind 25m15s.
• The responsibility is to make every day count in the remaining 74 days of the term 25m48s.
• Setbacks are unavoidable, but giving up is unforgivable, and the measure of character is how quickly one gets back up after being knocked down 26m3s.
• The American experiment endures, and it is essential to stay engaged, keep going, and keep the faith 26m40s.
• Vice President Kamala Harris and President Biden have acknowledged Donald Trump's decisive victory and pledged a peaceful transition of power, with Biden calling to congratulate Trump and committing to a smooth transfer on January 20 27m40s.
• Biden's concession speech also focused on his legacy, accomplishments, and the idea that there is more work to be done in the future, as this is seen as the swan song of his presidency 28m12s.
• Biden is getting a lot of blame within the party for the loss, with some suggesting he stayed in the race for too long 28m26s.
• The transition team is planning to work with the incoming administration, but there could be hiccups due to Trump's skepticism of the General Services Administration and intelligence agencies overseeing background checks 28m49s.
• The focus is now on the 74 days left to enact policies, with a potential focus on infrastructure, which plays to the tech community 29m17s.
• The Chips Act is unlikely to be dealt with in the lame-duck Congress, but rather in the next Congress, with a government funding deadline on December 21 29m38s.
• The makeup of the new Congress is unclear, but it will be a Republican Senate, and it would take a Republican House to unravel the Chips Act 30m5s.

Cryptocurrency and the New Administration

• Bitcoin has fallen below $76,000 per token, and crypto-related stocks have seen a surge due to the sentiment that President-elect Trump will approach crypto differently and be more supportive of the industry 30m38s.
• The crypto industry is expecting clarity on regulation rather than enforcement, but crypto will not be a top priority for the new administration 31m40s.
• A change of regime at the FCC would be beneficial for crypto assets, and removing the fear of action from the FTC would be a significant step 32m25s.
• The new administration may start by addressing stablecoins and providing clarity on their regulation, as well as considering the makeup of Congress 33m14s.
• There is skepticism about Trump's promise to buy Bitcoin, with concerns that he might walk back on the idea once he realizes it involves selling dollars, and that it would be difficult to get through Congress 33m48s.
• Not selling the US's current stash of Bitcoin would be good news for the market 34m5s.
• The stablecoin bill is bipartisan and is expected to pass easily, being considered the "low-hanging fruit" 34m17s.
• A crypto bill is needed to recognize the changing definitions and new types of rules required 34m39s.

Defense Tech and Spending Under Trump

• As Trump prepares to return to the White House, there are questions about his policies on AI, defense tech, and spending 35m35s.
• Palmer Luckey, a Trump supporter, believes it's great to have someone in office who is aligned with the idea of spending less on defense and getting more, and that the US needs to do a better job of procuring defense tools 36m33s.
• Luckey has been in touch with the transition team and has heard a few names being considered for various roles, but doesn't want to mention them publicly 37m16s.
• Anduril, Luckey's company, has spent years working with the DOD, and he believes that changes are needed in the department's structure, particularly in how the government does business with private enterprise 38m11s.
• Luckey suggests that the current cost-plus contracting system rewards the wrong things and that companies should be aligned with the way business is done in the rest of the economy, where making a good product and making money are the goals 39m20s.
• The success of Anduril has led to the creation of new startups in the defense space, with some raising more money than Anduril itself, which is seen as a viable business model 39m44s.
• The companies that will suffer are those that try to shift responsibility for failures onto the taxpayer, while the beneficiaries will be companies that have been around for a long time 40m8s.
• The defense space has remained nonpartisan, with Anduril's founder being a Republican and its CEO being a Democrat, and the idea of a strong US military and defending allies is a nonpartisan idea 40m38s.
• The election of Donald Trump did not cause Anduril to change its planning for China and allies like Taiwan, as it was already factored into their plans 41m12s.
• Elon Musk's association with Donald Trump is seen as a significant factor, with Musk's ability to keep Trump focused on defense being a key aspect 41m43s.
• Musk has outperformed expectations in managing multiple projects and companies, and it's likely he will be able to keep Trump focused on defense and space exploration 41m56s.
• Anduril's founder believes that Musk will be able to make a significant impact on the Trump administration's focus on space and defense 42m42s.

Musk's Investment in Trump and its Implications

• Elon Musk's investment in Donald Trump has paid off, with Tesla's stock rising, and his other companies, such as SpaceX, potentially gaining billions from Trump's presidency 43m22s.
• X's value has fallen, but its influence and political worth to Musk's other areas is likely worth more than what he paid for it or lost in running it 43m54s.
• SpaceX stands to gain significantly from the election, with Trump talking about Mars and ordering rockets from Elon Musk, potentially worth tens of billions 44m17s.
• Musk's other projects, such as his brain implant and The Boring Company, are federally regulated, which could be impacted by his association with Trump 44m36s.
• The question remains whether Musk will see through his association with Trump, given his strong personality and potential conflicts with Trump's personality 45m19s.
• Musk's wealth, power, and personal brand give him leverage over Trump that others may not have, but he still needs Trump to achieve his goals 45m49s.
• It is argued that Donald Trump and the Republicans need Elon Musk, but there are other positions of power within the U.S. government that could provide checks and balances 45m58s.
• The past Trump presidency and the character of Elon Musk and Donald Trump suggest that they do not pay close attention to the rules, which may lead to conversations about potential ethics violations 46m13s.
• A concern is raised about Elon Musk, as the owner of a major defense contractor, giving the U.S. government advice on defense personnel, which could be seen as an ethics violation 46m27s.
• Elon Musk's potential role in the administration is compared to Palmer Luckey, a major contractor who gave advice to the future administration, but the difference lies in being part of the White House or having a formal or informal role 46m45s.
• The question of whether Elon Musk will have a formal or informal role in the administration remains to be answered 46m51s.