>> this is bloomberg technology with caroline hyde and ed ludlow. caroline: i am caroline hyde at the world headquarters in new york. ed: i am in san francisco and this is "bloomberg technology." caroline: apple wiping out 200 million -- $200 billion in value. we discussed the output and what it means for u.s.-china the -- u.s.-china relations. ed: we dive deep into artificial

intelligence with the ceo of imbue and the former ceo of argo ai as he embarks with a new mission from softbank. caroline: instacart preparing to set its ipo price rate as the start up is gearing for its roadshow. we will bring you that and more. the market is being dk -- dictated front and center, but what is happening with apple? ed: the news that chinese authorities are thinking about expanding a ban on the iphone. it is state enterprises and government agencies. session lows and thursday, but following the open that was putting us on track for our biggest single day drops in september of last year. on a two day basis we were headed for our biggest drop since may 2022. that shows the severity, and we will look at some suppliers who

are also moving to the downside. you talked about the $200 billion market cap shared. because of what has been reported, that was on a two day basis. we are at 2.7 7 trillion or $80 billion, 80 billion dollars to 90 billion shared alone. apple is the biggest constituent of the s&p 500 and nasdaq, it is being much more broadly in financial markets. let us get on what is happening with the reported apple ban with marc, the chief correspondent for apple. what do we know? mark: what we are reporting is that governor noem -- government owned companies and agencies, those types of organizations are either banding or planning to ban the use of iphones and other foreign builds devices or foreign devices from foreign run companies to china within the

region. this is clearly having a major impact on the market, a couple of hundred billion dollars of market cap being wiped away because of this news. i think investor concerns are not on lost unit sales from a potential ban, but it is what it means for chinese nationalism and if people in china will decide to no longer buy iphones in some quantity because of this. if this will create some sort of domino effect for the iphone penetration within china. caroline: of course ed shouts out that the suppliers are under pressure and market valuations are being lost, we are thinking micron tech knology. what about the supply side or the amount of manufacturing done in china? mark: if you think about the larger ecosystem, it is not only landing at apple's doorstep but

all the suppliers that contribute, qualcomm and other technology makers that could be fearful of further bans down the road. certainly this is a concern, but you have to think about how what -- but we will have to see how widespread it becomes. china mobile there was a rumor that china mobile not be procuring iphone 15 units given that china mobile is a state run carrier with nearly one billion customers. that was scary, but the carrier has denied the idea that they will not be working with apple, so that is a positive. we have to see how widespread this becomes and how this will impact the minds of consumers. obviously the this comes at the same time that chinese filmmakers are up their game. so just days ahead of the big iphone 15 launch, there is a concern and we seen -- and we

need to see how broad this goes. caroline: for now, we really think mark, our chief correspondent on all things apple. let us get a take from alan young, and alec, do you agree with mark, that this is the concern of not just state run businesses, but the fact that this is chinese nationalism and this is a consumer not alone -- no longer wanting to purchase apple products. alec: certainly a noisy situation around apple. there is no question that part of the negative inferences that are swirling around is this idea that apple gets caught up in a nationalist rivalry between the u.s. and china. iphones, for example, if they were to become stigmatized over the next few months to the point where it depressed demand, those

types of narratives are popping into investors' minds. but so far, ban in the government agencies, we are looking at half a million units according to a lot of the wall street research that i am reading. that is out of a total run rate over the next 12 months of 45 million iphones in china. the current ban impacts 1% of the units. obviously if it spreads to state owned enterprises and it has a bigger societal impact in china, he would be much worse and much bigger. at this point it is fairly contained and that apple has been gaining market share in china over the last few years, 300 basis points in the last 12 months. it is true that huawei is launching more competitive phones, so it will be

interesting to see how that involves. the current context is that apple is doing well. caroline: its valuation has done well. do you think that this is a perfect storm? we see market cap erosion because of how well tech companies have outperformed because we are 29 times future earnings? alec: we are actually at 27 and change on the forward multiple. it is no question that when the stock peaked, it was around 30 times and price to perfection. this news will not be greeted favorably. in addition we have rising rates that can also pressure equity valuations. this is a healthy pullback, but in terms of the bigger question, does this change the long term? the jury is still out. there is probably some legitimate signal in the news, but also a tremendous amount of noise and overreacting to

knee-jerk noisy media driven things around this stock and many others frankly has not in a great way to make money on wall street. caroline: what is interesting is that apple has a big event coming up, but it has also been pretty dedicated to china in terms of what they have said. ed: this is the big question for me. last quarter they said there was a swing to 8% revenue growth from a 3% decline. but it is what they call switches, consumers that were buying an iphone for the first time or switching from a domestic or other international brand. i acknowledge what you said, but look at the market reaction and explain if this is knee-jerk or the market recalibrating what they have heard from apple in the earnings call. alec: i think it is a little bit about because investors have to react to the news as it breaks.

but that is only a recalibration of potential revenue headwinds and earnings headwinds. but, ultimately america and investors are not worth -- are not used to gaining government intervention, normally it is about the free market deciding who has the best product. on that basis chinese people of iphones. obviously when we have the government handed place so heavily, it is difficult for americans to read because it is not something we are used to in our home market or most major markets. we will have to see how it plays out, but unless the government takes a very heavy hands, i do not think this will really be looked back upon as a major negative game changing inflection point for the company. ed: the question for the day is is tech in trouble. the year of ai and the fed and

valuations, is geopolitics in china and equal weighted risk factor? alec: i do not know about equal weighted, we have a lot of other issues we are contending with but a geopolitical risk with china is at the top of the geo pole -- geopolitical risk table and the situation with why -- with taiwan. and now this general competitive tension that we have going on with the chinese, the trade secretary's recent visit did not go over that well, so it is definitely something that investors will have to monitor, especially in the light of recent regulations around semi conductors. and us banning their access to certain high end semiconductors. we have nvidia involved, but it

is something that investors have to watch. ed: i like young, chief investment strategist. the other top story is sk hynix has opened an investigation into the use of its chips in the latest phone from huawei after a tear down commission of the latest device revealed that the memory and flash storage was inside although the korean maker confirmed that it has not worked with huawei and it has been adhering to u.s. sanctions. this is an incredible story. caroline: this is where politics and supply chain really intertwined, and timing. gina was over in china, of commerce secretary at the exact moment way way unleashes this new product. we wondered where the chip had come from or, have they been bypassing some of these very stringent what do they call it? high walls?

the ability that the u.s. has been trying to cut them off but they still managed to access it. ed: this is how it came about. they put out the nate 60 pro. bloomberg got their hands on one and we took it to tech insights and they did a tear down. one of the main processors was made in china and they uncovered two memory chips that are covered by sanctions. essay -- sk hynix said that they did not work with huawei. caroline: meanwhile, it has been this moment to celebrate for the chinese, at least, the idea that they are able to produce powerful chips in their own country and supply them, and therefore make a more phone -- a more powerful phone that could be an apple killer in china and the question is how much of they managed to build and become self-sustaining when it comes to their own semi conductors. we will continue to dig into that story and think about the

knock off effects for the broader market. this is a key concern. china and the u.s. and what for apple. when you have the big bellwether that is apple under pressure you will have the nasdaq on the downside. meta-was sinking and now we are seeing some of the key players and suppliers to apple being under pressure. qualcomm for example. the two year yield, interesting that it is getting on the front end. and you're wondering where we see the federal reserve go. they claim once again strengthen the jobs market. for now, maybe a little bit of a buying moment after the selloff. the euro is under pressure because we have week european -- weak european data. eking out some. this is bloomberg. ♪

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i wasn't going to say it. ♪♪ ed: governor newsom signed an executive order on ai regulation to examine how artificial intelligence might threaten the security and privacy of residents while authorizing state employees to experiment with ai tools and try to integrate them. there is a pandora's box being opened and he wants it done in a safe way. patrick draghi's debt laden empire is weighing the sale of its french data centers. as well as the sale of part of the capital of the business, and

options for portugal telecom and its add tech company. all of this in an effort to shore up confidence in his businesses which has been battered by a portuguese corruption probe. finally, a fintech owner is facing allegations that he helped notorious drug traffickers attempt to launder hundreds of millions of euros through a crypto exchange program. he is alleged to have converted piles of cash into crypto accounts. the case puts the british financial technology seen under scrutiny amid fears that its controls are neighborly them -- enabling the movement of illicit funds around the world. caroline: really global stories. we will determine -- we will return a bit to home. online delivery grocery start up , instacart is preparing to set a price range for its ipo as early as monday.

boy have we got a back-to-school feeling. really it -- really try and set the scene of what they are trying to sell investors. ryan: there are certainly some energies and some cautious optimism and a set of new ipo's that have been talked about for months if not years. instacart is about to set its price ranges and kick off show. they could look to price as soon as the 19th and trading on the 20th. i think this is a point where we are starting to see people jostling for position. the biggest ipo of the year could have the price range pricing soon. there is certainly some energy, and i think there are a few investors that are starting to feel a little more constructive about how we think about ipo's in the u.s.. caroline: great to have you on, very early in the game in terms of bill burck -- on bloomberg, i

think we welcomed you into the company and you are already on television. ed: the clock is ticking before billions of government -- governor -- billions of dollars of government aid runs out for day care centers. we will talk about how the strains could be created for women. also we are looking at shares of meta, the parent company of facebook and other properties down in the 10th of 1%. we sought much earlier in the day and it had been markedly higher and now down point -- .8%. it has dropped quickly to 2%. this is bloomberg technology. ♪

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caroline: time for work shifting

where we look at the changing landscape of the labor market. today jobs data, the initial jobless came -- claims showing resilience, the lowest level since february amid a resilient labor market, there are issues. we have seen in particular them for women and they could be stalled as a pandemic era lifeline to daycare providers expires. 70 thousand childcare programs are estimated in danger of clothing -- of closing. alanna burka which -- berkowitz is here to talk about building enable -- infrastructural to enable working families to succeed. can technology be any kind of situation? it seems like a terrible scenario. >> it is pretty bad timing. we are at the start of the school year and the percentage of mobs and young children in

the workforce is higher than ever. having recovered post-pandemic, which is huge -- which is had huge consequences for career trajectories. we are allowed to lose 24 billion dollars in stimulus money which puts childcare slots at risk and put it risked the ability for all of these women to continue to participate in the workforce. this is not just a mom issue, it is an economy issue. caroline: you say it is an impact on gdp and earnings. what about anyway that company ies could give support? elana: so, of course innovation cannot replace infrastructure and public policy, it can augment. technology start solutions cannot print money but there is a lot to do to make it easier for families to pay for child care, and for businesses themselves which are often

mom-and-pop operations to run efficient. i will give one example from our portfolio and i am happy to talk or broadly about areas where we can sink technology. we are investors in a company are called wealthy which combines digital tools, and world-class human expertise to serve as a care coordinator for the employees of best buy, cisco and hilton. they match families with care professionals and automate workflow -- automate workflows whether you are looking for home health care or backup childcare for your kid so you do not have to miss work. that is one example in our own portfolio. but we think beyond backup care and childcare, there is a lot of opportunity for technology to improve. ranging from making care jobs better. caroline: dare i say artificial intelligence in that sentence?

elana: if we do not talk about ai, are we doing a technology show? surely, we know that health care worker burnout is an enormous problem. there are 1.8 million vacancies. things like automation or ai supported charting and documentation can give people time back in their schedules and improve some of the burnout crisis. that is one area. you know, i think there is also a lot of to use innovation and tech knology. -- technology to make care more affordable. even with government subsidies in place it could take months for that to be sent to providers. this is in small businesses that operate month-to-month, and there is a lot of room for a certain modernized technology flow. ed: the fear is that the tap for

this money closes later in the year, but the problem of the last 12 months has been getting money to people. i am wondering how closely you are tracking the fintech solution that brings government infrastructure into the 21st century. elana: there is a lot that we can do to improve the rails and also we see insurance companies, and we see a decent amount of start up activity in the space outside of care, whether it is making it easier to access government benefits like food stamps companies like propel, companies like promise that make it easier for folks to make payments to the government and interact with government. i think there is a lot of room -- we are used to being able to do anything to our phone to our job, find a hotel and do everything, and i think there is a push to modernize the

government into our daily lives. caroline: spring back collective , we thank you for joining us on a dramatic child killer -- childcare cliff. this is bloomberg. ♪ hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this."

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ed: welcome back. ed ludlow and san francisco. caroline: let us get back to a geopolitical macro picture that questions can the nasdaq and technology stops are stocks outperform, and gain when we see rates on the higher side and geopolitical tensions build. ultimately, when we question valuations. big tech is really feeling the brunt of sentiment souring and economic data slowing. also in china i shine a light on the yuan. it is at a 16 year low.

this economy seems to be managing to weather the storms being felt elsewhere. i am looking for something in a two year yield after we sold off 12%. this focus on the federal reserve is a very resilient jobs market and the jobless claims earlier today. going to some of the individual bits, because we know that the story is a tech wine, one of apple, the concern that china will push back on allowing government employees from buying iphones and what does that mean in terms of a consumer pushback. $1 billion in market value falling. qualcomm is feeling this -- is feeling the pain. else be else -- splc, qualcomm getting 20% of its revenue from apple. t-mobile, actually giving money back. dividends will be buying back shares and that is always music to an investor's ear.

and then some saying the iphone 15 will help the likes of t-mobile. ed: not doing much to put green on the screen. let us get back to the top story, china planning to expand a ban on the use of iphones for government backed agencies and state companies according to bloomberg sources. that is happened in apple's biggest individual foreign market. apple and the relevant chinese agencies did not respond to request for comment. joining us now, kailey leinz. quickly this is becoming a tit-for-tat. 24 hours ago the report on some government agencies, bloomberg reporting more and it follows the gina raimondo trip to china. kailey: the commerce secretary made a trip to beijing. she followed eckert terry janet yellen, the secretary of state antony blinken and john kerry. all in an effort to shore up the

relationship between the largest economy in the world and the second largest economy. trying to ease the path of u.s. businesses in china. she talked a lot about the uncertainty of operated -- of operating in the market with the headlines of what we are seeing with apple. it is not clear based on our reporting how many companies or agencies could eventually adopt these restrictions. obviously a massive risk to a company like apple who is dependent on china from a supply chain perspective. a lot of iphones are made in china in factories employing chinese people, it also from a revenue perspective. this made up 1/5 of their revenue in the previous quarter. caroline: this is a building concern not only from competition, you think of huawei and its phone reveal and what it does to apple sales. but also the relationship when we think of huawei and its

access to chips that the u.s. is trying to prevent them getting. can you give us any update to what jake sullivan and the like have been commenting on that? kailey: this is a prevalent topic of conversation in washington because last week huawei announced it smartphone that it had said was a triumph against u.s. sanctions because it was using chinese made chips. in theory what china is saying is that they are doing this in spite of sanctions. what we are hearing from capitol hill is that this might have been done in violation of sanctions. congressman michael mccaul, a republican who chairs the foreign affairs committee saying that it might require an investigation because he thinks it is obvious that the company violated sanctions by supplying opponent. components to huawei, and this is a company on the entity list for national security concerns. that has been echoed by others.

mike gallagher who chairs the china select committee says the u.s. might need to look at a ban or ending of all exports to huawei and smic. it is the idea of the national security in the u.s. being paramount and restrictions being looked at as a result. as ed was saying, this is a tit-for-tat idea. the u.s. moves to restrict one thing and china moves to restrict another. and this is the pattern we are in at this point. ed: to a point that was made a minute ago. citigroup put a note out saying that we do not know how many companies or government agencies or people using iphones, but it is probably the case they were already transitioning away anyway so it might have a limited impact. i guess that that note really brings to the point that relations between the u.s. and china in spite of the visit are not good. we are not in a good place right

now. kailey: absolutely not, and this is a tricky dance. on the one hand you are trying to make sure the relationship is stable and the sides are talking. to protect national security interests or otherwise you are seeing targeted action that works in theory against china. things like the executive order on outbound investment in areas like artificial intelligence, and semiconductor's. it makes it difficult for companies to engage with china but also for companies themselves to figure out how to navigate this market to the point of citigroup that you were talking about, that this is the idea that it might not be necessarily about iphone sales but the environment and uncertainty around it. caroline: no wonder that nvidia is down and tesla is down and other companies with big exposer to china and i think of what is coming breaking it down from the

washington spectacle, let us just shift gears, there is something that russia has at psion -- washington has its ion. the former executive brian salem is planning to plead guilty to criminal charges over the collapse of ftx. he was a co-chief executive before the exchange imploded last november. let us bring in someone who has been across it for more and given the other key executives gone before, this is not too much of a surprise. sonali: the thing that is potentially different is how much he will comply. many morrison has been complying with the role -- has been focusing on his role in this. when the initial issue came to the floor, it was brian salem who had really brought the case to bohemia -- bahamian officials. and so to come back around in

this fashion is quite interesting because even though he may plead guilty to certain charges, criminal charges it is not sure what his cooperation will be. ed: the timing is interesting because sam bankman-fried is scheduled to stand trial one month from now. does that contribute to that court case? sonali: it could, and the other folks who have come forward are cooperating. whether or not he does testify, it adds an element to this trial. remember, i want to talk about their relationship because i had a lot of my own reporting and i interviewed both men before the collapse of ftx. i spoke to ryan saleme a week or two before. the interesting thing about ryan and sam bankman-fried is they were not always in the same place. ryan was back and forth between

the d.c. suburbs and bahamas. and i spoke to the people around them i was told they kept separately. ryan saleme donating 24 million dollars to republican candidates when sam bankman-fried was donating to democratic candidates. they seem to have pivotal different says. so ryan saleme's role in all of this is certainly interesting leading up to this trial, although very early to tell what that would be. caroline: interesting the political donations, prosecutors withdrew the campaign-finance law issues being alleged at these particular moments. kailey: part of the -- sonali: part of the issue was how the money was used. the campaign-finance violations was a definite worry until they were withdrawn, but remember that they still are a big question mark about the role of cryptocurrency in washington and why the senators had taken the money and what was the motive.

i am going back to our initial reporting, it was not a little bit. both men were donating more than anyone else in the most recent cycle. and just going back and looking to remember, ryan saleme, there were pro-crypto candidates that he was giving to. when sam was giving he said this was a matter of pandemic preparedness and all tourism -- altruism. but not a matter about crypto. ryan had donated to very praying -- plainly a lot of candidates with ties to donald trump. they had different rationales for why they gave, so it is hard to tell what the motive was. ed: such deep reporting on what has been an endless saga and you will be back for more. coming up on bloomberg technology. keep on trucking. the private -- the founders of

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ed: the founders of argo ai, the atomics vehicle company that was shut down is back and they are at it with a new self-driving business focused on autonomous trucking rather than consumer cars. it is called stack av and it is backed.

one it is very official and they expect the softbank commitment to be more than one billion u.s. dollars. we bring in the cofounder so start by explaining what you are doing with stack av and what the end goal is. >> it is great to be here. we are announcing the formation of our new self-driving start up we are breathing -- building fully autonomous class eight trucks and looking to solve the biggest issues of the trucking industry. whether it be driver shortages, retention issues, over the road safety and inefficiencies we saw during the pandemic. we think self-driving trucks have a huge opportunity to solve those issues. ed: you are coming out of stealth and whether it is with more than $1 billion or not, you have moved quickly to grow.

where will you need to spend. talk about the talent and compute costs in your project. bryan: or priority is to build a great company that can scale and move fast to realize those benefits. you know, the number of people that is required to build this technology is enormous. the capital needs are large. but, our priority is to build the fantastic team and really get the technology deployed as quickly as you can and get test vehicles up and running. we are a new company that we have been moving quickly and we are excited about the team that we have built. ed: you always looked more holistically at autonomous technology. this is specific and technology in use case specific to what aurora is doing. why did you sense this was the best way of commercializing? bryan: we think that the business model is interesting and the cost of goods to ship

goods has really increased substantially. we know a lot of small businesses are feeling the pain. times to deliver are increasing across the industry, especially in larger markets. we think autonomous trucking has the ability to address those inefficiencies. it is not just in the atomics part of it, the self-driving aspect. it is also in the scheduling and overall logistics. the way the system works, there is a lot of opportunity for improvement and we think not just taking the benefits of ai but also the benefits of generative ai and the latest advancements that we have seen. we think this can be applied to the entire logistics equation. caroline: does that speed up things? ultimately the ford vw backing became impatient. 140 executive said it was easier to put a man on the moon then get autonomous driving up and running. did you just need a different

mindset of length and time to get capital? bryan: this requires patient, long-term capital and it certainly requires a big vision in order to make this happen. at the end of the day we want to improve lives. we want to improve the overall cost structure of the entire supply chain. the only way to do that is making big changes to how it works. that means any time are working on a problem, you have to really work in the details and take a big vision to make it a reality. that takes m time. what you are seeing and -- in general, different companies are playing to their strengths and how they can be most successful and adapt their business. what is unique and exciting about this is that softbank has a large commitment to ai in general. they believe in the power it has in transforming our everyday

lives and that is where stack av comes out, doing that and applying it to trucking. ed: yes. softbank said they are not just backing you with capital, but also with ai competence as well. could you explain that? is that your point of differentiation? your access to software and talent? bryan: we have an access to the entire softbank group and team. they have been wonderful in getting us started. they see a lot in terms of business models and what works and what does not. our team in terms of what works and what does not be able to see around the corners and how to build the tech knology, and so -- the technology, and at the end of the day we believe we have a really differentiated story and a very compelling team. caroline: that is where it is happening, stack av.

there is a ceo and we thank you for joining us. we are just finishing the conversation on artificial intelligence. nai startup raising $20 million. we will speak with the ceo. this is bloomberg technology. ♪

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ed: imbue, formally known as

generally intelligent raised $200 million series b in a valuation. joining us is the ceo of mbo. you also secured 10,000 h 100 and that has become the badge of honor. what was more important, cash or computer? >> both, cash is more easier to come by then compute. we got compute quite early. but we are very exciting to have both. ed: was that the structure? nvidia -- nvidia is one of your backers. the data just participate or was our payment in chips? kanjan: all cash. ed: as a quick follow, what are you building? we know a few companies building 100 billion parameter models. kanjan: we are focused on agents, systems that can take action and help us accomplish larger goals.

today's systems, they generate an output, but they will not go off and do a bunch of research and come back and restructure the argument and reason through what is happening. we build systems optimized for reasoning so that we could end up with ai that can help us do what we say, what we want and not what what we -- and not what we say. caroline: what is amazing is 200 million for a bold focus on ai agents that people have not been able to play with or touch. one of the key backers have. i am curious on how far down the road you are developments from your perspective? kanjan: it is hard to tell, we are quite excited to have things that people can use, it might be sooner or later. just like how apple, for apple iphone was under development for 10 years before it came out. it will not be 10 years, but

there is a right time for technology to be taken to market and there is such a thing as bringing it to market to early. we believe in seriously using the systems ourselves every single day and having some beta users using them every day and that is what teaches us that this is what is good enough and not good enough. caroline: it is interesting, the previous founder was talking about the need for patient capital. looking at your table, it looks similar. it is not a normal table in terms of money, it is the not-for-profit, nvidia and others that are behind you in the idea that this is going to take some time? kanjun: that is what we are looking for. something that is important to remember, openai did not ship chatgpt until six years after they were founded. whenever we are building a deep technology like this, that runtime is necessary. ed: can you tell me a little bit

about your business and company? are you highly concentrated in san francisco and all of your talented engineers here and why in san francisco? kanjun: we are primarily based in san francisco in person in the office and we have some remote team members and engineers. we structure as a hub and spoke model where the collaborative hub is made farruko -- for collaboration and remote members for autonomy. san francisco is a great technology hub. we host a lot of events and meet a lot of people and have a lot of potential customers, so it is a good place to be. caroline: you are building with archive and the group house of like-minded anchors and builders and focused on the sfb overall. we thank you for joining us. an amazing show but that does it for this edition of bloomberg technology. ed: you can read pat -- you can

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matt: welcome to bloomberg markets. let's check what's going on in the markets at this hour. we see the s&p and the nasdaq down, the dow jones actually is up for most of the trading session. tech stocks are weighing heavily especially apple on the s&p and the nasdaq where it is much more heavily weighted then it is on the dow. we see the s&p down 0.4%. we've come down from 4588.