>> this is bloomberg technology with caroline hyde and ed ludlow. >> live from said. bloomberg reports the u.s. is reviewing caps on ship sails to the middle east from come days like nvidia. dell says it is ready to ship servers with ai accelerators. we speak to a key executive. days after tesla wowed crowds with robots, we now know they were remotely operated by humans after all. we start with news that could have a major impact.

sources tell bloomberg news the biden administration and officials have discussed capping sales of advanced ai chips to certain countries. the sources at officials are focused on persian gulf countries that have shown growing interest in ai data centers. looking at the markets, these are the names impacted, nvidia, intel. it is worth noting part of the declines, if you are just joining us, have accelerated in the last 30 minutes, a really ugly earnings print from asml. ian king joins us in san francisco. the u.s. is looking at some of these middle east nations because they are throwing money behind ai. previously, officials were looking at china. what do we know about the latest initiative about blocking access to the accelerators? >> this is the key chokepoint to

control what happens. the concern is about china and allowing access to capabilities to china and all kaiser considerations and export controls up until now. ed: for our audience, sometimes they struggle to understand what it is t u.s. is trying to prevent. in ai accelerator is a high-performance trip that goes into a data center. how is it that any government can say to a company, we cannot allow you to sell your best thing to any market? that is basically what they are trying to do. >> is trying to place it cap on capabilities of the country or a company and stopping them from having ability to develop advanced ai, which can have capabilities.

once it is in the wild, who knows what happens with it? ed: asml, europe's most valuable company and leading maker of chipmaking equipment, is giving us earnings and a pretty ugly forecast. it has cut its bookings outlook for fiscal 2025 to a more narrow range. as we can see, shares have reacted negatively. what do we earn through the metric? >> bookings are the way a company says this is what our revenues going to be. it is a lead indicator. these machines are enormous. they take a long time to make, so it is a leading indicator of demand for the industry. ed: asml makes the machines which manufacture chips. why is it that names like nvidia and intel saw their own declines

accelerate? what are we learning about the sector? >> in general, chip equipment is a leading indicator. you buy equipment ahead of time. basically they have three customers. two of those customers are in cut back mode. >> there is a link between the first story and asml, which is the united states and allies has looked at the mechanism of controls on chipmaking equipment and asml has been at the center of that. please take it from there and explain why these machines are so critical and why governments want to control them. >> you have machines made by lots of companies. but the key piece of equipment is asml.

if you want to make an advanced chip, you need the ev machine and they are not allowed to export those to china because washington does not want china to have that capability. ed: interesting in all of this, this is europe's most valuable company. they are a dutch company with a footprint in silicon valley. where are they doing business principally? where are their biggest customers? ian: basically 60% of their revenue comes from intel. where ever these factories are, these companies want to make the most advanced chips. ed: earlier today, the u.s. to partner justice deputy attorney general spoke on bloomberg and said this about the importance of competition. >> i think history has shown us

the considered judgment of regulatory bodies and legislative bodies across the world has been that competition fuels entrepreneurship and innovation unlike anything else and that is why competition rather than consolidation in regulatory and enforcement schemes across the world. ed: those were the top news items in tech. let's get the investor analysis. two pieces of semi conductor industry news, bloomberg reporting the u.s. is looking at export controls in the middle east and asml cutting its bookings outlook. what is your assessment of how you want to treat the chip industry now? for so long, it has been a centerpiece for investor attitudes toward the technology sector. >> what is going on in the chip

industry and technology is key for the u.s. stock market because it is a large weight and influence not only on capitalization and price-performance but also a large share of earnings drivers of what is going on in the s&p 500. any guidance and forward outlook from the technology industry as a whole is one thing to keep an eye on. we are encouraged even though we are early in the earnings season , initial reports of continued spend on technology in general as well as ai related products, but as the earning report continue to come out we will want to monitor for further impact. ed: the reporting on export controls to the middle east states this is the biden administration thinking about it

. we have an election where the administration might change. i will not ask you to comment on that reporting, but there must be an element where investors have to factor in the election as one factor or risk in the approach to markets. how do you approach that? lisa: the election is a toss up with the polls and production markets so close. to your point, whatever policy comes out of the election, whether it is a prsidential race or congress, can make an impact on how the economy is impacted by regulation and other issues, so we are monitoring that closely. obviously right now there are some different views on where regulation may head, so we need to see what the outcome is as we move forward. ed: the calendar fourth quarter

or month of october for earnings will be interesting. do you think we will find ourselves in the context of big tech in rude health? or are you expecting to go into the earnings season braced for signs of things tapering off in the context of the u.s. economy? lisa: certainly if you look at expectations for third quarter and -- earnings, investors have adjusted for the fact the economy and corporate profitability and revenues are slowing, so just as an example in the second quarter we came in on the s&p 500 at about 11% and they are only expected to be about three point 9% in the third quarter. that said, 3.9% for the third quarter is still a solid number. we believe that is achievable,

especially since the bar for that number started earlier at higher levels and has come down to 3.9%. that bar seems reasonable and expectations have been dampened, so we view it as an achievable number. ed: what is the one thing the technology investor must look at closely in 2025? lisa: certainly the ongoing health of the consumer and demand for products but more importantly the appetite for capex will be important, so looking for that forward guidance coming out of these third-quarter earnings reports and also the demand in spend for that technology, particularly ai demand, will be key as we look at what is coming out of governance numbers.

ed: really great to have you on the program. thank you. let's look at shares of apple, which touched a record high in the session. apple unveiled the new ipad many it hopes will attract consumers to its early generative ai offerings. the tablet powers apple intelligence, which is due for a release later this month. the new ipad many costs $499 for the wi-fi model and $649 for the version with a cellular connection. it goes on sale october 23. coming up, too good to be true? a major reveal on the human touch that helped tesla's robots appear to come to life. let's go back to asml. shares in europe are now down 12.6%.

that is the biggest drop intraday since 2002. they only booked half the orders and quarter analysts were expecting also lowered guidance for fiscal 2025. this is a leading indicator. this is a chip equipment maker, the machines that make the chips, and tells us this is a sector that might be bracing for things to cool off. we will continue to track this story and the severity of that decline. this is bloomberg technology. ♪

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i always said i would go back to school when i had time. i went on our website, i spoke to an admissions counselor. we applied right then and there. that's when the journey really begins. going through the program, having the support that i had, really helped me understand what i can accomplish. and i learned this just by taking classes at night while working a full time job. the resources at snhu were incredible. i think if i was back at the beginning, i would choose snhu all over again.

ed: it is time for talking tech. erickson shares soar after third-quarter earnings beat analyst expectations. the company announced a 55% sales growth across north america, thanks in part to a major partnership with at&t. ibm is looking into misconduct allegations facing a top executive in china, accusing of excepting vouchers from external partners and violating company expense policies. ibm confirmed the letter is authentic. warner bros. discovery's max is planning a major debut across asian markets as competitors are scaling back investment in the region. max launched in japan three partnership with a local

streaming platform and plans to launch in australia next year. bloomberg has learned humans were remotely controlling some of tesla's robot prototypes at its recent showcase. elon musk told the crowd the androids would be the biggest product ever but did not disclose that they had human helpers on the night. the event was intended to generate investor bus for upcoming products, principally a robotaxi. what we reported in the store yesterday and what sources told me is this was kind of classic elon. three weeks before the event, he went to the optimist team and said i want optimist at the event and they said we do not have time to get the software ready. tele operation is our only option. and now we know it was what was happening. max: it does undercut the impact

of the event and the way people reacted to it. looking at the way people reacted to the optimus robots was the biggest surprise, the thing that excited investors the most. the fact they were using tele-operation, essentially remote control, makes it clear that although there may be mechanical breakthroughs here it is not clear how far tesla has come on ai, which is the purpose of this whole thing. ed: you raise an important point. going into this, we reported about it, the focus was robotaxi. friday, the morning after the event, the stock fell 10% in large part i think because there was a lack of detail about a future proprietary ride-hailing app. max: the problem here is that the robotaxi story is still very much a story. nothing about the event went

against that. the event was held on a soundstage. you are talking about the tele-operation of the optimus robots, but you can make a similar critique about the cars unveiled. they are running on a closed course, custom software, not totally clear that the cars themselves were running exclusively on ai either, so you have elon musk selling a vision of the future but not necessarily showing progress in the present. ed: elon musk is often late, as you know across many of his companies. he often does get there in the end and that is the sentiment that has been shared. what do we think will happen with the robotaxi? max: as you say, he is often late and he has achieved a lot, but this is one area where he has not achieved. he has been promising robotaxis

next year for years and we saw him do it again in 2026. you could hear during the event a lot uncertainty about when this would happen and the problem is that -- or the problem and opportunity, he is clearly swerving the company into this direction, saying this is essentially the future of everything. it is such a big market. investors are likely to give him a law of leeway because it is a big opportunity and it is elon musk. but nothing should be taken for granted. ed: thank you very much. coming up, dell is set to start shipping out servers with the newest nvidia chips. we will speak with arthur lewis next. this is bloomberg technology. ♪

ed: nvidia's roll out begins with dell. they say they are ready to begin shipping out devices with the chip next month, a sign that production at blackwell is back on schedule. we are joined now by arthur lewis of dell infrastructure solutions group. it has been reported about blackwell, delay or no delay. i guess the starting point is to ask if this was a surprise to you, that you were able to adjust or pivot and then ship next month unexpectedly. >> first it is great to be back and thank you for having us on your show. not unexpected at all. we have been working on this very hard. you think about the innovation we have been delivering from the start of the -- to what we

acknowledge -- announced from our infrastructure. we talked about the fact that the blackwell product was on the roadmap and would for customer testing in the second half of this year with general availability next year. we are just following through on the commitment we made at the beginning of the year. ed: so the last three months of the calendar year will look better. >> we have exciting products. customers are facing power constraints in terms of infrastructure, so we have significant product announcements that we had today. number one is the formfactor. this product is 25 times more efficient, but in addition we are bringing density to compute. we announced a system that does

two amazing things. number one, it solves the density problem by providing 27,000 cores and it is up to 60 times faster than the previous generation. ed: the industry are not making margin on this. are you going to make margin on this? if so, how? >> we showed we were able to make margin with 11% operating income for the overall isg business. our job is to remove the shroud of complexity and mystery around generative ai and deliver value to customers. we will be rewarded for that value in the enterprise space, where we have more opportunity to attach more service and storage offerings and networking offerings. ed: it was interesting, what you were talking about. everyone keeps asking me about

liquid cooling. with blackwell, you were sapling the technology before you switch -- shipped it and must have thought about a pivot to liquid cooling. >> we have been talking about liquid cooling since the beginning. we have heat capture. once you get into the 1000 watt range, this is where liquid cooling is mandatory. we have a wide variety of offerings that span the air cooling and liquid assisted air cooling and rare door heat exchangers. not all environments are ready to support liquid cooling, but our portfolio is broad and supports the requirements customers have to deliver the most dense and energy-efficient infrastructure in the market. ed: give us insight into the

reality of blackwell volumes. is this actual scale to production? arthur: our volumes is contemplated in the guidance we provide. if we have update to the guidance, we will update that, but we are excited about the amount of innovation driven in this space. if you think about where we were at the beginning of the year, we were talking about infrastructure. now we are up to 96 and talking about scalable systems interwoven to operate as one system with integrated networking. it is amazing, what we are seeing. ed: it is great to have you back on the program. thank you. stay tuned for special coverage ahead of and ask loose interview between former president trump

and john micklethwait. this is bloomberg. ♪

> from the world of politics to the world of business, this is balance of power. live from washington, d.c. >> from bloomberg's washington, d.c. studios, welcome to bloomberg balance of power. >> former president donald trump since down -- sits down for an exclusive interview with john micklethwait. kailey: his proposed policies on the fed and more are on the agenda, the conversation taking place three days from election day. >> will be joined by consent and

oer senior economic advisor to president donald trumpoe lavorgna with analysis from our panel. kailey: we begin with brad stone and mario parker, who went to mar-a-lago to interview trump for a business week cover story over the summer. thanks for being here. it was a very different race when that conversation happened, before the attempt on trump's life and joe biden dropped out. how should we expect the policy ideas donald trump may discuss or put forward today be different than what he was talking about months ago? >> we went down to mar-a-lago three months ago and three months is a long time in politics. things have gotten weird lately. yesterday in philadelphia, donald trump played music and dance on stage. when he spoke to the detroit

economic club, he said detroit was a failing city. i expect a little more of a focused and disciplined candidate. i expect he will talk up his economic plan so that is higher tariffs, lower taxes. we are entering a stage in the campaign where both candidates are trying to be tactical, so trump is trying to talk to black men, hispanic voters, conservative voters in the midwest. i think we will hear a little about how higher tariffs can fund childcare or no tips on taxes or overtime pay. that would be the best version of the gop candidate and we will see if we get him today. >> some wonder which donald trump will show up. will be the one dancing to oldies for 39 minutes in a rally that saw a couple people faint? or is it going to be the donald

trump with the economy had on today taking serious questions about policy? what is his view of this campaign? mario: the campaign feels as if the economy is the strongest issue versus kamala harris as we look toward the election, so by having a conversation with bloomberg, regarded widely as our brand with politics, this naturally puts guardrails up for the former president so we will not see him -- there will not be opportunity for him to dance like he did last night. this keeps them focused on those things we spoke about in our interview. kailey: it raises the question of the audience trump will be speaking to today. there is one physically gathered in chicago and our audience on

tv and radio. but knowing pockets of voters have yet to make up their mind in a handful of states, what is the messaging going to be to them? how many different audiences could he be trying to serve today? mario: a few. the business-class attending in person. he is in a blue state that republicans have no chance of winning, but it is also the third largest media market so you want, for him, to get this message out in middle america between those blue wall states, a kitchen table kind of economic message where kamala harris has cut into his lead. >> both candidates have been criticized for not speaking enough to pay for his. -- pay fors. does it behoove him to fill in the blanks for investors who

want to know more about how these tax cuts will be paid for? or does that make it more difficult for the campaign to say too much? >> as a voter, i wish he would. as someone sizing up the political landscape, i doubt he will. we are in the tactical stage of the campaign. three weeks ago, a tight election. these candidates are promising the moon to voters that he thinks can deliver a winning coalition, so the inconvenience of paying is probably not high on his list. if you listen to economists and surveys of economists, most think higher tariffs on goods from china can deliver to trillion dollars or $3 trillion of revenue but at great cost to inflation and economic growth

and certainly do not pay for the economic agenda he has laid out. i do not ask him to reconcile that. that will be john micklethwait's role as moderator to hold him to account and try to get answers on that. kailey: as we wait for the moderator and candidate to take the stage in chicago, we do have a crowd fully gathered in the ballroom where this is happening , so certainly the audience is ready, as are we. as we consider the kind of candidate donald trump is, bloomberg businessweek has profiled many leaders over the years, donald trump included. how is this candidate's style and nature different then candidates we have seen in the past that we could see reflected in this conversation in chicago? >> great question. a lot has been said about how challenging it is to interview

donald trump. we were at an advantage three months ago when we went to mar-a-lago. we conducted a print interview. we fact checked it when we printed the transcript. but trump is more challenging on stage and live. he floods the zone. he talks. the obvious gates. sometimes he denies. we asked him about comments were he said he would go after his political opponents and he denied having said that. most recently, he has talked about imprisoning democrats and going after adam schiff. he tends to suck the air and energy out of a room. i think he is unique. he does not hew closely to the facts here and it will be incumbent upon the moderator to try to hold him to account and make sure he does not go on for too long and to bring him close to the facts of the national

debate we are having. >> brad stone and mario parker, thanks for the insights. we will bring in our economic panel next to debate the merits of trump's known policy propoa. it is coming up next on a special edition of balance of power on bloomberg tv and radio.

>> when i am going to do is something nobody has thought about doing. no tax on tips. as part of our additional tax

cuts, we will end taxes on overtime. i want to cut taxes on americans will putting tariffs on china and foreign countries to bring our jobs back home. >> my plan is to make the trump tax cuts permanent. they are massive tax cuts, biggest ever, and to cut taxes more with a reduction in the corporate tax rate from 21% to 15%. no tax on social security benefits. saving thousands of dollars for residents of new york, pennsylvania, new jersey, and other high cost states. >> as part of our tax cuts, we will make interest on car loans fully deductible. >> collection of economic policy proposals former president donald trump has rolled out over the past couple weeks and months

as we bring you special coverage now of donald trump's interview on bloomberg. will be live from chicago, scheduled to begin a bit less than 20 minutes from now as we consider what we are going to hear. we assemble our economic panel. betty stevenson at the university michigan is with us along with a member of the council of economic advisors under the trump administration, a former senior economic advisor to donald trump. thanks for being with us. i suspect donald trump will be channeling you a bit today when he is speaking with john micklethwait. to what extent does he need to detail how he will pay for the proposals we just heard about? >> not yet. there are certain things the president would like to do. one is to permit the job cuts

act. he has come up with other ideas to keep middle income wages and salaries higher. and there are not details yet on how to pay for things. some will be through tariffs, ideally through faster growth, and then we see what happens. >> we have seen what happens when donald trump cuts taxes. we saw during his first administration they did not pay for themselves. knowing there was a pandemic involved grove growth lower and lead to millions of job losses, how do you expect this to look different and is it dependent on their not being other unforeseen events? >> i want to correct you on this. if you look at tax revenues, it went into place when revenues

were higher, so it did pay for itself. kailey: the deficit still did go up. >> hold on a second. in the last year, revenues as a share of gdp have slowed a bit. the deficit is up 6% in the last year with unemployment under 4%, which has never happened before, so be careful as to who is responsible for driving deficits. >> let's talk about what you're looking to hear today. there are investors out there who have yet to make up their minds on who might be friendlier to the markets, never mind who might be better for america. we are talking about the economy and specific proposals when it comes to taxes and initiatives. what does the middle want to hear from donald trump? >> the middle wants to hear an economic plan that is going to speak to them.

what they have been hearing is proposals rolled out essentially that donald trump seems to think of as he is standing on the stage, so he does not have a lot of information about whether those would benefit the middle class. he might say let's deduct interest on car loans and think that will benefit the middle class, but the middle class rarely itemizes their taxes. they are unlikely to actually benefit from such a tax scheme. then people who are aware of one of the problems of the tax code is its complexity raises costs for everybody really cringe at proposals like that designed to sound good that have little benefit for anybody and clutter up our tax code. i want to step back. the facts are it did not pay for itself.

if you look through the four years trump was president, we saw revenue below the historic average and spending above the historic average and that is simple math. if you -- if you're spending goes up and revenue goes down, you will run eager deficits. you might say that was worse in the pandemic, but what we want to do is reduce deficits and get a handle on debt during good times, like we had in the 10 years prior to the pandemic, so we are able to help each other during tough times like the pandemic, so i do not think you want to compare biden's years with trump because trump can into an economy that was strong. he left with one that was weak. we can debate how much control he had over the way the pandemic

hurt the economy. kailey: some of the proposals we have seen from donald trump are blatantly economic, but there are other proposals that have potential economic impact, like immigration. if he is talking about potentially removing millions of people who have not come to the country with legal status from the workforce, what economic impact do you expect that will have? >> the impact will certainly -- mass deportations, i do not know if that is going to happen. i cannot speak to that. the intention is to basically make sure the labor that comes in is legal and the intention is to try to raise u.s. worker wages. if there is less inexpensive illegal labor, that will help the u.s. side. generally, his tax plans are

effective. real median income rose for every demographic group. we had the pandemic and a lot of debt. it is unfair and unrealistic to look at that last year. when i was there, we talked about a v-shaped recovery, which is what happened. the economy turned over in 2021 because the economy is robust. i would be careful in terms of what we are cherry picking, the news that makes one side look better than the other. on polling, i can save you look at what households are saying, the former president pulls well on the economy, so clearly middle-class voters have a perception that things are quite good under the trump administration. that was totally the case for most of those four years. >> wall street seems to think donald trump is a friendly element when it comes to markets. a lot of that has to do with the

corporate tax rate. how much of it has to do with uncertainty? wall street spent four years with donald trump and has a good idea where he is coming from. >> they have spent four years with president biden now. kamala harris has been clear she is a more capitalist, more business friendly candidate than president biden. i think one of the challenges you have in maintaining a capitalist economy is you have existing businesses that like to try to shut out business formation because that is how they are going to make the most profits. it is the drop of somebody trying to protect capitalism to try to protect competition and make sure businesses can compete and businesses that have succeeded do not use success to try to prevent other companies

from competing with them. if you prevent competition, that is how we get stuck. that is how economic growth slows, so i guess there are two questions. if you are a current successful billionaire, are you looking for someone to protect your money or to help the u.s. economy grow? i think all of us should be focused on an economy that is going to grow. the way to do that is going to be to make sure lots of people have the opportunity to start new businesses. that is why kamala harris is focused on middle-class capitalism and making sure middle-class people are able to start new jobs. i want to touch on two important things. president biden plans to do mass deportations of illegal immigrants and has commented extensively on the legal haitian

immigrants in springfield, ohio. he would like to have them removed as well. these people have come into the united states. they have taken jobs that have allowed americans to form new businesses. new business formation has surged in the last three years. i go to academic conferences where we talk about entrepreneurship and everybody has been confused at the enormous growth in new business formation. that has been enabled partially by being able to hire people because we have had immigrants coming back to the u.s. after they left during the pandemic, so it would cause harm in terms of hiring. it is great for american workers if there are not people competing for your jobs. we have already seen higher wages -- wage growth occur at the bottom and some of that comes from equipping american

workers with new technology and new capital for them to be more productive. preventing immigrants from coming over and doing low wage labor is not going to be what gives americans the good jobs they want. what is going to get them good jobs is ongoing business formation. >> betsy was filibustering that response. on the polling, look at consumer sentiment. it said a recessionary type of reading. the data has been very good under president trump. one of the reasons president trump is pulling well is there is a bifurcated economy for many people and the middle class has suffered. if you look at wage growth, wage growth has risen about 20% the past 3.5 years but inflation is the same amount. clearly there is a lot of pain

at the lower income levels, which is why the president is testing these various proposals, whether it is the deductibility on interest, not taxing tips, which vice president kamala harris liked as well. i think the trump economic record speaks for itself and pulling reflects that. his doing well reflect that, so we will see where we go. i would like more information from the harris team. i do not think we have a lot. maybe she will be more procapitalist. there was talk of a capital gains tax. i do not know that will happen. i have not seen many details. i would like to. we would like to know what is going to happen. kailey: she has talked about increase in the capital gains tax lower than what joe biden was looking for for those earning over $1 million.

we only have about a minute left. i expect the federal reserve may come up in the conversation we are about to witness. can you speak about what influence a president should have on the fed and what consequences are if a president could put a thumb on the scale? kailey: that is easy. the president should have no influence on the fed. when you talk about uncertainty and volatility and the way to 11 eight uncertainty and volatility is to have professional experts managing our money supply. that is why we have an independent fed. there is research that suggests an independent fed is good. i want to put that out there. the u.s. since the end of the pandemic has grown 10.7%. compare that to the you -- eu. the rest of the world is saying, how can we be more like the

u.s.? so wages are above. joe: that is a very mild -- betsy: wealth is up more than it was. joe: that is fake. on the fed, i think the president should have a say. why should the president -- fed be undependable -- independent? >> we appreciate the lively conversation and your input. thank you for your time. thank you both very much. we are still waiting for this conversation to begin in chicago, donald trump sitting down with john micklethwait. >> we will have more coming up ahead on bloomberg tv and radio as we wait for the former president. we will have for you live.

on bloomberg. ♪

>> live from washington, d.c.. kailey: welcome back to a special edition of balance of power. i'm kailey leinz alongside joe mathieu moment the from bloomberg's five interview with former president donald trump in partnership with the economic club of chicago. donald trump will take questions on economic policy from bloomberg editor and chief john micklethwait. there are attendees gathered in the room in chicago. the remarks will begin any minute now. joe: it could be 10 or 15 minutes until they finy